I present the report of the recommendations of the whips relating to committee and delegation reports and private members’ business on Monday, 14 September 2009. Copies of the report have been placed on the table.
The report read as follows—
Pursuant to standing order 41A, the Whips recommend the following items of committee and delegation reports and private Members’ business for Monday, 14 September 2009. The order of precedence and allotments of time for items in the Main Committee and Chamber are as follows:
Items recommended for Main Committee (6.55 to 8.30 pm)
PRIVATE MEMBERS’ BUSINESS
Notices
1 MS HALL: To move—
That the House:
Time allotted—30 minutes.
Speech time limits—
Ms Hall—5 minutes.
First Opposition Member speaking—5 minutes.
Other Member—5 minutes each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Whips recommend that consideration of this should continue on a future day.
2 DR STONE: To move—
That the House:
Time allotted—40 minutes.
Speech time limits—
Dr Stone—10 minutes.
First Government Member speaking—10 minutes.
Other Member—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 10 + 4 x 5 mins]
The Whips recommend that consideration of this should continue on a future day.
3 MR CHAMPION: To move—
That the House:
Time allotted—remaining private Members’ business time prior to 8.30 pm
Speech time limits—
Mr Champion—5 minutes.
First Opposition Member speaking—5 minutes.
Other Member—5 minutes each.
[Minimum number of proposed Members speaking = 5 x 5 mins]
The Whips recommend that consideration of this should continue on a future day.
Items recommended for House of Representatives Chamber (8.40 to 9.30 pm)
COMMITTEE AND DELEGATION REPORTS
Presentation and statements
1 PARLIAMENTARY JOINT COMMITTEE ON CORPORATIONS AND FINANCIAL SERVICES
Statutory oversight of the Australian Securities and Investments Commission.
The Whips recommend that statements on the report may be made—statement to conclude by 8.50 pm
Speech time limits—
Mr Ripoll (Chair)—5 minutes
Opposition Member—5 minutes
Minimum number of proposed Members speaking = 2 x 5 mins]
2 JOINT STANDING COMMITTEE ON TREATIES
Report 105: Treaties tabled 13 May and 25 June 2009.
The Whips recommend that statements on the report may be made—all statements to conclude by 9 pm
Speech time limits—
Mr K. J. Thomson (Chair)—5 minutes
Opposition Member—5 minutes
[Minimum number of proposed Members speaking = 2 x 5 mins]
3 AUSTRALIAN PARLIAMENTARY DELEGATION TO MALAYSIA, THE PHILIPPINES AND CAMBODIA
Report on the Parliamentary delegation to Malaysia, the Philippines and Cambodia.
The Whips recommend that statements on the report may be made—all statements to conclude by 9.05 pm
Speech time limits—
Ms Owens (Delegation Leader)—5 minutes
[Minimum number of proposed Members speaking = 1 x 5 mins]
4 AUSTRALIAN PARLIAMENTARY DELEGATION TO CANADA AND MEXICO
Report on the Parliamentary delegation to Canada and Mexico.
The Whips recommend that statements on the report may be made—all statements to conclude by 9.10 pm
Speech time limits—
Mr Baldwin (Deputy Delegation Leader)—5 minutes
[Minimum number of proposed Members speaking = 1 x 5 mins]
PRIVATE MEMBERS’ BUSINESS
Notices
1 MRS B. K. BISHOP—To present a bill for an Act to amend the Renewable Energy (Electricity) Act 2000 in connection with emerging technologies. (Geothermal and other Renewable Energy (Emerging Technologies) Amendment Bill 2009)
The Whips recommend all speeches to conclude by 9.15 pm
Speech time limits—
Mrs B. K. Bishop—5 minutes.
[Minimum number of proposed Members speaking = 1 x 5 mins]
The Whips recommend that consideration of this should continue on a future day.
2 MR TUCKEY—To present a bill for an Act to amend the Renewable Energy (Electricity) Act 2000 and for related purposes. (Clean Energy Security Bill 2009)
The Whips recommend all speeches to conclude by 9.20 pm
Speech time limits—
Mr Tuckey—5 minutes.
[Minimum number of proposed Members speaking = 1 x 5 mins]
The Whips recommend that consideration of this should continue on a future day.
Orders of the Day
1 RENEWABLE ENERGY AMENDMENT (FEED-IN-TARIFF FOR ELECTRICITY) BILL 2009—Second reading (18 August 2009).
Time allotted—remaining private Members’ business time prior to 9.30 pm
Speech time limits—
Mr Oakeshott—5 minutes.
First Government Member speaking—5 minutes.
[Minimum number of proposed Members speaking = 2 x 5 mins]
The Whips recommend that consideration of this should continue on a future day.
Report adopted.
I move:
That the bill be referred to the Main Committee for further consideration.
I inform all honourable members that this motion enjoys the support of the Chief Opposition Whip, the honourable member for Fairfax.
Question agreed to.
Bill and explanatory memorandum presented by Mr Marles, for Ms Kate Ellis.
Bill read a first time.
I move:
That this bill be now read a second time.
This government is determined to deliver on our election commitment to rebuild essential student services and amenities on university campuses. We made this commitment because, unlike those opposite, we understand the critical importance of ensuring that students have access to vital campus services. And we make no apology for honouring that commitment by reintroducing these important measures today.
The Higher Education Legislation Amendment (Student Services and Amenities) Bill 2009 proposes a balanced, practical approach to funding campus services and amenities. Those opposite have been so blinded by ideology that they are simply unable to have a reasonable debate on this issue.
This bill does not allow for a return to compulsory student unionism. In fact the legislative provision which prevents a provider from requiring a student to be a member of a student organisation remains unchanged. The government does not want to return to the past. We simply want to ensure that students have access to vital services and amenities on campus in the future.
By voting against this important legislation during the last sitting period, the opposition voted for the continued demise of student services including child care, counselling, health, sport and fitness services. The government refuses to allow this to continue. Following extensiveconsultations with students and universities in 2008, it was found that $170 million had been stripped from funding for services and amenities. This resulted in the decline and in some instances complete closure of health, counselling, employment, childcare and welfare support services.
These are fundamental services that help students to navigate university life, to achieve success in their studies and to enable them to participate in sport and the university community. Subsequently, it is students who are being forced to pay the price of the $170 million—both directly and indirectly.
Alarmingly, it was discovered that some universities had been forced to redirect funding out of research and teaching budgets to support services and amenities that would otherwise have been cut. Universities Australia, the peak body representing the university sector, painted the picture clearly last year, stating:
Universities have struggled for years to prop up essential student services through cross-subsidisation from other parts of already stretched university budgets, to redress the damage that resulted from the Coalition Government’s disastrous Voluntary Student Unionism (VSU) legislation.
Some universities highlighted alarming price hikes for parking, food and child care—in one case, a price hike in the order of 500 per cent annually. During the consultations last year it was discovered that childcare fees at La Trobe University, for example, had increased by $68 per week. The cost of parking at Monash University rose by more than 500 per cent. At least three universities have closed their welfare services, which gave students important advice about Centrelink access. Nine universities are no longer able to offer legal advice services. This shows us that it is all of our students who are literally paying the price for the previous government’s ideological approach to student services.
The Australian Olympic Committee has noted that there has also been a serious impact on university sport, saying:
… the introduction of the VSU legislation has had a direct negative impact on the number of students (particularly women) participating in sport and, for the longer term, the maintenance and upgrading of sporting infrastructure and facilities and the retention of world class coaches.
Since then, Universities Australia and other bodies that have the interests of the students at heart have repeatedly called on the parliament to pass this legislation.
If the opposition fails to support this important legislation once again, then it is Australian students who will pay the price. And the students who will suffer most as a result of this decision are those from rural and regional areas. University services and amenities in regional areas are not just used by students but the whole community. In regional areas the sporting facilities at the university are often the only major facilities in the area and the university provides a social hub for the community. And importantly support services offered at regional universities create much needed jobs in local communities.
The National Party indicated at their recent conference that they were willing to support this legislation so far as it will provide funding for essential health and sporting services and amenities. This is welcome news and I commend the National Party for their commitment to students from rural and regional areas. But I call on them to recognise that there are other essential campus services which are also in dire need of funding. These include, for example, critical legal and welfare services.
One of the arguments from the National Party in relation to these services is that if students think they are important then they will pay for them voluntarily. In response to that, I would ask the Nationals to consider this question: how many students do you know who go off to university at the age of 18 for the first time and who expect to become involved in a legal dispute with their landlord? How many students plan to develop a serious mental health condition that requires counselling? How many students plan to need access to an emergency loan to cover basic costs of living when they become sick and are unable to work for several weeks? The answer is none.
These important services are there to support our students when things don’t go according to plan. And when you are a teenager from the bush, living away from home for the first time, you are all the more likely to come up against some of these challenges.
These campus services and so many others are no less important than health services and sporting facilities are no less worthy of funding. It should be our universities, in consultation with their students, who make the decision about what they need in line with the different needs of their university campus and within the fee guidelines.
I call on the National Party to vote to support this legislation, because it supports the students at the University of New England, at Edith Cowan University, at Charles Sturt University, at James Cook University, at the University of Ballarat and so many others.
The last time this legislation came before the parliament, the Nationals bowed to the wishes of their coalition partners and failed to cast their vote to help students from rural and regional areas. The coalition did not vote against compulsory student unionism. The coalition voted for the continued demise and possible destruction of vital services and amenities on university campuses.
I know that the National Party recognise how important this bill is and I call on them to join with the government to rebuild essential services and amenities on our university campuses. This bill is in the best interests of Australian students, it is in the best interests of our universities and it is in the best interests of rural and regional Australia.
I commend the bill to the House.
Debate (on motion by Mr Haase) adjourned.
Bill and explanatory memorandum presented by Mr Marles, for Ms Kate Ellis.
Bill read a first time.
I move:
That this bill be now read a second time.
This bill amends the Higher Education Support Act 2003 as part of the Australian government’s extension of the VET FEE-HELP Assistance Scheme to certain subsidised students from 1 July 2009.
The government’s VET FEE-HELP Assistance Scheme provides financial assistance to students to ensure those wanting to study diploma and above qualifications in the vocational education and training sector are able to make real choices about their training. By removing the burden of paying up-front fees, students are able to make important decisions about education based on what is best for them and not on financial circumstances.
The government is committed to broadening and increasing Australia’s skill levels, and increasing the number of people with diploma and advanced diploma level skills is a key element of this commitment.
The availability of VET FEE-HELP is expected to significantly contribute to the Council of Australian Governments target to double the number of diploma and advanced diploma completions by 2020. In this context, the bill allows for provisions which support the expansion of VET FEE-HELP to more training organisations and state government subsidised students, even further removing financial barriers to study for those students.
From 1 July 2009, the government extended VET FEE-HELP assistance to certain state government funded students with the aim of increasing access to financial assistance. As part of that extension, eligible state government-subsidised students will have a reduced VET FEE-HELP debt. This bill implements these changes for all eligible students from 1 July 2009, ensuring that no eligible students are disadvantaged.
In addition, the bill includes technical amendments to ensure that tertiary admissions centres are able to perform certain functions in relation to personal information on behalf of both higher education and VET providers. Tertiary admissions centres play an increasingly important role in the Australian tertiary system. These centres add to the efficiency and productivity of the administration of the Australian tertiary system by centralising and coordinating admissions procedures on a state-wide basis.
These amendments ensure that student information may be appropriately shared between relevant Commonwealth agencies, higher education and VET providers and tertiary admissions centres. These measures are part of the government’s commitment to ensuring that higher education and VET providers continue to play a leading role in equipping Australians with the knowledge and skills to make Australia a more productive and prosperous nation.
I commend the bill to the House.
Debate (on motion by Dr Southcott) adjourned.
Bill and explanatory memorandum presented by Mr Laurie Ferguson.
Bill read a first time.
I move:
That this bill be now read a second time.
The Rudd Labor government is committed to promoting sound, transparent and independent immigration decision making that reflects principles of natural justice and provides access to independent review.
Consistent with this commitment, the Migration Amendment (Complementary Protection) Bill 2009 amends the Migration Act 1958 to introduce greater fairness, integrity and efficiency into Australia’s arrangements for meeting our human rights obligations under international law.
Australia has a long and proud tradition as a protector of human rights, and it is a reflection of this tradition that Australia is a party to the major United Nations human rights treaties. These include in particular:
Successive governments have expressed an unequivocal commitment to upholding Australia’s obligations (known as non-refoulement obligations) under these treaties, to not return people to a country where they would be persecuted, killed, tortured, or subjected to cruel, inhuman or degrading treatment.
Australia already has in place a strong and effective mechanism for assessing claims under the refugees convention. It has served governments from both sides of politics very well. Asylum seekers may apply for a protection visa, and their applications are decided through a transparent process that incorporates principles of natural justice. Applications for a protection visa are first considered by an officer of the Department of Immigration and Citizenship acting as the minister’s delegate. A decision is taken and written reasons for the decision provided. Applicants who are unsuccessful can seek independent merits review by the Refugee Review Tribunal, or the Administrative Appeals Tribunal for applications refused on the basis of exclusion or character issues. The relevant tribunal must also provide written reasons for its decision.
However, the Migration Act does not currently permit claims that may engage Australia’s non-refoulement obligations under treaties other than the refugees convention to be considered in the protection visa process. This bill addresses that anomaly by permitting all claims that may engage Australia’s non-refoulement obligations to be considered under a single integrated protection visa application process. It ensures that all people who may be owed Australia’s protection have access to the same transparent, reviewable and procedurally robust decision-making framework that is currently available to applicants who make claims under the refugees convention.
This protection from return in situations that engage non-refoulement obligations under the CAT, ICCPR and CROC is known as ‘complementary protection’, in the sense that it is complementary to the protection owed to refugees under the refugees convention.
The rationale for introducing complementary protection into the Migration Act is straightforward. It makes perfect sense to bring the same fairness and decision-making integrity to considering whether a person would face arbitrary deprivation of his or her life, or be tortured, as to considering whether a person would face persecution under the refugees convention.
It is a statement of the obvious that the consequences of return may be no less grave for a person who would face torture than they would be for a person who is a refugee and would face persecution. Where the harm faced is serious enough to engage Australia’s non-refoulement obligations, fine legal distinctions about which human rights instrument the harm fits under should not determine whether a person is guaranteed natural justice, has access to independent merits review, or meets the criteria for grant of a protection visa.
The need for change is also manifest in the shortcomings of the current arrangements for considering complementary protection claims. Determinations as to whether a person would be killed, tortured, or subjected to cruel, inhuman or degrading treatment or punishment on return to another country, if not covered by the refugees convention, may currently only be considered by the Minister for Immigration and Citizenship under personal intervention powers.
These are extraordinary powers. Subject to certain prerequisites, the minister may grant a visa if the minister considers it is in the public interest to do so. This may include cases in which non-refoulement obligations are owed under international law. However, decisions may only be made by the minister personally; no-one can compel the minister to exercise the powers; there is no specific requirement to provide natural justice; there is no requirement to provide reasons if the minister does not exercise the power; and there is no merits review of decisions by the minister.
While there can be no doubt that ministers take very seriously their obligations to consider whether a visa should be granted to meet Australia’s human rights obligations, the very nature of ministerial intervention powers is such that they do not provide a sufficient guarantee of fairness and integrity for decisions in which a person’s life may be in the balance.
Relying upon ministerial intervention powers to consider complementary protection claims is also administratively inefficient. Ministerial intervention powers are not enlivened until after a person has been refused a visa both by a delegate of the minister and on review by a tribunal. This means that under current arrangements people who are not refugees under the refugees convention, but who may engage Australia’s other non-refoulement obligations, must go through the entire visa process before their claims can be considered by the minister.
Even where immigration officers or the Refugee Review Tribunal might consider that the applicant’s circumstances engage a non-refoulement obligation, they are currently unable to grant a visa, because these obligations are not reflected in the visa criteria. Some applicants understand at the outset that their claims fall under human rights treaties other than the refugees convention, but are forced through the protection visa process because that is the only route to ministerial intervention, where their claims can be considered.
The need for changes to better address complementary protection claims has been recognised by both domestic and international bodies charged with considering the issue. Domestically, the introduction of complementary protection has been recommended by the Australian Human Rights Commission and by several parliamentary committees including the:
The Refugee Council of Australia and other organisations with firsthand experience of the shortcomings of Australia’s current arrangements have also been tireless advocates for the introduction of a system of complementary protection.
Internationally, this reform has the strong support of the United Nations High Commissioner for Refugees (UNHCR) and is consistent with a number of conclusions by the state membership of UNHCR’s Executive Committee. It has also been recommended by other key international human rights bodies.
The United Nations Committee against Torture recommended, most recently in May 2008, that Australia adopt a system of complementary protection, ensuring that the minister’s discretionary powers are no longer solely relied on to meet Australia’s non-refoulement obligations under human rights treaties. In addition, the United Nations Human Rights Committee recommended, in May 2009, that Australia should take urgent and adequate measures, including legislative measures, to ensure that nobody is returned to a country where there are substantial grounds to believe that they are at risk of being arbitrarily deprived of their life or being tortured or subjected to other cruel, inhuman or degrading treatment or punishment.
Australia is almost alone among modern Western democracies in not having a formal system of complementary protection in place. Many European and North American countries already have established complementary protection arrangements. The New Zealand government already has a bill before their parliament to introduce complementary protection. This bill brings Australia into line with what is now recognised as international best practice in meeting core human rights obligations.
The case for the introduction of enhanced arrangements to meet our complementary protection obligations is compelling. I will turn now to the key aspects of the bill.
Protection claims under the refugees convention will continue to be considered first against the existing refugee criteria set out in the Migration Act. Only protection visa applicants who are found not to be refugees will have their claims considered under the new complementary protection criteria. This approach is strongly supported by the UNHCR, and recognises the primacy of the refugees convention as an international protection instrument.
The bill establishes new criteria for grant of a protection visa in circumstances that engage Australia’s non-refoulement obligations under human rights treaties other than the refugees convention. These obligations, express or implied, apply to particular types of irreparable harm contained in the relevant human rights treaties. These types of irreparable harm are specified in the bill, and are:
The prohibition on arbitrary deprivation of life is contained in article 6 of the ICCPR. A prohibition on torture, and cruel, inhuman or degrading treatment or punishment is contained in article 7 of that convention.
The United Nations Human Rights Committee, which is the body of independent experts responsible for monitoring the implementation by states parties of the ICCPR and its optional protocols, has made clear its view that countries are obliged not to return a person to a place where there is a real risk that these rights would be violated.
Parties to the Second Optional Protocol to the ICCPR (including Australia) are also obliged, under article 1, to take all necessary measures to abolish the death penalty for all persons within their jurisdiction. For countries that have abolished the death penalty (like Australia), there is an implied obligation not to expose a person to a real risk of its application.
The non-refoulement obligations noted above may also be implied under the CROC, to the extent that the CROC contains obligations in the same terms as the ICCPR.
An express non-refoulement obligation in relation to torture is contained in article 3 of the CAT.
The bill provides some definitions of these concepts to assist decision makers in interpreting and implementing these international obligations. These definitions will assist Australia to meet its non-refoulement obligations, without expanding the relevant concepts in a way that goes beyond interpretations of those obligations that are currently accepted internationally.
Non-refoulement obligations do not apply in every case in which a person claims that they will suffer some type of harm if removed to another country. In each case, there must be substantial grounds for believing that, as a necessary and foreseeable consequence of being removed, there is a real risk that a person will be irreparably harmed. A risk of harm must go beyond mere theory or suspicion to give rise to a non-refoulement obligation. According to the commentary of the United Nations Human Rights Committee, a real risk of harm is one where the harm is a necessary and foreseeable consequence of removal.
A real risk of harm has been found in instances where there is a personal or direct risk to the specific person, as opposed to a general risk faced by the whole population of the country. The risk must also be a real one that the person would face throughout the country. If a person can reasonably be expected to relocate to access protection within their own country, then international protection is not required. Australia’s protection will similarly not be necessary if the person can obtain protection from the authorities of their own country, such that there would not be a real risk of the harm occurring. Protection in Australia will also be unnecessary if the person can safely relocate to another country where they have right of entry and residence.
The legal threshold for Australia’s non-refoulement obligations to be engaged is reflected in the bill. The bill also contains provisions to ensure that only applicants who are in need of Australia’s protection will be eligible for a protection visa on complementary protection grounds.
Unlike obligations under the refugee convention, Australia’s non-refoulement obligations under the CAT and the ICCPR are absolute and cannot be derogated from. While Australia accepts that this is the position under international law, the government is committed to maintaining strong arrangements for protecting the Australian community and avoiding allowing Australia to become a safe haven for war criminals and others of serious character concern.
For this reason specific provision has been made in the bill to refuse the grant of a protection visa where there are grounds for considering that the applicant has committed war crimes, crimes against humanity, serious non-political crimes or other particularly serious crimes. These provisions are modelled on the existing exclusion provisions under articles 1F and 33(2) of the refugee convention, which apply in the current protection visa process when assessing a person’s refugee claims.
In incorporating exclusion provisions in the bill, Australia will be following general international practice, particularly in the European Union, where similar clauses have been incorporated into most countries’ respective legislative versions of complementary protection.
In the small number of instances where non-refoulement obligations would arise for persons who are excluded on security or serious character grounds, it is appropriate for determinations as to post-decision case management to remain with the minister personally.
International law does not impose an obligation on Australia to grant a particular type of visa to those people to whom non-refoulement obligations are owed. Rather, there is an obligation not to remove the person to a place where there is a real risk that they will be arbitrarily killed, subjected to the death penalty or subjected to torture or cruel, inhuman or degrading treatment or punishment.
In all circumstances, Australia is committed to meeting its non-refoulement obligations in a way that best protects the Australian community.
Visa applicants who engage Australia’s non-refoulementobligations on complementary protection grounds, and to whom the exclusion provisions do not apply, will be granted a protection visa with the same conditions and entitlements as applicants owed non-refoulementobligations under the refugee convention.
Where a person’s circumstances have been found not to engage a protection obligation either under the refugee convention or by virtue of the non-refoulement obligations in the CAT and the ICCPR, that person will be able to seek independent merits review of the decision within the existing merits review framework. Review of protection visa refusals is by the Refugee Review Tribunal except if the decision relates to matters of character or exclusion, in which case review is by the Administrative Appeals Tribunal.
There are a range of consequential amendments throughout the Migration Act to embed the non-refoulement concepts within the protection visa framework.
In addition to the proposed amendments in the bill, amendments to the Migration Regulations 1994 will be required. The regulations will reflect the criteria in the act and complete implementation of complementary protection in the protection visa subclass.
In early consultations with stakeholders, the Australian Human Rights Commission and non-government organisations expressed some reservations that Australia’s international obligations under the statelessness conventions were not expressly included in the proposed complementary protection arrangements. The protection visa framework will provide protection to stateless persons in cases where there is a real risk of harm on return that engages Australia’s non-refoulement obligations—this includes stateless persons who face a real risk of death, torture or cruel, inhuman or degrading treatment or punishment. In cases where no issue of harm on return arises, statelessness alone does not give rise to a protection need.
While the government has determined that grant of a protection visa is not an appropriate outcome where there is no risk of harm on return, it is committed to ensuring that other stateless cases are not left in the too-hard basket. The government is acutely aware of past failures to resolve the status of stateless people in a timely manner. The Minister for Immigration and Citizenship is committed to exploring policy options that will ensure that those past failures are not repeated.
As I have already observed, the policy arguments for introducing a system of complementary protection are overwhelming. We must remember, however, that complementary protection is not principally about policy, but about people—people at risk of the most serious forms of harm if returned to their home country. It is also about our values as a nation.
Complementary protection will cover circumstances in which a person may currently be refused a protection visa because the reason for the persecution or harm on return is not for one of the specified reasons in the refugee convention—that is not on the basis of race, religion, nationality, membership of a particular social group or political opinion.
For example, it is not certain that a girl who would face a real risk of female genital mutilation would always be covered by the refugee convention, whereas she would be covered under complementary protection. Women at risk of so-called honour killings can also potentially fall through gaps in the refugee convention definition. In some countries victims of rape are executed along with, or rather than, their attackers. Again, depending on the circumstances, this situation may not be covered under the refugee convention.
The Rudd Labor government is convinced that Australians would expect claims of this gravity; claims involving female genital mutilation, execution for victims of rape and so-called honour killings to be dealt with through a process that affords natural justice and access to independent merits review. Where such claims are accepted as true, Australians would expect a protection visa to be granted.
That is why we have introduced this bill: to establish a fair, transparent and robust system for considering just those sorts of complementary protection claims, to enhance the integrity of Australia’s arrangements for meeting its non-refoulement obligations and to better reflect our longstanding commitment to protecting those at risk of the most serious forms of human rights abuses.
Debate (on motion by Mr Haase) adjourned.
On behalf of the Joint Standing Committee on Treaties, I present the committee’s report entitled Report 104—treaties tabled on 20 August 2009.
Order that the report be made a parliamentary paper.
by leave—Report No. 104 of the Joint Standing Committee on Treaties recommends binding treaty action be taken in relation to the following treaties: (1) the proposed amendment of the articles of agreement of the International Monetary Fund to enhance voice and participation in the International Monetary Fund; (2) the proposed amendment of the articles of agreement of the International Monetary Fund to expand the investment authority of the International Monetary Fund; and (3) the proposed amendment of the articles of agreement of the International Bank for Reconstruction and Development to enhance voice and participation in the International Bank for Reconstruction and Development.
The treaties committee has taken the unusual step of making an interim recommendation that binding treaty action be taken while the committee undertakes a more detailed examination of the three treaty amendments involved. The Treasurer wrote to the treaties committee on 27 August asking that the committee give urgent consideration to the treaty actions.
The treaties in question have the common aim of improving the effectiveness and legitimacy of the membership based international financial institutions—the International Bank for Reconstruction and Development, also known as the World Bank, and the International Monetary Fund or IMF. Australia was co-chair of the G20 working group on IMF reform and was instrumental in developing the reforms embodied in these treaties. The reforms will be an important agenda item at the next G20 leaders summit, to be held from 22 to 24 September. The Treasurer advised that, in order for Australia to perform the leading role expected of it in relation to this matter, Australia would need to take binding treaty action before 10 September.
While the committee have already taken evidence from the Treasury in relation to the proposed treaty actions and is convinced that taking binding treaty action in relation to these matters is in Australia’s best interests, we recognise that this action will truncate the opportunity for interested persons to make submissions about the proposed treaties. The committee will therefore consider any other issues in the framing of their final report, which they intend to table at a later date. I commend the report to the House.
Debate resumed from 8 September, on motion by Mr Albanese:
That this bill be now read a second time.
I rise today to voice my support for the Aviation Transport Security Amendment (2009 Measures No. 1) Bill 2009. This bill is yet another example of this government’s commitment to keeping the aviation environment as secure and safe as possible. The key elements of this bill will see practical reforms in four areas. The amendments are timely changes that will finetune a system designed to safeguard Australia’s civil aviation operations against ‘acts of unlawful interference’. Acts of interference include things like:
It also includes:
The framework of Australia’s aviation security legislation has a number of layers to ensure the deterrence, detection and prevention of acts of unlawful interference with an aircraft.
Both the Minister for Infrastructure, Transport, Regional Development and Local Government and his department are responsible for the development and implementation of a national framework of consistent aviation security measures. Practical operational aviation security measures are obviously required as a result of the changed environment in which the industry now operates. Following events like that of September 11 and the heightened threat of terrorism involving the unlawful use of aircraft and airport facilities, we all live in a new world order.
The aviation industry plays a key role in connecting Australia with the world and Australians with each other. As the minister said in his keynote address at Waypoint 2008:
The Rudd Government is committed to working with the aviation industry and the community to meet these many challenges.
We understand the aviation sector’s importance to Australia’s future economic development within the era of globalisation. Today, more than ever, the aviation industry underpins domestic economic growth and provides vital gateways to the global economy.
This sector supports almost 50,000 jobs and contributes an estimated $6.8 billion to our gross national product.
That is why we on this side of the House are committed to keeping the aviation environment as secure and safe as possible.
Whether moving tourists, families, freight or businesspeople, the aviation industry is essential to the efficient operation of the Australian economy. I know the wonderful people who live in my electorate of Solomon, as well as the tens of thousands of visitors who travel to the Northern Territory every year, understand this. They know only too well the significance of the aviation sector and, of course, the importance of having a secure and safe aviation industry. The Northern Territory is a huge area. Often places are cut off during the wet season and the only way of travelling around is by light aircraft.
From my own perspective, I know only too well about plane travel. I certainly acknowledge that the member for Kalgoorlie can relate to this. Last year alone, I think I spent 49 days in a plane—seven weeks of my life—travelling to Canberra. That is a lot of time out of my electorate and I thank all those involved in keeping me safe—the cleaners, the caterers, the security guards, the AFP, the check-in crew and the baggage handlers. They are all people who keep the airport safe.
This bill contains practical reforms to the Aviation Transport Security Act 2004 in four key areas that bolster the enforcement powers of Australia’s aviation security regulator. Firstly, the bill increases the flexibility in designating an airport as a security controlled airport by enabling regulations to be made to categorise airports in accordance with their relative risk profile. The second key area of the bill will increase the range of situations in which aviation security inspectors may enter certain premises without notice. Thirdly, this bill will introduce the option of enforceable undertakings as a compliance measure. Lastly, but very importantly, this bill will allow aviation security inspectors to issue compliance control directions in a wider range of circumstances.
Finetuning these security measures now will provide a more comprehensive regime. The amendments proposed will eliminate the ‘one size fits all’ approach of the current act. It means that small regional airports like those in the Northern Territory could be spared much of the expense of developing their own security program. It means that small regional airports could benefit from the certainty of knowing what they need to do to comply. The finetuning will protect both the travelling public and aviation industry employees from potential unlawful interference with the operation of planes and airports. It means that small regional airports have a general reduction in regulatory requirements.
As it stands currently, the declaration of an airport as a security controlled airport places the same legislative requirements on all such airports, regardless of their size, location and the type of aircraft operating from the airport. This amendment provides finetuning to allow regulations to be made that prescribe different legislative requirements for each category of security controlled airport. This will ensure regulatory activity is better targeted to reflect the relative risk associated with each category of airport.
The amendments will allow an inspector to enter the premises of an aviation industry participant or accredited air cargo agent who is not on an airport site and inspect their activities without notice. At the moment, inspectors can only undertake these inspections ‘on-airport’, despite many critical aviation related businesses being located well away from an airport. Obviously the current requirements to provide reasonable notice of ‘off-airport’ inspections limit the effectiveness of doing the inspections. This is particularly the case for many businesses within the air cargo sector, as their security obligations are largely procedural in nature and, with notice, can be changed briefly during an inspection.
Under the amendments, inspectors will be allowed to enter premises, observe and discuss procedures, and in so doing access documents and records. This bill is an example of the Rudd government’s commitment to strengthening Australia’s national security framework across the vital areas of airport security, counterterrorism, policing and intelligence capability in our region. I commend the bill to the House.
I rise today to speak on the Aviation Transport Security Amendment (2009 Measures No. 1) Bill 2009. The bill proposes amendments to the Aviation Transport Security Act 2004, which was introduced by the former coalition government, specifically to change the existing Commonwealth aviation transport security regime. The amendments aim to improve Australia’s aviation security apparatus and strengthen the enforcement powers of the Office of Transport Security.
The Aviation Transport Security Act 2004 established a regulatory framework to safeguard against unlawful interference with aviation. To achieve this purpose, the act establishes minimum security requirements for civil aviation in Australia by imposing obligations on persons engaged in civil aviation related activities. Under these laws anyone who operates within the aviation industry is responsible for helping to maintain Australia’s excellent reputation as one of the most secure places in the world.
It was the coalition that introduced legislation that strengthened the regulatory framework surrounding aviation security. Importantly, this legislation also involved aviation industry participants in order to provide the flexibility necessary to respond to the rapidly-changing environment. That legislation is what the House proposes to amend today. Because of the smart and thorough actions taken under the coalition government, Australian airport security is safer than ever before. The Aviation Transport Security Amendment (2009 Measures No. 1) Bill will continue the work done by the former government to ensure airport security is a priority into the future.
I would like to acknowledge the contribution aviation has made to Australia’s overall economy. Steady economic growth, particularly during the years of the previous coalition government, and increased tourism made for a more profitable airline sector, which in turn has driven the expansion of Australia’s aviation sector. In the 2007-08 financial year, over 49 million passengers travelled on Australian domestic airlines. It is also very important to note that regional airlines carried 5.8 million passengers, a figure that represents an increase of 11 per cent over 2006. Regional airlines and regional airports are an important part of Australia’s aviation history and future.
A healthy aviation sector is vital for growth, and in particular I would like to acknowledge the development of Newcastle Airport, which employs hundreds of my constituents living in the Paterson electorate. Newcastle Airport is fast-emerging as a key player in aviation growth domestically, with the potential for international expansion mounting. The net regional economic benefit generated by Newcastle Airport has been assessed as $433 million annually, supporting 3,128 jobs—of which the tourism sector generates $150 million and supports 894 jobs annually.
Over the past 60 years, from its simple beginnings as Williamtown Civilian Airport after a charter flight landed at the RAAF Base Williamtown in 1947 to the first scheduled commercial operations commencing in 1948, Newcastle Airport has grown to a position of strength in the region. The federal government continued to run the airport until 1990. However, it was not until 1993 when the Newcastle City Council and Port Stephens Council accepted an invitation from the federal government to jointly operate the civil aviation area at RAAF Base Williamtown that Newcastle Airport Ltd was born. The two councils accepted full responsibility for operating, maintaining and developing what was to become Newcastle Airport.
The civil airport is located on Commonwealth land inside the boundary of Royal Australian Air Force Base Williamtown. Newcastle City Council and Port Stephens Council, under the auspice of Newcastle Airport Ltd, hold a 40-year lease, terminating in March 2045, from the Department of Defence for 28 hectares of land to the south of RAAF Base Williamtown. The structure of the operation of Newcastle Airport Ltd is a joint venture between the two councils. It is important to note that all profits from the operation of the airport and its facilities are reinvested in the operations and future growth of the airport.
For many years the passenger terminal at Newcastle Airport was nothing more than a little tin shed. This was remedied with the opening of new terminal facilities in 1975, and in 1994 and 2000 Newcastle Airport underwent further major upgrades which included the doubling of the terminal floor area, total refurbishment of the interior and exterior of the building and the provision of office suites for airlines. In 2000, jet services commenced with the introduction of the Impulse Airlines, now Jetstar, Boeing 717 aircraft to service the Newcastle to Melbourne route. In November 2003 Virgin Blue introduced B737 aircraft on a daily service to Melbourne and in May 2004 introduced daily services to Brisbane. In May 2004 Jetstar also commenced services on the Newcastle-Melbourne and Newcastle-Brisbane routes using Boeing 717 aircraft.
In 2005 Newcastle Airport underwent a further $9 million major upgrade which in turn doubled the terminal floor area, doubled the departure and arrival areas, introduced a retail precinct and provided additional office suites and upgraded the car parking and road systems. The terminal facilities were upgraded to cope with future demand and security requirements. In that same year, Newcastle Airport was named Regional Airport of the Year by the Australian Airports Association. This is an accomplishment which we can be extremely proud of in our region.
Today Newcastle Airport has grown to be one of the key regional airports in Australia. It is serviced by all the major domestic airlines that provide services to the major destinations along the east coast of Australia, including Aeropelican, Brindabella, Jetstar, Norfolk Air, Virgin Blue and QantasLink. Since the introduction of jet services into Newcastle Airport, the number of passengers using the airport has increased from 214,000 in 2003 to over one million people in the 2007 calendar year. The success story does not end there. The Newcastle Airport is at present undergoing further expansion, increasing the check-in facilities to accommodate the growing number of travellers and developing more parking to accommodate the needs of our travellers. It is important to take note of the commercial aviation developments during this time as well. Home to BAE Systems, Boeing Defence Australia, Raytheon, Thales, Jetstar Engineering and GE Aviation, and boasting a large network of specialist businesses, the Hunter region provides a highly skilled local workforce, sophisticated defence and civil aviation infrastructure and a proven track record in delivering defence projects.
Newcastle Airport also works in close proximity to and is supported by the Defence Support Group, the RAAF and especially RAAF Base Williamtown. An agreement exists with the RAAF to provide landing and take-off rights, services and the use of airport infrastructure. The current Newcastle Airport master plan demonstrates a strategic vision for the continued growth of the airport and harmony with RAAF operations. The airport’s master plan considers and protects the operational integrity of RAAF Base Williamtown in terms of aviation safety, air navigation, air traffic control, base security, aviation fire fighting and rescue services and communications. There can be no doubt that RAAF Base Williamtown is an important economic driver for our region and is the pre-eminent fighter base for the Royal Australian Air Force. It is one of the busiest RAAF bases in Australia, handling over 1,000 movements per week. It is home to the majority of RAAF’s FA18 Hornets and Hawk lead-in fighters and is headquarters for the Air Force’s Surveillance and Response Group, Air Combat Group and two training squadrons which include the FA18 Hornet, BAE Hawk 127 lead-in fighter and the Pilatus PC9 aircraft.
As you can see, their presence in the aerospace industry is particularly notable. One of the most significant tenants in the area is BAE Systems. BAE Systems is a global company engaged in the development, delivery and support of advanced air, land and sea defence, security and aerospace systems. The first major commercial aviation development was with the hangar and associated facilities built by BAE for the assembly of the Hawk lead-in fighter. BAE is contracted by RAAF to maintain the Hawk lead-in fighter and the FA18 aircraft. A second BAE hangar was constructed initially for the centre barrel replacement program but also in anticipation of future Joint Strike Fighter contracts with defence.
When I became the member for Paterson in 1996, I became concerned at the amount of underemployment of ex-RAAF personnel in our region. A range of very highly skilled people who chose after their service to the defence of Australia to live in and around the area were not able to find work in their field of expertise and, rather than facing another posting or travelling to other areas to continue in their field of expertise, they took up employment in other fields, quite often well below their capacity. I was of the view that more needed to be done to provide opportunities for these people. With the introduction of the BAE Hawk lead-in fighter contract, I was determined to establish an aviation technology park with airside access for service to both military and commercial aircraft. I have been on the public record promoting and actively supporting this project since 1996, and when I served on Port Stephens Council in 1999 I helped drive the development of employment opportunities at the airport through pushing for the redevelopment of the farmland surrounding the airport.
The stage is now set for the increasing presence in aerospace and aviation development within the region with the Williamtown Aerospace Centre by Hunter Land, which includes the Newcastle Airport precinct and the 80 hectares of industrial land surrounding the airport. The centre will provide world-class facilities, tow-way access and a variety of infrastructure solutions to meet the needs of individual organisations of any size or requirement. Williamtown Aerospace Centre will position the Hunter as a major national and international centre for the aerospace and aviation industry. The success story will be about utilising those skill sets that have served our country and are now looking to reside in our wonderful area.
The amendments presented today reflect and continue the work begun by the coalition. They will support regional airports such as Newcastle Airport and I am happy to support them. The first amendment of the Aviation Transport Security Amendment (2009 Measures No. 1) Bill 2009 will give the secretary of the department the power to designate an airport as a security controlled airport. In order to achieve this, the airport must fulfil certain security requirements. This amendment will allow security controlled airports to be assigned to a category that prescribes specific requirements reflecting the risk profile of each airport.
Under the current arrangements, any airport which is declared to be an SCA faces the same security requirements regardless of their location, size and type of aircraft operating from the airport or security situation. This means that a regional airport, such as Newcastle Airport, will be subjected to the same security requirements as Sydney Airport. Many regional airports would benefit from a more flexible and appropriate system directly related to their personal situation.
A consistent approach needs to be adopted for aviation security, particularly at regional airports and in particular with the jet versus non-jet powered aircraft issue being an example. Allowing an airport to be assigned to a particular category will enable security resources to be allocated in a more appropriate way, rather than applying the same requirements to all airports. Security should be a risk based cost-benefit approach, otherwise it will become a significant disincentive for regional air travel and potentially put smaller airlines out of business. It is important to note the cost of implementation to regional airports. If costs can be reduced through a more appropriate security regime, the viability of regional air services will be enhanced. This can only benefit regional areas, such as Newcastle, that depend so much on the resources that aviation provides.
Terrorist attacks in the United States on 11 September 2001, nine years ago this Friday, reinforced the importance of the security of aviation operations globally, including in Australia. September 11 demonstrated the potential for disaster, where the repercussions are still being felt globally. Since the incidents on September 11, the coalition took action to improve aviation in security in Australia. Since this time, over $1 billion has been spent to enhance aviation security.
The coalition provided additional funding to improve security in the air cargo industry, and the second amendment will continue with the coalition’s commitment by allowing unannounced aviation security inspections of businesses involved in air cargo. Currently, inspectors are only able to exercise their powers without notice within the boundaries of a security controlled airport. This amendment will extend their inspection powers to sites not located at airports, without the need to provide prior notice. It is important to note to the House that such an inspection would only be carried out at a time when the site is open and operating, and it would only be carried out at sites directly associated with aviation security. Under no circumstances does this amendment propose to grant inappropriate powers to aviation security inspectors; it merely seeks to extend the current powers to cover non-airport sites related to aviation security.
The third amendment will introduce the option of enforceable undertakings as a compliance measure. There currently exists a variety of sanctions available to aviation authorities. For example, if an aviation industry participant was to contravene the act, or breach their transport security program, the authorities are able to issue an infringement notice. If a stronger response is warranted, the next step would be court action, which may require shutting down the activities of the aviation industry participant. Therefore, enforceable undertakings would provide an appropriate midrange sanction in some cases. Enforceable undertakings would require aviation industry participants to take or refrain from taking specified actions.
Under the amendment, the secretary of the department would be allowed to enter into enforceable undertakings with aviation industry participants in relation to all matters that are dealt with under the act. The department would establish the terms of an enforceable undertaking in consultation with aviation industry participants. The breach of an enforceable undertaking would enable the secretary to apply to the Federal Court for an order to direct compliance. It is very important that the views and concerns of airlines, air cargo agents, airport operators and other industry participants are taken on board when resolving security issues. This amendment is designed to encourage voluntary solutions to minor security issues.
The fourth and final amendment will allow aviation security to issue compliance control directions in a wider range of circumstances, such as to airport operators or screening authorities. This will enable inspectors to direct screening authorities or airport operators to take specified actions in relation to the airport, or to screening points at the airport, in the same way that they are currently able to direct pilots or aircraft operators. Overall, the bill will provide more flexible and appropriate security regimes that will enhance aviation security without imposing undue or excessive restrictions on industry participants.
Therefore, the coalition supports these amendments unreservedly.
I rise to support the Aviation Transport Security Amendment (2009 Measures No. 1) Bill 2009. This bill contains amendments which aim to strengthen the aviation security legislative framework. In particular, the amendments would improve the Office of Transport Security’s ability to perform its duties as regulators of aviation security to ensure compliance with the act and regulations in order to safeguard against unlawful interference with aviation.
The bill contains four key amendments to the Aviation Transport Security Act 2004 which would: firstly, enable regulation to be made to designate security controlled airports a particular category of airport, according to their risk profiles; secondly, allow unannounced inspections of businesses involved in air cargo; thirdly, allow the secretary of the department to enter into enforceable undertakings with aviation industry participants as a remedial measure; and, finally, expand the scope of ‘compliance control directions’ to cover operators of security controlled airports and screening authorities.
I will look at the amendments in a bit more detail, starting with the categorisation of security controlled airports. Currently, a subsection of the act provides that the secretary of the department may declare an airport to be a security controlled airport. Such a declaration allows, amongst other things, the secretary to then establish airside and landside security zones. There may be different types of such security zones prescribed by regulation but, as their name implies, these zones are intended to provide appropriate levels of security by controlling movements of persons, vehicles and goods et cetera.
Furthermore, the act requires the operator of a security controlled airport to have a transport security program. The declaration of an airport as a security controlled airport places the same legislative requirement on all such airports, regardless of their size, location and type of aircraft operating from the airport. Regulatory activity could be better targeted if airports were categorised in accordance with their relative risk to security.
Therefore, it is proposed that the secretary of the department be able to designate, by notice, a security controlled airport as a particular category of airport. The assignment of a particular category to an individual airport will be done in the same way as airports are now declared to be security controlled airports—that is, by publishing a notice in the gazette and giving a notice to the airport operator. A decision by the secretary made under this amendment would be reviewable by the Administrative Appeals Tribunal.
It is also proposed that the regulation-making power under the Aviation Transport Security Act be amended so as to allow regulations to be made to designate security controlled airports as a particular category of security controlled airport. This will enable regulations to prescribe different legislative requirements for each category of security controlled airport to reflect the relative risk associated with each category of airport. Section 79 of the act details powers of aviation security inspectors, including powers to enter and inspect any area, building—other than a residence—or vehicle under the control of an accredited air cargo agent or aviation industry participant. Aviation security inspectors are employees of the administering department or state or Federal Police officers or Protective Service officers under the Australian Federal Police Act 1979. Such inspectors have wide-ranging entry and inspection powers under existing section 79, which can be exercised for determining whether a person is complying with the act and/or investigating a possible contravention of that act.
Amongst the inspection powers are those to enter and inspect any area, building or vehicle under the control of an accredited air cargo agent or aviation industry participant. However, where the proposed entry and inspection is in a place that is not within the boundaries of a security controlled airport, reasonable notice must be given before exercising the power. Currently, these powers cannot be exercised outside of the boundaries of a security controlled airport without providing reasonable notice. The requirement to provide reasonable notice reduces the effectiveness of inspection activity as businesses can briefly alter their practices for the period of the inspection.
There are good reasons why this amendment is being made. Firstly, most businesses involved in air cargo supply chains are located outside of the boundaries of a security controlled airport, requiring reasonable notice of an inspection; and, secondly, the obligation placed on many regulated business, particularly accredited air cargo agents, are procedural in nature, allowing easy short-term amendments to practices during an inspection. This makes regular procedural non-compliance difficult to identify. In order to address this issue it is proposed that the act be amended to allow aviation security inspectors to exercise the following powers at any time and without notice: firstly, enter any area, building—other than a residence—or vehicle under the control of an aviation industry participant or an accredited air cargo agent and inspect equipment, documents and/or records. This includes photographing or copying documents and/or records and operating equipment to gain access to documents and/or records; and, secondly, observe operating procedures and discuss those procedures with employees of an accredited air cargo agent or aviation industry participant or an accredited air cargo agent itself or aviation industry participant itself.
On the amendments covering enforceable undertakings, currently the regulatory powers under the act of the Office of Transport Security in relation to aviation industry participants are generally concentrated at the higher end of the hierarchy. For example, should an aviation industry participant breach their obligations under a transport security program, they face the possible sanction of the cancellation of their transport security program, thus preventing them to continue to operate. The act fails to provide a set of middle-range sanctions to address regulatory issues and contraventions of the act, particularly in instances where the breaches are not serious enough to warrant the imposition of a criminal penalty or preventing an aviation industry participant to continue to operate. Introducing enforceable undertakings as a middle-range administrative enforcement tool under the Aviation Transport Security Act will enable a more responsive regulatory approach, generate more confidence on the part of both the travelling public and the industry and encourage better industry compliance.
It is envisaged that this would also enable the Office of Transport Security to deal more effectively, flexibly and in a more timely fashion with compliance issues under the act and provide greater ability to set compliance strategies, negotiate outcomes and accept voluntary solutions. For example, an enforceable undertaking would involve a commitment to future security standards by industry, including steps that are to be taken by an aviation industry participant to ensure that specific types of incidents does not occur again.
The proposed amendment would allow the secretary of the department to enter into enforceable undertakings with aviation industry participants, which may be made in relation to all matters that are dealt with under the act. An aviation industry participant may withdraw or vary the undertaking at any time with the written consent of the secretary. In addition, the secretary may, by written notice given to the participant, cancel the undertaking.
Finally, should an aviation industry participant breach an enforceable undertaking, the secretary may apply to the Federal Court for an order which may include the following: an order directing compliance with the undertaking; an order directing a payment of an amount of financial benefit that the participant has received, whether directly or indirectly, as a result of the breach; an order directing the participant to compensate another person who has suffered loss or damage as a result of the breach; or an order that the court considers appropriate.
Finally, in the amendments, we come to the expansion of compliance control directions. The Aviation Transport Security Act currently permits aviation security inspectors to direct the pilot or operator of an aircraft that is in Australia, but not in flight, to take a specific action in relation to the aircraft. Such a direction by an inspector is a compliance control direction. An inspector is only allowed to issue a compliance control direction if it is necessary to ensure compliance with the act. However, there is no currently no scope for aviation security inspectors to issue compliance directions to airport operators or screening authorities. Therefore, the amendment would expand the operation of section 74B of the act in order to allow an aviation security inspector to direct operators of security controlled airports, screening authorities or screening officers to take specific action in relation to the airport or screening points at the airport: for example, an airport operator or screening authority may be directed to screen or rescreen certain passengers and baggage.
It is clear in these times of increased security risks around the world that we need to make our airports the safest possible places to travel through, work at and do business with. All of us have become used to going through increased and enhanced security checks when we fly. Those countless times when we have had to take off our shoes, boots or belts, dislodge the laptop computer from our carry bag or be subject to a random personal scan at the airport are all part of the modern security regime and are all for the good of the community in general. We have learned not to take these things personally. We understand that it is for the security of this country. While these sometimes tedious encounters at the security points might seem a hassle, it is much better to feel safer in the knowledge that screening is widespread at our airports and includes everyone.
The amendments outlined in this bill are only modest changes to the Commonwealth’s aviation transport security regime; nevertheless, they are important. Indeed, the act has been regularly amended since 2004 to incorporate various changes to the regime. While a principal aim of airport security is to prevent ‘unlawful interference’ with aircraft that could lead to fatalities among passengers and crew, major airports themselves are critical infrastructure for the ongoing health of the economy and for our people’s lives and livelihoods and are potential targets for serious crime and terrorism. A substantial amount of both exports and imports pass through our airports, and annual passenger arrivals and departures total some 100 million, with about one-fifth of that figure being international passengers. Airports also provide direct employment for about 150,000 Australians.
Unfortunately, the flow of wealth and people through these concentrated nodes that we call airports can also be the target for criminals and terrorists. We can never afford to have lax security or even petty criminality at our airports, because this can provide opportunities for terrorists to exploit weaknesses in airport security. We must always bear in mind the fact that staff, however much they are checked and screened at the outset, can be bribed to ignore criminality or be paid large sums to assist in drug trafficking or theft. This type of seemingly petty criminality can always lead to worse things. Once compromised, such employees may be unable to stand up to terrorists. Of course, terrorists also need money to conduct their operations. For funding, they regularly engage in theft, drug trafficking and fraud. A classic example of this was in 2004, when the Provisional IRA stole ₤24 million from a then Australian owned bank in Belfast.
The Australian government, state and territory governments and the private sector have made many positive security changes and have dedicated significant resources to combating terrorism, especially since the attacks in the United States on September 11 2001. But there is still work to be done. As the Joint Committee of Public Accounts and Audit reported so eloquently just three years ago:
The primary objective of aviation security is the protection of life and property. However, perhaps the greatest current threat to aviation security, terrorism (as opposed to hijacking or other activity), does not confine its target to life and property. Terrorism is an attempt to terrorise, to destroy a public’s sense of security and confidence.
The report went on to say:
An important consideration in implementing an aviation security regime, therefore, is not only the effectiveness of security outcomes but public confidence that the regime is effective.
This bill and the amendments contained in it will go quite a way towards not only improving our systems of security at Australian airports but also helping public confidence, and therefore I commend the bill to the House.
I am pleased to have an opportunity to participate in this debate on the Aviation Transport Security Amendment (2009 Measures No. 1) Bill 2009. These amendments make modest changes to substantial legislation that was passed in 2004, the Aviation Transport Security Act. It was introduced to implement a national framework for protecting Australia’s aviation industry, airports and, indeed, the travelling public. Earlier, the Howard government also introduced the Air Security Officer Program, which placed sky marshals on selected international and domestic flights.
We just heard the member for Dobell saying that many of us have experienced inconvenience at airport check-ins, but I think we are all pleased that we can be assured that there is good security in our airports and that we are reasonably protected from the kind of chilling events that we saw unfold in the United States in 2001—a terrorist act that changed security arrangements at major airports all over the world. So I do not think any of us really mind the inconvenience so much as long as we know that we are reasonably safe when we embark on air travel.
I think that, as operations have progressed, there has at times been a clearly seen need to make additional changes, and there have been amendments since the 2004 legislation was passed to incorporate various changes in the regime. I think that is understandable. Certainly the security we need has not been experienced at the level we have seen since that 2001 event. There have been reviews as well. There was the Wheeler review in 2005 and, in 2006, a report of the Joint Committee of Public Accounts and Audit on these security issues in the aviation industry.
As a result, I think, of the tightening of security worldwide, terrorist attacks on aircraft have been intercepted. Certainly the risks to the travelling public, thankfully, have been averted. Almost every country in the world has adopted very stringent security measures to protect the travelling public as well as to protect public and private infrastructure and those who work or live in it. However, government must continue to be vigilant in maintaining a high level of security at airports within their jurisdiction, making the safety of the travelling public of paramount importance.
Aviation is a vital industry responsible for connecting the towns and cities across our expansive country and ensuring fast transport to countries beyond our borders. Trade and industry, tourism and service delivery all rely on a modern, efficient air transport system, so it is really important that the public have confidence in how our airports are being administered in terms of security. In 2007 and 2008, for example, Australian domestic airlines carried in excess of 49 million passengers, and 23 million international passengers passed through Australian airports. Domestic air travel has experienced national growth of five per cent over the previous year of operation. It is therefore not surprising that a high priority has been given to security. Since 2001 over a billion dollars has been spent to boost security in Australia’s airports and aviation hubs.
Five years on, the commitment of the Howard government and the legislative framework for airport security is being further strengthened with the amendments contained in this bill. Air transport is a fast-growing industry and an essential element of Australia’s transport infrastructure. The industry contributes over $6 billion to the Australian economy annually and it directly supports 50,000 jobs, and 780 million tonnes of freight is carried by air. A significant proportion of operations are in regional areas, providing a significant boost to local economies. In fact, the increase in passenger numbers in regional areas was 11 per cent, up in 2007 on the previous figures.
Those of us who live in Western Australia—as in your state, Mr Deputy Speaker Scott—understand the importance of a strong air transport system because air travel means people and goods can be transported to the many outlying towns in Western Australia in a timely and efficient manner, ending the isolation and boosting local economies. Flights have become a part of a regular way of life for many people, whether they are commuters from Perth and the eastern state cities to the powerhouse mines in north Western Australia or businesspeople and tourists traversing the nation.
The Bureau of Infrastructure Transport and Regional Economics has forecast that there will be a four per cent increase each year for the next two decades in air passenger movements in Australian airports. Around the country there are approximately 180 security controlled airports. While some of these are major city hubs, many are in smaller regional airports and currently when an airport is designated as a security controlled airport it becomes subject to the same blanket regulations and requirements regardless of its size, location or capacity as other so classified airports.
This bill will introduce a classification system so that individual airports may be assigned more appropriate legislative requirements, depending on the need and relative risks associated with each of the airports. Other amendments arising out of this bill include the extension of aviation security inspectors’ power so that they can inspect security controlled premises outside the airport grounds without notice and can issue compliance control directions in a wide range of circumstances. The sanction regime is strengthened by the introduction of enforceable undertakings that are stronger than mere warnings but less severe than restricting the operation of an aviation industry participant. It is highly desirable that all Australian airports operate in a nationally consistent way and under a nationally consistent framework, and this legislation should deliver such an objective. It is my hope that further advancements will be made in this vein in the near future for strengthening of legislation and regulation concerning all other aspects of airport operations.
In Western Australia we have recently had first-hand experience with the consequence of what appears to be an inconsistent and inadequate approach to changes to air flight paths and remedies for members of the public who are subjected to the consequences of those changes. On the face of it, it appears that there is a lack of clear legislation and regulation governing these changes and the consequences that people face. Major changes to flight paths at Perth Airport have taken place without adequate community consultation. Not unreasonably, residents in affected areas are extremely upset, indeed angry, about this situation. Many people living in the suburbs of Glen Forrest, Bickley and Chidlow are experiencing flights on an hourly basis between midnight and six o’clock in the morning and the amenity and peaceful enjoyment of their homes has been dramatically impacted.
These are not new issues. Disaffection of the public about the way in which airport operations are managed and the inconsistencies from one capital city airport to another has long caused considerable angst. There is a long history of private members’ bills and motions in relation to problems with airport noise, changes to flight paths and lack of open and public accountability and consultation in this place, and often there has been considerable bipartisan support for changes to be made, as there is for this for this amendment bill before us today.
I take the opportunity in speaking to this bill to raise these issues because three weeks ago I sent a survey about the changes to air flight paths to 3,500 constituents in affected suburbs of Pearce. We have already had 466 returns and only 4.5 per cent of the respondents were aware of the changes before they were subjected to the constant noise that has had a profound impact on their quality of life; 95.5 per cent of respondents were not aware of the decision to change the flight paths and yet they are very directly and very profoundly affected by this event.
The member for Grayndler, who is now the Minister for Infrastructure, Transport, Regional Development and Local Government, actively represented his constituents affected by aircraft noise at Sydney Airport when in 1999 he presented a bill to establish an aviation noise watchdog or an ombudsman for aviation. When he spoke to the Aircraft Noise Levy Collection Amendment Bill 2001 he said:
The practical impact of aircraft noise on the people in the communities that I represent is much greater than suggested by the theoreticians, the forecasters who sit comfortably in offices in Canberra.
While I wholeheartedly agree with this observation—and it is for that reason that I support the extension of a uniform but flexible national framework not only for security issues but also for all aspects of airport operation and particularly for security as we are achieving in these amendments today—more recently, in 2007, the minister contributed to a debate on the Airports Amendment Bill 2006 and said:
We will revisit key issues in government in a broader review of the legislation to make sure that airports act in conjunction with local communities rather than disregarding them.
I say, ‘Hear, Hear!’ to that because it is exactly the experience of the people of Pearce and others in the Perth metropolitan area who going through that now, and they feel very aggrieved because they are disregarded in changes made to flight paths. The minister’s colleague the member for Melbourne, now Minister for Finance and Deregulation, said when speaking to the Adelaide Airport Curfew Bill in 1998:
We in the opposition say that everybody in Australia who lives in the immediate vicinity of a major airport should be entitled to insulation based on a small ticket tax on the basis that it is offered in Sydney. That should be done on the same basis of equality right across the country.
… … …
There is no reason why you should not have equality of treatment across the country.
Now that the member for Grayndler is the responsible minister and the member for Melbourne is the finance minister, I call on them to implement these policy objectives with haste, not just for the people of Pearce and Grayndler but for the many thousands of Australians who have no opportunity to engage in any meaningful consultation on the aircraft noise that so affects their quality of life. The legislation before us is a timely reminder that it is the responsibility of the Australian parliament to act to ensure that there are nationally consistent frameworks for all aspects of operation of Australian airports, not just for matters of security but for those aspects of airport administration, such as flight path consultation and noise abatement measures, where there is a constant and invasive presence in people’s lives. There is a need for real bipartisan action to better manage the operation of air traffic. We need a consistent national approach to a contemporary issue that will continue to grow.
This is an issue that will not go away. Just as we need to constantly upgrade and consider the security issues for airports we also need to look at their operations as they grow and develop. For example, Perth Airport have already achieved their 2015 passenger movement targets. There is a master plan for an expansion program and there will be a greatly increased amount of traffic through that airport. So it is not just the security issues that need our full bipartisan attention. All issues in relation to operations of major city airports, in particular, need a bipartisan approach to give consistency and fairness right across the country, not just to people who live in one city but to people who live in all cities and people who are affected by the worst aspects of increasing aircraft movements.
Airports and the aviation industry generally are an integral aspect of Australia’s transport infrastructure. That is fully understood and it is appreciated. We can be very proud of our aviation industry and, with proper consultation and review processes, we can ensure that it is not a zero-sum game between those who are affected by aircraft noise and pollution and those who use the aircraft and those who run businesses which rely on air traffic. But, returning to the specifics of this bill, maintaining public confidence in the safety of air travel is a very high priority, and anything that can be done to further refine and expand the screening of passengers and checked baggage is welcome progress. Let us not forget that it was the coalition in government that strengthened the regulatory framework for aviation security, with the flexibility to respond as required, and took immediate action to put air marshals on both domestic and international flights.
The confidence of the public can be easily shattered, and that is why we in this place have a grave responsibility to make sure we are doing everything we can to maintain public confidence. We have seen unfold during this past week, and in recent times, events in Britain, so the public want to feel secure when they travel by air. It is highly commendable that the responsibility for managing security of Australia’s airports is being advanced today on a bipartisan basis. It demonstrates that, when there are grave matters of national interest, we can come together and pass sensible and vigorous legislation in this place to make sure that those aims are achieved. These are sensible amendments which will further strengthen the process of enhancing aviation security which originated in 2001.
We think of air transport in terms of tourism, trade and commerce, but it is also very important in delivering emergency services around this country. I am very proud of the fact that in Western Australia my great-uncle was responsible for the fledgling services that became the Flying Doctor Service and the bush nursing association in Western Australia. I think often about his contribution to health care, particularly in the regional and rural areas of the big state of Western Australia. Whether it is flying sick people to major city hospitals or fighting fires, today it is a fact of life that we are more and more reliant on air transport to achieve these objectives in the interests of public safety and public service. I pay tribute to all the men and women who carry out what is sometimes very dangerous work flying sick or injured people to major hospitals and to those who are involved in flying aircraft to prevent the spread of fire. They are dangerous occupations, and we have seen some great heroics in the recent terrible events in Victoria. This is an opportunity to say thank you to the many men and women throughout Australia who fly planes as a public service.
The next phase in airport management, I hope, is to extend a national framework to all aspects of airport operations to cover important issues such as airport noise abatement and the introduction of clear and consistent guidelines for community consultation to be undertaken by airports and Airservices Australia when flight paths are changed. We understand that there are times when changes are necessary in the public interest, due to safety issues. At a recent meeting that I attended in Perth, Airservices Australia made the point that they are no longer funded by government; they get their funds from the airlines and the airline industry. That is a conflict of interest, because it means that they do not feel any great need to consult the public about the changes. We are never quite sure. We understand that there probably are safety issues but we have not to date seen the evidence to demonstrate that the decisions to change the flight paths in Perth were made on the basis of safety. Some constituents who have expertise have done an extrapolation which appears to show that a lot of the flights have been taken away from the western suburbs and have been transferred to and concentrated over the eastern suburbs. The time has come for some independence and for the opportunity for the public to have a say about these kinds of changes before they actually occur and have a profound impact on their lives.
I commend this bill, which strengthens the security in all airports around Australia, to the House.
I rise today to speak in support of the Aviation Transport Security Amendment (2009 Measures No. 1) Bill 2009. I agree with the member for Pearce, who has just spoken, that the issues are much larger than just the security of aviation. It is also about the impacts on infrastructure. I will talk about that later in the debate. The economic considerations are very important.
The bill contains four sets of amendments to provide additional flexibility in managing security at Australian airports. These are amendments to enable the secretary of the Department of Infrastructure, Transport, Regional Development and Local Government to designate security controlled airports as a particular category of airport according to their risk profiles. They will also enable regulations to be made to prescribe different legislative requirements for each category of an SCA in order to reflect the relative risk profile associated with each category of airport. This will allow security controlled airports to have different levels of security based on category. This advancement will mean that security arrangements can be better tailored to size, location and type of aircraft at an airport.
The second set of amendments will allow unannounced inspections of businesses involved in air cargo. Currently, inspections outside of the boundaries of a security controlled airport can only occur with reasonable notice, which reduces the effectiveness of inspection activity. It is anticipated that this will better utilise inspection resources and provide additional confidence in the inspection process.
The third set of amendments allow the secretary of the department to enter into enforceable undertakings with aviation industry participants in relation to any matter dealt with under the act. Enforceable undertakings are currently concentrated at the more serious end in terms of potential consequences. These changes are to put in place middle-range sanctions to address regulatory issues and contraventions of the Aviation Transport Security Act. Flexibility is central to the operation of these amendments. An aviation industry participant would be able to withdraw or vary an undertaking with written consent of the secretary, and the secretary would be able to cancel an undertaking with written notice.
The final set of amendments expand the scope of compliance control directions to cover operators of security controlled airports, screening authorities and screening officers. Currently, aviation security inspectors cannot issue compliance control directions to airport operators or screening authorities, despite their role in airport security. It is proposed that an aviation security inspector will be able to direct operators of security controlled airports, screening authorities and screening officers to take specified actions in relation to the airport or screening points at the airport.
On the Queensland Gold Coast—and, as the member for Forde, I represent part of the Gold Coast hinterland—confidence in Australia’s aviation security is essential for our economic wellbeing and sustainability. In August this year I had the pleasure of touring the Gold Coast Airport at Bilinga, near Coolangatta. The Gold Coast Airport services residents and supports tourism in the Gold Coast and Tweed Coast areas. It is very important to have our Minister for Tourism in the chamber today. He understands very well the Gold Coast and its developing needs for infrastructure, as well as the connection with aviation security and the importance of people feeling safe when they travel to our region. My tour of the airport was escorted by Paul Donovan, who is the chief operating officer at the Gold Coast Airport. The Gold Coast Airport is owned by Queensland Airports Ltd, who also own the smaller Townsville and Mount Isa airports, located in the electorates of Herbert and Kennedy respectively.
The Gold Coast has not been immune from the challenges of the global economic difficulties. Unemployment on the Gold Coast moved from 3.7 per cent in July 2008 to 6.4 per cent in July 2009. Overall numbers of visitors, particularly domestic visitors, have slowed. However, despite the global economic challenges, the Gold Coast Airport achieved its second highest throughput month in July this year, with nearly 415,000 passengers. In the previous financial year, over 4,600,000 passengers passed through that particular airport. Importantly for international tourism, this number actually conceals a large increase in international traffic. There are nearly 57,000 international passengers a month. In the 2008-09 financial year there was a 97 per cent increase in international passengers—almost 510,000 people. Airport security and aviation security is essential in a continually growing region like the Gold Coast.
The Gold Coast Airport terminal is currently midway through a $100 million development planned for completion by March 2010. Two of the four stages are now complete, with the final terminal to be double the current size at 28,000 square metres. Upgrades so far include 32 common-use check-in areas, a new $2 million modern baggage system, new departure lounges, new shops and a new common-user security area. The airport facilities have a massive 20,000-square-metre roof catchment area. To take advantage of this catchment, a one-megalitre water-harvesting facility has been installed. This will provide water for toilets and other essential services, which are responsible for up to 60 per cent of the terminal’s water consumption. Stages 3 and 4 of the upgrades promise new baggage carousels, a new facility for transit passengers, a customer control area and an international arrivals hall.
In the long term, one of the most exciting plans is to connect the Gold Coast Airport to the Brisbane domestic rail network, at an estimated cost of almost $700 million. It is planned for between 2019-20 and 2025-26. This project will open up the Gold Coast Airport in much the same way that the Airtrain opened up the Brisbane airport in 2001. As I said at the start of this speech, the economic sustainability and the importance of airport security for the large numbers of people who will move through these regions is ever important.
Just this year, the Rudd government committed $365 million in funding to a light rail system for the coastal areas of the Gold Coast. Having also received $464 million from the Queensland government, the Gold Coast Rapid Transit Project is now in full swing. The construction of the corridor from the Griffith University to Broadbeach is planned to start in 2011, with the system operational from late 2013. In the long term, the Gold Coast rail is planned to also connect with Coolangatta. This will provide another valuable link for the airport to the central tourist areas of the Gold Coast, including Broadbeach and Surfers Paradise.
These investments will complement many other substantial investments made in recent years on the Gold Coast. In early 2008 the Queensland Premier, Anna Bligh, opened the $160 million Skilled Park stadium at Robina. This modern facility is brilliantly located within walking distance from bus and train public transport facilities. Many residents of Forde have enjoyed a good Rugby League game at Skilled Park since it opened. The connections with the airport and that infrastructure are vital and are also supported by the aviation security.
In the works now is a major upgrade of the AFL stadium at Carrara. The Queensland government has put forward $60 million, Gold Coast City Council $20 million, the AFL $10 million and the federal government $36 million. These are big dollars and mean jobs and tourism for the Gold Coast. Around 350 jobs will be created in this process, and this is before the Gold Coast AFL team joins the league in 2011, which will also increase the numbers of sporting visitors and tourists to the area. The strong dedication to infrastructure of the Queensland government, the federal government and private interests is to be applauded. With transport and facilities advancing rapidly, the Gold Coast is securing a vibrant future. This is all on the back of ensuring aviation security for economic sustainability.
Just recently the Standing Committee on Infrastructure, Transport, Regional Development and Local Government has been inquiring into the impact of the global financial crisis on regional Australia. As part of that inquiry the committee members and I toured the Gold Coast and parts of my electorate of Forde, which includes the Gold Coast hinterland, as well as taking evidence in Beenleigh on the following day. I must thank the Gold Coast councillors and the mayor, Ron Clarke, for their gracious welcome and hospitality. On a sad note I should say that Ron Clarke lost his daughter only last Saturday to the sudden onset of cancer. I would like to express my best wishes and those of the federal members of that region, and I am sure all members of this House, to Ron, his wife, Helen, and their family. Ron Clarke, who has been a strong advocate for infrastructure and tourism for the Gold Coast, understands that tourism brings employment and wealth to the Gold Coast and surrounding areas.
Strong and effective airport security systems are essential to supporting this industry and providing certainty for domestic passengers. The changes proposed in the Aviation Transport Security Amendment (2009 Measures No. 1) Bill 2009 are about flexibility. The range of amendments proposed provides flexibility in addressing security issues in airports. The amendments will better cater for different airport types, provide more effective inspections and allow better enforcement activities to be undertaken. While the security and safety of travelling passengers through the airports is important, aviation security is also about economic sustainability because our tourism industry depends so heavily on having safe transit and transport. One thing that I know from travelling overseas is that people overseas do see Australia as a safe destination, and these security measures for our aviation sector are so very important. Given this consideration and given the amendments, I would like to commend these amendments to the House.
I rise to speak on the Aviation Transport Security Amendment (2009 Measures No. 1) Bill 2009. I do so because I believe very much in the best possible security for aviation, because with aviation there can be no mistakes. Mistakes in aviation history have resulted in deaths following bombings and hijackings. There are four amendments within this bill to modify the Aviation Transport Security Act 2004 and improve aviation security as well as strengthening the Office of Transport Security. Firstly, the bill will allow various categories of a security controlled airport. Although the details will come later with regulations, it is envisaged that security requirements may be modified depending on the attributes of location, size and specific security circumstances. The categories of security controlled airport will be assigned by the secretary of the department. The second change is to enable an aviation security inspector to enter and inspect the premises of an aviation industry participant that is not on an airport site. This will allow the inspector to carry out an inspection without notice, previously only allowed on airport land. The next change will create enforceable undertakings as a mid-range sanction against contravention of the Aviation Transport Security Act. The final change will see an expansion of the ability of the aviation security inspectors to issue compliance control directions to airport operators or screening authorities. Currently, pilots and aircraft operators can be issued with a compliance control direction, but this change will allow airport operators and screening authorities also to be issued with directions to ensure compliance with the Aviation Transport Security Act. This is a necessary change to allow the act to be fully applied.
Although September 11 is the aviation security failure that we all recall so clearly, I would like to go back to the Lockerbie disaster in 1988, as I think that was as bad a failure of security as could possibly be conceived. I still remember hearing the reports regarding the Lockerbie disaster when Libyan terrorist Abdelbaset Ali Mohmed al-Megrahi caused the deaths of 270 people on the aircraft and on the ground in the Scottish village of Lockerbie. As part of the investigation that followed the 21 December 1988 bombing, the bodies of the dead lay in Lockerbie’s streets for days afterwards so as to allow a detailed forensic examination. It is little wonder that those who survived the destruction of the debris that rained down on the village from the 747 have little sympathy for the perpetrator of these murders. As we know, the perpetrator, al-Megrahi, was recently released from jail because he has a terminal illness. My view is that there are some mistakes that you do not get a second chance for. Child molesters are one example and mass murderers of innocent people are another. Their only end should be that they are carried out in a box, forever a reminder that evil has one end and compassion has no place when dealing with evil.
Leaving the principles of dealing with these people aside, my purpose in speaking about Lockerbie is to look at the failures of security—admittedly from another time but it is useful to remind ourselves how these disasters occurred so that we can very clear about making sure it will not ever happen again. Investigations into Lockerbie found that the explosion of a Samsonite suitcase filled with the plastic explosive Semtex and baby clothes was the device that caused a 51-centimetre diameter hole in the fuselage that split the aircraft into three main pieces within three seconds. Pieces of a circuit board from a radio cassette player were also found, making the entire device similar to a bomb used by a Palestinian terrorist group just two months earlier. The baby clothes were found to have been made in Malta and al-Megrahi was identified as the person who bought the clothes. He was not only a terrorist but also a Libyan intelligence agent and the head of security of Libyan Arab Airlines. It was subsequently found that the suitcase originated in Malta as unaccompanied baggage and was moved through Frankfurt and then onto Heathrow where it was loaded onto Pan Am flight 103. While I do not think that Australia has credibly faced such a threat for many years, it is interesting that a luggage-screening employee at Frankfurt did not even know what Semtex was until 11 months after Lockerbie.
In reviewing incidents over the last 40 years I have found out a great deal about aviation security and terrorism. It says a lot about the security standards that existed over the period from 1969 to 1985 that terrorists were pulling weapons and explosive devices out of their bags or their clothing in what we consider should be secured areas, such as on board aircraft and beyond immigration control. With regard to hijacking, the first incident occurred in 1931, when Peruvian rebels took control of a Pan American aircraft in order to drop leaflets. The next significant incident was in July 1968, when Palestinian terrorists hijacked an El Al Israel Boeing 707. Fortunately on that occasion there were no casualties. On 18 August 1969 a United Arab airliner was hijacked. On that occasion there were also no casualties. Just 11 days later Palestinians hijacked a TWA 707, taking it from Rome to Damascus, Syria. The aircraft was destroyed with explosives after it had landed. Most of the hostages were released immediately, but six Israelis were released months later in exchange for Palestinian prisoners.
Incident after incident has taken place since those days as terrorists elude existing security and overcome heightened security as the risks are assessed and changes made. The 2001 attacks in New York and Washington highlighted that terrorists have no remorse and are not prepared to act like normal humans. This country’s aviation security has greatly advanced since 2001, and in some ways we were more advanced than countries like the USA before 2001. Unaccompanied baggage is not allowed here. Baggage will always be offloaded if the passenger does not board. Similarly, passenger X-ray machines are very strict now and, beyond one’s watch and belt, very little metal remains undetected.
History has shown us that terrorists will continue to seek new options for their evil acts. I note that the day before yesterday three British-born Muslim men were found guilty in the United Kingdom of planning to blow up seven aircraft with homemade liquid bombs smuggled onto planes in soft-drink bottles. Their plot was discovered in 2006, and it was from that discovery that the rules changed around the world for taking liquid on board aircraft. This incident demonstrates that terrorists continue to plan and to target aircraft and that we must always be on guard against the threat. It is also worth noting that just because someone comes to your country and they or their parents swear loyalty as citizens it does not mean that they are loyal. In this case I understand all three were born in the United Kingdom and so were able to take advantage of the education and social system that country provides, only to find fault with that country and plan mass murder. Incomprehensible as it is, it demonstrates the mentality of those involved and serves as a warning for other nations.
Although we have a good history here in Australia, we always need to be on our guard. When I was in the Federal Police in the 1980s I always wondered what the standard of training was for those operating the X-ray machines at airports. It was obvious that they picked up weapons, as every time we walked through the machine our revolvers would set it off. However, looking at the screening of carry-on luggage—and this was more so in the past—I was never that confident that everything was 100 per cent checked, because of the way some of the operators conducted those checks. Yet it was at Perth Airport that I got my first arrest, with one passenger being found by the security guards with cannabis, so they certainly picked that up.
In any case, we have a good history in Australia, and with these changes the system will be further strengthened. I personally will be very interested in seeing the regulations surrounding the security controlled airport categories and how that will work. However, I do not see any negatives regarding this bill and I look forward to it passing. There is, however, no doubt that this will not be the last change to the Aviation Transport Security Act, because the evil murderers that are terrorists will continue to try to get around these security measures and we must continue to look for new ways to defeat them.
It is a great pleasure for me to speak on the Aviation Transport Security Amendment (2009 Measures No. 1) Bill 2009. As we have heard from other speakers, this bill serves purely to ensure that aviation is secure across Australia, and we have a proud history in securing aviation. There are four sets of amendments to the ATSA in the bill, and many of them are to do with the Department of Infrastructure, Transport, Regional Development and Local Government designating security controlled airports a particular category of airport, according to their risk profiles. Included in this risk profiling are our very valuable regional airports, which are valuable in more ways than one. There are the commuter airports that deliver medical professionals and businesses into rural and regional communities to ensure their sustainability and equity of access to medicine, and there are other airports that bring the aviation history of Australia to our attention.
Australian aviation has a very proud history. Legislation changes and improvements such as we see today enable our aviation history, both civilian and military, to be celebrated. One such celebration of aviation which is very relevant to the way in which the Australian people understand and appreciate aviation and the need for aviation safety is the Temora Aviation Museum. In the midst of the current economic difficulties and the drought which grips vast areas of rural and regional Australia, the Temora Aviation Museum is a success story which few rural and regional towns and cities can match. In just 10 years this museum has grown into a world-class institution. It is truly a tribute to the hard work and determination of both the Temora community and military aviation enthusiasts, who have been led by Sydney businessman and former Australian aerobatic champion Mr David Lowy.
It was indeed fitting that just 10 years ago a decision was made to locate and develop a military aviation museum in Temora. That decision was consistent with Temora’s aviation history in the Second World War, having been home to the No. 10 Elementary Flying Training School established by the Royal Australian Air Force in May 1941. No. 10 EFTS was the largest and the longest-operating flying school established under the Empire Air Training Scheme during World War II, and it was always focused on the safety of aviation for the Australian people, pilots and all those involved in aviation.
Throughout World War II more than 10,000 personnel were involved at the school, with upwards of 2,400 pilots being trained there. The great majority of the graduates served either in Australia or overseas in the European or Asia-Pacific theatres. At its peak the Temora unit contained a total of 97 de Havilland Tiger Moth aircraft. Four satellite airfields were set up around the Temora district to cope with the demand to train RAAF pilots. I often meet ex-RAAF officers and men who are based in Temora, and invariably they mention the hospitality they received when based in this mid-sized country town which was focused on aviation safety and security.
No. 10 EFDS ceased operation on 12 March 1946, making it the last World War II flying school to close. Since then Temora has continued its aviation heritage, becoming the preferred airfield for a growing number of sport aviation activities, including gliding, parachuting and recreational flying—all with an emphasis on aviation security and ensuring that safety measures are undertaken at every possible opportunity. However, it was the forward-looking decision in 1999 to establish the Temora Aviation Museum that has had a significant impact on both the town and the commemoration of the deeds of the men and women who served in the RAAF in World War II and in the Korean and Vietnam campaigns. The museum’s hangar facility was completed in February 2000 and the donations of the first aircraft followed. The museum was opened for public viewing in June 2000, and construction commenced in late 2000 on the exhibition buildings containing the display space, a theatre, an admissions entrance, a gift shop, a children’s playground and a picnic area. These were completed and opened to the public in August 2001, at no cost to the government, to enthuse and attract people to aviation, the safety of which is paramount in Australia.
Stage 3 of the museum complex was completed in November 2002 with the opening of a 1,980 square metre display hangar. All aircraft are housed in this new hangar, with the original hangar becoming a customised engineering and maintenance facility focused on aviation safety. Stage 4 was completed in 2007 and includes a specialised aircraft restoration facility, a storage hangar and additional car parking. Since that time the museum has gone from strength to strength. The most recent flying display earlier this month attracted more than 7,500 military aviation devotees—all committed to safeguarding aviation’s future and ensuring that the aviation measures in place meet the expectations of all government departments. We saw an original Tiger Moth, a Spitfire, a Hudson bomber, a Vampire jet and a Gloucester Meteor all doing their routines in the clear Riverina skies. Australian-made aircraft also featured, with a Wirraway and a Boomerang attracting very keen interest.
It needs to be said that the museum would not have been a success but for three vital elements, including, first and foremost, the vision, passion, expertise and generosity of Sydney businessman David Lowy, the founder and president of the museum. Over a 10-year period he has contributed countless hours of his time in planning and executing the tasks that go with developing a world-class institution—with aviation safety in mind. In the museum’s first decade of operations he has donated more than $30 million to fund the purchase of the items in the collection, the buildings, the plant and equipment as well as the recurrent costs which provide for the specialist technical skills that are needed to maintain military aircraft. The museum employees 23 full-time staff and has an active apprentice program in order to educate the Australian public and the massive visitation to the museum about the need to respect aviation’s past and make its future safe.
Secondly, the unstinting efforts of the Temora community, including its municipal office bearers, have been critical. On each occasion that there is a flying day—and there are eight flying weekends per year—the staff of the museum swells from 23 full-time members to 70 or 80. The difference in numbers is due to the specially trained community volunteers, who manage to handle a crowd which exceeds the entire population of Temora. The museum attracts more than 40,000 visitors each year. They are given a consistent and complete education experience on aviation history and the need for aviation security now and in the future. The museum is a true community partnership. On flying days the food services are provided by the local volunteer fire brigade, with all of the profits being donated to local area charities. To date, approximately $200,000 has been raised and donated.
I would be remiss if I did not acknowledge the work of the RAAF personnel who have so ably and readily assisted the museum. Take, for example, the most recent flying display. The Chief of Air Force, Air Marshal Mark Binskin, was on hand to officiate at the first public flying of the recently restored Sabre jet fighter. I also acknowledge that my colleague in the Senate and senator for the ACT Senator Kate Lundy was in attendance. I welcomed her to the Riverina. The Sabre restoration was a joint RAAF-TAM effort which took more than three years. The RAAF technical experts assisted the TAM crew in the complete rebuilding of this aircraft. In addition, over the years RAAF personnel and others, as part of their recreational flying, have donated their time to pilot the museum’s aircraft and explain to the many aviation enthusiasts and the general public across Australia the critical requirements for aviation safety.
It is important that the members of this parliament take an active interest not only in civil aviation—as we have seen today with the amendments that we have put forward—but also in military aviation and this particular military aviation museum, as its importance extends well beyond the township of Temora. The museum is an active reflection of Australia’s air defence history and Australia’s commitment to safety for its pilots, whether they be used in military defence personnel or in civil aviation history. Australia, as a large and mainly uninhabited island continent, needs a strong air force to protect its shores, and also to protect those who are assigned to be its defenders whether on land or sea. This is what we are particularly focused on with the Temora Aviation Museum, or TAM, as I have previously referred to it.
As well as preserving our historical Australian military aircraft in flying condition, the museum goal is to pay tribute to those Australian men and women who have served in the defence of our country. In this regard I would especially draw to members’ attention the homecoming on 31 August 2009 of the last of those young Australians who went missing in action and failed to return from the Vietnam War. Young aviators Pilot Officer Robert Carver and Flying Officer Michael Herbert were flying a Canberra Bomber with a call sign Magpie 91 when it went missing on 3 November 1970. I commend to members the moving speech of the member for Charlton and Minister for Defence Personnel when he addressed the repatriation ceremony at Richmond Air Base, which was attended by relatives, friends and colleagues of the deceased. For those of you who watched the repatriation ceremony on national television, the aircraft positioned just behind the minister was Temora Aviation Museum’s Canberra Bomber, currently the only operational Canberra Bomber in the world. The museum provided the aircraft for the ceremony at Richmond Air Force Base. The aircraft was piloted by Air Commodore Rod Luke, a retired RAAF pilot.
Finally, it is important that any young Australian who aspires to join the armed forces be able to see in action the equipment used by previous generations in defence of Australia. This tangible reminder of our history is something that should be sustained if we are to maintain the culture of service in defence of one’s country and its citizens. Accordingly, I offer an invitation to all members to visit my electorate and go to Temora to witness the work that has been done to recognise the contribution of our past and present Air Force personnel. It is just a two-hour drive from this parliament and a drive which you will find well worth while.
In speaking to this bill today, I would suggest that everything that is undertaken at the Temora Aviation Museum is designed with a focus on the future of aviation security. I commend this bill to the House and I commend to the House the much appreciated efforts of all of those involved with the advent and the successful operation of the Temora aircraft museum.
I am pleased to also talk today on the Aviation Transport Security Amendment (2009 Measures No. 1) Bill 2009. Security at our airports in Australia, whether they be metropolitan or regional, is of great importance. The aviation sector is a key contributor to the Australian economy. It is in many respects the lifeline of rural and regional Australia, where I am a local member, as is the previous speaker, the member for Riverina. The coalition believes it is integral to maintain high standards in order that we compete in a marketplace that has evolving environmental, safety and security standards. More than any other country, Australia’s economic prosperity is closely tied to the health and the competitiveness of the country’s aviation sector. This is due to the vast distances within Australia between this continent and the rest of the world. ABS statistics show that Australia has the world’s 55th largest population and the 15th largest economy but it manages 11 per cent of the world’s air space, second only to the United States. Aviation specific businesses contributed $6,427 million towards Australia’s total GDP in 2007-08. As at August 2008, they employed 48,800 staff.
Undoubtedly since the events of September 11, 2001 the importance placed on the airport security apparatus, specifically passenger screening and security checks, has increased markedly. To address the new and evolving security threats of the 21st century, the former coalition government invited aviation expert Sir John Wheeler to undertake a review of aviation security in Australia. The subsequent Wheeler report, released in 2005, made 17 recommendations, including recommendations for regional airports. Following the report’s release, the then federal government implemented all 17 of those recommendations. The Sydney Airport incident which involved a violent confrontation between members of the Hell’s Angels and Commancheros motorcycle clubs on 27 March this year does, however, demonstrate that this government has more work to do on airport security.
Sir John Wheeler noted in his 2005 review that a large measure of the uncertainty surrounding everyday security in criminal matters in airports is caused by a disconnect between those units charged with counterterrorism first response responsibilities and those who have the tasks of community policing and of investigating crime. The Australian Federal Police Protective Service officers performing the counterterrorism first response role do so, in the judgment of the review panel, with varying degrees of competence and professionalism. But many at airports expect more of them and cannot understand why these uniformed officers do not participate fully in handling crime or breaches of the peace. The fact that the AFP Protective Service uniforms display ‘Police’ on jackets and caps reinforces in the minds of the public the belief that these are regular police officers. But in terms of their constitution and powers they are not, and therein lies the difficulty. As well as having a visible police presence at the airports, it is just as important to ensure that there are sufficient police numbers, including sworn police. Paul Maley reported in the Australian on 19 March 2009 in his article ‘Airport security still lacks force’:
The Police Federation of Australia yesterday said low police numbers and divided responsibility between the states and commonwealth was putting commuter and public safety at risk. … “We (also) understand the numbers have deteriorated further since June 2008,” Mr Burgess said. “In other words, the major airports are understaffed with sworn police by a staggering 35 per cent or more.”
Mr Maley goes on to report:
In the Police Federation’s submission to the Transport Department’s green paper into the aviation sector, Mr Burgess said that as of June 2008, 233 state and territory police officers have been seconded to Australia’s airports—124 short of the 2005 COAG commitment and 101 short of the subsequent reviewed commitment.
I understand the Police Federation has been receiving anecdotal reports that the number of police at the airports has declined since then. In true tradition of Labor breaking election promises since this government came to office, 199 Australian Federal Police members have been made redundant. This is despite a Rudd government promise to bolster the force with an additional 500 members. Time is running out for those additional promised 500 members.
The incident at Sydney Airport, while most unfortunate, probably partly demonstrated that we do not have sufficient numbers of sworn police and that the secondment of state police to the AFP and the interaction between sworn Federal Police and Protective Service officers in similar uniforms have added to an allusion that the public is protected when the reality is quite different. Our major airports are understaffed, as I said, by a staggering 35 per cent. As at June 2008, the AFP had 233 state and territory sworn police officers seconded to work at the major airports. This falls short of the COAG commitment of 357 officers for major airports and 101 short of the reviewed commitment. The airport security awareness training program, Operation Hawkeye, which was supposed to be implemented in 2007, I am advised was shelved also indefinitely by this government.
Air cargo is an important part of Australia’s international and domestic trade. It is a vital part of the aviation industry and a contributor to our economy to the tune of $28 billion in 2007-08. Approximately 80 per cent of Australian domestic cargo is carried on passenger aircraft. The coalition, when in government, worked hard to ensure security risks were minimised in the air cargo screening regime. Australia’s aviation security system uses a combination of examination methods at various points along the cargo supply chain. The government in their last budget slashed $17.1 million over four years from their risk based cargo inspection regime. The CEO of the Australian Customs and Border Protection Service, Michael Carmody, said that inspections of air cargo consignments would be reduced from 6.2 million to 1.5 million as a result of these cuts. So we will see target inspections for air cargo drop by 4.7 million consignments over this financial year. This decision to cut funds to a vital area of Customs will put strain on staff that are already overstretched and will inevitably lead to more illicit drugs, illegal weapons, biosecurity threats and illegal smuggled wildlife slipping through our borders. It is not good enough to base cargo inspections on a resource factor. It needs to be done purely on a risk basis, which means that if it is required that more than 20 per cent of containers are inspected then that ability should be there—and the resources should be there to allow that to happen.
Intrinsically linked to aviation security and the cargo supply chain is the issue of infiltration of airports by organised criminal groups. Figures from the Department of Infrastructure, Transport, Regional Development and Local Government reveal that around 10 per cent of the 33,644 people who have applied for an aviation security identification card since October 2008 have been convicted of a crime. Of those, 148 have been denied a security card. So, of the approximately 33,000 who have applied for the card, only 148 have been denied.
As reported in the Age on 25 June 2009 by Nick McKenzie and Linton Besser, a three-year intelligence operation by the Australian Crime Commission has revealed serious weaknesses in the security of ports and airports. The Australian Crime Commission listed in their ‘Crime in the transport sector’ inquiry those that had been investigated by the ACC and other agencies, including associates of outlaw motorcycle gangs and other crime groups who are working at major airports—including the Vice-President of the Outcasts motorcycle gang, who has a Commonwealth security pass and is a Melbourne airport baggage screener—and an executive of an Asian airline who used his security pass to smuggle drug money through secure sites at Melbourne airport and on to an aircraft. McKenzie and Besser reported that the Australian Crime Commission in its three-year probe produced 86 reports of criminality in the airport sector. It is concerning that criminal figures are working at our major airports more than three years after the Wheeler inquiry into airport security called for a thorough overhaul. It has also been reported that ongoing problems at airports, including inadequate screening of casual employees, nepotism when hiring, camera black spots and poor coordination between police and security companies are all contributing to an extremely substandard environment.
I know the Minister for Infrastructure, Transport, Regional Development and Local Government, at the table, will have turned his attention to reports in today’s Fairfax newspapers about security shambles at our ports. While the substance of that article deals with port security, it is clearly noted that there is a still secret review of the aviation security identity card system which has recommended sweeping changes. If that review is with the minister, I suggest that he acts on it fairly swiftly because I would not be surprised if it finds that workers convicted of serious criminal offences have been granted passes to work in security-sensitive areas—airside, in container-loading depots and, as I said, in the most sensitive areas of our airports. While this bill deals with further access for airport security inspectors, the minister would do well to look at the criteria under which the aviation security identification card is issued. There is no point in ramping up security in one area if it remains lax in another. There has been ample evidence demonstrated of that laxity.
The government conceded in their aviation green paper that Sir John Wheeler was correct in his 2005 review that the aviation sector was exploited by criminal groups. I again quote Mark Burgess, from the Police Federation of Australia, who noted in that federation’s submission to the green paper:
As at June 2008, the AFP had 336 State and Territory sworn police officers seconded to it and 233 of those officers were seconded to work at major airports. This falls 124 officers short of the Council of Australian Governments’ (COAG) commitment…Further, because States and Territories have been unable to meet and maintain all commitments to provide secondees, there were at 30 June 2008, 86 vacancies in the Airport Uniform Police. For example, the three Queensland airports had 37 vacancies, Melbourne had 15, and Sydney had eight vacancies. All up, officers deployed falls short of the COAG commitment by 124 sworn police officers. We understand the numbers have deteriorated further since June 2008. In other words the major airports are understaffed with sworn police by a staggering 35 per cent or more.
It is evident that this Labor government is not serious about securing Australia’s ports or airports. I commend the amending legislation to the House.
in reply—I thank members for their contributions to the debate on the Aviation Transport Security Amendment (2009 Measures No. 1) Bill 2009, however confusing some of them might have been, particularly the contribution from the member for Farrer, who gave a critique of this bill but then commended it to the House. I note that no amendments have been moved to this legislation and that the opposition will be supporting it.
This legislation is a part of the government’s ongoing vigilance when it comes to transport security. Australia’s aviation security framework has a number of layers to ensure the deterrence, detection and prevention of acts of unlawful interference with an aircraft. The Rudd government is vigilant to ensure security agencies have the necessary tools to deal with threats to the Australian aviation industry. The Aviation Transport Security Amendment (2009 Measures No. 1) Bill 2009 makes four important amendments to the Aviation Transport Security Act 2004. The government’s aviation security agencies need the tools provided by these amendments to improve security at airports and along the freight supply chain. I note that these are all improvements to the regime that we inherited from the former government, and the shadow minister’s critique of the former government’s transport security regime was very interesting indeed. Indeed, it is quite astonishing that those who were part of the former government forget that they were there for 12 years.
Reference was made to the report today on the maritime security regime at our ports. That is a regime that we inherited from the former government. I believe that the former government were ahead of the curve when it came to instituting the MSIC. That was in response to the circumstances arising from the acts of terrorism in September 2001. The former government did act, did put in place a regime and that was supported by the then opposition. Upon coming to office we instituted an audit of that regime. I received that report just weeks ago, and we are consulting with industry before we announce the details of a tightening of the security regime at our ports. But it is a tightening of the former government’s regime. I do not seek to make points of a partisan nature on this because I believe that any fair analysis will show that the Howard government were ahead of most of our major industrialised countries in taking action, but improvements can be made. But the idea, though, that a shadow minister can make a critique of the former government as though it was our regime and nothing to do with them is, quite frankly, extraordinary.
This bill makes four important amendments to the act. The first amendment will amend the act to allow for greater flexibility in the categorisation of airports for security purposes. All airports where regular passenger transport services land are security controlled airports. At present they are all subject to a standard set of Commonwealth security regulations. This amendment will enable the secretary to designate security controlled airports into categories and insert a regulation-making power to prescribe different requirements for each category of airport. Categorising airports according to their relative risk will allow security resources to be deployed based on risk, giving greater flexibility to the regulation of airports while maintaining security. This measure will not be implemented until there has been consultation with industry, and passage of the bill will allow that consultation to start in the near future.
The second amendment expands the powers of aviation security inspectors from the Office of Transport Security in my department to allow them to make unannounced inspections of air cargo businesses that are not at an airport. Currently, inspections of cargo businesses outside airports can only be undertaken with reasonable notice. While many air cargo companies are located well away from an airport the integrity of their security procedures is important for aviation security because the freight that is packed at those sites ends up in the body of a plane. Amendments to aviation security inspector powers are required to ensure effective compliance monitoring of the Accredited Air Cargo Agent Scheme, which will commence early next year.
The third amendment introduces enforceable undertakings as a middle range enforcement tool under the act to deal with breaches of transport security plans. Currently, there are no intermediate penalties if an operator breaches their transport security plan and offences may trigger cancellation of the plan, which would prevent the cargo operator or airline from operating. Enforceable undertakings are flexible and conciliatory in nature, presenting a particularly useful option considering the often unpredictable nature of the aviation security environment.
Finally, the act will be amended to expand the scope of compliance control directions so that they can also be issued to airports and screening authorities. Currently, the act permits aviation security inspectors to direct the pilot or operator of an aircraft that is in Australia, but not in flight, to take a specified action in relation to the aircraft. Such a direction by an inspector is a compliance control direction. The amendment will allow an aviation security inspector to direct operators of security controlled airports, screening authorities or screening officers to take specific actions. For example, an airport operator or screening authority may be directed to screen or rescreen certain passengers and baggage.
The bill makes important changes to the aviation security legislation framework. The government will continue to monitor the effectiveness of measures within the aviation security framework to ensure that it remains responsive to threats to the travelling public and the Australian aviation industry. We will continue to do this on an ongoing basis, we will make changes wherever they will improve transport security and we will continue—as we have with this legislation—to consult with the opposition to ensure that these measures gain bipartisan support, because it is important when it comes to our transport security framework that it be in the national interest rather than politicised, as the previous speaker sought to do.
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 24 June, on motion by Mr Bowen:
That this bill be now read a second time.
I move an amendment to the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009, which I will return to in the consideration in detail stage of this debate:
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:
This bill seeks to alter the Corporations Act in order to tighten regulation around termination payments. The bill is, in many ways, sound. The opposition welcomes reform which empowers shareholders, increases disclosure and, of course, enhances our corporate law.
The opposition supports the initiative to lower the quantum an executive can receive as a termination benefit from seven times their total salary before a shareholder vote is required. It is now appropriate that this threshold be reduced in a manner that will reduce excessive termination payments, whilst maintaining sound principles of corporate governance.
Unfortunately, the stated intention of this particular bill will be undermined through the bill’s practical application and its unintended consequences. The purpose of the bill should be to lower unjustifiable executive payments, to further align shareholder interests with directors and executives and to provide appropriate long-term incentives to directors to act in the best interests of companies and, of course, their shareholders. There is one significant problem in the bill which will likely have the perverse effect of raising executive and director payments on a permanent basis—that is, those payments which are not at risk or incentive based. This is because this bill will cause base pay to rise.
Make no mistake, this is sloppy policy making. Unintended consequences have again emerged—it is reminiscent of employee share schemes and the unlimited bank deposit guarantee, not to mention debacles such as Fuelwatch and GroceryWatch. It is very important that our parliament gets it right. We have to ask questions, such as, do we really want executives to have less pay at risk? Or, do we want to move away from performance based remuneration? ‘I think not,’ is the answer.
It is not hard to see how the government have managed to get this bill wrong. There was no regulatory impact statement prepared for the bill. I think this point goes some way in explaining the reason for the significant unintended consequences we find in this bill. Through the Senate Standing Committee on Economics’ process, a considerable weight of evidence has emerged which shows that this bill will undermine the alignment of executive and shareholder interests, and will actually cause base pay, and therefore total executive pay, to rise. I will return to this evidence in due course.
Let me now go to the substantial elements of the bill which, as I said earlier, seek to amend the Corporations Act. It does this by the following means: firstly, it lowers the threshold limit for termination benefits which can be received by directors and executives without requiring shareholder approval; secondly, it expands shareholder approval coverage to additional executives; and, thirdly, it broadens and clarifies the definition of a termination benefit.
The current corporate law provisions in the act relating to executive remuneration were devised during the Howard government’s Corporate Law Economic Reform Program, otherwise known as CLERP. A non-binding shareholder vote on the remuneration report was introduced in 2003 alongside a binding shareholder vote for termination payments to directors where greater than seven times total annual remuneration was to be provided. The current government announced in March this year that it would amend the Corporations Act to lower the threshold at which termination payments must be approved by shareholders from the current level down to one year’s average base salary. This termination payment initiative was announced alongside a holistic review into executive remuneration by the Productivity Commission, to be chaired by both Gary Banks and Professor Alan Fels. The commission is due to report to the government in November this year.
Despite the announcement of this holistic review, the government chose not to await its recommendations and decided to introduce this bill ahead of its completion. An exposure draft of this bill was released in May for public comment. On release of the exposure draft, many industry participants were of the opinion that the proposed provisions would be unworkable and indeed impractical. Subsequently, there have been a number of changes from the exposure draft to the final bill; these alterations are chiefly around the holding of AGMs for voting and the timing of shareholder votes when considering termination payments.
The bill carries four key objectives. Firstly, the bill seeks to expand shareholder approval coverage to additional executives and senior management. Currently, only certain executives are covered by termination pay provisions of the Corporations Act. The proposed requirements will extend coverage to senior executives and key management. Coverage of these additional persons will be determined through the accounting standards. This will occur through the Australian application of the International Financial Reporting Standards, otherwise known as IFRS.
Secondly, the bill broadens and clarifies the definition of a termination benefit. The definition of a termination benefit has been widened and regulation has been provided for the government to amend the definition at any given time.
Thirdly, a facility is provided for minor changes to the Corporations Act, including: repayment of unauthorised termination benefits and stronger penalty provisions for contraventions.
Fourth and finally, the bill lowers the threshold limit for termination benefits which can be received by directors and executives without shareholder approval. The current threshold provides for an unapproved termination pay limit of seven times a recipient’s total annual remuneration. Under the proposed changes, the new threshold before a shareholder vote is triggered would be any amount exceeding one year’s average—over three years—base salary. The definition of ‘base salary’ is provided by accompanying regulation, which was released last week.
It is this aspect of the bill—in relation to base salary—which will cause base salary to rise in order to compensate for the potential loss of incentive based remuneration. This defeats one of the key purposes of the bill, which is to limit excessive executive salaries. Low base pay reflects a company’s desire to remunerate executives and directors fairly and appropriately by linking their pay to performance. The coalition believes that this is desirable and must be maintained. In many cases, chief executives are provided with very low annual base salaries, with the remainder of their annual remuneration being short and long-term incentive based pay. It is often the case that the incentive component makes up some two-thirds of their total pay. The threshold of one year’s average base pay is a very low figure in terms of an executive or director’s total remuneration and inappropriate for the purposes of defining a platform level of remuneration.
This legislation threatens to undermine the objectives of short- and long-term incentives, which are designed—at the end of the day—to align the interests of those executives and directors with the shareholders and it will in fact increase fixed or guaranteed pay as a consequence. It is therefore the case that this bill, in its current form, will encourage companies to move away from incentive based remuneration.
Shareholders will ultimately bear the brunt of such low pay threshold provisions through growing base salaries, which will be fixed costs regardless of performance. In its current form, the bill is also likely to create ‘golden hellos’ or ‘golden welcomes’ or, if you like, ‘front loading’ in order to compensate for the potential loss of pay.
The Senate, through its Economics Legislation Committee, has clearly demonstrated these concerns around the base pay threshold. On Tuesday, 25 August in Sydney the committee conducted a public hearing. The majority of witnesses appearing before this committee highlighted the significant flaws in this bill. For the benefit of the House, I would like to quote some of the evidence provided to the committee.
The Business Council of Australia, with representation from Rio Tinto and Insurance Australia Group, discussed the definitional failure of base pay for the purposes of the bill. They said:
… we would like to bring to the committee’s attention the prospects for the bill to have a number of unintended consequences—consequences which are likely to extend beyond the stated policy objective and also have the potential to cut across other policy objectives of the government.
They went on to say:
… it is important to remain mindful of the objective of aligning executive remuneration with company performance. One consequence of the bill will be to encourage future remuneration packages to be more heavily weighted to base rather than performance linked remuneration.
They said:
Finally, the case does not appear to have been well made as to the basis for base salary being used as the critical threshold as opposed to the total remuneration package as the threshold.
They also said:
I think the issue we would see, for instance, is if the additional remuneration is in base salary, it is a certain additional cost to the company.
Moreover, the Australian Institute of Company Directors, AICD, stated in relation to the issue of the base pay threshold:
They are likely to cause an increase in the proportion of executive remuneration paid up other than as termination payments.
… … …
The bill is also likely to increase total executive remuneration, given the greater uncertainty for incoming executives and the likely necessary response by companies to have what would have only been a contingent payment.
They also said:
In practice it means you will be increasing your base pay. That is the inevitable consequence, because basically you are either guaranteeing STRs, which is not a good practice, or you are increasing the base pay. It introduces distortions to what should be a very open, transparent exercise.
In the context of a recent practical example of a company which has allegedly not produced optimum performances of late, the AICD also said in their evidence that there have been no fixed pay or base pay increases. They said:
Base pay has been held since April 2007. There is a direct relationship between the outcome for the shareholders and the outcome for the senior executives. If they deliver, they will be well paid. If they do not deliver then they do not receive their STI—
That is, short-term incentive—
and the benefit of any LTI—
in other words, long-term incentive—
under these circumstances is remote.
The Australian Bankers Association provided further evidence of problems with base pay as the platform. They said:
… the termination benefits legislation is likely to create pressure to increase the proportion of an executive’s salary which is base pay. This is inconsistent with moves to have executives put more salary at risk.
Guerdon Associates, who are remuneration consultants, said in relation to the base pay threshold:
The other issue is the possible consequences of the low maximum payment. It might put pressure on other areas of remuneration such as increase in base salary or increase in sign-on payments.
… … …
An elevation in the base payment in our view needs to be looked at carefully. The merit of a remuneration structure that has elements of variable reward and fixed payment is that it gives the company the opportunity to properly reflect payment and performance.
They went on to say:
More particularly, if you get an economic downturn, you have got a higher fixed cost base and so it probably translates in the extreme to the need for companies to separate employees, to reduce their workforce, rather than being able to reduce their overall costs by simply having the flexibility not to award variable remuneration payments. So, in essence, it is increasing fixed pay and it is taking control away from the company and its shareholders to be able to link the payments overall with the performance of the individual and the organisation.
They said:
Our preference would be to see a limit calculated by reference to both fixed pay and variable pay, because it has become part of the reward mix overall for executives, and a very important part, to have both short-term variable pay and long-term variable pay.
There is a considerable amount of evidence which emerged from the public hearings in the Senate Economics Legislation Committee inquiry into this bill. The evidence really does speak for itself. Clearly the bill, in its current form, would work at cross-purposes to what is good corporate governance practice. That practice is aligning the interests of shareholders and executives and increasing the amount of remuneration at risk, not decreasing the amount at risk.
I believe the failure to link pay with performance is contrary to the principles espoused by the Financial Stability Board of the G20, which has been championed by the Labor government. This bill, as drafted, is also inconsistent with recently stated government policy and regulatory approaches internationally. Furthermore, the threshold of one year’s base pay would leave Australia with one of the lowest base pay thresholds of comparable corporate law in any country. This prescriptive approach could threaten our ability to entice talented managers to our country and retain them.
Definitions of this essence should be vested in the legislation, not in the regulations. The market deserves certainty, not changing goalposts. It deserves not only certainty but consideration. As I mentioned earlier, a regulatory impact statement was not prepared for this bill. I think it is quite incredible that the government can have a bill here which will require many, many companies to restructure their remuneration policies and that a regulatory impact statement was not even bothered with. Regrettably, I think it demonstrates where the unintended consequences of this bill have emerged.
As this aspect of the bill will run at cross-purposes to the supposed objective of the bill, the coalition will move to amend this bill to alter the threshold to one year’s total annual remuneration. I will move this detailed amendment during the consideration in detail stage of the debate. Performance and pay should be linked, as should executive and shareholder interests. Causing base pay to rise will make these objectives far, far harder to achieve. Indeed, the adverse consequences of this bill will ultimately be borne by the shareholders themselves. This cost will be borne by all shareholders—by large institutional shareholders and by so-called mum and dad investors who are shareholders. It is for these very logical and, I believe, sensible reasons that this bill should be amended as proposed by the opposition so as to ensure that its objectives can actually be achieved.
Is the amendment seconded?
I second the amendment.
The Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009 will amend the Corporations Act 2001 to strengthen the regulatory framework relating to the payment of termination benefits to company directors and executives. These amendments will empower shareholders to reject or veto excessive termination benefits that are not in the interest of the company.
Under the bill, the amount that can be received before shareholder approval is required is reduced to one year’s base salary as opposed to total remuneration. The bill will strengthen the regulatory framework by significantly lowering the threshold at which termination payments must be approved by shareholders. Currently a termination benefit can reach up to seven times a director’s total annual remuneration package before shareholder approval is required. Under the new arrangements, termination benefits for company directors and executives exceeding one year’s average base salary are subject to shareholder approval. It is important to note that boards can still pay departing executives as much as they like as long as it is with shareholder approval. It is the shareholders who own a company, after all.
Most Australians would agree that huge, exuberant golden handshakes, particularly where a company has not performed or where workers have been retrenched, are simply a means of rewarding failure and are absolutely unacceptable—and who can blame them? Indeed, there are media reports stating that shareholders in some of Australia’s biggest companies would have saved up to $62 million last year if proposed new laws that aim to put an end to excessive golden handshakes had been in place
The community expects the government to act and to act decisively, and this government is doing so. We have seen example after example of corporate executives doing little more than raiding the kitty and bailing out when times got tough for their companies. These men and women with positions of responsibility in a company are being rewarded with sometimes millions of dollars without the approval of shareholders, the owners. This is just simply not good enough and definitely not fair, and we as a government will act decisively to make such actions by executives once and for all illegal if shareholders do not agree to it.
In the media there has been some argument that this long overdue move will limit the ability for companies to attract overseas talent. Studies have shown that the vast majority of executives are promoted from within a company, with only 18 per cent of CEO appointments from overseas. The government’s decision to act on improving the accountability on termination benefits follows increasing community concern about the excessive pay practices, particularly at a time when many Australian families are being hit by the global recession. The government is determined to ensure regulation of executive pay keeps pace with community expectations. In addition to lowering the threshold the bill addresses these concerns by expanding the number of company officers for which approval is required. This is good for accountability.
The bill also clarifies and expands the definition of what constitutes a termination benefit by requiring that a broad interpretation of the term ‘benefit’ is given and providing that the substance of the payment should prevail over its legal form. The bill provides businesses with certainty and guidance by including a regulation-making power to specify for the avoidance of doubt whether certain types of payments are or are not a termination benefit.
The bill also introduces an express obligation on the recipient to immediately repay a termination benefit that was given in contravention of the requirement to seek shareholder approval. Furthermore, it introduces significantly higher penalties for unauthorised payments of termination benefits, with potential fines now set at $19,800 for individuals and $99,000 for corporations. This is aimed at holding companies accountable in promoting responsible remuneration packages.
The new arrangements will not apply retrospectively to existing contracts and will apply to all new contracts which are entered into, extended or substantially varied after the commencement date. The key measures of the bill include: (1) significantly lowering the threshold at which termination payments must be approved by the shareholders; (2) expanding the scope of the provisions to include key management personnel for companies that are a disclosing entity; (3) clarifying and expanding the definition of what constitutes a termination benefit; (4) prohibiting directors and executives who hold shares in the company from participating in the shareholder vote to approve their own termination benefit; (5) introducing an express obligation on the recipient to immediately repay unauthorised termination payments; and (6) introducing significantly higher penalties associated with unauthorised payments of termination benefits.
The amendments are urgent as there is significant community concern about excessive pay practices, particularly at a time when so many Australian families are doing it tough in the global recession. This bill effects changes in the regulatory framework in relation to better empowering shareholders, improving the accountability of company management and in setting remuneration and promoting responsible remuneration practices. The new arrangements will not apply retrospectively to existing contracts before the bill becomes law and will apply only to all new contracts which are entered into, extended or substantially varied after the commencement of the provisions. This framework aims to curb excessive termination benefits paid to company executives and directors and is a win for fairness. I commend this bill to the House.
I am very pleased to participate in the debate today on the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009. The so-called golden handshake practice of large termination payments being made to company executives has generated a great deal of concern throughout the community, especially in recent times since we have seen the collapse of the financial markets. Shareholders of large corporations have every reason to expect us to examine the provisions of the Corporations Act and make sure that shareholders who fund the companies but who are also beneficiaries of the success of those companies have a say in how executive pay is determined and at what level.
In the electorate of Pearce I am sure that the wider public have concerns about what is seen as excessive termination payments. Even before the financial collapse we saw a number of large corporations in Australia who provided very substantial termination payments for top-end executives only to see those companies lose considerable shareholder value under the administration of those individuals, who jeopardised the future of the corporation. In many cases the shareholders—I think, rightly—felt they had little say in some of the arrangements that had been made. So the measures are broadly sensible, the intent is sensible, and I think the public expect us to examine what has been happening and perhaps to deal with some of the worst abuses.
Under this legislation, termination payments will be limited to an executive’s total annual remuneration for one year; under the current arrangements it is limited to seven years total annual remuneration. Termination payments will be subject to the approval of company shareholders, which is a reasonable proposition and, by most standards, is a fairly lenient requirement. This bill seeks to make sure that shareholders in both institutional and retail corporations have some say in the matter. The key objective is to lower the threshold so that shareholder approval will be required where a termination payment is more than one year’s base salary. Clearly, this is a dramatic change with potentially important consequences for some big corporations, and as such it is a change that warrants thorough and informed debate. I agree with the shadow minister, who spoke quite eloquently on this bill, that above all we need to ensure that this legislation does not have a perverse impact on a company executive greeted with a golden handshake—that is, we need to ensure that companies do not load up the upfront payments to company executives without having to meet the requirements of these amendments.
In addition to the changes to the threshold, there are other more technical changes, which also have the propensity to massively alter the remuneration practices of many businesses throughout Australia. Shareholder approval will be required not just for chief executive officers but for an extended array of executives and non-director executives as well. I can well understand the disgust that many people in the community feel when they hear of company executives under whose watch company profits fell and the value of shares seriously declined being given a golden handshake on leaving. These are certainly emotive issues, and I am sure that the government has felt pressured, given the high level of publicity around these issues, to act to address the injustices. But we must also guard against taking a rushed approach, an over-the-top approach, that sees the Corporations Act riddled with a minefield of unintended consequences. Businesses in Australia come in many shapes and sizes—indeed there is no typical company—which is why we must ensure that what is a practical solution to the problems encountered in some corporations does not become a problematic imposition for others. The role of this legislation, and indeed the debate surrounding it, should be to find the right balance between the worthy objective of constraining inappropriate termination payments being made at the expense of company shareholders and the need to ensure that business efficiency is not threatened. The shadow minister made the comment that it is a matter of aligning the interests of directors and shareholders. There has to be a balance.
On 18 March 2009, the government announced the reforms contained in this legislation. It was surprising—it certainly surprised me—that that was the same day that a Productivity Commission report was commissioned to investigate executive remuneration in Australia. The findings of this report may well be crucial to the way that we in this place shape legislation to deal with any inequities or injustices. I am sure that the report of the Productivity Commission will have the capacity to contribute a great deal to informed debate on termination payments, and the report would have assisted us in getting the legislative balance right. It is not so long to wait; we would have done a much better job with this legislation if we had waited for the outcome of the Productivity Commission.
Many of the submissions to the Senate Economics Legislation Committee inquiry into this bill commented that the debates over executive remuneration and termination payments are inextricably linked. It is astonishing that the legislation is being considered now, while the Productivity Commission’s inquiry is considering the following items, because their investigation goes very directly to the heart of this legislation. The Productivity Commission is investigating, firstly, the trends in director and executive remuneration both in Australia and abroad; secondly, the role of institutional and retail shareholders in setting and considering remuneration; and, thirdly, the effectiveness of the international response to remuneration issues arising from the global financial crisis, particularly excessive risk-taking and corporate greed. That third item is quite important. It is a fact that we live in a global environment and business is conducted in a global environment. If we in this place are too out of step with what is happening with our major trading partners in the way that we legislate to curtail certain activities of corporations, we put our own companies at a great disadvantage.
I think we are seeing this thread through a number of debates in this House. Perhaps it is a failing of a new government’s lack of experience. We are seeing it also with the ETS, where there is a willingness to pass legislation in this place before we know what is happening in the United States and before we know the shape of any international agreement. It has the capacity to place our corporations in a position of great risk without actually achieving the kind of outcomes that every man, woman and child in this country would expect. We are seeing a thread here. This is very much a cart-before-the-horse approach and it unfortunately does generate considerable cynicism and frustration with the way in which government operates, not only within the public but also within the corporate sector. It smacks of fairly crude politics—that is, responding to sensational media headlines rather than looking at the real issues and making sure that we are addressing them in an effective way.
Australian businesses, I would imagine, would also prefer to wait—not to stall the legislation, but it is reasonable that they see the shape of the Productivity Commission’s inquiry into executive pay—and would expect us in this place to have a fully informed debate rather than impose on them rushed, ill-informed legislation that only addresses one part of the problem. The timing of this legislation has nothing to do with efficient practices in this place or indeed getting a good outcome that passes the public interest test. Rather it has everything to do with a new government making the most out of the media cycle on public concerns as to executive remuneration. As I said, it is a knee-jerk reaction to sensational headlines. I think that is unfortunate.
I am no apologist for the corporate sector. I have had many skirmishes on behalf of the average constituent in my electorate over the years, but I do think we can be pretty proud of the way in which many of our corporations function, the successes they have, the income they generate and the taxes they contribute. Many of the corporations, I have to say, demonstrate a great public-spiritedness. While we have seen the outcomes of the financial meltdown and the impacts on people in other countries, we have had a rigorous system that has served the public reasonably well in this country. It is not to say that there is not some pain—there clearly has been—but we have done a reasonably good job of striking that balance between public interest and the capacity for corporations to operate efficiently and flexibly.
Nevertheless, we must not back away from a full and frank debate on this piece of legislation as it stands before us today. Here it is; we have it before us. We would rather have waited for the Productivity Commission’s report but we have to now debate it. Whilst the coalition supports the broad objective of this legislation—that is, giving shareholders a greater say—I am not convinced that a number of issues have been dealt with adequately. There are further concerns still as we wait to see what shape the regulations will take. These regulations will have a significant impact on the operation of the legislation, and the failure to incorporate them into the legislation leaves important questions unanswered. Again, this is another indication of a new government at work falling into some of the old traps and putting the cart before the horse.
My key concern with the drafting of the legislation was the move to set the threshold limit according to an individual’s base salary rather than using the existing terminology of total annual remuneration. Clearly, the base salary is a lower figure and thus shareholder approval will be required in an extended number of circumstances. However, the real concern is that the change will distort the manner in which remuneration is now packaged. As the minister said, we may see the ‘golden hello’ at the front of a contract, an appointment, instead of the golden handshake at the end.
It is assumed that the base salary will mean the risk-free payments made to executives and directors. But the Law Council of Australia, in their submission to the Senate Economics Legislation Committee inquiry into the legislation, argued that, for many executives, the base salary makes up less than half of the total remuneration package. There is a growing trend—generally supported by shareholder groups—that executive remuneration should be tied to performance or incentive. With the commercial realities which we face and with the global environment as it is, that is a fairly sensible approach. Such performance based payments would not be considered as part of the base salary, potentially meaning that many executives would only be entitled to half of their annual remuneration as a termination payment before shareholder approval is required.
The other distortion that will potentially arise from this legislation is that, rather than executives being given golden handshakes, as I said, they will get a front-end loading as a signing-on bonus. The Treasury responded to the prediction in the Senate economics committee report that the legislation might produce a distortion, with front-end loading of contracts, by noting that such payments would be listed in the remuneration report and, as such, at least payments will continue to be transparent. That misses the point, because the objective of this legislation, I thought, is to empower shareholders to veto termination payments, not to ensure that they are informed of front-end loaded payments after the fact. It does not make a lot of sense to me. It is good to have transparency, but we want a result here. Whilst it is true that shareholders vote on a company’s remuneration report, this vote is non-binding, so it is for merely persuasive purposes and it is required only for listed companies.
I think we should be favouring a model that does not promote artificial and creative restructuring of remuneration packages, as I said, to create a perverse approach to this. I do not believe for one minute that the majority of businesses would consider doing this to deliberately mislead shareholders, but I think it is entirely foreseeable that the distortion will take place for business efficiency purposes and to provide certainty for executives at the commencement of their employment. I think we have to understand as well that we have been working and continue to work in a very competitive environment in this particular marketplace.
The simplest way to ensure that this legislation does not turn out to be counterintuitive is to amend the threshold provisions so that the total annual remuneration is used rather than the more limited base salary requirements. The legislation is noticeably the product of community outrage. I understand that and I think we have an obligation to do something about it. If the government is not prepared to await the outcome and recommendations of the Productivity Commission, then at the very least it should give full consideration to the amendments being put forward by the coalition. The member for Aston is sensible and I think he is balanced in his approach, and I would like to think that we can have a bipartisan approach to this piece of legislation. The amendments that the shadow minister has put forward are all about getting the balance right, seeing that shareholders have a say and are protected from unscrupulous termination payment arrangements but also ensuring that legitimate business interests are not threatened. These are sensible amendments that will ensure the sensible operation of this legislation. I pay tribute to the work that the shadow minister has done to bring forward thoughtful and well-considered amendments that truly have the capacity to improve this piece of legislation, to give shareholders full rights, to let them have a say in how executive pay is structured. I hope that the minister responsible will give full consideration to those amendments.
Before calling the next speaker, I acknowledge that we have some members from Clancy College here. Welcome to the parliament.
I speak in support of Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009. I can recall vividly a conversation I had with a fellow one Saturday morning in my mobile office at Brassall shopping centre in my electorate. He told me that he was an ‘average worker’, to use his expression. He said—and I will not use the language in this House that he used to me—that there were executives and directors who parachuted themselves out of failing companies and left their shareholders and the general public aghast at the excessive payments they received upon termination. The sheer outrage of this gentleman, the sheer frustration and fury in his voice that day, I will never forget. But his is not a lone voice. His is a voice of many people in our community who express fury and utter disgust at the many executives, directors and those in leadership positions in some of our biggest companies who at times of great difficulty and global recession, when their companies profits are down and their shareholders are suffering as a result of the dividends paid based on their shareholdings, decide that it is appropriate to take termination payments of an extraordinary amount.
This has been going on for decades. We have seen companies such as Telstra, Pacific Brands and Qantas—there are so many others I could name—where this has happened. We need to get the balance right, as the member for Pearce said. We need to ensure that we keep our best and brightest at home. About a million Australians live overseas, many of them working in top legal firms, banks, finance companies and corporate entities across the world. You can see Australians everywhere as you travel through Asia. There are many in the Middle East in places like Dubai and Hong Kong, in Europe in places like Paris and London, and in New York and other places. We need to make sure that our executives at home are remunerated appropriately and that we can keep our top executives at home, but we cannot have a situation where it is unbalanced. We cannot have a situation where workers struggle day in and day out to get the kind of wages they need—sometimes they negotiate individually and sometimes collectively through their unions—from management in large corporations. These may be in mining, resourcing or other areas like banking or finance. They find chief executives—key personnel in management—who when things go wrong say, like Pontius Pilate, ‘I’ll wash my hands, take a large payout and go and live elsewhere in the lap of luxury.’ Alternatively, they will live with considerable affluence in their retirement or go from board to board. This is so annoying to the general public.
We need to make sure that our executives are paid properly. Their salaries and entitlements and their share in profits and dividends should be appropriate. I agree with the member for Pearce: we need to get the balance right. But it is unbalanced, and there is nothing you can say to my constituents in Blair or the general public that will convince them otherwise. It is absolutely crucial that the Productivity Commission come down with a good recommendation for a new system of regulatory arrangements in relation to directors and executive remuneration. We cannot have a situation where it is not reviewed. It needs to be a wide-ranging review and I commend the government for what it is undertaking in this regard. We cannot ignore international trends, but we need to make sure that corporate greed is stamped out in this country.
We have about four million people working for small business in this country. There are actually more small business operators than there are trade unions. Those people do not have access to these golden handshakes, and they are just as angry at what goes on as the constituent of mine who came to see me that Saturday morning at Brassall Shopping Centre. It is clearly unbalanced.
I am appalled when I see some of the submissions that were made to the Senate inquiry. Many of the companies and business organisations that were so quick to criticise the government—so quick to look at this and so hands-off when it comes to government intervention in this area—were quite happy for legislation like Work Choices to come in and adversely impact upon the salaries, wages and entitlements of average workers. They were so quick to say: ‘Government should have no role in this. We should leave it up to shareholders.’ But, with non-binding resolutions and only 15 instances in the last year out of a possible 300 where shareholders actually passed resolutions rejecting what directors said at AGMs in relation to remuneration, that is simply not good enough.
Shareholders clearly do not have the power they need to under the Corporations Law. It took a long time through the COAG process for the Corporations Law as we know it today to actually come into being. I am sure our founding fathers would have done something very differently if back in the late 19th century they could have foreseen multinational companies and the way businesses would evolve and develop over decades and decades. We cannot have the same sort of robber baron mentality in our corporate sector—in big business, finance, mines, energy and other areas—that we saw in the late 20th century in America and, to a lesser extent, Australia. We need to have fairness, equality and justice when it comes to these sorts of things.
The legislation before the House is important legislation and it accords with the wishes and aspirations of the general community. I believe strongly that the constituents in my electorate of Blair in South-East Queensland would support this legislation, and I am pleased to be speaking on it today. Its purpose is to make company directors and senior executives more accountable. It is important that we link termination payments to fair remuneration. Many times workers leave and get paid their holiday pay, their sick pay and an ex gratia payment because of their length of service. Many times employers and employees have good relations. In fact, it is important that that be the case. I was in business for a long time and I know how important it is to have a good relationship with your employees.
Out of generosity, not charity, and in appreciation of what their employees have done in that business, company or partnership over many years, many employers pay money as a going away present. I have done it myself and I know many employers who do it. But you cannot have a situation where corporate executives take up to seven times their package in remuneration and think that is not going to have an impact on whether shareholders perceive justice and fairness, particularly in circumstances where their dividends are going down as a result of the global financial crisis. When workers know, particularly in areas like catering, cleaning, child care and others, that their salary has suffered under Work Choices and they look at what chief executives get when they decide to take a golden handshake, they are furious. That anger in my view is righteous.
I am pleased that the Treasurer and the Assistant Treasurer, who was then the Minister for Superannuation and Corporate Law, issued the joint media release on 18 March to say that the Productivity Commission would examine the regulation of golden handshakes in this area. It is long overdue, and the previous government should have done it. Whilst quite happy to attack the salary entitlements of workers through Work Choices, they were not prepared to do this when it came to chief executives and key personnel in management in the corporate sector. It says a lot about the motivation of the previous government.
I am pleased that what we have done here is expand the definition of a termination payment to catch all types of payments and rewards provided at termination. Because of the miracles of modern accountancy, corporations can structure their entitlements in such a way as to get around the problems, vicissitudes and challenges of this area to pay large sums of money to executives. It is not just the readers of the Australian Financial Review but also the readers of the Daily Telegraph who are angry about this.
With respect to the base salary, I think that is a worthy amendment. I think that the base salary should be defined in the regulations to give the law flexibility. I accept that, but I think that what we need to do is make sure that the base salary is really a base salary and not one with all the add-ons we have seen key personnel and management in the corporate sector avail themselves of in the past to supplement their golden handshakes.
The clarification and expansion of the definition of a termination payment is extremely important. The regulation giving the power to prescribe whether certain benefits and payments come within the operation of this piece of legislation is also a vital reform. The significantly higher penalties, with potential fines now set for individuals at $19,800 and for corporations at $99,000, are certainly welcome. But the average person in the street would probably think that they are still too low, based on the kinds of golden handshakes some chief executives and company directors have received over the last few years. Particularly at times of challenge and crisis, the Australian public has historically shown that it is keen to ensure fairness, justice and equity in the workplaces and companies of our nation, because we are all in it together. When someone gets a free kick the average person does not like it, and rightly so.
I am pleased that we have seen, in this bill, the widening of the scope of individuals subject to the regulatory framework of this legislation. Extending the application of the law to key management personnel is important because there are many people in companies who decide things. Companies are usually made up of very senior management: often a CEO, a chairman of the board and a board of directors. And big companies have a great deal of administration. We see that in terms of bureaucracy in governments, but we also see that in our big corporations. So clarifying who is captured by the regulatory framework is important, and expanding that to capture other key management personnel is a crucial reform.
We cannot let the status quo continue. It is just untenable in the mind of the Australian public. You cannot have excessive termination payments paid to company executives in circumstances where the average Australian is subject to the rigours of the global financial crisis, CPI increases to pensions have caused pensioners to feel that they are not being paid enough, workers in low-paid areas with a lack of bargaining power have felt that they have been disadvantaged under the previous government’s Work Choices regime and farmers are struggling with climate change—as they are particularly in my area, in the Fassifern Valley and the Lockyer Valley and the rural parts of Ipswich. We cannot have a situation where shareholders feel absolutely and utterly aggrieved at greedy corporate barons taking golden handshakes in circumstances where the companies are failing and their dividends are lower than ever before.
This legislation is important because it is about a timely intervention in the corporate sector. It is about ensuring greater power for the Australian public, and, by legislation, ensuring greater responsibility in our corporate sector. It is about making sure that those who are given the charge of responsibility for not just products, services and goods but the lives of the men and women in their companies and the consumers of Australia are accountable, responsive and responsible in circumstances where we face such a challenge economically.
So I am very pleased to support this bill. I believe it will not militate against ensuring our chief executives stay at home and do not go abroad. I believe that the member for Pearce is wrong in thinking that this legislation is not timely. I think she is also wrong in thinking that somehow the corporate sector should be left alone. I think it is important that we ensure that they are given a very clear message: they need to behave responsibly in all the circumstances. I support the legislation.
It is always good to follow the big-government interventionist, the member for Blair. Big government should be the centre of the economy and big government must intervene in what shareholders are doing. Shareholders do not know best, according to the good member for Blair—government knows what is best. The fact that shareholders own the company and are responsible for the company’s direction is irrelevant. Only big government has the solutions. Only big government has the answers. Big government must be the centre of the economy—so Labor would have us believe. But here we are, with another bill before us where big government is here to save the day. Well, let me give you the drum, Member for Blair: big government does not save the day, because the problem with big government—indeed, the problem with socialism—is that, at some stage, you run out of other people’s money.
The government intends to amend the Corporations Act through the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009, the principle of change being to lower the threshold for shareholder approval for termination payments paid to company directors and certain other persons, from the current seven years total remuneration to one year’s base salary. As we know, termination payments are governed by division 2 of part 2D.2 of the Corporations Act.
Interestingly, though, on 18 March this year, the government announced a Productivity Commission inquiry into executive remuneration more generally. The commission is due to release its draft report sometime this month and a final report by 19 December. In May this year, APRA, the Australian Prudential Regulation Authority, also released a discussion paper on remuneration for authorised deposit-taking institutions. Subject to consultation, it is expected that the final prudential standards will be released again this month and be effective from the start of next year. There are a range of reviews and commissions going on in this area. But, rather than wait for the outcomes of those—that is, have evidence based policy, as Mr Rudd continues to talk about—here we are, legislating. I note, though, that in June 2004 the Parliamentary Joint Committee on Corporations and Financial Services noted thresholds and appeared to raise some issues with them. I also note from reading that report that the Labor members put up a dissenting report calling for termination payments not to exceed one year’s salary. At least they are consistent.
In summary, the bill lowers the amount that a termination payment may be before shareholder approval is required. The threshold will go from seven years total remuneration to one year’s base salary. I note that ‘base salary’ will be defined within the regulations. I note also that the bill intends to extend the act to cover termination payments for all key management personnel, that is, not just the CEO and directors but a whole raft of other senior people. I wonder how many key management personnel there are in Rio Tinto? Are there 100? Are there 1,000? In the case of reporting entities, this consists of all key individuals that are disclosed in the company’s remuneration report. It will be interesting to see what response companies’ remuneration reports will have to this legislation. The bill also prevents directors and executives from voting in relation to their own benefits and, of course, requires that any payments made without approval be repaid.
The big question facing all legislators is: what problem are we trying to fix? What is it that necessitates a move to amend the Corporations Act and increase regulation? This Labor government came to power promising that for every one regulation it would add it would take one away. During the last two years that I have been here, I have seen literally hundreds of new regulations, yet I have not seen one disappear. I look forward to that day, though I fear that day may never come. So let us focus on what the problem that is that the bill is trying fix. The principal justification for the bill, as far as I can see, is community concern. The minister said in the second reading speech:
There is significant community concern about the levels of termination benefits paid to company management. Such payments are given to outgoing company directors and executives at a time when they are no longer able to influence the company’s future performance. The government’s reforms will empower shareholders to more easily reject such payments where they are not in the best interests of the company …
I note that the minister gave no factual evidence of significant community concern. He just rolled it out. On 18 March 2009, the Treasurer referred to community concern about ‘obscene’ and ‘outrageous’ termination payments and the need to ensure that executive pay is in step with good corporate governance, provides correct incentives and meets decent community standards. Again, there was no evidence of obscenity, and the idea of linking current arrangements and saying they are not good corporate governance is simply outrageous.
Let us look at this issue of whether termination payments are indeed excessive. This bill is premised on there being excessive termination payments across the board and community outrage about how excessive they are. There are clearly some standout cases. Mr Owen Hegarty of Ausminerals received a bonus of $8.35 million in 2008. John Anderson of Consolidated Media received $15 million in 2008. Kim Edwards of Transurban Group received $16 million in his final year, including a termination payment of $5.2 million. There are certainly large numbers. There are always cases of large numbers. But let us look at the entirety. Let us look at the whole, because it is less than clear to me that these excessive examples are indeed representative of general practice within business. In 2004, an article in the Australian Financial Review stated:
An analysis …of the latest annual reports released by 50 of Australia’s largest companies reveals that nearly a third of chief executives are entitled to termination payments worth more than the equivalent of 12 months salary, as well as performance-linked bonuses and entitlements to shares and options …
‘At least a third’—let us call that 30 per cent. That means that 70 per cent are not. The minister is putting forward the idea that this is out of control, it is rampant and it is excessive, but the facts seem to indicate that, based on the analysis of the Australian Financial Review, around 70 per cent are less than the equivalent of 12 months salary. I would suggest to the government that that is not excessive and community concern is blowing out, when for the vast bulk of companies it is less than 12 months salary.
The great fear with any legislation is the unintended consequences—the adverse reactions, the implications and the responses to bills. The Senate Economics Legislation Committee received a range of submissions warning that there were likely consequences, that reducing termination payments to one year base salary would have the impact of inflating base salaries for executives. Reading from the Senate committee report, the Australian Institute of Company Directors described the possibility as such:
… attempts to restrict termination payments are likely to result in a “squeezing the balloon” effect, by which we mean artificial restrictions on one component of executive remuneration will cause upward movement in another component.
The Law Council of Australia expressed similar views:
For many executives in large corporations, base salary represents less than half the value of their remuneration package … this proposal will actually limit termination payments to less than 6 months total remuneration, which is likely to be viewed as inadequate compensation for the risks to tenure of executives in these organisations … the likely consequence of the proposal will therefore be to increase base pay levels, both in absolute terms and as a proportion of an executive’s total remuneration.
The Law Council is warning about the use of ‘golden hellos’ when executives commence a new position. How can the government possibly present a bill that would see that adverse consequence—especially when there are a range of reports and commissions going in, with drafts being released this month alone, to look at remuneration?
The Senate committee report also indicates that other submitters warning of possible increases in base salary include such small and inconsequential firms as Ernst & Young, the Business Council of Australia, ACCI, ABA, Guerdon Associates, the Insurance Australia Group and IFSA—all warning the same thing. Even the AMWU warned that treating termination payments in isolation could lead to manipulation in other areas. My concerns echo theirs and I am also concerned that this legislative overreach and the government’s continued intervention in the market will introduce a range of distortions which will not be in the interests of shareholders. Shareholders are responsible for the company’s outcomes. Shareholders are able to make informed decisions about what they accept and what they do not otherwise do. Shareholders are able to turf directors out and force changes. They do not need the government.
I would suggest that this legislation is little more than a knee-jerk response, an appeasement—yes, Mr Deputy Speaker, in our time—to public opposition to ex-gratia payments made to executives. I can only see that the government is acting after the event, as many corporations are already reviewing their policies on how they deal with these types of issues. This legislation is pre-empting what the Productivity Commission is doing and it is rushed. I am not alone in this parliament in saying that corporate Australia have the capacity to deal with these issues themselves. I have confidence in Australia’s corporate frameworks. I have confidence in Australia’s boards to be able to deal with these issues. I do not have confidence that big government and Labor’s intervention will be able to assist, especially where, if the AFR is correct, 70 per cent of corporations in that top 50 already have termination payments below the levels of 70 per cent. There is further evidence that many companies are moving towards a self-regulatory practice on this issue, especially considering the recent downturn in the economy.
These provisions are, of course, widespread. They move from public to unlisted companies and they lower the thresholds, which will capture middle managers serving as directors. The definition of termination payments is broadened, and there is concern that it will catch genuine retirement of long-serving directors. I do not think the unintended consequence of the impact this may have on sourcing, especially of international directors, has been properly considered by the government. I support the amendment moved by the relevant shadow minister in seeking to make this bill more appropriate for the market in which it operates, and I look forward to the government’s response to what is a sensible and significant amendment.
I am very pleased to rise in support of the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009. I think it is a measure long overdue. The people of Australia have for too long observed some at the top end of town who are only too keen to walk away from their corporate responsibilities with extravagant and vulgar parting handshakes at a cost to shareholders and at a cost to the consumers of Australia.
This bill goes a long way to putting some responsibility back into the corporate largess that is provided to some of our highest paid and most senior executives. Significantly, the key measures of the bill lower the threshold at which shareholder approval is required for a termination payment from seven times the annual remuneration package to one times the annual remuneration package.
When we talk about the packages that those in corporate world receive, we need to put some measurement on that, because I do not think most Australians would appreciate just how well paid some of the Australian business community are. The Business Review Weekly in April this year produced a list of some of the wealthiest Australians. That list also included their estimated annual remuneration. At the top of that list—not surprisingly—is Rupert Murdoch, who receives from News Corporation a remuneration of $28 million. But let me just go down the list and refer to a number of others: Frank Lowy from Westfield, with an annual total remuneration of $15 million; Westpac Chief Executive Gail Kelly, receiving $8½ million; Brian McNamee, Chief Executive of CSL, receiving $5.7 million; Bank of Queensland CEO David Liddy, receiving $2.7 million; and Origin Energy Managing Director Grant King, receiving $4.8 million. These are very large sums of money received as annual remuneration. It is interesting to compare them to the remuneration of the head of the government of the nation. The Prime Minister of this land receives a salary of about $330,000. There are plenty of CEOs in receipt of 10 times that and much more.
It is important that we put in place a mechanism that encourages executive remuneration packages to have realistic base salaries and realistic and proper termination payments. Some of the remuneration packages for our most wealthy raise as many questions as they answer and make you wonder whether or not the base salary is indeed a genuine indicator of what they receive. For example, on the BRW list of Australia’s wealthy, coming in at No. 8, not surprisingly, is Kerry Stokes. What is surprising is that Kerry Stokes, who—according to the BRWhad a personal value in 2008 of $990 million to his name, earned only $119,000 a year. One suspects there are some fairly substantial bonuses, entitlements and share allocations that Kerry Stokes receives.
So when we talk about establishing a fair and proper benchmark for payouts, a key to that is having a fair and proper base salary against which it can be measured. But Kerry Stokes is not the only person for whom that question is raised. James Packer, who was listed as our fourth richest Australian, with a value in shares of about $1½ billion and a total value of assets in 2008 of $3.6 billion, had a total remuneration of zero—and, obviously, James Packer is not short of a quid for tonight’s dinner. We need some regulation in this country to encourage some proper accountability of our CEOs and the remuneration packages they receive. This bill will help do just that.
The bill also expands the number of company officers for which approval is required to include the key management personnel of the entity where the company is a disclosing entity. This is at least going to provide shareholders with a greater degree of authority, and at the end of the day it is the shareholders’ money—it is taken from the customers of the business being operated but it is the shareholders’ money—that we are talking about here that is being distributed. The bill retains the existing requirements for the giving of the benefit to be approved by a resolution passed at a general meeting and for the details of the benefit to be set out in or to accompany the notice of the general meeting. It restricts the ability for a retiree or an associate of the retiree to participate in a shareholder vote that includes their own termination payment unless they are acting as a proxy on behalf of another person. And for those in the business community who have complained about this and thought it harsh, it does in fact operate prospectively. This is not retrospective legislation. It does not impact upon existing arrangements.
For too long we have seen payouts to corporate executives in cases where companies have done very badly and where the corporate executives have been shunted off not because they have done an outstanding job but frankly because they have done an appalling job. And we have actually seen golden handshakes in the millions handed out to individuals only to find that the share price rises after the golden handshake has been given and the deadwood has left. In most places of employment where you had not been doing a good job you certainly would not be given that sort of golden parachute—a handshake in the millions. If you happen to be amongst the lucky few in our land, however, that is possible for you. But whether you have done a good job or a bad job it is very hard to justify to shareholders, and I have to say a lot harder to justify to many of the workers in these companies and to the consumers who buy their products, payouts of the magnitude that we have witnessed.
I will quickly mention some of the cases that I think the Australian public would regard as excessive: the CEO of Santos Ltd, John Ellice-Flint, who received a handshake of $16.8 million on the way out the door; John Alexander from Consolidated Media Holdings, who picked up $15 million; Oz Minerals Ltd’s Owen Hegarty, who received $8.3 million; the ASX Ltd’s Tony D’Aloisio, who picked up $7.7 million; Challenger Financial Services Group’s Mike Tilley, who picked up $6 million; and Fairfax former CEO Fred Hilmer, who picked up $4½ million. And so goes the list of people who have, in some cases, been paid even after shareholders have expressed a view that they should not be paid. These are very large sums of money that are being paid to individuals and not, in all cases, because the corporations have done well. I want to refer to one of those cases from a few years ago. I quote from an article in the Age referring to some of the failed business executives in the National Australia Bank:
Three sacked National Australia Bank executives who last year took the blame for more than $3.6 billion in losses—
let me repeat that: they took responsibility for $3.6 billion in losses—
from the United States-based HomeSide subsidiary have walked away with … A$8.3 million in termination payments from Australia’s biggest bank.
And at the time the NAB chairman, Charles Allen, described the payments as ‘a necessary step.’ I have got news for the NAB: most Australians would not regard it as a necessary step. They would regard it as obscene. To have people who have been found to have created a $3.6 billion loss being told that they are no longer needed but that there is $8 million on their way out of the door is simply indefensible.
One of the things that I find most difficult to reconcile is the attitude of these same executives, and the boards that approve these payments, to such unwarranted largesse at the top end of the town whilst at the same time they mete out treatment to most of their workforce that can only be described as unfair and harsh. We saw it so often over the course of the last four or five years of the Howard government; some of these large corporations to which I have referred were only too keen to force their workers onto individual contracts negotiated without the support or assistance of their fellow workers or trade unions. They were only too keen to drive down their employees’ conditions of service at the same time as they were putting their hands into the corporate till to pay one another millions of dollars as they left these organisations in, in some cases, a worse state of repair than they found them in when they walked in. It is a reprehensible set of double standards, but it was all too common to witness, particularly in the last four or five years of the Howard government. And I have to say it was encouraged by ministers on the other side of this chamber at the time. In fact, it became so bad and so embarrassing that in the final days of the Howard government I can even recall the then Treasurer having to speak out publicly against some of these obscene payouts to directors whose companies had gone backwards and whose share price had fallen through the floor but who were still happy to pay themselves exorbitant amounts of money in the millions.
Australians who have just gone through a difficult period of 12 months because of a global economic crisis and who have been concerned about their own jobs in ordinary Australia, as well as the investors who have seen their money in shares under pressure because of the global economic crisis, have said, I think quite rightly, that enough is enough. This government has heard that voice of the Australian people—the voice of the Australian investors and the Australian workers of those companies. And it has heard the voice of the consumers of their products who at the end of the day have paid the money from which these profits and dividends are derived. The Australian Labor government has heard that call and this bill is dealing with the problem.
The payout that people get at the moment can be seven times the annual salary without reference to a shareholders’ meeting. As I have commented, this bill will reduce that to one times. I want to give some examples of payouts compared to base salaries that we have witnessed in recent years. These are taken from a report by RiskMetrics Group, whom a number of members will be familiar with and who are often quoted in these sorts of debates. AGL Energy Ltd’s Paul Anthony had a base salary of $1.3 million, which is not a bad salary to take home in any event. The termination benefit paid to Mr Anthony from AGL was $5.1 million—a 394 per cent return on his annual income. The Commonwealth Bank’s David Murray had a base salary of $1.9 million, again, a tidy take-home pay, I would have thought. When he left, he managed to get $2.4 million—a 126 per cent return on his base annual salary.
I want to make further mention of David Murray and the Commonwealth Bank. Under his leadership, the Commonwealth Bank’s attitude towards unions in the workplace and conditions of employment reached a low for the Commonwealth Bank, an organisation which for so long has been highly regarded for its ethics both in the marketplace and as an employer. Under David Murray, they had no trouble at all putting the thumbscrews on the conditions and employment remuneration of so many of their workers, but it did not stop David Murray picking up $2.4 million when he exited the Commonwealth Bank.
I have already made mention of Mike Tilley from Challenger Financial. His remuneration package in 2007 was $1.5 million. He received a termination payout of $6 million—a 400 per cent return on his annual salary. Under our law, a payment of that kind when this bill is passed will need to be referred to the shareholders, and so it should. The shareholders are entitled to make judgments on these matters. I also mentioned earlier John Alexander from Consolidated Media Holdings and his remuneration. In the year in question, he had a base salary of $3.2 million. He received a determination payout of $15 million—a 468 per cent return on his annual salary. Fairfax’s Fed Hilmer received a payout that was 300 per cent of his annual salary. He walked away with $4.5 million. Orica Limited’s CEO Malcom received a payout of $4.78 million—315 per cent of his base annual salary. The two final ones that I will refer to are, firstly, Owen Hegarty, who had a base salary of $1.3 million. He got a golden handshake of $8.3 million—642 per cent of his annual salary; and, lastly, Santos Ltd and John Ellice-Flint, whose annual salary was $2.69 million, a substantial salary package. The golden handshake was $16.8 million—625 per cent of his base annual salary.
The Australian public have had enough of this largess. Many ordinary Australian investors, workers and consumers have had to do it tough in the face of the global economic crisis. Many have had to tighten their belts and have had to deal with all of the pressures that this government has also been tackling. Against that background, to see the sorts of obscene payments that have been made without reference to shareholders is simply unacceptable and unfair, and it cannot continue. This bill is a good bill. The government has the support of many of the shareholder associations. I have no doubt that the government has the support of the overwhelming majority of Australians in this respect.
It is disappointing to see members of the opposition stand and try and put up the feeble argument that somehow the government has overstretched on this point. At least the opposition have read the breeze well enough to know that the Australian public will not tolerate a continuation of their regime. At least they understand that the laws that they defended for so long in government are repugnant to the Australian people and they have not sought to maintain those laws, although every now and then you do get that glimmer of Work Choices and their hope that maybe they can return to those sorts of approaches when dealing with Australian workers. I suggest that those opposite do two things: gauge that public breeze a bit better than they have to date and, more than that, actually look at the decency of this proposal.
This proposal will ensure that shareholders’ rights are better protected. It will ensure that some of the closed shop, top-end-of-town largesse, which is indefensible, is at least brought into the daylight. It does not in any way alter the base salary that can be paid; nor, indeed, is it going to stop necessarily any particular given payout on termination. What it does is provide transparency and accountability when folk at the top end of town want to walk out from their senior executive position taking millions with them. They are not decisions that can be made by the mates down at the club on a weekend after the golf game or down in the cigar filled chambers of the Melbourne Club, or someone else; they are decisions that need to be made in the light of day before shareholders meetings. We are going to provide the opportunity for shareholders to do just that.
I rise to speak in support of the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009 as moved originally by the minister back on 24 June and now before the House today. This bill aims primarily to strengthen the voice of shareholders. After all, they are the owners of the companies. When it comes to the provision of termination payments and golden handshakes for outgoing directors and executives, they should certainly have a say. I think this is especially pertinent to my electorate, where many of my constituents are what the media has quaintly termed ‘mum and dad investors’. But it is also pertinent to the many retirees and superannuation account holders whose savings are invested in publicly listed companies. I very frequently receive correspondence on issues relating to shares and the stock market, and the topic of excessive executive payouts and salaries is raised often. I think shareholders should not be denied a say in how much an executive or director of a company is paid upon termination. Their voice should be their vote.
Earlier on, I was listening to the member for Blair’s contribution and just now I was listening to the member for Brisbane’s contribution to this debate, and I agree that there is enormous community outrage and resentment towards these massive payouts. There are at the moment no defined limits to these payouts, unlike termination benefits that apply to ordinary working people whose termination payments are governed by awards, agreements and legislative instruments. You certainly will not find seven years of salary or wages paid to a worker at the time of termination—not once, not ever. Even when you look at some of the most progressive workplace agreements that actually deal with redundancies you will see they only allow up to four weeks pay per year of service—and many awards and agreements offer much lower levels. If you have a think about it, at an accrual rate of four weeks per year, an employee would have to work for 91 years to achieve a payout of seven years worth of remuneration.
This bill reflects action on the part of the government in the face of long-held community concern regarding exorbitant executive payouts, especially to the executives of underperforming companies. This bill has been put together in consultation with the industry and shareholder groups with the aim of strengthening the existing corporations legislation. Provisions are made in this bill for the protection of genuine leave entitlements, such as annual leave and long service leave, that would always be paid on resignation, as well as super entitlements up to the statutory percentage.
This bill also broadens the concept of who is considered to be key management personnel to a base wider than just directors to now include the five most highly remunerated officers of a disclosing entity. So people such as chief executives fall under the provisions. Importantly, this bill will ensure the shareholder vote cannot be affected by a retiree or an associate of a retiree by restricting them from voting for their own golden handshake. That happens far too often at the moment.
This bill also introduces company and personal fines for organisations that are found to have breached these new provisions. The fines of $19,000 for individuals and $99,000 for companies are a strong reminder of the government’s commitment to the enforcement of this regulatory regime. This bill will only affect new contracts and renewed or extended contracts. There is no provision in this bill for backdating to affect any existing, unaltered contracts.
The Rudd government, importantly, respects reward for effort—of that there is no question. There is no move by the government to cap payouts. Companies will not be compelled to reduce any payment or salary to anyone covered by the provisions of this bill. However, they will need to have any golden handshakes greater than one year’s base salary approved by shareholders—that is, the owners of the company. It is the shareholders after all that have to foot the bill in the reduction in the value of their shares after a large termination payment to a person who no longer works for their company and is of no current or future value to the company. This is an important point, as golden handshakes, as they are euphemistically called—although I like to call them ‘termination payments’—are a payment made to an executive or director after they have left the employ of a company, which can hardly be categorised as the most efficient use of company funds.
The government is installing a greater measure of democracy and transparency in the sector and allowing all shareholders a greater say on the actions of their boards, the performance of their executives and the performance of their company. The provision for this sort of decision for shareholders already exists; however, at the current threshold, it is a ridiculous seven years of total director or executive annual remuneration. This bill brings the threshold into a position which is more in line with community expectations and which will allow shareholders more say. This can hardly be considered a bad thing in this day and age, with the global financial crisis affecting economies across the world at a time when we have just witnessed the very worst of what a lax attitude to corporate governance can allow to occur. Good executives, performing well, will have no impediment to ample reward for their performance. But it seems incongruous to me that executives should be outlandishly rewarded for poor performance, without the opportunity given to the owners of the company—the shareholders—to vote on such a payout.
Recently, my staff and I assisted a number of constituents in my electorate who lost their jobs when Pacific Brands decided to sack 1,850 employees and shift its operations offshore. The Holeproof factory in Nunawading, in my electorate of Deakin, was one of the plants closed by the company. When those employees who are now redundant talk to me about the challenges now facing them, I have trouble measuring that up against the $3.5 million payment that the former Pacific Brands CEO Paul Moore received when he stood down from the company in December 2007. After all, it was under Mr Moore’s direction that Pacific Brands bulked up on acquisitions, leading to an $800 million debt that in part triggered this year’s abandonment of local production and the consequent mass lay-offs. Under the existing act there is no accountability to the shareholders of Pacific Brands—or its employees, for that matter—for Mr Moore’s actions, and he has already walked away with $3.5 million.
The idea that shareholders should have a say is not new either. As we saw in 2008, shareholders of Oxiana, now OZ Minerals, rejected a $10.7 million payout for chief executive Owen Hegarty. When this payout was announced in June 2008, it was assumed that it was a fait accompli and that it would be approved at the AGM the following month. But, in July 2008, the shareholders rebelled and that payment did not happen at that time.
To touch base with the reality of daily life for a while, a worker on an average salary of $55,000 per annum would have to remain at work for 194½ years, if you ignore inflation, to accumulate a sum of $10.7 million. That is mind-boggling when you think about it—in fact it is better than winning Tattslotto and not having to share the first prize. Yet this amount was put forward as being reasonable for a payment to a CEO who was no longer working in that role for the company. No-one could deny that Mr Hegarty had worked at Oxiana over a period of time, and had, I am sure, built value in the company, but the proposed payout was simply more than what the shareholders were prepared to put up with. This rejection of Mr Hegarty’s golden handshake was heralded by stock market commentator Stephen Mayne as a ‘red letter day for shareholders’. But, of course, there is more to that story—and, as the member for Brisbane said earlier, Mr Hegarty later collected $8.3 million for leaving. That is still an enormous sum of money in anyone’s eyes.
In the past week we have heard the news that the outgoing chief executive of Fairfax had his $762,000 base payment for five months work topped up with a $4.1 million golden handshake. This, of course, is in the same year that Fairfax reported a loss of $380 million. This payout to Mr Kirk came after remuneration details in last year’s Fairfax annual report indicated that Mr Kirk was entitled to a $2 million termination payout. Was there any explanation for this given to shareholders? No, there has been none forthcoming--not until the annual general meeting in November, according to Fairfax chairman and prominent Victorian Liberal identity Ron Walker. By that time the former chief executive, Mr Kirk, and the $4.1 million will be long gone. Under this bill, Mr Kirk’s payout would have been capped at a far lesser amount before a shareholder vote was required. Obviously, that opportunity to be heard would be far more palatable to shareholders than the unexplained $4.1 million payout that Fairfax sent Mr Kirk away with.
These are all examples of high executive payouts for poorly-performing companies. But there are also examples of large payouts in other companies, and I suppose I cannot speak on a bill such as this without talking about the former CEO of Telstra Sol Trujillo. He walked away with a payout of $3.76 million. I will go into this a bit more later on, but Telstra is a company that has performed a little better than some of those others I recently mentioned. But I never hear from my constituents about how well Telstra are doing or the outstanding service they give. In fact I hear the opposite. The feedback I get from constituents is about their burning anger that they are being slugged $2.20 to pay their telephone bills at a Telstra shop or a post office.
Let’s think it through. There are no surprises here—the money for these executive payouts has to come from somewhere. As the member for Brisbane said before, at the end of it all it is going to come from a customer—it is going to come from an ordinary person who has to stump up more money so that some fat cat at the top of the tree can walk out the door with more money. Interestingly, in the case of Telstra’s payment to Sol Trujillo, despite the size of the payment it would actually be below the thresholds proposed by this bill. Why is that? Well, that is due entirely to the size of Mr Trujillo’s base salary of more than $13 million. It certainly raises the related issue of executive remuneration, which I shall leave for another time. That is certainly something worth talking more about.
Recent research compiled by the RiskMetrics Group indicates that amongst the top 100 companies payouts of golden handshakes under the new regime proposed by this bill could have reduced by as much as $47 million for last year alone, if you take out statutory entitlements. Of the 13 top 100 companies that had a CEO depart during the 2008 financial year, all received payments of some sort, but, importantly, five of those 13 did not involve payments that would have triggered the need for a shareholder vote because the executive termination payouts did not exceed one year’s salary. So there is in my mind some sort of standard that already operates there at the moment. I suppose there is some defence of that standard by those companies. These five companies—Aristocrat Leisure, BHP Billiton, Bluescope Steel, Downer EDI and Westpac—show that what is proposed in this bill is not that far removed from current good business practice.
The RiskMetrics report found that three out of the 13 Top 100 companies had estimated potential savings in excess of $10 million should the shareholders have had the right to vote on these golden handshakes. It is not right that those very few people at the top of the tree dictate their own terms and conditions, not only when they are there but also when they are leaving, without reference to shareholders. I welcome this long-overdue reform to excessive executive and director termination payments and I commend the bill to the House.
I am pleased to speak in support of the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009. Most ordinary Australians are fed up with the largesse of executive salaries, and particularly the inequality of excessive termination payouts. Over the last few years we have heard of too many examples of executives and company directors walking out the door with obscene amounts of moolah. If you flick back through the business pages of any newspaper over the last few years, you will see some examples of this. For example, Transurban CEO Kim Edwards walked away with $13.3 million. Santos gave John Ellice-Flint a parting gift of $16.8 million. Sol Trujillo received a $3 million termination package after he earned more than $30 million in the job as Telstra CEO. If I can judge his performance on the comments made to me by my constituents, the mum and dad investors, they were not happy with that arrangement at all, especially when you look at the way Telstra shares have performed over that time.
Oxiana paid out $10.7 million to Owen Hegarty despite shareholders voting against the move. Great Southern paid $2 million to former chief executive John Young when he retired in February 2008, and of course after that investors lost some $1.8 billion in this failed company. There were obviously some flawed arrangements in that company. Great Southern made up nearly 50 per cent of the MIS sector, so many mum and dad investors lost out and many rural communities were destroyed when Great Southern went down the gurgler, yet $2 million was paid to the former chief executive, John Young, not too much earlier.
Such payments illustrate that this sector is out of control. They represent irresponsible corporate behaviour of the worst kind. What is particularly offensive to most ordinary Australians is that many of these payments have been made in the face of dwindling share prices and falling company profits—or, in the case of Great Southern, to the executive of an entity that was about to go kaput. In the midst of the global financial crisis, it is just not fair for retirees and mum and dad investors to watch their investments plummet while the failed CEOs and executives can leave with the so-called golden handshakes, when in reality few of them would actually deserve even a fake gold watch. President Obama recently put it this way:
… what gets people upset—and rightfully so—are executives being rewarded for failure.
I could not agree more.
It would have been easy to leave this issue in the too-hard basket, as the Howard-Costello government had done. However, the Rudd government is determined to do something about it. So the bill before the House amends the Corporations Act 2001 to beef up the regulations that govern termination benefits paid to company directors and executives. In doing so, the bill empowers shareholders to reject massive termination payouts that are not in the interests of the company. Under the Howard government system, an executive could receive up to seven times their annual salary before there was any shareholder approval required, and it is easy to see how quickly payouts can blow out when a director can receive seven times his package without any appropriate shareholder approval. This bill drastically reduces this threshold from seven times an annual remuneration package to one times the average annual base salary—surely a much more sensible, common-sense approach. This measure alone will go a long way to rein in excessive payouts.
When we look back historically at the way CEOs and executives have been paid, it is a horrifying arithmetical progression. I will not go back to the 1950s, when the situation was much better than it is today, but let’s look back to 1990, which is not that long ago. For Queenslanders, the Broncos had only been around for two years, to put it in context. Between 1990 and 2005 the average cash remuneration of a CEO in one of the top 50 listed Australian companies rose by 564 per cent to $3.4 million, which is 13.5 per cent per annum adjusted by inflation. But, if you look at average full-time earnings, they only rose by 4.2 per cent per annum. Here we are comparing apples with apples. If you look from 1990 to 2009, the top CEO pay ballooned from 18 times average full-time earnings, as they were in 1990, to—what do you think would be appropriate in 2009?—74 times. Obviously things are a little bit out of control.
But let’s not stop there. Let’s also have a look at the actual results of these companies. If they were performing at rates commensurate with those increases perhaps you could quieten down shareholders, but that is not the case. In fact, if you analyse the performance of companies against three criteria—return on equity, share price change and change in earnings per share, which anyone would agree are real measures of how a company is performing—researchers found that high and excessive pay levels actually coincide with a lower bottom line. It is counterintuitive, almost. This is from research by Dr John Shields from University of Sydney’s school of business. He said:
If you look at the numbers, it is accurate to say the more you pay a CEO the worse the company performs and the less you pay the better it performs.
It is obviously the principle they work on when paying politicians!
The bill will also increase the number of company officers for which shareholder approval of payments is required, to include key management positions as well as directors and senior executives. This is a good safeguard. It provides for additional accountability and, most importantly when it comes to corporate affairs, transparency. The bill also attempts to block any loopholes emerging by clarifying and expanding the definition of a termination benefit. It requires a broad interpretation of ‘benefit’. The bill also includes a regulation-making power to clarify, whenever there is doubt, whether payments are termination benefits or not.
Any termination payment made without shareholder approval will be required to be paid back immediately. Wouldn’t you love to see that—someone sitting down to write a cheque to give back to the corporation, to give back to the shareholders? I would like to see that. Obviously, it is not enough to have the carrot; we also need the stick. The arrangements are backed up by tough penalties for unauthorised payments, including $19,800 for individuals and $99,000 for corporations. These new arrangements will apply to all new contracts entered into, extended or substantially varied after this bill comes into law.
It takes courage for a government to introduce legislation like this. Ridiculous executive pay packets and golden handshakes have unfortunately become the norm in a culture of entitlement and greed in some sectors of corporate Australia, but that does not mean that we cannot turn this culture and that atmosphere around. We can drive a stake into the heart of these corporate vampires. Gordon Gekko must die! This bill is a response to an overwhelming feeling in our communities that these inequalities are just not right. It also sends a strong signal to corporate Australia: we and the Australian community are watching what you do. We expect you to be responsible and we expect you to treat your workers and your investors in the same spirit that you treat your CEOs. Ordinary Australians demand nothing less from the Rudd government, so I commend the bill, proudly, to the House.
I welcome the opportunity to speak in support of the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009. This bill will amend the Corporations Act 2001 to strengthen the regulatory framework relating to the payment of termination benefits to company directors and executives. The key measures of this bill include significantly lowering the threshold at which termination payments must be approved by shareholders; expanding the scope of the provisions to include key management personnel for companies that are not disclosing entities—this means it is not just CEOs that are covered by these provisions but also other senior executives who are on similar types of contracts; clarifying and expanding the definition of what constitutes a termination benefit; prohibiting directors and executives who hold shares in the company from participating in the shareholder vote to approve their own termination benefits; introducing an express obligation on the recipient to immediately repay unauthorised termination benefits; and, finally, introducing significantly higher penalties associated with unauthorised payments of termination benefits. These measures go to the heart of many of the causes of the global recession and the elitist corporate culture that has evolved in recent decades and which appears to be right in the corporate sector—a corporate culture that is driven by greed and self-indulgence and that has contributed substantially to inequality, price abuse and worker exploitation. I will speak to each of these matters in the time that I have.
Gone are the days when a CEO was usually someone who had worked their way up through the company, dedicated their working life to it and had the long-term interests of the company at heart. Today senior executives move frequently from one organisation to another and are generally on performance based contracts, taking with them huge payouts every time they move on. There is now very much a focus on the short-term result, which can end up in, amongst other things, the reckless behaviour that led to the current global economic crisis, or organisations whose long-term prospects are worse than when the executive started. At the same time the performance driven culture has created out of control and unjustified income disparity between executives and workers with respect to both salaries and termination payments. To highlight this point, I want to quote some statistics from the USA. Whilst these might be US statistics, I would expect that similar trends have occurred in Australia. Regrettably I do not have the Australian statistics, because I am not sure that a similar survey has been carried out. Data from the United States shows that in 1965 the average wage of a CEO was 51 times the minimum wage. By 2005 this ratio had grown to 821 times the minimum wage—that is, from 51 times to 821 times. That is the kind of change we have seen.
At a time when Australia has seen massive improvements in our health, education and economic position, the inequality between CEO and worker salaries is greater than ever. A key measure of this bill prohibits directors and executives who hold shares in the company from participating in the shareholder vote to approve their own termination benefit. An independent board of directors is expected to be part of the checks and balances within a company structure, yet we have seen several examples in recent corporate history in Australia of company directors acting to protect their own financial situation rather than that of the company and its shareholders. Directors of HIH Insurance served time in jail because they were providing misleading information to shareholders. This was the largest corporate collapse in Australian history, and the directors were providing misleading information on the company’s true financial position. They compromised their judgment by trying to protect the value of their own shareholding in the company. Directors of both ABC Learning and Babcock and Brown had significant shareholdings in their companies that had been purchased using margin loans. How can a director act independently when they are concerned that the loan they used to purchase shares may be cancelled by the bank if the share price drops below a certain level? These practices are dishonest, they are fraudulent and they must cease.
We have also seen several instances of this in the past 12 months in the United States, where CEOs and executives of firms have been given massive payouts while their company required a bailout from taxpayer money. Many of these so-called golden parachutes were paid from taxpayer dollars. The CEOs of Merrill Lynch, Lehman Brothers, Citigroup, Fannie Mae, Freddie Mac and AIG all received massive payments either as termination payments or, incredibly, as bonuses as government bailouts were being provided while the firms were being wound up.
This bill increases transparency and empowers shareholders to reject excessive termination payments. In Australia there are similar examples of excessive CEO golden handshakes and remuneration packages. According to a story written by Emma Connors in the Australian Financial Review in 2008, in the five years to 2006 the average base pay for a CEO of the top 100 listed companies jumped from $888,407 in 2001 to $1.8 million in 2006. The average annual bonus paid also more than doubled, reaching $1.66 million. Contrast those payments with those of working Australians. In the same period, from 2001 to 2006, the minimum wage increased from $413 per week to $511 per week. So, in a period when the average base pay of a CEO more than doubled, the minimum wage increased by only 24 per cent. Bonus payments also more than doubled for the same period. The departing Oxiana CEO Owen Hegarty was paid $8.3 million. The departing Telstra chief Sol Trujillo was paid $3.7 million in addition to the Telstra shares he was given. I understand that Sol Trujillo’s total salary package for his final 12 months was $9 million. This is despite Telstra’s share price falling around 40 per cent during his time—from above $5 in 2005 to around $3 in 2009. At the same time Telstra laid off around 20 per cent of its workforce under Sol Trujillo’s tenure, leaving some 10,000 Australians out of work.
Paul Moore, former CEO of Pacific Brands, received $3.48 million in termination payments when he resigned in 2008. Sue Morphet, the current CEO of Pacific Brands, received a pay increase from $700,000 to $1.8 million at the same time that 1,800 workers in her company lost their jobs. And there was $12 million paid to departing Qantas CEO Jeff Dixon in 2008. Interestingly, at the 2008 annual general meeting of Qantas 40 per cent of Qantas shareholders voted against the remuneration report that included this $12 million payout. These payments can only be described as greedy.
In today’s edition of the Australian Matthew Denholm has written about Tasmanian company ACL Bearings, which went into receivership last month. Jeremy Partridge, a worker at the company for the past 23 years, talks about the voluntary $100 a week pay cut he and other workers took in an effort to protect the long-term interests of the company. During the time when workers were cutting their pay by 20 per cent and moving to a four-day week, two directors were paid a total of $665,000 in redundancy payments. To add to this insult, the receivers of the company have advised that there is no money left in the company to pay the entitlements the workers are entitled to under their workplace agreement. I will quote Jeremy Partridge here. He said:
We’ve been shafted. They’ve walked away with the money and we got next to nothing.
I certainly understand and empathise with his sentiments. You can understand how workers at ACL Bearings feel betrayed by these two directors of the company putting their own financial interests first. I understand that this company also got some taxpayer assistance to try and keep it afloat.
In September 2008 the US government bailed out AIG using $182 billion of taxpayers’ money. AIG then used this taxpayer money to pay $185 million in bonuses to executives in March 2009. There was nothing legally the US government could do to stop them using taxpayer money in this way. It was only public outcry that forced some executives to forgo these bonuses. I refer to the US cases because we live in a global economy and we know full well that whatever is happening in other parts of the world is clearly going to happen here in Australia as well. We have seen similar situations in Australia with administrators of companies working to recover bonuses from directors of such companies as OneTel and ABC Learning. The measures in this bill mean that if a termination payment is made in contravention of the requirement to seek shareholder approval, the money must be repaid immediately. Failure to do so will result in significantly higher fines of $19,800 for individuals and $99,000 for corporations. These measures shift the balance away from the directors and executives to the taxpayer or the shareholder whose money is being used to pay the bonuses.
Earlier I referred to a corporate culture which underlies price exploitation and working conditions. I also referred to the performance based contracts today’s executives are placed on, performance measures which are inevitably tied to the bottom line of the annual profit and loss statements of firms. The profit focus of company executives inevitably leads to the two consistent strategies that we see from these profit driven executives, squeezing more out of their workforce through measures such as unpaid longer working hours, wage control, reduced staff numbers or contracting out services. Nothing original, no innovation—just ruthless and insensitive cost cutting.
The opposition we frequently see from CEOs to wage increases or better working conditions—or their support of the failed Work Choices laws—is not driven by national productivity improvements but by the personal gain and individual greed of executives whose own incomes rise as company profits rise. Contracting out services or outsourcing achieves a similar objective, except that the contractor, usually a small business operator, is squeezed to the hilt. And if the contracting business goes down the smaller contractors are often sent bankrupt and pushed to the back of the queue of creditors trying to recover money from the failed company. In the long term, the most productive organisations are those that invest in their workforce rather than exploit them. But when all you are interested in is short-term results, there is the behaviour I have just described.
I now turn to the second matter I referred to earlier, and that is the exploitation of consumers. Bottom line profits are also affected by prices charged. That is particularly so when consumers have little or no choice because the business they are dealing with has a monopoly or limited competition for the product or service being provided. There could be no better example of that practice than in the recent decision by Telstra to charge customers $2.20 for paying their accounts with cash. This matter has already been raised in the House by my colleague the member for Braddon. This new fee can only be described as a rip-off. Cash is legal tender, guaranteed by the government, and now Telstra has imposed a charge if customers use it. It has done because it can—not because it is right, not because it needs to, but simply because the new Telstra CEO wants to impose a fee, obviously to increase Telstra’s profits. One can only speculate why, but I will leave that to the imagination of the Australian people.
Constituents in my electorate of Makin who have contacted my office about this matter are outraged at the $2.20 fee, and understandably so. If they pay their accounts through their bank they are likely to be charged a bank fee. If they use a credit card they incur a credit card fee. So, whichever option they choose, it is likely to incur an additional cost. Payment of accounts is part of the administrative costs of every organisation and should be costed into the operational overheads of a business. One wonders what other charges Telstra proposes to add on in the future. And would the company act so inconsiderately if it did not have a monopoly?
The last point I make is how executive payments have contributed to the global financial crisis. It is my view that they have contributed to the global financial crisis because senior executives were hell-bent on short-term profiteering, thereby exposing industries and financial organisations to extreme risks—risks driven by unrealistic expectations and poorly assessed proposals and schemes and risks which would never have been taken if executives assessed the long-term outcomes of their decisions rather than the short-term profits. They do that because they know that they are only there for the short term and they do that because they know full well that by the time the consequences of their actions are exposed they will have moved on and be working elsewhere. They will have moved on having taken their own handsome remuneration from those organisations—all based on performance criteria which are underpinned by the bottom line profit of the company or firm that they are working for. Those kinds of practices, and practices which I referred to earlier, are not only dishonest but in some cases fraudulent. When we see some of those practices it is not surprising that some of those executives have ended up in jail. What is even more concerning and disturbing is that even as their failed organisations were going down senior executives were squandering company funds on lavish self-indulgences.
I heard the shadow spokesman refer to performance based criteria in contracts and the fact that this kind of bill may be a problem for such contracts. I have some experience in sitting around a table trying to determine whether a CEO has met the performance criteria that were expected of him. It is my absolute and clear conclusion that performance based contracts are nothing but a sham. Trying to determine and measure true performance is near impossible when in most cases the performance criteria are usually set in advance of the person being employed and are set in a way which would make it almost impossible to refute the CEO’s or executive’s claim that they have achieved their performance targets. So they become nothing more than a sham and nothing more than an opportunity for CEOs and executives to claim additional payments from the companies or firms that they work for. I am not persuaded by the opposition’s concern about that point; nor am I persuaded by the other matters that the shadow spokesman raised in his response to the bill.
This bill may well not solve all the problems that I have referred to and it may well not fix all of the concerns that I have with the way many CEOs and executives operate, but it is a welcome start. It is a start in the right direction. It is a start that I believe will be widely supported by the Australian people and, more so, a start that I believe that the Australian people would be expecting of this government. I commend the bill to the House.
The Australian people have become accustomed in recent years to reading stories of failed companies and of reading stories of companies that have recorded very substantially reduced profits or, indeed, very substantial losses in particular years of operations. They have become used to reading stories of companies that have reduced profits or substantial losses retrenching very, very large numbers of employees. Equally, in the context of these same stories, they have become used to reading of executives rewarding themselves notwithstanding the failure or poor performance of their companies with excessive termination payments at the very time that the company is on the slide. Almost all Australians who read stories of that nature recoil. There is something wrong about a system where company directors and senior company executives sitting around the boardroom table together can decide, in effect, to reward themselves with extraordinarily large amounts of money. They are not mere numbers, as the member for Fadden would have us believe, they are real dollars, excessive amounts of money, and what this bill, the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009, seeks to do is to impose some check, some curb, on those kinds of excessive termination payments.
In the last two years alone we have seen several high-profile Australian companies—Telstra, Pacific Brands and Qantas spring to mind as concrete examples—which have posted reduced profits or significant losses and which have restructured their operations and retrenched large numbers of employees. At the same time, those very companies, Telstra, Pacific Brands, Qantas—and there is a whole range of other companies that I could name—have continued to pay not only large salaries to their senior managers but often very, very large termination payments which almost everyone looking at them would say are excessive. Throughout the 11½ years of the Howard government nothing was done to rein in this kind of excessive remuneration of executives, and it has been left to the Rudd Labor government to try to come to grips with what, on any view, is a serious problem. It is a serious problem because what we are seeing is a failure of corporate governance; what we are seeing is a disconnect between the performance of a corporation and the way in which its executives are remunerated.
We are all familiar with the notion of bonus pay; we are all familiar with the notion of providing an incentive for good performance. But how far have we gone from a true system of incentive pay or performance pay when, at a time of shockingly poor performance by a company, the senior executives who have been responsible for that shocking performance are rewarded with huge salaries—payments that are in no way connected to the performance of that corporation—and a huge termination payment that is itself unrelated in any way to the performance of the company.
This bill seeks to alter the structure of executive pay and strengthen the regulatory framework that relates to the payment of termination benefits to company directors and executives. Specifically, at the moment, company executives can receive up to seven times their annual remuneration before shareholder approval is required. That represents a significant problem, as there is evidence that there is a lack of shareholder control and oversight. The House should be in no doubt that what this bill is directed at is returning some measure of control to the shareholders of corporations, because that is the mechanism that has been adopted in order to impose some curb or check on these excessive executive termination payouts.
There will be a requirement, if this legislation is enacted, for shareholder approval for termination payments of more than one year’s base pay. That will go some way towards curbing excessive termination payments. There is, on any view, something seriously wrong—and the Rudd Labor government is acting on this sentiment—when executives can walk away with millions of dollars, having engaged in a course of excessive risk taking, having presided over a situation where the company has lost substantial amounts of money and where hundreds or, in some cases, even thousands of employees have lost their jobs as a result of excessive risk taking by those executives. Something is seriously wrong when it takes just three days for some executives to earn what their employees take home in a year.
The government does expect that this legislation will lead to a change in the behaviour of senior executives and the behaviour of the boardrooms of Australia. Because even though it might be said that the mechanism that has been adopted here for shareholder approval will not in itself automatically lead to complete control over these kinds of payments, the fact that approval will need to be sought will ensure that the amount of these termination payments will become publicly known and, in the course of seeking shareholder approval, discussion of the amount of these termination payments will be possible. As always with matters of this nature, as the famous United States Supreme Court judge Justice Louis Brandis once said, ‘Sunlight is the best disinfectant.’ The fact that termination payments will be exposed to public scrutiny, exposed to the scrutiny of shareholders, and that shareholder approval will need to be obtained means there is likely to be a check and some brake on these payments, which at present are not subject to any check.
Currently, there are some requirements for disclosure of the actual remuneration levels of company directors. There is some requirement for disclosure of actual remuneration levels of the five most highly paid executives of corporations but, even there, there is a doubt as to whether those disclosure requirements that have been present in the Corporations Act for many years are requirements that will lead to the disclosure of any termination payments which are the subject of this legislation.
The House should be in no doubt about the amounts of money involved. It is not necessary to name the individual directors who have received very large payments in the millions of dollars. We have heard from a number of speakers identifying particular senior company executives who have received amounts in the millions of dollars. It is better to look at this as a systemic issue, and we need go no further than an article, which appeared in last week’s Herald Sun, reporting on an assessment done by leading corporate governance adviser RiskMetrics, which revealed:
At least $62 million could have gone to shareholders rather than departing CEOs if proposed legislation curbing “golden goodbyes” had been in force.
The research by RiskMetrics also revealed:
… departing chief executives from top Australian companies cost shareholders $80 million in termination deals last year.
And further:
Fourteen CEOs from 13 companies reaped generous payouts, with the average deal worth $5.71 million—almost 1.7 times the average paid over the past three years.
Eight of the CEOs received termination payments that exceeded a year’s fixed remuneration, effectively costing shareholders an extra $62 million.
It is worth quoting what Mr Martin Lawrence, head of RiskMetrics Australian and New Zealand research had to say about this very legislation which is before the House. He said:
… shareholders could have voted down the deals if proposed legislation had been in place.
To finish the quotation of Mr Lawrence:
One of the frustrations people have with executive contracts is that they are not drawn up in the context of deteriorating economic conditions when a lot of them are invoked …
We had the usual bizarre contribution earlier in this debate from the member for Fadden, who would have it that, in some way, this is interventionist legislation or socialist legislation, ignoring entirely that this legislation simply adds to a scheme of regulation of executive salaries, a scheme of regulation of directors’ remuneration that has been in place for many years. And the speech from the member for Fadden failed to understand that context.
Order! It being 2.00 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour. The member for Isaacs will have leave to continue speaking when the debate is resumed.
My question is to the Deputy Prime Minister, the Minister for Employment, Workplace Relations, Education and Social Inclusion. I refer the minister to today’s revelation that Building the Education Revolution will spend $2½ million demolishing four functioning classrooms at Abbotsford primary to replace them with four classrooms, in direct contravention of the wishes of the school community. Can the minister explain to the House how any cost-benefit analysis could justify such waste and reckless spending?
I thank the Leader of the Opposition for his question. It is important, because it goes to the government’s nation building for recovery plan in response to the worst global recession in 75 years. We do note the Liberal Party’s continuing opposition to supporting jobs during a global recession, and also its continuing opposition to supporting the biggest school modernisation program in the nation’s history.
The Leader of the Opposition has asked me a specific question, so I will answer it with some facts. The Building the Education Revolution component of our nation-building plan is supporting 24,000 individual projects that have been approved in around 9,500 schools across the country. These projects, of course, are benefiting students and supporting local jobs. More than 12,500 projects are underway and more than 400 projects are already completed, delivering tens of thousands of jobs around the nation.
These unprecedented efforts to support these jobs are being coordinated by coordinators at the national level and the public servants who support them, by the leaders of the Catholic and independent school authorities and by coordinators at state and territory government levels and the public servants who support them. I would like to thank the people across state, independent and Catholic education authorities who have worked so hard on this program that is vital to supporting jobs today and also supporting the nation’s productive future.
On the question of the Abbotsford Public School, which the Leader of the Opposition has raised with me, I can advise him of the following facts. The proposal about the development at the school was accepted by the school community on 25 May. That is, they endorsed the proposal that came from the New South Wales government, as the responsible education authority, through to the national government. So it was accepted by the school on 25 May. In terms of the proposal itself, it is about demolishing a building that was constructed—
What about what they want?
I am talking about the school community’s attitude to the proposal on 25 May. Then, in terms of the description of the proposal, the proposal is about demolishing a building from the 1950s, which is in poor condition, and giving a building in its place which, of course, would be a great improvement in terms of standards.
I note that there was some reference in today’s media reports about a covered outdoor learning area. That covered outdoor learning area is actually a program from the Building Better Schools program of the state government; it is not a Building the Education Revolution project. The Building the Education Revolution project is constructing the new building to replace the 1950s building, which is in poor condition.
I understand from media reports today—in the Australian newspaper, I believe—that there is concern in the school community about this, although the school community made a decision about it on 25 May. In circumstances where there is concern in the school community, obviously we are very keen to hear about their concerns. The best way, and the way that has been used by other school communities to indicate concerns and to have them looked at, is by emailing our Building the Education Revolution coordinator. The email address is ber@deewr.gov.au.
I can advise the Leader of the Opposition, in case he is interested, that during the course of the Building the Education Revolution program—more than 24,000 projects in around 9,500 schools—49 complaints have been received to date. Of course, those 49 complaints have and are being dealt with.
My question is to the Prime Minister. Will the Prime Minister update the House on the latest economic data and the government’s ongoing strategy to tackle the continuing global recession?
I thank the member for Franklin for her question. As a Tasmanian member of this place, I know that she and other members are acutely concerned about the impact of the global recession in all states in Australia and across her state as well, and what practical actions can be taken to reduce the impact of the global recession.
There have been a number of releases of data over the last 24 hours which show that, while Australia is continuing to weather the storm of the global economic recession better than most economies, we are by no means out of the woods yet. Overnight and today the new Westpac-Melbourne Institute index of consumer sentiment report was released, dated 9 September. The Westpac-Melbourne Institute index of consumer sentiment rose by 5.2 per cent in September to its highest level since July 2007. To quote the Westpac Chief Economist, Bill Evans, ‘This is a truly extraordinary result.’
Consumer sentiment is 34.4 per cent higher over the last four months. The consumer sentiment is now 45.4 per cent higher than October 2008, when the government announced its first economic stimulus package. The September result, of course, is attributed by Westpac to relief on the part of consumers that the economy has avoided recession and that expected job losses have not materialised—although, as I think the Deputy Prime Minister said yesterday, we are still deeply concerned about the further loss of jobs in Australia because of the impact of that recession.
It is worthwhile also putting into context where consumer sentiment lies here relative to other economies around the world. Confidence in Australia has been above total OECD consumer confidence in each month since the announcement of the government’s stimulus strategy last October. Furthermore, according to the latest Nielsen Global Confidence Survey released in July, Australia’s consumer confidence is the fifth highest globally and higher than that of any of the other major advanced economies.
I said before that there is data out today which underpins the fact that Australia is weathering the global economic recession better than most other economies but also there is data which has come out, which represents a wake-up call to the Leader of the Opposition, the Liberal Party and the National Party about how difficult the road to recovery actually is. For any party to celebrate the early withdrawal of stimulus would quickly turn into a wake for Australia’s economic recovery. As we see in today’s retail data and housing finance data, we still have a long road ahead and the government stimulus strategy, through our infrastructure strategy, is a key element of making sure that we get there in the end.
I referred just now to the ABS retail data. I inform the House that in the month of July the value of retail trade fell by one per cent and in the same month housing finance also fell by 2.3 per cent. These are sobering facts for Australia, which indicate that we have a long, long way to go in terms of charting the course to economic recovery.
This data underpins the need for our nation building for recovery and our nation building for the future strategy—a strategy, which is, so far, working. But we have a long way to go. Our strategy is about supporting jobs, small business and apprenticeships today by investing in the infrastructure we need for tomorrow. As a result of the strategy, Australia is the only one of the 33 developed economies of the OECD to have registered positive economic growth over the last year, it is the fastest growing economy of the major advanced economies, it is the second lowest unemployment of the major advanced economies, it has the lowest debt and deficit of the major economies and it is the only one so far not to have gone into recession.
Government policy has had an impact here. Critically, the decisions by business and small business have also had a huge impact in registering a better performance in this economy relative to others which have been buffered by the global economic crisis.
Opposition members interjecting—
Those opposite constantly interject. I would ask them to reflect simply on what the growth numbers for the last 12 months have been for the major advanced economies. The Japanese economy contracted 6.4 per cent, the UK economy contracted 5.5 per cent, the US economy contracted 3.9 per cent, the Canadian economy contracted 3.2 per cent, France was down 2.6 per cent, Germany was down 5.9 per cent, Italy was down six per cent, the G7 average contracted 4.6 per cent, the OECD average across 33 economies contracted by 4.6 per cent and the Australian economy grew by 0.6 per cent.
Why is it so hard for those opposite to say anything positive about the performance of the Australian economy? The government’s economic strategy has been supported by the Treasury; it is supported by the Reserve Bank of Australia; it is supported by national peak industry bodies—for example, ACCI was referred to yesterday by the finance minister; it is supported by public economists across the country, it is supported by each of the G20 economies; it is supported by the IMF; and it is supported by the World Bank.
There was a further contribution to debate today, a further development, which was the appearance at the doors of the member for Fadden, otherwise known as the ‘brains trust’ of the Liberal Party. The brains trust of the Liberal Party was out there at the direction of the Leader of the Opposition to reveal new truths about Liberal Party policy on the economy. What did the brains trust of the Liberal Party have to say on the doors today? Here is what he had to say:
… every other government in the world except for Mr Rudd and Labor, is actually winding back stimulus.
I presume that was the instruction from the dispatch box, from the advisers and from the Leader of the Opposition—to say:
… every other government in the world except Mr Rudd and Labor, is actually winding back stimulus.
It is a pity that those opposite occasionally do not read the odd report which comes from offshore because there was a communique out a couple of days ago at the G20 finance ministers meeting in London, which had this to say on behalf of the 20 largest economies in the world:
We will continue to implement decisively our necessary financial support measures and expansionary monetary and fiscal policies, consistent with price stability and long-term fiscal sustainability, until recovery is secured.
We have got the member for Fadden out there, representing the new orthodoxy on the part of those opposite, saying that, mysteriously, all these other governments around the world are reining their stimulus strategies in—except that the central bank governors and the finance ministers of the 20 largest economies of the world have said, in fact, ‘We have got to keep going because the recovery is not secure.’
I say this to the Leader of the Opposition before he dispatches the brains trust to the doors again, because we know how strongly he articulates the Liberal Party line handed to him on a sheet every morning. He will walk out there—a bit like walking up there to face the shrapnel each day—and deliver the line faithfully, except that he did not bother to actually read what was on it before he read it out. Here are a few basic things for those opposite to understand. Fact No. 1: the world is currently facing its most difficult recession in 75 years. Fact No. 2: the global economies, the G20, do not regard us collectively as being out of the woods yet, and the full consequences of this recession have not yet been reflected in the unemployment numbers. Fact No. 3: major economies around the world are not pulling the rug from under economic recovery by prematurely stopping their stimulus; they are in fact implementing their stimulus strategies. Fact No. 4, for the benefit of the member for Fadden, is that Elvis is not alive and well flipping burgers in Mississippi in a roadside diner run by the member for Fadden. The Leader of the Opposition lacks judgment; we all know that. The Leader of the Opposition now demonstrates himself to have lacked judgment on the economy. It is time they got with the national program.
My question is to the Deputy Prime Minister, Minister for Employment and Workplace Relations, Minister for Education and Minister for Social Inclusion. I refer the minister to her answer yesterday in which she indicated that Evesham State School, the one-student school that received a $250,000 grant under the Primary Schools for the 21st Century program, was in discussions with a view to amalgamation with other schools. According to the press, this appears to be news to the acting principal, who is also the sole teacher. At the time of answering this question yesterday, what discussions had the minister herself, her department or her office had with the one teacher, one student or one caregiver of the student at Evesham State School?
Very careful!
I thank the shadow minister for his question. Of course, his question, like the first question by the Leader of the Opposition, relates to the government’s nation-building plan for recovery, to our support for jobs during the worst global recession in 75 years and to the biggest school modernisation program this nation has ever seen. I note the continued opposition of the Liberal Party to the more than 24,000 projects in around 9,500 schools that are being delivered through this program in order to support jobs today, during the worst global recession in 75 years, whilst engaging in the biggest school modernisation program the nation has ever seen. I say to the shadow minister: the shadow minister would be aware that the Building the Education Revolution program works through education authorities. It works through the Catholic education authority, and I thank them for their efforts in delivering this program to schools.
Mr Speaker, on a point of order: the question did not go to a recitation of the guidelines for Building the Education Revolution. It went specifically to what discussions she, her office or her department had with the Evesham State School about amalgamation. I would ask her to answer that question.
Order! The member for Sturt will resume his seat. The Deputy Prime Minister will respond to the question.
Thank you, Mr Speaker. Of course, the reason I was going to the question of education authorities is that—although the shadow minister for education may not fully appreciate this—the Commonwealth government does not own or operate schools. What the Commonwealth government does—a fact that has clearly escaped his attention in the time that he has been shadow education minister—is to deal with education authorities. We deal with the Catholic education authority for the Catholic sector, we deal with independent education authorities for independent schools and we deal with state and territory government education authorities for state schools. Of course, the Evesham State School is operated by the Queensland Department of Education and Training on behalf of the Queensland government. Consequently, all discussions about amalgamations of this school—or indeed any other school, whether it is in the state system, the Catholic system or the independent system—would be conducted by those relevant education authorities.
So why did you say that yesterday?
The member for Sturt has asked his question.
As I am advised by the Queensland Department of Education and Training, the Evesham State School is located in the Central West Education District. It was opened in 1967. The nearest schools are the Longreach State School, some 72 kilometres away; the Muttaburra State School, 118 kilometres away; and the Winton State School, 124 kilometres away. So they are at quite some distance.
Mr Laming interjecting
The member for Bowman is warned!
The Queensland department advises me that the sudden drop in enrolments was unpredicted and related to a set of personal circumstances relating to families at that school. The Queensland department commenced formal consultation on the viability of the school, so those consultation arrangements are obviously in train. The Queensland department advises me that obviously they are concerned about this circumstance but they want to work through it with the community, particularly in circumstances where this drop in enrolments was not predicted. So those things are being managed by the Queensland department of education, as is appropriate, on behalf of the Queensland government. If a similar circumstance arose in the Catholic sector, it would be managed by the relevant Catholic education authority. If it arose in the independent sector, it would be managed by the independent education authority. When we set up the Building the Education Revolution program, we were obviously aware that schools do close and amalgamate, so the guidelines and arrangements for Building the Education Revolution can cater for such a circumstance and have catered for such a circumstance around the nation.
My question is to the Treasurer. Will the Treasurer update the House on the outcomes of the G20 finance ministers meeting held over the weekend in London?
I thank the member for Solomon for his question because last weekend in London I met with G20 finance ministers to discuss the full implementation of all of our commitments that were agreed to at the April summit. I think it is pretty clear that there has been a fair bit accomplished by the G20 over the past six to 12 months. One of the most significant accomplishments of the G20 over that period of time has been to put in place coordinated economic stimulus which has averted an economic catastrophe and it is the case that if it had not been for that coordinated stimulus the world economy would have been in a far worse condition than it is now. It is the case that finance ministers believe that we are not out of the woods yet and, until there are signs of a sustained return of private demand, stimulus must be implemented. So Australia has a lot at stake in this process because we are outperforming the rest of the world, something that seems irrelevant to those sitting opposite. But we are not immune to what is going on elsewhere in the world. There is a lot of hard work to be done to ensure that we can cushion our economy from the impact of this global recession.
It is pretty true to say that every finance minister in the G20 understands just how fragile the global economy is, something not understood by those opposite. This is the view of those internationally. Let us just look at the view of the IMF. Director Strauss-Kahn said:
While global growth appears to have turned a corner, we should not forget that so far, this has been mainly due to massive policy support … … … …
Unwinding the stimulus too soon runs a real risk of derailing the recovery, with potentially significant implications for growth and unemployment.
Let us go to what Tim Geithner, the US Treasury Secretary, had to say:
The classic errors of economic policy during crises are that governments tend to act too late with insufficient force and then put the brakes on too early.
We on this side of the House are determined not to make those mistakes. The UK Prime Minister said:
To decide now that it is time to start withdrawing and reversing the exceptional measures we have taken would in my judgment be a serious mistake.
Those are the views of three of the people sitting at the table over the weekend, and I would make the point that sitting at that table on the weekend were representatives and finance ministers from all sides and all ends of the political spectrum. There were conservatives sitting there; there were centre left governments sitting there. So how is it that everyone across the spectrum, across the globe, through the G20, agrees that stimulus must be maintained but that the only people in parliaments around the world who disagree are the Liberal Party of Australia? They are so out of touch. But it is worse than that. They simply do not understand the nature of the global challenge, and if they do not understand the nature of the global challenge they cannot be part of the solution. We had the farce on the door this morning of the member for Fadden. This is what the member for Fadden had to say:
… every other government in the world except for Mr Rudd and Labor, is actually winding back stimulus.
He said that in spite of what had been decided at the G20 over the weekend. He said it despite all of the evidence of what stimulus has done in this economy to protect small business and to protect our people. If they had their way, this economy would be in recession right now and instead of a positive figure of 0.6 per cent for the year it would have been minus 1.3 per cent, hundreds of thousands of people out of work and businesses closing their doors.
It is not just the governments of the world but also the business community. Those opposite are supposed to be the party of business, but on 8 September Peter Anderson, Chief Executive Officer of the Australian Chamber of Commerce and Industry, ACCI, said:
… the balance of risk supports the maintenance of most of the current fiscal and monetary policy stimulus.
… … …
The underlying conditions facing Australian business remain weak …
… … …
An in-built scaling down of economic support is preferable to sudden withdrawal.
That is the government’s policy. They are supporting the government’s policy. The only ones who are one out here are the Liberal and National parties in this parliament. Why is that the case? Because they will always put their politics ahead of the national interest. They will always put their self-interest before the jobs of Australians because they are not capable of coming on board for a set of proposals which protect our national economic interests. That is what has become apparent since the meeting of G20 finance ministers on the weekend. They are out of touch, they are out of their depth and they do not understand the nature of the challenge facing this country.
We on this side of the House will pursue the national economic interest. We will continue to support employment and business in the Australian economy. We understand the nature of the challenge. Business investment is weak. There has been a very substantial cut to our national income. Many businesses and employees are doing it tough and, while that is the case, we will continue to support them because that is in the national interest. The Liberal Party are operating in their own political self-interest, hoping that unemployment goes up, hoping that a withdrawal of stimulus will produce dramatic effects in the economy which will support their political objectives. We will move forward in the national interests and they should be condemned for their overtly political approach.
My question is to the Deputy Prime Minister, Minister for Employment and Workplace Relations, Minister for Education and Minister for Social Inclusion. I refer the minister to her answer yesterday about the one-student Evesham State School, which received a $250,000 grant under the Primary Schools for the 21st Century program. I further refer the minister to comments by the acting principal, who is also the sole teacher, in today’s media suggesting that the school did not even apply for the grant in the first place. How many other schools have been given grants under this program that they have not even applied for?
I thank the shadow minister for his question because it enables me to explain something about the Building the Education Revolution program that he obviously does not understand. The Building the Education Revolution program has three components: Primary Schools for the 21st Century, the National School Pride Program and the Science and Language Learning Centres for 21st Century Secondary Schools. The science and languages centres funding was applied for by schools in a competitive funding round. Funding for the other two programs—Primary Schools for the 21st Century and the National School Pride Program—was not applied for by schools; there was not an application process. The shadow minister may want to go back to the very first announcement of this program, and when he does he will find that when we announced the program we said we would work with education authorities to disburse the funds.
That seems to be resulting in some great hilarity amongst opposition members, but that is exactly the process that is used when the Commonwealth disburses recurrent funding to schools. When the Commonwealth disburses recurrent funding we disburse it through education authorities. So exactly the same process that was used to disburse funds to schools each and every year when the Howard government was in office is being used. That is, we deal with education authorities. We deal with the Catholic education authority to disburse money to Catholic schools, we deal with the independent education authority to disburse money to independent schools and we deal with state and territory government departments to disburse money to state and territory run schools.
I do not know if the opposition’s political case here is that the Catholic education authority cannot be trusted or the independent schools authorities cannot be trusted. I do not know what their political case is, but that is the way it works and that is the way it is working. We work with the education authorities to manage the program. The education authorities then consult and work with local schools on their needs and material comes through those education authorities to our Building the Education Revolution coordinator and, of course, the public servants who work with our Building the Education Revolution coordinator, as is a proper process.
On the question of the Evesham State School, the situation here—and I would have thought anybody just bringing some common sense to bear would quickly understand this—is that this has for many years been a very small school. Obviously other state schools are geographically quite far away. There was an unexpected drop in enrolments to one student this year. Clearly, that requires some decisions to be made about the future of the school. I am advised by the Queensland education department that the local community believes that factors like drought have impacted the number of families in the region and the number of children in the school. Those things are obviously worked through and consulted about at local levels, and that is happening now. On the $250,000 amount that the shadow minister refers to, of course that will not be used for a facility at the school whilst these discussions about the school’s future are in progress.
I seek leave to table the Queensland list of the Primary Schools for the 21st Century round 3 who received grants they had not applied for.
Leave not granted.
My question is to the Minister for Human Services and the Minister for Financial Services, Superannuation and Corporate Law. What role has the government stimulus package played in supporting investor confidence in the Australian economy? Why is it important that the government stimulus package remains in place and what risks are there to this not occurring?
I thank the honourable member for her question. The government stimulus package has helped employment and economic growth in the most difficult economic environment we have faced since the Great Depression. Important in this is consumer and investor confidence. The House will recall the numerous guest lectures from the Leader of the Opposition about the importance of consumer and investor confidence when confidence was falling. He has been strangely silent on this issue more recently and I cannot think why that might be the case. It might be because consumer confidence in Australia has increased by 46 per cent since October 2008, prior to the announcement of the government’s first fiscal stimulus package. This compares to an increase around the world and the OECD of two per cent over the same period.
Today I can inform the House of indicators of investor confidence that are also responding to Australia’s economic performance and the government stimulus package. The Investment and Financial Services Association today released the Quarterly Investor Sentiment Research Report, a survey taken across 700 different investors. In the first quarter of this year the index stood at minus 22.3 per cent. It now stands at positive five per cent for the third quarter.
It would be foolish for anyone to declare victory in the war against the economic crisis. It would be foolish and negligent in the extreme to declare that we can pull the rug from underneath the recovery and withdraw the stimulus. There are significant challenges that lie ahead, and these are underlined in some data out today. The housing finance figures and the retail trade figures out today indicate that there are still very significant challenges ahead for the Australian economy. To keep the unemployment rate steady it is necessary to create around 20,000 jobs per month and grow the economy at around three per cent a year—a huge challenge in this international environment. This underlines the need for the stimulus package to remain in place.
To declare victory and withdraw the stimulus is actually to concede defeat on unemployment, to say 0.6 per cent growth is enough, consigning thousands of Australians to an unemployment rate higher than that which is unavoidable. This is not just the government’s view; this is also the view of the Australian Chamber of Commerce and Industry, not an organisation necessarily famous for supporting government intervention. Yesterday the chief executive of ACCI said:
… there are considerable downside risks to any sudden or immediate withdrawal of the economic stimulus measures.
That recovery is not yet here. Therefore, those economic stimulus measures need to be maintained.
Perhaps it has been said best by Craig James, the chief economist with CommSec, who said:
The stimulus put in place by government spending and low interest rates has certainly done the trick of insulating the economy from global doom, but it is too early to declare victory.
While Australia is doing better than any other developed economy, we are still well below where the government would want to be and where as a nation we need to be in relation to long-term trend growth. It is far too early to declare victory in the fight to support jobs and economic growth.
I was very interested to hear the Leader of the Opposition declaring victory on the economic front. He is a bit like an armchair general a thousand miles behind the front line: he has opposed all previous attacks for the economy and now he declares victory. ‘We’ve won,’ he says, when he did not turn up to the battle. He says, ‘It’s all over; the war’s over.’ The Leader of the Opposition and the shadow Treasurer are engaged in a very tricky political manoeuvre. I like to call it the reverse ‘I told you so’. They have gone from arguing that the stimulus would never work to arguing that it has worked too well and now must be withdrawn. These guys make Janus look consistent. They lurch from saying, ‘Why isn’t the government acting?’ to ‘Why is the government acting?’ They go from saying, ‘The economy will be unaffected by the stimulus’ to ‘The stimulus is overheating the economy.’ They go from beating their chests and saying, ‘We’ll have nothing to do with this deficit-financed investment,’ to saying, ‘Where do we get the invitation to the library opening?’ They go from saying, ‘This will all overheat the economy,’ to saying, ‘Make sure you get my good side at the photo opportunity at the opening.’ They go from the ridiculous to the sublime, and today we saw the worst of it, with the revelation of the Robert doctrine, which says—
Mr Speaker, I rise on a point of order. I refer to standing order 104 on relevance.
The minister is responding to the question. The minister should commence to conclude his answer.
I do tend to agree that the member for Fadden is normally irrelevant, but he is relevant today because we see the Robert doctrine, which says, ‘If you cannot find a fact to support your argument, just make one up.’
Order! The minister is in continuation, but he should conclude his answer.
Those opposite should start voting and talking the way they position themselves at infrastructure photo shoots—that is, in support of the government’s stimulus package, continuing to support jobs and, most importantly, underwriting our continued economic recovery.
My question is to the Deputy Prime Minister, Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion. I refer the minister to her previous answer, where she appeared to tell the House that, of the three programs in Building the Education Revolution—the National School Pride Program, the Primary Schools for the 21st Century program and the science and language laboratories program—the only one for which schools made application was the science and language laboratories program. If the House heard her correctly, why did she announce last week that there was a 90 per cent take-up of Primary Schools for the 21st Century program, when it was a program for which they did not make application?
I will endeavour to explain this to the shadow minister as clearly as I can. If he had been interested in the way these programs worked, he could have learnt about it from the very first day that they were announced by the Prime Minister and me, when the nation building for recovery plan was announced earlier this year.
Opposition members interjecting—
I am just explaining the three elements of the program for the shadow minister. He asked me about them. I am presuming that he is interested in the answer. With respect to science and language centres, schools individually applied, went into a competitive round, an independent panel assessed who was going to be successful and 537 schools were successful. In contrast, when the government announced the National School Pride Program and the Primary Schools for the 21st Century program, we said that they would run out in correlation with school size and we would manage the process through education authorities.
We worked through education authorities for the three rounds of Primary Schools for the 21st Century and for the rounds for the National School Pride Program. We managed them through authorities rather than having individual school based applications sent to the federal government. The shadow minister obviously would be aware that, in working with the Catholic education system, the independent schools system and with state and territory governments, we managed the programs through those authorities. They then worked with school communities. The school communities identified projects, and the projects went through in three rounds for the primary schools and in a number of rounds for the National School Pride Program.
I would have thought that that was fairly clear and easy to understand. The shadow minister then asked me about costing assumptions in relation to Primary Schools for the 21st Century. As I have explained, in the management system I have just described the costing assumption was that there would be a 90 per cent take-up—that is, as we managed through school authorities and they—
But you’re giving them the money!
The shadow minister just called out: ‘But you’re giving them the money!’ That is what he misunderstands. When I say ‘managed through school authorities’, I mean we worked with school authorities to consult with school communities and feed in project details. That is why it was appropriate to make an assumption about take-up—how many schools would choose to participate through their education authorities.
When we come back to the basics, working with people of goodwill, Catholic education offices around the country support the program and their schools support the program. When we work with the independent school system, they support the program and their schools support the program. When we work with state and territory governments, and they work with state schools, they support the program—including the Liberal government of Western Australia—and their schools support the program. At the end of the day, the shadow minister can come into this House and ask the kinds of questions he is asking, but he knows, and the members of the Liberal Party who talk to us and go to their local schools know, that this is being grabbed by schools with both hands as a great opportunity to modernise school facilities and support jobs in the local community. This is part of the nation’s response to the global recession: supporting jobs today. It is the biggest school modernisation program in the nation’s history. It is part of modernising schools for this nation’s future.
My question is to the Minister for Competition Policy and Consumer Affairs and Minister for Small Business, Independent Contractors and the Service Economy.
Opposition members interjecting—
They are definitely very keen to listen to the minister. Will the minister advise the House of the latest retail sales figures and the role of the government’s stimulus package in supporting retail sales for business, including small business? Are there any impediments to ongoing stimulus?
Opposition members interjecting—
Are there any impediments! I thank the member for Fowler for her question. I can report on the retail sales figures that were released this morning. They indicate that the retail sales for the month of July actually fell by one per cent, which follows a contraction of 0.8 per cent in June. I can, though, put this in some perspective. Retail sales since November last year—that is, the pre-stimulus period—have in fact grown by 4.8 per cent. That sets us apart from the rest of the developed world because in the rest of the developed world retail sales have contracted in that period.
What it really means is that we need to take a reality check on the economic situation in this country. Yes, there are encouraging signs. Yes, there are positive signs in the consumer confidence figures that were released today. But we know how fragile consumer and business confidence is. We need to do everything that we possibly can to back in that consumer and business confidence and thereby prepare for the recovery. That is the view of just about every respected commentator in Australia and overseas. In fact, yesterday I cited no fewer than 13 examples of institutions and organisations overseas and here in Australia who say that a premature withdrawal of stimulus would be precipitant, reckless and irresponsible. Indeed, the International Monetary Fund said:
Premature exit from accommodative monetary and fiscal policies is a principal concern.
We have already heard the Treasurer refer to CommSec, who said, ‘We wouldn’t be advocating that the government or the Reserve Bank change their settings in any way at the moment.’ The Commonwealth Bank chief economist, Michael Blythe, said: ‘The Australian economy will continue to benefit from economic policy stimulus in 2009. We’re not there yet.’ An ANZ economist said, ‘Government policy actions continue to be a critical factor supporting the economy.’ They are just a few of the 13 organisations overseas and in Australia who say it would be reckless and irresponsible to withdraw stimulus.
But of course there are different views, and the different views have been articulated today straight off the script issued by the Leader of the Opposition’s office. The member for Fadden, the Gomer Pyle of Australian politics, stood up and said: ‘Gol-lee! Gol-lee, Sergeant! The rest of the Western world right now is lookin’ at how to wind back stimulus. Stimulus is all about puttin’ government money in where private sector money comes out.’
The minister should be very careful.
‘Well, as private sector money is goin’ back in, every other government in the world, except for Mr Rudd and Labor, is actually windin’ back the stimulus.’ Andy Warhol once said that everyone will have 15 minutes of fame. Well, brother, this is your 15 minutes of fame—the Gomer Pyle of Australian politics. But you did not write the script; we know that. It is not your fault—well, not entirely. You walked out with a script from the opposition leader’s office without reading it.
Mr Speaker, I rise on a point of order. We know Donny is very excited by having three answers in three days, but he needs to refer to the member for Fadden by his title.
The minister knows the requirement to refer to members by their parliamentary titles and to refer his remarks through the chair.
I will, Mr Speaker. When I was looking up various news reports for commentary on the retail sales figures about which I have commented just now, I noticed a report. You might remember, Mr Speaker, that earlier in the week I likened the opposition leader to Major Tom, an astronaut circling around the world isolated on the issue of stimulus. But he is not exactly alone. I learned today that Buzz Lightyear has been circling the earth for more than a year in the International Space Station. Do you how long he has been circling the earth? Four hundred and sixty-seven days, which is the number of days since the shadow minister for small business last asked me a question. Up Buzz Lightyear went into the atmosphere after I got that last question—two days later. I urge the Leader of the Opposition to come back to earth with Buzz Lightyear, get away from the isolation of the upper stratosphere, support the Rudd government, support the Rudd government’s stimulus package, support small business—
Order! The minister will now conclude his answer.
support the Australian economy and support Australian workers.
Honourable members interjecting—
Order! Members in cockies corner, including the member for New England, will put their props down. I am surprised by the actions that unite the Independents and the National Party. I make the observation, without in any way being partisan, that the education revolution might need to attract the attention of the member for Kennedy.
My question is to the Deputy Prime Minister, Minister for Employment and Workplace Relations, Minister for Education and Minister for Social Inclusion. I refer the minister to an estimate from Abigroup of $2.9 million for work on six classrooms in the Sutherland Shire in Sydney as part of the Primary Schools for the 21st Century program and another estimate for work on six identical classrooms in Cecil Hills in Sydney for $2 million provided by the contractor for the south-western Sydney area. How does the minister explain an inflation factor of almost $1 million between two schools less than an hour’s drive from each other that are building the same six classrooms?
I thank the member for his question. As the member may be aware, the Building the Education Revolution program, with more than 24,000 projects around the country at around 9,500 schools, is there to support jobs today whilst building the school infrastructure we need for tomorrow. He has drawn to my attention in this parliament two quotes he says he is familiar with from two schools for identical projects. Obviously I do not have with me sitting here in this parliament the project specifications and designs of the more than 24,000 projects authorised under this program. However, if he believes that there is a problem with the provision of tenders and quotes in relation to any school then obviously we want to hear about that. If any school has raised an issue with him and he wishes to raise it directly with me, I am very happy for that to happen. If the school community wants to raise it then the school community can raise it, as I have said, through the email address at my website.
As I have said, during the life of a program that has more than 24,000 projects at around 9,500 schools we have received 49 complaints. When those complaints are received, obviously we work to address them. If the member has information that he believes it is important for the government to have, particularly when it relates to something as detailed as whether or not the actual building projects are identical, which he claims—and I am not dismissing what the member says, but obviously I would want to see the building plans and the full details—I would be more than happy to work it through with him.
Mr Speaker, I rise on a point of order. There is a longstanding practice that, when a minister is unable for good reason to answer a question, they promise the House they will come back with the detail. I request you ask the minister to follow that practice.
Order! There is not a point of order.
Remember Darrell Lea?
The member for North Sydney!
I’m just trying to help the minister.
If the member is suggesting he wants to go to a confectionery shop, I can arrange that, but he will cease interjecting.
My question is to the Minister for Finance and Deregulation. What challenges to improving Australia’s productivity confronted the government when it took office? Is the government’s approach to addressing these challenges achieving support?
I thank the member for Hindmarsh for his question. It is instructive, if you want to understand the challenges facing Australia’s economy in the medium term, to look back to the time when this government took office. We had experienced in this country 10 interest rate rises in a row under the stewardship of a government that had promised to keep interest rates at record lows, and over several years the Reserve Bank had warned Australians on no less than 20 occasions about capacity constraints in the Australian economy, in our skills capabilities and in our infrastructure, all of which were putting upward pressure on interest rates, both short and long term. It is also instructive to recall that in the middle of a mining boom we inherited a budget with settings for spending growth at five per cent in real terms and all kinds of extraordinary spending horrors, ranging from $457 million being spent over 16 months on government advertising and the Regional Partnerships scandal to smaller and more spectacular rorts like $350,000 being committed to subsidise the private gift of an ornate carriage to the Queen by an ordinary Australian citizen.
During that period Labor consistently warned about the need for Australia to lift its game on productivity, to lift its game on infrastructure and to lift its game on skills, and from the moment we took office we have been resolutely focused on these challenges, firmly focused on the holy grail of reviving Australia’s productivity performance. It is true that that challenge has been complicated by the global financial crisis and by the global recession that has battered Australia in recent months, but we have never taken our eye off that challenge. All of the government’s primary efforts in the economic sphere, including our stimulus strategy, are ultimately directed to that goal, to nation-building for the future—huge investments in road, rail and ports; a big program of investment in higher education; a big injection of funding into early childhood, into schools, into technical education; a very large new program in innovation and research; and, of course, an ambitious regulatory reform agenda to deliver a seamless national economy by harmonising economic regulation across Australia.
Unfortunately, instead of learning from their mistakes in government—on productivity, on exports, on infrastructure, on skills—the opposition seem intent on moving into weirder and weirder economic positions. Yesterday we heard the member for Sturt declare that the global economic crisis is over, and today we have heard the member for Fadden state that every government in the world apart from Australia’s is winding back its stimulus strategy. They do appear to be living in a parallel universe. Pretty soon they will be denying that the global financial crisis even happened. As well as climate change deniers on the other side, we will have GFC deniers as well. The GFC will be something that was faked in a Hollywood studio—like the moon landing! That is where they are heading. That is where they are moving.
For those in the community who may be tempted to question the Liberal Party’s capabilities on economic issues, for those who are prepared to give them the benefit of the doubt as to whether they are a viable alternative government and not just behaving like a minority in the Senate, I would urge you to ask them a few questions, Mr Speaker, and they are questions of this kind—
Mr Speaker, what’s going on?
I am delighted that the member for North Sydney has dragged himself away from his twittering for a few moments. We know he has got an attention span problem, but it would be good if he actually paid attention to the parliament rather than sitting there twittering all day. We should ask the opposition: when they were in government why was it that they inherited productivity running on average, over five years, at above three per cent and when they left government the figure was one per cent? Why on their watch did Australia slip way behind most of the developed world on broadband? Why under their stewardship was Australia the only developed nation in the world where public investment in higher education went backwards? Why over their time in office was no effort made to get uniform national regulatory arrangements in occupational health and safety, in trade licences, in consumer laws and all those other areas where they did absolutely nothing? We know the answer to these questions. The answer is that they have learnt nothing from their time in office. The government is committed to that holy grail of productivity improvement, to fixing productivity in this country, and that is what all of our economic efforts are directed to.
My question is to the Deputy Prime Minister, Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion. I refer to the report in today’s Adelaide Advertiser in relation to the $112,000 in architectural fees for the three campuses of the Kangaroo Island school. Is the Deputy Prime Minister aware that the three so-called concept drawings, costing $112,000, were produced by an architect from Mount Gambier, 600 kilometres away, and took two days to complete, and that two of them were the same and a third was a design that already existed? Does the Deputy Prime Minister believe that $112,000 for two days work represents value for money?
I thank the member for Mayo for his question, and I note that he represents in this parliament an electorate with 73 schools and 212 Building the Education Revolution projects valued at more than $117 million. Despite his having voted against this program in this parliament, we are of course supporting jobs in his local community in South Australia while modernising the schools he purports to represent in this parliament. The member has raised with me, as part of our program, the three campuses of the Kangaroo Island community centre, the schools on Kangaroo Island. As I understand it, that is what he has raised with me. In raising that with me, I am sure he would understand that he is referring to three projects that are part of more than 24,000 projects at around 9,500 schools.
In relation to those three projects, their total value is $3.7 million. There is a project at Kingscote, for $2 million; a project at Penneshaw, a well known holiday destination in South Australia—I was there for school holidays myself once—which is valued at $850,000; and a project at Parndana, for $800,000. Each of these is for a multipurpose hall, and originally it was indicated that a standard design template would be used. However, because the local schools determined that they would prefer to use a non-standard design for their projects, architects were engaged to do the drawings. I understand the force of the member’s question to be that he believes the architects engaged—from Mount Gambier, I think he said—have not charged appropriately for their work. He obviously believes they have charged more than the work is worth.
If the member believes that to be the case and he wants the matter investigated, clearly we are happy to investigate it. I would obviously want him to supply to me the details he apparently has of the drawings. So, should he want to forward the drawings to me so that I can see evidence of the claims he has made about the quality of the drawings and whether or not the drawings are original or are of some sort of standard nature, I would obviously look at that and get back to him. If he would prefer, he can advise the schools on Kangaroo Island that they can deal direct with our Building the Education Revolution coordinator through the email address at my departmental website. I would indicate to him that this is a course that has been taken by 49 other schools out of around 9,500 schools which have had complaints—49 out of around 9,500—and the complaints that have been raised have been addressed.
My question is to the Minister for Health and Ageing. Will the minister update the House on the government’s plans to reform the health system through sensible saving measures to ensure its long-term sustainability?
I thank the member for Kingston for her question and for her ongoing interest in health reforms. The Rudd government’s health budget this year was all about laying the groundwork for reforming our health system: delivering better services to the community, funding new drugs and expanding successful programs but also making programs fairer and more sustainable in the long term. Unfortunately, the opposition do not seem to have made that connection between funding new programs and demanding that existing ones are fair, are delivering to patients and are providing best value for taxpayer dollars. We all know that health dollars are always scarce and, as the Health Reform Commission has said, business as usual is no longer an option. So the limited funding that we have must be targeted to ensure we get the best bang for our buck. The government believes we owe it to taxpayers to ensure that their hard-earned dollars are being used wisely and support goes to those in the community who need it most.
Yet the government’s measures that are doing just that are being blocked by the opposition. Our changes to ensure that patients, not specialists, get the benefits of taxpayer support are being opposed. Our changes that ensure that we are supporting secretaries who want to take out private health insurance rather than supporting the CEOs who expect us to pay for their private health insurance are also being opposed. We do want to adjust the fees that are paid for cataracts to better reflect the time, true cost and complexity of procedures. But the opposition, instead of arguing for the protection of patients or for taxpayers, want to protect ophthalmologists.
Get an architect to do it.
The member for O’Connor is interjecting. I know he is particularly interested in people of a certain age needing these cataract procedures, which I understand. What I would like to explain to the member for O’Connor and all members in this House is that, even if our cataract changes are accepted, ophthalmologists will earn, not as their income but just from the Medicare rebates, over half a million dollars on average every year from Medicare, after our cataract changes are supported. But the opposition still want to protect those ophthalmologists, who are going to earn more than half a million dollars a year on average just from Medicare—not from co-payments, not from health insurance, not from private payments.
It is time, we believe, that taxpayers are able to enjoy the dividends that new medical technology and new treatments have brought to patient care in recent years. The opposition cannot expect taxpayers to keep supporting new items and new medicines if they are then blocked from enjoying the benefits and savings that flow from new technology. Nearly $2.5 billion of money that could be better used in health is currently being blocked by the Liberal Party in the Senate.
Opposition members interjecting—
Perhaps those who are interjecting opposite might want to tell us which programs the Liberal Party wants us to stop funding so that they can actually move these measures. Do they want to remove the cancer drug avastin from the PBS, a measure that was only introduced in the budget because these savings measures were expected to be delivered? Perhaps the Liberal Party do not want to fund new regional cancer centres that were promised in the budget. Perhaps they should ask their colleagues in the National Party whether not funding those regional cancer centres is a good idea. Or perhaps the rural health package is what they have got in their sights.
Back at budget time the shadow Treasurer made clear that each and every measure in the budget would be supported with the exception of private health insurance. All of them would be supported. But now we see that the member for Dickson is not backing the shadow Treasurer. It also seems he is not backing the leader. Yesterday he held a press conference at the same time as the Leader of the Opposition, in competition with the Leader of the Opposition. He is not backing sensible health reform, he is not backing sustainability in the health system; he is certainly not backing the constituents in Dickson as he runs off to try for another seat on the Gold Coast. I do have one suggestion for what it seems possible that the member for Dickson is backing, and that is found at Sandown today, horse number 7, race 7. The name of the horse: Cut and Run. That is what the member for Dickson is backing.
Mr Speaker, I raise a point of order. Clearly this answer is no longer relevant to the question, and I would ask you to bring the minister back to the question or sit her down.
The minister will come to a conclusion.
It is time for the member for Dickson to back sensible reform, it is time for the member for Dickson to back sustainable reform and it is time for the member for Dickson to start backing his leader and telling those in the Senate to back our budget measures, as they promised in budget week.
Mr Speaker, I request that the minister table the documents from which she was quoting.
Was the minister quoting from a document? No.
My question is addressed to the Deputy Prime Minister, Minister for Employment and Workplace Relations, Minister for Education and Minister for Social Inclusion. I refer to the minister’s answer yesterday that the one-student Evesham State School is in ‘community consultation about an amalgamation’. I also refer to the minister’s answer today which identified the nearest other schools to the Evesham State School as between 72 and 124 kilometres distant. Can the minister reconcile these two statements, or does she agree that she has allocated $250,000 to build a library at a one-student school that the House can only conclude on the basis of today’s answer faces the prospect of closure?
I thank the Leader of the Opposition for his question and, to the Leader of the Opposition, he may be interested to know that in his own local electorate there are 43 schools, 103 projects worth $82 million—
Mr Speaker, on a point of order: clearly the beginning of this answer is not relevant to the question. If the minister is too embarrassed to answer she should just sit down and admit—
The Manager of Opposition Business will resume his seat.
Ordinarily, it seems to me that members in this parliament are pretty proud to come into this parliament and represent their local schools and they are pretty proud to hear about developments in their local schools. That is certainly the attitude of this side of the House. Obviously, the Leader of the Opposition is made of different stuff and does not want to know about the more than $82 million going to 103 projects in his 43 local schools. On the question the Leader of the Opposition has asked me—
Opposition members interjecting—
Leave the Ponzi scheme out of it.
The member for Banks should be very careful. His clean sheet is looking very, very hazy.
On a point of order, Mr Speaker: doesn’t the Deputy Prime Minister’s preamble to all these questions constitute tedious repetition?
There is no point of order.
If the allegation is that I am going to be repetitive talking about the benefits of this program to local schools, the answer is you betcha. On the question about the Evesham State School that the Leader of the Opposition has asked me, I made it clear in answer to an earlier question that no money will be spent at this school whilst it is in consultation about its future. That is a standard part of how the Building the Education Revolution program works. From the outset of this program we said we understand that education authorities—state, catholic, independent—work with school communities and from time to time schools open, schools close and schools amalgamate. That is an ordinary part of the way our education system works. If a school is facing closure or facing amalgamation, then education authorities would work through that process in their standard practice and obviously money would not be allocated and spent on school facilities in schools that are not going to be continuing as school facilities. We have had examples of that in this House in the past. Those examples have been raised by the opposition and I have explained it in the past.
If the Leader of the Opposition is somehow tossing and turning in his bed at night concerned that $250,000 is about to be spent at the Evesham State School and then it is going to close, can I tell him he can go and have a good night’s sleep—that is not what is happening. Can I also say to the Leader of the Opposition that if he wants to broaden his view then he may want to think to himself about how this program is supporting jobs right around the country during the worst global recession in 75 years. He might like to think to himself about how this is modernising our schools as needed for the future. If the Leader of the Opposition is going to lose sleep about anything, I think he should be losing sleep about his lack of support for those local jobs and his lack of support for schools around the country.
Mr Speaker, I seek leave to table the page from the Nation Building Economic Stimulus Plan which highlights Evesham State School has been allocated $250,000.
Leave not granted.
My question is to the Minister for Indigenous Health, Rural and Regional Health and Regional Service Delivery. What action is the government taking to improve men’s health in Australia?
I thank the member for Brisbane for his question and note the importance with which the government takes the issue of men’s health and the actions we are taking. I note also, and it is particularly relevant today, that this evening the Treasurer will be launching awareness month for prostate cancer. It is that issue on which I want to address members of the parliament today. We take men’s health very seriously. Prostate cancer is an important issue for every man in Australia. The Prostate Cancer Foundation at its website tells us—and it is very important for those of us in this place, most of us in middle age, some of us progressing through middle age—
Government members interjecting—
It is a question of definition of middle age. I can tell you that you all fit it. Some of you don’t, young lady. What we need to know is that, for a man in his 40s, there is a one-in-a-thousand chance of a diagnosis of prostate cancer; for a man in his 50s—and there are plenty in this place—12 in a thousand; for a man in his 60s, 45 in a thousand; for a man in his 70s, 80 in a thousand. Each year in Australia close to 3,000 men die of prostate cancer. That is equal to the number of women who die from breast cancer annually. Around 18,700 cases are diagnosed in Australia every year. Every day about 32 men receive the news that they have prostate cancer. Tragically, one man every three hours will lose his battle against this insidious disease. One in nine men in Australia will develop prostate cancer during their lifetime. Prostate cancer is the most common form of cancer in men and is the second most common cause of cancer deaths in men.
The government takes this issue very seriously. We have provided $15 million over five years to establish two dedicated prostate cancer research centres, the first of their kind in Australia. One is located at Epworth Hospital in Richmond and the other at Princess Alexandra Hospital in Brisbane, hosted by the Queensland University of Technology. These centres will conduct research to develop improved diagnostic tests, screening tools and treatments. Research programs are already underway at these two sites: $10.8 million has been provided in 2009 for 45 grants dealing specifically with prostate cancer through the National Health and Medical Research Council and $2.5 million has also been provided to fund a range of organisations through the Building Cancer Support Network grants. A further $2.6 million will be provided until 2012. Andrology Australia will also receive $1.2 million to support its focus on the prevention of men’s sexual and reproductive health issues, including prostate cancer.
The important thing, though, is that all Australian men need to take responsibility for their own health. All Australian men, and particularly those of us in middle and later middle age, need to have a regular health check, which includes a check for prostate cancer. I confirmed with my good friend Dr Washer that this would mean a PSA test and a simple physical examination. It does not hurt, it is worth doing and it could save your life.
My question is to the Treasurer. The Treasurer will recall saying in this House: ‘The price that must be paid by the Australian people for this government’s spending spree is higher interest rates, which the Reserve Bank said are now on the cards.’ Does the Treasurer agree with his own view that government spending sprees will result in higher interest rates?
I do welcome the question from the shadow Treasurer because it enables me to clear up a number of matters and distortions that the shadow Treasurer has been engaged in for some time. I am sure that whatever he quoted then certainly is not a reflection of my position. It is part of a determined campaign by those opposite to camouflage their vote against the stimulus by running a scare campaign, which claims there is some link between the government’s stimulus and any particular rise in interest rates that may be decided by the Reserve Bank independently of the government.
The first point is very clear. Interest rates are at record lows—50-year lows. These settings have been described by the Governor of the Reserve Bank as emergency settings. There were cuts to the cash rate of 425 basis points late last year and through into this year. Of course, that has brought great benefit, particularly to those with a mortgage. Someone with a $300,000 mortgage would have had the benefit of something like $9,000 a year. It was part of a powerful monetary policy response put in place by the Reserve to complement and to work with a very powerful fiscal policy response put in place by the government. The result of that is that our economy grew by 0.6 in the year through to June and without that stimulus it would have contracted. That was just the fiscal stimulus. Of course, the monetary stimulus has been on top of that. It is viewed around the world as being one of the most effective stimulus packages put in place.
The Governor of the Reserve Bank has also made the point that he is entirely comfortable with the fiscal stance of the government and its medium-term fiscal policy. He also made the point that, because rates are at emergency lows, at some stage into the future they will rise; they will be adjusted independently by the Reserve Bank. That brings me to the next point, and this is where those opposite are so desperate with their scare campaign. They come into this House and somehow pretend that global forces are not going to have any impact on interest rates in this country. Of course they will—they will have an impact in this country as they will have an impact around the world. The Prime Minister and I have made the point that rates internationally will rise over time as the global economy recovers, and we are not immune from that, and that will impact on the cost of credit in this country. The other factor that does impact on it is official decisions of the Reserve Bank which they take independently.
I would make the point that the 0.6 per cent growth figure that we recorded in June is well below trend growth. Trend growth came in at 0.6 for the year; that is, there is a lot of spare capacity in the Australian economy. But, of course, just as we are unwinding our fiscal stimulus as we go through next year, monetary policy will be adjusted as well. That is what happens when an economy begins to grow.
Those opposite are so desperate that they come into this House and somehow pretend that the fiscal stance of the government will have an immediate and direct effect on decisions of the Reserve Bank, when it is not the case. It is yet another scare campaign from those opposite to hide their embarrassment at the fact that they came into this House in February and voted against the package we put in place to support small business and to support employment in the Australian economy. Of course, now that they have been proved wrong by the data, by all international organisations and by the Australian business community, they seek to hide their embarrassment from that fact by constructing another fake and false scare campaign.
The business community in particular understands the importance in this country of having customers come through the door. The construction industry understands the importance in this country of our stimulus measures and the business community also understands that they are wound down over time. They were put in place to have the maximum impact in the June quarter, and we can see the results of that. As we go through subsequent quarters they will be wound down. That is as it should be, because fiscal stimulus is temporary and targeted. They cannot hide—
$40 billion from the 1st of July!
Sloppy Joe over there cannot hide his embarrassment that when the nation needed the Liberal Party to back the country they backed themselves. You can see the embarrassment on their faces here today. How do they go out and explain to the Australian community that when business needed the backing and when workers needed employing they were playing politics in the parliament. This distortion of what I have said in this House from the shadow Treasurer today is yet another example of another scare campaign to camouflage the fact that they have not got one positive idea for Australia’s future.
My question is to the Minister for Families, Housing, Community Services and Indigenous Affairs. When and how will pensioners benefit from the government’s pension reforms?
I thank the member for Longman for his question, and particularly for his hard work on behalf of more than 23½ thousand pensioners in his electorate.
I am very pleased to be able to inform the House that from 20 September we are going to deliver an increase to the pension payments of 3.3 million aged pensioners, disability support pensioners, those on carer payment, wife and widow pensioners and veterans on income support payments. These increases are fair, sustainable and long overdue. They certainly provide Australia’s pensioners with much needed support but, of course, also strengthen the pension system to make sure that we are meeting the needs of an ageing population.
The government’s secure and sustainable pension reform was, of course, announced by the Treasurer in the May budget, and these are the most significant reforms to the pension since it was introduced 100 years ago. From today, and over the next two weeks, pensioners will receive letters from Centrelink setting out their payment rates. From 20 September, in just a few days time, a single pensioner on the maximum rate of the pension will receive an increase of $32.50 a week. That is as a result of the budget increases. This will be paid via an increase of $32.00 a week in the base pension and a $2.50 a week increase in the new pension supplement.
The new pension supplement will include the full value of the utilities allowance; the telephone allowance, paid at the higher internet rate; the GST supplement; the pharmaceutical allowance plus the increase in the base rate; and, of course, the increase for the pension supplement. These increases are in addition to that which pensioners can expect to receive from regular indexation. Regular indexation will also occur on 20 September.
Members might be aware that we have introduced a new pensioner living cost index as part of this major reform package. This will operate alongside the consumer price index and the male total average weekly earnings benchmark. Just for the information of pensioners who might be listening, and all members, this September the government’s new pensioner living cost index has resulted in the higher pension rise, rather than either the CPI or the MTAWE benchmark.
For the information of all members, total indexation for single pensioners will be $5.83 a fortnight and for couples combined will be $9.93. As a result of the budget increases and indexation single pensioners on the maximum rate will see an increase of $70.83 a fortnight from 20 September, bringing their total pension payments to $671.90 a fortnight. Pensioner couples on the maximum rate of the pension will receive a pension reform increase of $20.30 a fortnight, paid through the new pension supplement, and indexation increases of $9.63 a fortnight. This will bring the total increase for couple pensioners combined to $29.93 a fortnight for those on the maximum rate, bringing their total pension payments to $1,013 a fortnight.
In these very difficult economic times we have succeeded in fundamentally reforming the pension system, making it adequate for the millions of aged pensioners, disability support pensioners, carers and those veterans who do depend on it. We have also made the very tough policy decisions to make sure that this pension rise is affordable so that Australians have got a fair and adequate pension system for those who need it when they need it.
My question is to the Treasurer. Is the Treasurer aware that not only is Australia now a net importer of fruit and vegetables, pork and seafood but also the ABS international trade series indicates that Australia will become a net importer of all food items within the next 12 years? Would the Treasurer advise how Australia will feed itself when the Murray-Darling, currently producing 45 per cent of Australia’s food, is cut from eight million megalitres of irrigation to only five million megalitres?
Finally, in light of this and the dire implications of the diminution of our indigenous soil—albeit that all three are creations of the previous government—could the Treasurer assure the House that, in contrast, this government will look at some food and biofuel production in Northern Australia, where an area the size of Europe with almost all of Australia’s water has at present virtually no agricultural or biofuel production whatsoever, except for a minute coastal strip in a small dot of the Ord—
Honourable members interjecting—
It is a good point that I am going to make. Just shut up and listen. Is Northern Australia to continue—as a creation of previous governments—to be increasingly condemned to being a fire starter, a feral pig farm and a prickly acacia nursery?
Order! The member for Kennedy should approach his questions with a little bit more care. I understand his enthusiasm.
I thank the member for Kennedy for his question. He raised a number of very important points of policy, and I will attempt to address as many of them as I can. I start off by saying that I and the government recognise the enormous potential of Northern Australia. With dangerous climate change, this brings great opportunities to that region and also great dangers and great threats to a number of our traditional industries elsewhere in the country. Indeed, I think this is a view shared by the member for Solomon, the minister for regional development, the member for Kalgoorlie, the member for Leichhardt and the member for Dawson.
There is a variety of issues here. I will start with one that is foremost in my mind. Can I say that I very much enjoyed my recent trip to Mount Isa—to the centre of what is called the ‘northern economic triangle’. This was to evaluate, as the minister for resources knows, what can be done not just to enhance the supply of power to Mount Isa but, in solving this critical problem, to further enhance mining in the region and, most particularly, to liberate the potential of this area for renewable energy.
If you look at a map of Australia in terms of potential for renewable energy, what you will find is that across Northern Australia—and particularly in the seat of Kennedy—there is enormous potential for renewable energy, for solar, for geothermal and for wind power. If we can overcome some of the issues to do with transmission—and a part of that is a study about power to Mount Isa—then that combined with the government’s response to climate change through the CPRS, and most particularly through the renewable energy target, will have a dramatic impact and provide an enormous incentive for investment in these areas. That is just with renewable energy, and there are many other possibilities.
The Prime Minister has been to the Ord, where something like $100 million is going in from the Commonwealth to stage 2 of the Ord. On top of all of that there is the potential for industry and the potential for trade. The Minister for Trade is spending enormous numbers of hours on planes, going around the world trying to do something about breaking through the gridlock in the Doha trade round. There was a very encouraging meeting in India just last week in which the Minister for Trade was very prominent in trying to ensure that we can make some progress. Why do I raise that issue? I raise that issue because one of the very big problems we have, being a country that produces an enormous amount of rural produce, is getting access to markets. Many other things need to be done in that sector but without getting access to markets we have a real problem, and the government is very much seized by that issue. That did happen over the last 12 years, as the member for Kennedy indicated. Come in, spinner, because the member for Kennedy was quite correct in his categorisation of the inertia of the previous government when it came to Northern Australia.
I have always had a long interest—as the member for Kennedy knows—in what can be done to enhance food processing in this country. The nature of food processing has a lot to do with price at the farm gate, as the member for Kennedy has indicated. A review of the Horticulture Code of Conduct is currently in train and recommendations are coming from that. Even if those opposite do not understand this, I know that the member for Kennedy does understand the importance and how those couple of issues are linked. Then there is the wider issue of what happens to agriculture in this country. You are correct to point to the fact that there is so much water in the north and that, as climate change comes forward, we have some very big decisions as a country to take in this area. That is just covering a few of the issues raised by the member for Kennedy but, as always, I am happy to talk to him later on about the rest of them.
My question is to the Minister for Veterans’ Affairs. Will the minister inform the House about the importance of the government’s pension reform package for the veteran community?
The Harmer review and these pension reforms are good news for the veteran community in this country. We are talking about an additional $1.1 billion with respect to income support for those veterans and war widows who are in a situation where they rely on government income support. We are talking about some 320,000 Veterans’ Affairs pensioners in this situation, some 190,000 service pensioners and over 105,000 war widows. This comes on top of the 325,000 or thereabouts who benefited from the bonus payments in the first stimulus package and the nearly 130,000 who received support under the second stimulus package.
The Harmer focus was very much on the issue of income support for those who really needed it. As was outlined by the Minister for Families, Housing, Community Services and Indigenous Affairs earlier, it was also about simplification of payments and also improved indexation methods. It is complex, and the circumstances around individual veterans are something which they will need to understand. They will be written to accordingly to ensure that they have the information that they need to understand the nature of what they are receiving.
Opposition members interjecting—
Again, the point was targeting where it was really needed for those who definitely required it—those who were on the lowest levels of income support from government. I note from some of the interjections that there have been issues raised around the question of disability pensioners under Veterans’ Affairs, the circumstances they face and the position around the question of why they did not receive this increase with respect to their disability pension payments. Let us make it clear, though: overwhelmingly they do receive support through these changes. Of TPIs—those most severely disabled veterans who have suffered in the cause of their country—some 80 per cent-plus will receive benefits as they receive income support payments from government because they are in a situation where they are reliant on income support payments from government. Some 60 per cent of TPIs will in fact receive a net benefit into the future regardless of the impact of the taper rate and the transition situation, because nearly 50 per cent of TPIs are in receipt of the maximum level of income support they can receive from government according to their circumstances, whether they be single or in a couple. In fact, overall almost two-thirds of DVA disability pensioners, including those on general rates, will receive benefits through this system.
I want to make it very clear: the indexation method that was fought for over a 10-year period of neglect under the Howard government has been maintained and enhanced through the introduction of PBLCI as outlined earlier during question time. There is absolutely no doubt that this is a positive move forward for the veterans community in terms of those relying on income support.
Tell us about the DFRDB. Tell us about the defence pension.
You were a passenger on that one, Griffo.
I note also from some of the comments made across the table that there are issues around the question: what does the opposition really stand for on this issue? Maybe it is time we heard what their actual position is, because there has been a bit of smoking going on around the edges—smoky positions with respect to this. There were a few people on email suggesting certain things about what they stand for and a few people around the edges intimating that they might support the shadow minister over there. The shadow minister, the member for Paterson, has alluded to the fact that there might be some support there. Let us get clear what the opposition’s position has been with respect to these issues over the term of this parliament.
Tell us what the government position is.
That is an interesting point, but you see, Member for Kalgoorlie, there actually was an opposition position on this issue. It is one of the few issues where you actually had a position.
The minister will ignore the interjections.
You might recall that when the member for Bradfield was the Leader of the Opposition you had a position. You believed targeted income support was an urgent need. So what did you have? You had 30 bucks a week for single age pensioners, but that is all you had.
Order! The minister will refer his remarks through the chair.
In fact, when asked the member for Bradfield specifically excluded service pensioners—I might add, to the shock of the RSL and others in the ex-service community. But then you had another policy. The member for Wentworth became Leader of the Opposition and you expanded that to cover—
The minister will refer his remarks through the chair.
Sorry. The opposition, Mr Speaker, expanded it to cover service pensioners, but they still left out couples and war widows. So even when they have had a policy—and it is one of the few areas they have had a policy in since they have been in opposition—the circumstances were that they excluded massive elements of the veteran community. So where is your policy now? Are you supporting an income support targeted approach as implemented by this government? You are, because you have passed the legislation, but are you going further than that? Are you prepared to go further? I do not think you are.
Order! I remind the minister that my vet affairs days were 23 years ago and he should refer his remarks through the chair.
My question is to the Treasurer. I refer to his earlier statement that the government is unwinding the stimulus next year. Treasurer, how can you possibly claim to be unwinding the stimulus when 40 per cent of the $106 billion of new additional spending announcements since the 2008 budget kick in from 1 July next year? Moreover, how can you make that claim when even in 2012-13 government spending as a percentage of GDP will be nearly 2½ per cent higher than what you inherited in 2007?
That is not bad coming from someone who was a member of a government that was the highest taxing government in Australian history, spent like a drunken sailor at the height of a boom and presided over 10 interest rate rises in a row when it had promised to keep interest rates at record lows. That is the record of the Howard government, and we will not do what it did, which was to mislead the Australian people when it claimed it would keep interest rates at record lows. That is what it did. It told a lie to the Australian people and it was sprung at the last election. That is exactly what happened. So let us have no more humbug from those opposite when it comes to interest rates.
Mr Speaker, on a point of order: if he cannot answer it, it was about record levels of spending.
The member for North Sydney knows that that is not a point of order.
Answer it.
The member for North Sydney should contain his enthusiasm.
Yes, more sloppy work from the shadow Treasurer. He is famous for it, because he has no attention to detail and he gets it wrong most of the time. He was in here twittering yesterday in question time. That gives you some idea of the attention to detail and their focus on alternative policy. What lies at the core of the argument that is being put forward by those frauds opposite is simply this: somehow they are claiming that the responsible borrowing that we had to do—
Responsible borrowing?
Yes, responsible borrowing—responsible borrowing to save the Australian economy, responsible borrowing to support business, responsible borrowing to support workers—something which never has a priority with those on that side of the House.
Mr Speaker, a point of order on relevance—spending. Stop spending money.
In coming to the dispatch box and raising the point of order, the member for North Sydney quite succinctly went to his point of order, being relevance, and then added matter that had no relation to the wording of his question. He went to argue a case.
No, I didn’t.
I would think that shouting ‘Stop spending’ is putting a case and is debating. Whether it is the right case or the wrong case is not for me to decide whilst in this chair. I simply say to the member for North Sydney that that is an abuse of the opportunity that I have protected for people to raise points of order and I would hope that he desists from that in future.
As a consequence of the global recession, the government had to borrow to cover the revenue collapse—and there was a revenue collapse of $210 billion. Those opposite do not want to acknowledge that fact because, presumably, if they will not acknowledge that fact, they can come into this House and tell us how they were going to make up the difference. Were they going to cut government services by $210 billion or were they going to put up taxes by $210 billion? If they had done either of those, they would have crashed the economy.
Mr Speaker, on a point of order: the Treasurer was asked a question about winding back the stimulus, which is clearly a question about spending not a question about revenue, and I therefore ask you to draw him back to the question.
The Treasurer will respond to the question.
We did have to borrow responsibly to support the economy. Those opposite will not acknowledge that and what they have to nominate is the increased taxes or the services cuts they would have put in place to replace the loss of $210 billion. This goes to the very core of their economic credibility. It is the case that we have borrowed responsibly for economic stimulus, and they will never understand that our stimulus has been carefully designed to withdraw from the economy as the private sector recovers. That is how it is designed; that is how it is constructed. It means doing all the heavy lifting that those opposite have opposed every inch of the way when private demand was at its lowest. Withdrawing it is just common sense as private demand returns. So they have it so wrong on stimulus. All of this hysteria and all of their scare campaigns are about camouflaging the fact that they have not got a clue what is going on—absolutely clueless.
They said the stimulus would not work; now they are saying it has worked too well. They said it would not create a single job; now they are saying it is creating too many. The Leader of the Opposition said that the stimulus was not going to create a single job. Has there ever been a bigger own goal in public policy in the last 50 years than what the Leader of the Opposition said at the Press Club when he said stimulus would not create a single job? If anything demonstrates how clueless they are, if anything demonstrates the lack of judgment of the modern Liberal Party, it was that statement at the Press Club just prior to the budget this year. All the way through this term they have shirked the hard work. We know the job is not finished and, in the face of this dirty scare campaign which has no basis in fact, we are going to defend the national interest and support Australian jobs.
Order! The Treasurer will resume his seat. Has the Treasurer concluded? The Treasurer has concluded.
My question is to the Minister for Infrastructure, Transport, Regional Development and Local Government. How is the government assisting motorcyclists to stay safe on our roads?
Today the member for Werriwa assisted in the launch of the Good Gear Guide, a practical initiative developed by industry and the Motorcycle Safety Consultative Committee in conjunction with my department. It was a very big event at the front of Parliament House. We had the member for Werriwa and the member for Bradfield both in their leathers out there with their bikes supporting motorcycling safety. They were joined by the press gallery’s own two-wheeler Malcolm Farr as part of the launch.
Was he wearing leather?
He was wearing leather as well, I can inform the Deputy Prime Minister. The member for Bradfield summed it up best when he said, ‘Motorcycling’s a bit like politics: you need a back protector.’ Who better than the member for Bradfield to know that? It is an activity that we all love. It is not quite as dangerous as politics, but is getting there. I thank the member for Bradfield, the member for Werriwa, Malcolm Farr and the Motorcycle Safety Consultative Committee, including Shaun Lennard from the Australian Motorcycle Council, for their promotion of this important safety initiative.
The number of registered motorcycles has grown by 50 per cent over the last five years and we are seeing great growth, particularly in recreational riding. It is important that the message get out there that people need to be safe every time they get on a motorcycle, be it a scooter or right up to a superbike. Those figures come through in that motorcycles make up five per cent of registered passenger vehicles on the road but motorcyclists make up 17 per cent of fatalities. We know that 12,000 motorcycle riders are hospitalised every year as a result of either on-road or off-road crashes.
What the Good Gear Guide does is promote a valuable resource in that it helps riders to protect themselves in the best possible way—and that is through what they are wearing. There is no doubt that many injuries can be avoided or their severity reduced if riders are wearing the right gear: appropriate protective clothing including jackets, boots, gloves and, of course, helmets. This is very much a practical guide that will help riders when they are shopping to get the right gear. It can also be downloaded from my department’s website www.infrastructure.gov.au. It is a great safety resource and I encourage local members to promote the Good Gear Guide in their electorates—even with their reduced newsletters, they can certainly do that. This is a very practical initiative and I very much thank Malcolm Farr, the member for Bradfield and the member for Werriwa for their assistance with today’s launch.
Mr Speaker, I ask that further questions be placed on the Notice Paper.
Mr Speaker, in my capacity as Leader of the House I have received correspondence from Harold Thomas Golden and Norma Jean Golden of Tara, in Queensland, who raise the issue that they received correspondence from the federal member for Maranoa thanking them for signing a petition. The letter to me indicates that Mr and Mrs Golden state that they have never heard of the petition or signed the petition.
I want to make it very clear that I cast no aspersions on the member for Maranoa, whom I know to be a man of honour, but in terms of the issue of petitions that are signed and the issue of whether people are therefore made accountable or not I would suggest that perhaps it could best be referred to the Standing Committee on Petitions to look at this question. I table the correspondence for your benefit and ask you to rule or to suggest accordingly.
How is this a question to you, Mr Speaker?
It might become clear why I have taken the question as a question about the way in which the House would deal with this matter. Under the standing orders we have created a Standing Committee on Petitions. Standing order 205, which talks about rules for signatures, says that each signature must be made by the person signing in his or her own handwriting. I think that in the first instance, as with analogous situations where there is an appropriate committee, I propose to refer the letter that was sent to the Leader of the House to the Standing Committee on Petitions for them to deal with it as a committee. If there are other things that are required arising from their discussions, we would then bring them back to the House. I say that it is not really a matter for executive government; it is a problem for the parliament to have a look at and decide which way it wishes to proceed.
Mr Speaker, I seek to make a personal explanation.
Does the member claim to have been misrepresented?
Yes, I do.
Please proceed.
Mr Speaker, on the Victorian regional ABC Radio drivetime program yesterday, the topic was the distribution per electorate of the Regional and Local Government Community Infrastructure Program grants, where the funds were allocated on a competitive basis. I reported factually that Murray electorate did not receive a single cent from that program. That was a fact, Mr Speaker.
The Minister for Infrastructure, Transport, Regional Development and Local Government then came onto the same program and claimed that I was wrong and proceeded to refer to some different grants that were allocated to all Australian local government bodies on a formula basis. The facts were therefore misrepresented. Murray electorate did not receive any competitive program funding, and I seek permission to table a document which details that very fact.
Leave not granted.
Mr Symon interjecting
Order! The member for Deakin is not assisting.
Mr Speaker, I wish to make a personal explanation.
Does the member claim to have been misrepresented?
In a most egregiously scurrilous manner.
Please proceed.
In the Prime Minister’s lame tirade today during question time he somewhat surprisingly failed to read out the entire quote where at the end I had made a correction and actually used the phrase ‘considering a stimulatory reduction’. It would have been helpful if the Prime Minister had done the right thing and read out the full transcript.
Mr Speaker, I wish to make a personal explanation.
Does the honourable member claim to have been misrepresented?
I do, Mr Speaker.
Please proceed.
The member for Murray alleged earlier today that I had somehow made a misleading statement to ABC Victorian regional radio yesterday. I pointed out that the Murray electorate had benefited from $3.715 million in funding through the Regional and Local Community Infrastructure Program and outlined the programs to councils, including Shepparton, that were received.
I think that, by the time we get to a one-all draw, maybe, there are other mechanisms that might be used.
Mr Speaker, on indulgence: I was referring, as you know, to the competitive grants, and the document spells out quite categorically the facts.
The member for Murray cannot use indulgence to start to argue the point.
Mr Speaker, on indulgence: Friday will mark the retirement from the Australian Public Service of Ms Helen Williams, who is present with us in the Speaker’s gallery today. Helen has been the Secretary of the Department of Human Services since May 2007. However, Ms Williams has been a departmental secretary or equivalent since 1985—over a quarter of a century of service at the highest levels of the Australian Public Service. She was appointed Secretary of the Department of Education in January 1985. She subsequently served as Associate Secretary of the Department of Employment, Education and Training, Associate Secretary of the Department of Transport and Communications, Associate Secretary of the Department of the Prime Minister and Cabinet, Secretary of the Department of Tourism, Secretary of the Department of Immigration and Multicultural Affairs, Public Service Commissioner and Secretary of the Department of Communications, Information Technology and the Arts.
Importantly, Helen was the first female departmental secretary in Australian history. She is also the longest serving departmental secretary currently serving, and I am advised that she has served longer as secretary or secretary equivalent than any other individual in Australian history bar one, Sir Robert Garran. Helen has been a trailblazer for women in the Public Service and has been involved in an enormous array of public sector reforms.
I have personally appreciated her counsel and support in my brief period as Minister for Human Services. Helen is well known for her support of the professional development of those under her management. This means that, although she leaves the Public Service on Friday, the qualities of rigour, independence and dedication that she has instilled in her colleagues will remain as perhaps her most valuable legacy.
I thought it was important that the House mark this important milestone and I know that the Prime Minister would like to add to these remarks. I know the whole House will join me in wishing Helen all the best for a very well-earned retirement.
Hear, hear!
Mr Speaker, on indulgence: I am not going to detain the House long, but I would echo the remarks of the Minister for Human Services. Helen Williams has been a loyal, dedicated and professional public servant for many, many years. We should honour those who are the muscle and sinew of government in this country, and public servants are obviously that. We would not be able to run a government without thousands of public servants, and the dedicated leaders of the Public Service should probably be acknowledged.
I would also like to congratulate, if I may, Finn Pratt, on his assumption of the secretaryship. I worked with Finn Pratt closely in the department of employment. He was an extremely diligent, hardworking and enthusiastic public servant back then. He supported the policies of the former government, as he should, and I am sure he will support the policies of the current government with equal professionalism.
Mr Speaker, on indulgence: I would like to support the remarks which have been made by the Minister for Human Services in relation to the impending retirement of Helen Williams. It is important, when people who have served so long as a professional public servant leave office, that the parliament, in the cases of outstanding careers, acknowledges that transition. The fact that Helen Williams has been so long a secretary of Commonwealth departments in multiple capacities is itself worthy of note. What is doubly worthy of note, as the Minister for Human Services indicated before, is that she was in fact the first woman to be a secretary of a Commonwealth government department.
This is actually very important in the Public Service when you look across the ranks of the SES and see how the composition of the APS has changed in terms of the representation of women at senior executive service levels. When I first entered the Public Service 25 years or so ago, the number of women who were SES officers was very, very thin indeed. Now I am advised—and I stand to be corrected on this—that we are looking at something like a third of SES officers across the APS who are women. That figure we hope to see improve over time. The contribution which Helen Williams has made as a role model and, as the Minister for Human Services said before, as an encourager of young women and other young officers seeking to carve out a career in the APS should be noted.
The other thing I would say, on a personal note, is that I have worked with Helen as a public servant in the past as well, except we were on different sides of the table. I was working for the Queensland government and she was representing the Department of the Prime Minister and Cabinet in those days. In those days, the states were right and the Commonwealth was wrong. These days the tables have turned! From my earliest experience in working with her as a colleague on complex questions of Commonwealth-state relations, she demonstrated all the professionalism that we associate with the independence of the Australian Public Service.
The last thing I would say is that what we see in Helen Williams is, I believe, a model for the independence of the Australian Public Service that we wish to see evolve into the future as well. Whatever happens in this place with changes of government from time to time, we wish to see that the culture of our independent Public Service is reinforced, strengthened and perpetuated into the future. That is something which I believe the outgoing Secretary of the Department of Human Services has reflected with great distinction in her career so far and therefore I believe represents a symbol of what needs to occur and continue to occur in the future as well. Helen, we wish you all the best in the next stage of your professional life.
Order! I am sure that all members of the House would wish me to associate the House with the remarks of the Prime Minister, the Minister for Human Services and the member for Warringah and wish Ms Williams all the best for the future.
Hear, hear!
Mr Speaker, on indulgence: I just want to draw the House’s attention to the fact that today is the fifth anniversary of the terrorist bomb explosion outside the Australian Embassy in Jakarta on 9 September 2004. The explosion killed 11 Indonesians and injured over 200 others, about 30 very seriously. Some of the victims themselves worked in the Australian embassy. Today our thoughts are of course with the families of the victims. This will be a sad reminder for them.
It is also a reminder of the professionalism, the stoicism and the courage of Australian officials who were in the embassy at that time. I was reminded of this recently when I visited Jakarta in the aftermath of the July Jakarta hotel bombings. This is a group of Australian officials who have been through a lot of pain and hardship in recent years—the Bali bombings, the Garuda air crash, the embassy bomb attack and the recent Jakarta hotel bombings. We very much value their professionalism, their courage and their dedication to the work they do for Australia in Indonesia.
Members on both sides might recall that our ambassador at the time was Ambassador David Ritchie, who was actually seated at his desk when the bomb went off. A metal fence post went through the window and he narrowly escaped serious harm, if not death. Fortunately, he was unscathed. He then immediately set about the task of establishing a command post. We pay tribute to the good work that he did on that occasion. Since then he has been Deputy Secretary to the Department of Foreign Affairs and Trade, serving governments of both political persuasions with distinction. Recently he advised the acting secretary of the department and me that he was proposing to retire as deputy secretary, effective on Friday. I have asked him to conduct some offline projects, which he will do, and towards the end of the year he will prepare for an overseas mission, the details of which I will announce in due course. But, on the fifth anniversary of the attack on the embassy, where Ambassador Ritchie performed with such courage and distinction, I want to draw his longstanding contribution to the attention of the House.
Could I also just make the point that, in all of these very difficult and tragic events that we have dealt with, our cooperation with the Indonesian government continues at a first-class level. No country has done more than Indonesia to hunt down terrorists and to offset terrorist activity, and we continue to very much applaud their efforts in this respect.
Mr Speaker, on indulgence: today, 9 September, marks the fifth anniversary of the bombing of the Australian Embassy in Jakarta. As the Minister for Foreign Affairs stated in his remarks, 11 people were killed, including visitors to our embassy and Indonesians who were employed by our embassy—a guard, a gardener—people going about their everyday lives. About 200 people were injured in the attack, including a police officer whom the Australian government medivaced to Singapore and paid for his treatment and hospitalisation. This attack came in the form of a car bomb outside the entrance to the embassy. It was a message from terrorists to Australia, but it only increased our resolve to work with Indonesian authorities to eliminate terrorist activity in the region.
This week we will also mark the eighth anniversary of September 11. Our thoughts and prayers go to all affected by terrorist attacks, and particularly—on this day, 9 September—to those affected by the tragic event in Indonesia five years ago.
Documents are presented as listed in the schedule circulated to honourable members. Details of the documents will be recorded in the Votes and Proceedings, and I move:
That the House take note of the following document:Government Response to the House of Representatives Standing Committee on Communications—Phoning Home: Inquiry into International Mobile Roaming
Debate (on motion by Mr Hartsuyker) adjourned.
by leave—I am pleased to inform the House of important progress that has been made in our efforts to conclude the Doha Round.
New Delhi outcomes
Last week in New Delhi, the Indian government hosted a trade ministers’ meeting, which was significant for two reasons. First, 35 countries attended, meaning that this was the most representative meeting of trade ministers since the Doha talks stalled in July 2008. Ministers were not just there in their own right, but also representing all the significant groupings within the WTO. Second, with India as the host, it represented the significant re-engagement of India, which was seen by many last year as an obstacle to conclusion.
Arising from New Delhi, significant and strengthened political momentum was injected into the Doha Round negotiations, with a direction to chief negotiators to intensify their efforts next week in Geneva. There was unanimous recognition that we are in the ‘end game’ of the Doha Round. There was unanimous support for a new and broad based commitment to intensifying negotiations to conclude the Doha Round in 2010—a commitment to not only focus only on the agriculture and NAMA issues, but negotiate horizontally across the range of Doha issues, such as services, rules and trade facilitation.
This outcome from New Delhi built on momentum from the significant re-engagement of the round since June this year. The outcome in instructing chief negotiators to meet next week is designed to enable significant progress to be reported to the G20 leaders meeting in Pittsburgh later this month.
Australia’s role
The outcome of last week is another hard won outcome. It has come after long periods of strong and sustained advocacy by Australia. For the last 18 months this government has done everything possible to reactivate the Doha Round, to find a way through the obstacles, to work with key players, to find solutions. This government inherited less than ideal parameters in which to pursue Australian interests. This point was highlighted in the August edition of the Farm Policy Journal, which noted:
In 2001-2002, perhaps Australia could have negotiated differently within the Cairns Group and perhaps that might have made a difference
I have not used this as an excuse and just blamed predecessors. On the contrary we have accepted the legacy and tried to build upon it, to fight for gains for our industries and to fight for export markets that will result in more Australian jobs. But the legacy has meant that we have had to work hard to put Australia back at the centre of the world trade talks. We got very close to concluding the round in July of last year—we solved around 80 per cent of the major issues.
Last year the US and India were seen by many as the major players holding up a Doha outcome. Since then, Australia has been at the forefront of drawing these countries back into the negotiations—culminating in the outcomes in India last week. Progress since July last year has been difficult. The timing of the appointment of the new US trade representative and Indian elections have hampered efforts at quick resolution of engagement and quick resolution of outstanding issues. We took the first decisive road back to engagement at the Cairns Group meeting which I convened early in June in Bali, a meeting that is now widely acknowledged as having provided a new boost of political momentum to the Doha Round. A considerable amount of the credit for that re-engagement should go to the host, Indonesia—not only a strong Cairns Group member but also the Chair of the G33, the grouping of developing countries in the WTO. Despite its own elections in July, Indonesia saw the need to show leadership in the round.
The Cairns Group meeting also engaged the new US trade representative, Ron Kirk, and the new Indian commerce minister, Anand Sharma, for the first time—the latter barely one week into the job. That meeting in Bali started the momentum for the new political will needed to conclude—an instruction called for at an earlier London meeting of G20 leaders. The political will generated in Bali was further built upon at a meeting that we hosted in Paris, on the margins of the OECD. Collectively, the results from Bali and Paris fed into the L’Aquila, Italy, meeting, where leaders of the G8 plus an additional eight called for conclusion of the round by 2010. Then followed meetings of APEC in Singapore and ASEAN in Bangkok. These combined efforts prepared the ground for the successful outcomes that we had in New Delhi. Following that meeting, Prime Minister Singh told us personally that India is committed to concluding the round in 2010. He strongly supported us in getting the job done.
Progress has been evident on a number of fronts since July 2008. There have been two important factors in the way forward. First, the impact of the global financial crisis had a significant bearing. Leaders recognised trade is a key ingredient of the global recovery. Leaders have squarely placed their weight behind conclusion of the Doha Round, and the reasons are threefold.
Because of the importance of trade and concluding Doha, world leaders stand ready to become engaged to achieve that objective. So what we have is significant buy-in to the political will needed to achieve this result.
The second point I wanted to make here is that we also learnt the lesson from placing too much emphasis on just one ministerial meeting. As important as the meeting of ministers was in Geneva last July, it seemed to place all our eggs in one basket. It was a significant meeting because the political engagement got 80 per cent of the way there. The remaining 20 per cent has remained elusive ever since. To bridge the gaps we agreed that there should be more frequent engagements by ministers, in an informal way—to reinforce constantly the political will and to give continued and strong direction to negotiators—and in effect to establish an iterative process between political will and the technical solutions to outstanding Doha issues.
The way forward
Our senior negotiators will meet in Geneva next week with clear instructions to do just that—to resolve issues or to narrow the gaps. The forward agenda will focus on key agriculture and NAMA issues. But it is also accepted that we need to intensify progress across the Doha landscape—services, rules, trade facilitation and other areas. This is the progress that we will report to the G20 leaders. This is the momentum that we must maintain at every opportunity remaining this year—as part of an intensified effort to conclude the round.
Recent critics of Doha
I think it is important to use this opportunity to address a couple of issues raised in two recent commentaries on Doha and on trade protectionism initiatives. The August edition of the Farm Policy Journal, which I referred to earlier, makes two key arguments that I wish to respond to. First, it suggests that what is on the table on agriculture is worse for Australia than existing trade opportunities. But nothing could be further from the truth. Doha offers enormous potential gains to Australian workers and Australian businesses, not just Australian farmers. For our farmers, what Doha offers is this:
On this point, last Thursday I met again with EC Commissioner Fischer-Boel to continue our push for the EC to end its dairy export subsidy program—a program that endangers the interests of our dairy exporters. Whilst we seem to have had some success in limiting the impact of these detrimental policies, the fact is that the subsidies still remain. Only the conclusion of the Doha Round would ensure the eradication of these sorts of policies and mean that they cannot be used in the future. That is what I mean when I talk about strengthening and building the insurance policy against the future use of policies detrimental to our farmers.
Beyond the agricultural gains, Doha would mean real market opportunities for our industrial producers and for our service providers. It would mean breaking down behind-the-border barriers to trade. It would make overseas investment easier and more reliable. It would mean jobs for Australians—and it should be noted again here in the House that one in five Australian jobs is generated by businesses involved in trade. Quite simply, the benefits from the Doha Round would be unparalleled and unequalled by any other trade agreement.
With the growing momentum for the conclusion of Doha, and the emerging signs of economic recovery, it is time to strive for more than an ‘exit strategy’ from the global recession. It is time to strive for the higher goal of sustainable economic growth—growth that can create ongoing employment and deliver higher living standards.
The second article I want to refer to from the Farm Institute journal calls into question the role of the Cairns Group. The Cairns Group occupies a unique position in the WTO negotiations, being the only agricultural negotiating bloc that brings together developed and developing countries. Despite this mix, it provides a united, strong voice in the WTO against further agricultural trade distortion. Regardless of criticisms of the conduct of the group in the past, no-one can question the leadership of the Cairns Group over the past 18 months. We convened the group regularly in the lead-up to and during the July 2008 ministerial meeting.
The Cairns Group meeting in Bali this year is widely considered to have kick-started the Doha negotiations. And most recently, in New Delhi, the Cairns Group statement delivered strong impetus to the important outcomes from that meeting. I have heard no calls from farming groups—the very people that benefit from our leadership of the Cairns Group—to discontinue the grouping or to walk away from the Doha agriculture package. The truth is that the Rudd government has no intention of walking away from the Cairns Group—a grouping we initiated over 20 years ago, a grouping that we have re-energised and a grouping which is helping Australia strive for the best possible Doha outcome.
Trade protectionism and the G20
Another publication that came out recently was a paper from the Lowy Institute which recommends further G20 action to counter protectionist trade policies. In particular, I note that the paper calls for greater domestic transparency to counter domestic pressures for trade protectionism—particularly on so-called non-tariff barriers. I agree. But I think we need to go further. This government takes the view that transparency of trade policy development is not just about exposing protectionism—it is also about greater transparency and understanding of the benefits of trade. Put simply, we need to highlight why trade is good, not just here but globally.
As part of my recent intervention at the OECD ministerial meeting in Paris, I urged that further analysis be undertaken by the OECD on the significance of trade as a stimulus both domestically and globally. How expanded trade brings benefits to an economy. How better to quantify that. In the same way that the Australian government recently released a study into the impact for Australia of trade liberalisation over the past 20 years.
What that Australian study showed was that trade liberalisation, along with the structural reforms of the 1980s, and intensified focus on Asia, had been significant factors, along with the fiscal stimulus, in cushioning Australia from the global financial crises. And these are some of the major reasons also why Australia has the fastest growing developed economy in the world. What the study showed was that, as a result of trade liberalisation:
We have got to build on that legacy. There is much unfinished business, not just with opening markets but also structural reform and lifting productivity. There is not any point opening markets if countries are not competitive enough and productive enough to take advantage of those openings. The reforms of the 1980s showed the importance of action on both fronts. In fact, the combination of Labor’s reform initiatives led to the biggest step-up in productivity the country has ever seen—delivering productivity gains of more than 3.3 per cent through the 1990s.
We have also widened the focus of our trade agenda beyond agriculture and product markets to include services and investment. Services constitute 80 per cent of the Australian economy and yet service exports represent less than 30 per cent of our exports. Investment is another area of huge potential. I regard it as the crucial new form of trade. Our challenge is to tackle the behind-the-border barriers to these forms of trade, but also to better facilitate investment flows, enabling businesses to get closer to the bigger economic markets and to engage better in global supply chains. So greater transparency by openness in these areas, coupled with greater analysis of the benefits of trade, would be enormously beneficial to our efforts to maximise the flow of a range of Australian exports.
As part of building-in the analysis, we need to build bipartisan support for trade liberalisation. That is why in this parliament I have initiated an organisation called the Friends of Trade, which invites members from all parties in the houses of this parliament to participate.
A broader trade agenda
Of course, it is important to see our work on Doha in context. Doha is our trade policy priority, but that certainly does not mean it is our only priority. This government has managed to balance our drive for Doha with our drive for better regional integration and our drive for key bilateral agreements. Our renewed focus on Asian trade has been a critical part of the cushioning for the Australian economy during the global recession. Our reorientation of trade and diplomatic focus towards Asia gives us greater opportunity as Asia, now more than ever, is emerging as the centre of world economic growth. That is one reason why we have been negotiating greater access for Australian exporters to these markets and also engaging in commercial promotion.
As Minister for Trade I have visited China six times, Indonesia four times and Singapore and Thailand multiple times. I have also visited Japan, Malaysia, the Gulf and Vietnam. We hosted the Malaysian minister here last month as part of that bilateral. I have just returned from India and plan to be back there again at the end of this month. I plan also to travel to Japan and Korea next month. It is Asia where there is growth and huge opportunity in dynamic markets. Australia and New Zealand have recently signed a free trade agreement with the 10 ASEAN nations, and that comes into force on 1 January next year.
Last month in Bangkok Australia worked together with others to push for track 1 status of an examination of a new Free Trade Area spanning the 10 countries of South-East Asia, the ASEAN countries, plus India, Japan, China, South Korea, New Zealand and Australia. This East Asia Summit-wide, or ASEAN+6, would cover three billion people and have a collective GDP of over $US14 trillion. This complements our strong push for bilateral agreements with key trading partners in the region, and I speak here of China, Japan, Korea, Malaysia, the Pacific Islands through Pacer Plus and the Trans Pacific Partnership members, as well as prospective members to those structures. I also hope that this list of negotiations will soon include the launch of bilateral negotiations with India and Indonesia.
I note that a significant factor in this regional engagement is the recalibration on ‘aid-for-trade’ to trading with developing countries. In our view our trading agreements with those countries are more than just agreements. They have to also involve capacity building—ensuring that those developing economies are able to participate more comprehensively in opportunities that more open markets should provide. This can also open new opportunities, of course, for Australian business in the services, investment and value-added aspects of our traditional strengths, beyond just resources—meaning that our competitive advantages are on show in a much greater way.
Conclusion
In conclusion, it is with great optimism that I report the positive outcomes from New Delhi last week:
These outcomes would not have been possible without Australia’s strategic and sustained advocacy. The Rudd government will continue to use every opportunity to pursue our trade priorities across a range of fronts and will use every opportunity to make sure that we conclude a successful Doha deal. It is too important for Australia and the global economy. We persist in this endeavour with renewed determination.
Mr Speaker, I ask leave of the House to move a motion to enable the Leader of the Nationals to speak for 26 minutes.
Leave granted.
I move:
That so much of the standing and sessional orders be suspended as would prevent the Leader of the Nationals speaking in reply to my statement for a period not exceeding 26 minutes.
Question agreed to.
I thank the House for the opportunity to respond to the minister’s statement. Today’s statement has brought us up to date in relation to some of the trade developments, an interesting travelogue of the minister’s latest trips, and discussions about some of the meetings that are underway. I am a little disappointed that the statement seeks to rewrite history. This seems to be the week of the Labor Party rewriting history to accentuate its own role in the important events of the world and to take credit for anything worthwhile that has happened this century. Certainly the minister has shamelessly sought to reinvent history and to accentuate his own role in the progress that is being made—almost a eulogy written by himself. In an area where there has been a degree of bipartisanship in relation to trade policy, I think that it is appropriate for a minister to give recognition that these sorts of discussions go over very long periods of time and that some credit deserves to be shared around. It does not all belong to one individual. The more important thing, however, is not to talk about who should gain credit: whether there is any credit due is also a matter open to conjecture.
I would like to talk about some of the issues and in particular the progress being made towards the Doha Round. If it is in fact true that countries are really committed to bringing the Doha Round to a conclusion, it is important that the government take on board some of the key concerns that there are in this country about the current state of negotiations. I think this is the third, fourth or maybe fifth time that the minister has come into the House with a ministerial statement telling us that we are just about to achieve the outcomes in Doha. We have heard all about the important progress, injection of momentum, intensifying efforts—those are all phrases I suspect he has used four or five times himself in ministerial statements to this parliament. I have used some of them myself in earlier statements. It has been going on for a while. But now we are at a stage where he says we are coming to the endgame.
The sad fact is that we are coming to the endgame because there is nothing left on the table. The Farm Institute was right, frankly, when it raised questions about whether the deal was still worth doing. If we are at the end of the game, it is because there is little or nothing left. The ambition of the Doha commitment has been lost. All of the ambition of the Doha Round has been lost. When the coalition committed to this process we had strong and ambitious goals in mind, as did the other parties who entered into these discussions. We expected real, genuine breakthroughs in relation to trade. We expected a real reduction in subsidies in both secondary and primary industry. We expected real gains in services. We expected that there would be not only reductions in subsidies but also reductions in trade barriers—real reductions that actually meant that world trade could flow freely.
We were hoping to achieve objectives that would have delivered billions and billions of dollars to world trade and to the growth in world economies, not just what is left at the present time. We are being asked now to grasp thin air, to be grateful for some water being taken out of the tariff systems. But in reality there is so, so little left on the table that people are saying they might be able to get to some kind of an endgame. Is this a merciful end, or is this an end that is actually going to be worth while to the participating countries?
I note that the minister says that this is a hard-won outcome. What is the hard-won outcome? More talks and more meetings. I know you have got to have meetings. We have been meeting for seven, eight or nine years now in relation to these issues, and it takes time talking to achieve results. But sadly the results have been achieved, the progress has been made, by inventing new tricky words, developing new exceptions, removing some key things off the table altogether. So in reality we come to a position where there is just so, so little on the table.
The minister said in his statement that we have solved 80 per cent of the major issues since the breakdown in July last year. How many of those issues have been solved simply by backing away, by backing down, by taking them out of the agenda altogether, so that in fact there is so, so, so little left? I am concerned that, instead of providing a new boost of political momentum into the Doha Round, we are in fact walking further and further away from the real objective that the leaders in Doha set for themselves, and that was a genuinely reforming world trade agreement. It would deal with some of the issues that were overlooked at Uruguay or could not be fixed at Uruguay so that we would end up taking a substantial step forward.
TheFarm Policy Journal makes some very key points, as the minister said in his statement. In his statement he said that Australian farmers should take comfort from what is already on the table in relation to the Doha Round, and he identified cuts of up to 70 per cent on developed country tariffs. But those are not real cuts. Those are not cuts in the applied rate; they are cuts in the bound rate. In fact, they still leave space for some tariffs to even go up. The reality is that there will be very little real benefit in actual reduction of tariffs. The minister has changed his rhetoric a little over recent times to say that the benefit of doing this deal is that tariffs will not be able to go up so much in the future. So we have given up on the ambition of reducing tariffs; we are now thankful that they are not going to go up quite as much as they might otherwise have been able to go up.
Then he said there are going to be reductions of between 70 and 80 per cent in domestic supports via the subsidies from countries like the EC countries, Japan and the US. Again, that is not an actual reduction of 70 or 80 per cent in their subsidies; there will still be options for them to even increase support in many instances, and certainly the drafts open up new, creative ways to enable countries to increase their subsidies. So it is simply flippant to try and placate intelligent farm industry commentators by suggesting that they are going to get 70 or 80 per cent cuts to tariffs and support when in reality that is not going to happen. There is just so much space in the agreement, there are so many exceptions, so many special provisions for sensitive products and special products, that many of the biggest subsidies in the world, many of the strongest tariff barriers, will remain unchanged—and unchanged permanently.
The other comment is that there would be a complete elimination of export subsidies by the end of 2013. That, of course, was agreed years ago in Hong Kong. It has not stopped the subsidies in the interim. We see them re-emerging at the present time. If we were able to get rid of all export subsidies, that would be a worthwhile achievement, but you cannot then turn around and negotiate a whole stack of special provisions and the like—exceptions to the rule—and think that you have achieved anything.
The other thing that we need to take into account is that, even if the Doha agreement were negotiated and agreed in its current text, according to the minister’s statement the Director-General of the WTO has said the round would bring benefits of $150 billion per year. I have heard the Director-General make that statement, and he has been making that statement now for 12 months or so. So, as the round stands now, watered down as it is, the benefits that could come are $150 billion per year. Let us put that in a little bit of perspective. That compares with world trade in 2007 of $17 trillion. In 20 years time, when the Doha Round is fully implemented—and that is provided that there is not more watering down between now and the end of 2010—world trade, without any intervention, will probably be about $30 trillion. So we are talking about a $150 billion benefit on $30 trillion worth of trade. So all of these eight years, all of these negotiations, will deliver less than half a per cent of benefit to world trade. That is hardly a triumph. That is a triumph for the talkers and the negotiations and the diplomats over the traders. That is not going to deliver massive new benefits to the world economy.
When the Labor Party and the Prime Minister are talking about the Australian government’s $300 billion debt, which they are committed to, that is some small, manageable amount—$300 billion is seen as a small, manageable amount for a country of Australia’s size to be able to pay back. But the total benefits to the entire world of the Doha Round are projected by the director-general to be only $150 billion. When the Minister for Trade is talking about $150 billion worth of trade benefits, that is a huge benefit, but, when they have $300 billion worth of debt, that is a small, trifling matter that nobody needs to worry about. Of course, if there is anyone who has a vested interest in talking up the outcomes of the Doha Round it is Mr Lamy, who is in his second term now as director-general. It has been his lifetime’s work. It has been an important work. But even he has to acknowledge now that the best he can hope for from the agreement, assuming there are no more backdowns, is half a per cent to world trade. I wonder, if we had put this amount of effort into many other things, whether we could have achieved that much benefit or maybe even more. Therefore the Farm Institute has a right to say: ‘Let’s have a look at some of the structural factors. What best can we do to make sure that the world is able to move forward?’
I do not think there is any doubt that all of the trade ministers now sitting around the table know in their hearts that we have to find a better way in the future to progress these sorts of issues. The bilateral agreements can sometimes make progress, but in other instances they have actually gone backwards and therefore cannot assuredly be a reliable path. Regional agreements also, in some instances, such as the Australia-New Zealand-ASEAN free trade agreement, have actually led to some backtracking from where we otherwise could have been. We need to be making constant progress, and I acknowledge that this is not easy. I acknowledge that the task is thankless and that the progress is incredibly slow, but what I grieve about today is how much momentum has been lost, how much ambition has been lost and how little there will be if in fact there is an agreement at the end of all of these activities.
I will also comment in relation to some other issues concerning trade. The minister referred to his meetings in Delhi, Bali, Paris, Singapore, Bangkok and Pittsburgh, six visits to China, four to Indonesia and numerous other events around the world. His frequent flyer points score is certainly going up, and it is the job of a trade minister to be in those places. But we also know that it is important that we recognize that good trade policy also begins at home. If we are going to be able to take advantage of any gains that might be made in Doha and any gains that might be made in other trade agreements, we have to put in place an environment in Australia that actually encourages industry, that gives us an opportunity to grow our exports.
While the minister was overseas, or while he was here, his government tried to force through an emissions trading scheme, which will place a huge burden on Australian exports and make our costs more expensive than those of other countries. He talked about the importance of agriculture and the comments of the Farm Institute. This same institute has done some excellent work on the impact of an emissions trading scheme on Australian exports; the fact that Australian food processors will have to pay carbon taxes, where other food processors will not, and the fact that the cost of exporting out of this country will be so much greater.
In his statement he spoke about productivity reforms, but while he has been out of the country the unions have taken back the running of the workplace. Today, the wine industry is the latest to express concern about the government’s new award modernisation process, which will increase the cost of picking grapes by up to 200 per cent. We are proud of our wine industry; it is one of our major exports, and one of the areas where I hope the minister might still hope to get some gains out of the Doha Round. And yet he is imposing these heavy cost increases upon them through the government’s new industrial relations arrangements.
Then, of course, there are new taxes, particularly the increase in the export inspection charges, which are likely to go up by as much as 1,300 per cent. If the trade minister were really interested in ensuring that Australian traders had the best opportunity to participate in world markets, he would talk very sternly to the Minister for Agriculture, Fisheries and Forestry about his proposals to increase export inspection charges.
The minister knows what the impact will be on world trade and Australia’s capacity to export as a result of these changes. A division of his own department, Austrade, has just made a submission to the Senate Rural and Regional Affairs and Transport References Committee inquiry on the removal of the rebate for AQIS export certification functions. The issue is that the minister with responsibility for Austrade was, no doubt, aware of this submission, which takes a scathing approach towards the government’s plans to remove the rebate for the Australian Quarantine Inspection Service export fees. If the minister has not seen the damning comments from Austrade, let me place them on the record. This is from Austrade’s submission to the Senate inquiry just this week:
Austrade notes that the removal of the 40 per cent fee rebate for the Australian Quarantine Inspection Service Export Certification functions increases costs for Australian exporters which could adversely affect the competitiveness of many Australian exporters and ultimately could impact on trade growth in established markets and in new market opportunities.
Later, it talks about the cost recovery arrangements:
These changes have the potential to impact those Australian industries which regularly reliably meet high export standards. These industries, in effect, provide the basis for Australia’s sound reputation for quality goods and services.
The worst-hit industries as a result of these quarantine inspection fee increases will be the very agricultural exporters the minister claims he is trying to help through the Doha Round discussions. They will have to pay substantial fees—in many instances, thousands or tens of thousands of dollars—that their competitors around the world will not have to pay. The subsidies on export inspection fees in other parts of the world will remain untouched as a result of the Doha Round, but our government now seeks to turn export inspection into a revenue-making function.
Let us talk about the uncompetitive position Australia is being placed in by this decision. Austrade notes in its submission:
… exporters in the United States pay a flat fee of USD $50, while in Canada Export Certification is free.
Our competitors sending beef or dairy products or fruit from Canada to the rest of the world pay no export inspection fees, but the Labor government is proposing to introduce fees which will cost thousands and thousands of dollars. That is not the kind of incentive that a trade minister who is concentrating on building Australia’s trading capacity could allow to go unchecked.
I congratulate Austrade, the premier organisation for promoting Australian trade around the world, for being bold enough to tell the truth to the Senate committee so that they are aware of the real impact of this cost. They are the front-line people on the ground, who know what is necessary to break into markets around the world. They are telling the government and telling the Senate inquiry that the imposition of these high costs will have an enormous impact on our export capability. I call on the government, if it is at all sincere in endeavouring to boost our trade performance, and if it really cares about eliminating barriers and putting Australian exporters on a level playing field with other countries—not Third World countries but Canada and the United States—to look at our export inspection fees compared with those in other parts of the world.
While I am talking about the importance of the issue that ‘good trade policy begins at home’, let me remind the minister of the Mortimer review on export policies and programs. That was completed well over a year ago, and we were promised a response by Christmas of last year, but we are still waiting.
These are key issues that an attentive trade minister needs to give direction on whilst he is in Australia. On his rare visits to Australia, let him look after some of the Australian industries that provide the products he is trying to sell around the world—give them a fair go and put them on a level playing field so that we do have an opportunity, if there is some new trade agreement negotiated, to at least be able to pick up any crumbs that might be left on the table.
I think that trade agreements have, in the past, delivered very substantial benefits to Australia, and they can do so in the future. I do not subscribe to the disgraceful comments of the then shadow trade minister and now Prime Minister, Kevin Rudd, who said in July 2006, ‘Doha is as dead as a dodo.’ I hope that the current Minister for Trade reminds the Prime Minister of his scepticism in 2006, and does it often. It was somewhat bizarre.
I think the minister should listen to the genuine concerns raised by the Farm Policy Journal article rather than devoting the time of the House to seeking to rebut them in this chamber. No-one could accuse the Australian Farm Institute of being anything other than supportive of trade. What they are critical of is what has happened to the Doha Round, the way it has drifted away to nothingness. It has drifted away to an empty table. The endgame is near because there is nothing left to fall off the table. There is nothing left to talk about. What we want is a real benefit with real gains to Australian industry.
May I conclude with an analogy. Dennis Lillee used to run a long way up to the bowling crease. Once he ran all the way from the fence. But, in the end, he did deliver the ball and he delivered it with great potency. The Doha Round has certainly had the long run-up, but I fear that what we get at the end is, at the very best, a powder puff, a no ball, something that has not delivered anything for Australian trade. If the minister wants to come back here and claim credit for a Doha Round, let him come back with real gains for Australian industry, not more backsliding and weakness.
I have received a letter from the honourable member for Warringah proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The Government’s failure to pursue a reform agenda
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—
If the first modern Australians had camped at Sydney Cove and congratulated themselves for arriving at a garden of Eden, they would have starved. If the colonial statesmen of the 19th century had been content with the social and economic progress of that time, there would never have been a Commonwealth of Australia. If the leaders of our country had not mobilised all our resources in the dark days of 1941 and 1942, Australia as we know it might not have survived the Second World War. If recent Australian governments had not tackled the economic stagnation that was threatening our country, we would not be the one developed country that has best weathered the recent international economic storm.
As the former Prime Minister, John Howard, would often say, ‘Today’s reform is the basis of tomorrow’s prosperity.’ But, by contrast, this Prime Minister’s motto might well be: ‘Today’s prosperity means that we can talk about reform without actually providing any.’
I rise today to celebrate the reforms of Australia’s two most recent governments and to applaud the courage of the leaders who drove them. Not for this side of parliament the cheap partisanship and the denial of credit where it is due, which has, in recent times, characterised this government. When Mr Hawke became Prime Minister, with Mr Keating his Treasurer, back in 1983, Australia was in the midst of a deep recession. But those statesmen did not try to spend their way out of a recession; they knew that would not work. Instead, they reformed their way out of the recession. The then Treasurer, with the then Prime Minister’s strong support, deregulated financial markets, reduced and, in some cases, eliminated tariffs and began the process of privatisation subsequently brought to fruition by the subsequent government. The former Treasurer and then Prime Minister even took a small but significant step towards workplace relations reform with his enterprise bargaining changes of 1993.
There are two important points to be made about the reforms of the former Labor government. The first is that they defied Labor Party orthodoxy. That orthodoxy of high spending, high taxing and big government, which had previously characterised the Australian Labor Party, was rejected by Bob Hawke and Paul Keating. Let me say, it takes guts to reject your party’s orthodoxy. It takes guts to turn your back on aspects of your party’s history, even when it is embarrassing and even when it is wrong, but those two statesmen had the courage to do so.
The next point I make is that those reforms were all achieved with the strong support of the then coalition. In fact, given the divided nature of the Labor Party, those reforms could not have been achieved but for the strong support of the then coalition. Let me stress that point. The Liberal Party, now supposedly obsessed with neoliberalism and now supposedly in the grip of market fundamentalism—whatever that is—strongly supported the reforms of the then Labor government. According to those who now call the Liberal Party neoliberals and market fundamentalists, either there was something wrong with the then Labor government’s reforms or there was nothing really that wrong with the Liberal Party. What you cannot be is a party that is all bad supporting a government that is all good. That is the proposition which seems to have been enunciated by the Prime Minister earlier this week.
When Messrs Hawke and Keating were in power, the coalition was not content merely to criticise the government when it made mistakes or when it did not go far enough. Under John Howard, the former Prime Minister, and also under John Hewson, the former Leader of the Opposition, the coalition developed a program for further economic reform which addressed the real problems that our country faced and which reflected the important and enduring values of the Australian people. When John Howard finally became Prime Minister in 1996, with Peter Costello as his reform minded Treasurer, Australia was just emerging from another serious economic recession. We had had but five minutes of economic sunshine in 1996, as some members of this House would well remember.
John Howard did not commission 100 or more reports to tell him what to do. He did not summon 1,000 of the bright and beautiful people to Canberra to give him ideas. John Howard and Peter Costello systematically and methodically set about the reforms that the previous government had been too politically compromised by its own left-wing faction and its union affiliations to make. Peter Costello made very serious, real cuts in his first budget, amounting to one per cent of gross domestic product. Peter Reith negotiated sweeping workplace relations changes which established for the first time in our country’s history the existence of a statutory non-union contract—subject, of course, to a safety net—and reduced the scope of awards and the role of arbitration. It was on these changes that the productivity increases of the late 1990s and the prosperity that we now enjoy were fundamentally based. Those changes, I should add, were also based on the confidence that the people of this country had moved beyond the old class war shibboleths and stereotypes and were prepared to work together, workers and managers, for more productive, more profitable and ultimately more successful enterprises and that we did not need unions and other third parties constantly to hold our hands in order to make a success of our economic lives.
As well, Peter Reith pushed through reform of the waterfront—a reform that had always been too hard for members opposite when they were in government—which produced a 50 per cent increase in crane rates, an increase previously thought to be impossible. One reform that I should mention is the replacement of the old Commonwealth Employment Service with the Job Network, a network of charitable, community based and private providers which not only helped job seekers but also enabled private businesses to use their expertise to help the unemployed. This in particular is a reform that the Prime Minister should be grateful for and should recognise.
Finally, there was tax reform: the GST, a massive change which had also defeated the former government but which the Howard government was prepared to go to and win an election on. In subsequent terms, the Howard government established the Australian Building and Construction Commission in the teeth of ferocious opposition; commenced welfare reform, including massive involvement of the unemployed in Work for the Dole; launched an intervention into the disgraceful situation of Aboriginal townships in the Northern Territory, where civil society was in virtual collapse; sold the rest of Telstra; and began the process of water reform. There was a further round of workplace relations reform, which was a political mistake, but let us be under no illusions: it was economically advantageous. More than half a million new jobs were created for Australian workers, more than 90 per cent of them full time, while Work Choices was in operation.
There is one point that needs to be made about the reforms of the Howard government in contrast to the reforms that were made in the time of the Hawke and Keating governments. Every one of those Howard government reforms was opposed by the Australian Labor Party. You can say what you like about John Howard—you can say that he changed too much or that he did too little—but you cannot say he was both a neofundamentalist and indolent. You cannot have it both ways, which this Prime Minister is trying to do now.
This week the Prime Minister launched Paul Kelly’s latest book, The March of Patriots. This book studies three prime ministers, Hawke, Keating and Howard, and it suggests—indeed, I would say it demonstrates—that they had a complementary and overlapping vision of economic reform that has permanently changed this country for the better. I should say that it might equally have been titled The March of the Reformers, and the great, screaming question now is: has this march stopped? The fact that in formally launching the book the Prime Minister made the revealing—indeed, freudian—slip of calling it The March of Politics suggests that the time of reform, at least as far as members opposite are concerned, is well and truly over.
The Prime Minister inherited a $20 billion surplus. He inherited more than $50 billion in various government funds. He inherited an economy that was the envy of the world. But, having mimicked John Howard and echoed his policy pre-election, since the election he has been on an ideological crusade to vilify the best Prime Minister since Menzies. I think the Australian people are looking for bravery and generosity in their leaders. They want our leaders to be brave in tackling our real problems and generous in acknowledging that no side has a monopoly of wisdom or merit and generous in being prepared to give credit where it is due. I regret to say that I fear that in the current Prime Minister we have a leader who is at once timid, smug and partisan: timid because he cannot make a decision that does not involve giving people just what they want; smug because he thinks that Australia’s economic strength owes everything to the last 18 months and nothing at all to the previous quarter of a century; and partisan because he has completely failed ever to acknowledge the strengths as well as the occasional mistakes of the previous government. I would like our Prime Minister to be better than that. I say it as a political opponent, but the Australian people deserve a Prime Minister who reflects our best instincts, not our worst, and we have not seen that on display from this Prime Minister.
Men and women of strong conviction can usually appreciate and understand the convictions of others even when they are different. Trashing other people’s beliefs, trashing other people’s achievements, is often a sign of someone who has few real convictions of his own. That, I fear, is the problem with our Prime Minister. The evidence suggests that he still has not worked out what his real political character is. He told the Financial Review that he was an old-fashioned Christian socialist; he told the Age that he was not and never had been a socialist. When he was running against John Howard he said that he was proud to be called an economic conservative. I am a conservative and I know conservatives: he ain’t a conservative. Now he says that he is a social democrat. The truth is he is not a socialist, he is not a conservative, he is not a social democrat and he is certainly not a reformer; he is a chameleon. That is what he is—a chameleon.
An iguana!
Don’t mention iguanas, please! The Australian people know what they want in a leader. They want someone who is fair dinkum and I ask the Prime Minister to be fair dinkum with the Australian people from this point forward.
I am grateful for the opportunity that the opposition has given me to talk about the significant reform agenda that the government has. But I am a little surprised at the line of argument that the member for Warringah has brought to this topic because I for one was expecting him to put forward some reform agenda. What we actually had from him this afternoon when he finished was just a personal rant against the Prime Minister—a litany of personal abuse, which I was surprised about given the topic of the matter of public importance. More significant, I suppose, was the way in which the member for Warringah focused entirely on the past. He is not at all concerned about an agenda for the future. He defended Work Choices. He defended Peter Reith, no less, and John Howard and looked entirely to the past for things that he might justify. He looked entirely to the past, to Peter Reith and John Howard, for the ideas that he seems to support.
The other thing I thought, when I read the matter of public importance, was that maybe he was going to come in here and defend his own book but it seems he wants to defend some comments that were made by others at the launch of another book. Another possibility I thought of was that he might be coming in here to put forward his leadership credentials, but I certainly do not think he has demonstrated any of those today unless he thinks leadership is just about looking to the past and being full of personal abuse. I am not quite sure why their tactics committee would let him come here today and present a litany of what he might consider to be achievements by Reith and Howard and then just attack the current Prime Minister.
By contrast, I want to take this opportunity to go through in some detail the vigorous reform agenda that we are putting in place. I find it extraordinary that anyone would question the cracking pace of reform that our Prime Minister sets. I will limit my remarks to the areas in my own portfolio, where there is significant reform both already achieved and underway, but right across the government there is an extraordinary pace of reform. If there is one thing the Labor government is proud of, it is the reform that has introduced a fair system of workplace relations, a fair system of workplace relations that has got rid of Work Choices.
One of the things that have been so important to the Labor government, something I talked about in question time today, is the most significant reform to the pension system that has been delivered in the 100-year life of the age pension. From 20 September this year we are going to see 3.3 million pensioners receive an increase to their pension. These increases are long overdue and not a reform ever pursued by the previous government. Delivered within our short time in office, these pension reforms are going to mean a real and sustainable difference to age pensioners, carers, disability support pensioners, veterans—many, many people who have been waiting a long time for this pension rise.
We had to make some very tough decisions in coming to these increases and one of them was to increase the age pension age. The member for Warringah announced in his book—not that he mentioned it in the MPI debate today—that, even though he did not mention it all of the time that he was a minister in the previous government, he now thinks we should increase the age pension age more quickly and it should go up to a higher age. We of course will take a more considered approach to what was a difficult decision.
Another major reform that this government will deliver, which once again the previous government refused to do the whole time they were in office, is the first paid parental leave scheme in this country. The scheme will make sure that we do two things: encourage the participation of women in the workforce and, most importantly, give babies the best start in life. It is certainly going to be a very significant win for parents and babies and also an important win for the workforce. This is another item that has made it into the member for Warringah’s book. He apparently used to be opposed to paid parental leave, but somehow he has had a transformation. Now that he has the solitude of the opposition, he seems to embrace this idea—an idea that he was opposed to in government.
Another major area of reform for this government has been in the area of housing. My colleague the Minister for Housing, Minister Plibersek, is doing an outstanding job implementing a range of reforms, whether it is the encouragement of home ownership with the first home owners boost or the introduction of the National Rental Affordability Scheme, which is all about providing incentives to those who are building affordable rental housing. For the first time, we have seen real effort to address homelessness. It is an effort led by the Prime Minister and strongly supported by the Minister for Housing, making sure that we provide not only specialist housing for the homeless but all those specialist support services as well. We are providing the single largest investment in social housing ever made by an Australian government. Of course, when those opposite were in government they did not even have a housing minister, let alone make any of the reforms that this government has put in place.
Turning to the very important and long-neglected area of support for people with disabilities and the people who care for them, we are delivering increases in the pension to people with disabilities and to carers. We are delivering the highest ever level of indexation in the new National Disability Agreement. This is an area where we know we have a lot more to do, but with the states and territories we are pursuing a number of reforms to deliver new ways of making individualised care packages available to people and providing more supported accommodation to give peace of mind to older carers in particular. We on this side of the House are all very aware of the enthusiasm that Parliamentary Secretary Shorten has brought to this task. It was this government that ratified the United Nations Convention on the Rights of Persons with Disabilities, and we are also improving building access standards. I have mentioned the improvements that we have made to the carer payment, and we introduced a permanent carer supplement—unlike the previous government, where carers had to depend on the whims of the Prime Minister. We have changed the eligibility criteria and assessment processes for carer payment (child).
One of the most significant reforms—yes, for a small group of people—is for a group of people who are caring for children with profound disabilities. This is not a reform that was delivered by the previous government. It is a reform that was delivered by this government after less than two years in office. There are going to be around 19,000 carers of profoundly disabled children under the age of 16 who are going to benefit from these new arrangements. It has been this government that, for the first time, has delivered a national child protection framework. It was never delivered by the previous government, but this government is about working with the states and territories and working with the non-government sector to do everything we can to protect our children. We have an agreement with the states and territories to develop national standards for out-of-home care. Just this week I announced new protocols to allow the sharing of information between Medicare and state and territory child protection authorities. We already have that operating between Centrelink and the state and territory child protection authorities. It was never delivered by those opposite.
When it comes to Indigenous reform, we have a very ambitious program. We have, of course, reframed the public debate. We acknowledged and apologised for the injustices of the past.
Opposition members interjecting—
Unfortunately, I am hearing only mutterings about these very important issues from those opposite. We have set about resetting our relationships with Indigenous Australians and we have set ourselves very tough and measurable targets right across the board because we know how important it is to improve service delivery. We also know how important it is to reset our relationship. We have decided to overhaul the way we deliver services and infrastructure, especially in remote parts of Australia. Remote parts of Australia deserve the sorts of services and infrastructure that exist in similar sized country towns in other parts of Australia. We are delivering in the areas that are so critical to making sure that children have a safe place to grow up, investing $5.5 billion in remote Indigenous housing and making sure that when we do this we deliver it with secure tenure so that we protect assets and make sure that houses are properly maintained. These are difficult reforms that are so important to the future of Indigenous people.
There is a major reform program in health for Indigenous people. The minister at the table, Minister Snowdon, is helping to drive this to make sure that we prevent and better manage chronic disease and that we address the needs of hearing and vision impairment and dental health services, particularly for children. We are establishing 35 new child and family centres in areas of need, focusing on antenatal care, pre-pregnancy, teenage sexual health programs—the list goes on in health.
It is the same in education. We understand just how important it is to deliver early childhood education to all of our four-year-olds, particularly to Indigenous children in the most disadvantaged parts of Australia. This government has significantly expanded the Indigenous Employment Program. We have reformed the Community Development Employment Projects Program to make sure that we demonstrate that we can support Aboriginal and Torres Strait Islander people getting decent pay for a decent day’s work, not getting second-rate pay.
We have understood how important it is to do the hard things about healing, uniting and restoring human dignity and cultural pride—working with Aboriginal and Torres Strait Islander people on Indigenous languages, addressing the difficult task of bringing back Indigenous remains from overseas, and making sure that we develop a new voice with a new national Aboriginal and Torres Strait Islander representative body. We are establishing an Aboriginal and Torres Strait Islander Healing Foundation with a strong focus on the unique needs of the stolen generations.
These are just a small number of the significant reform issues that this government is pursuing with vigour and determination, unlike the nasty attack that we saw from the member for Warringah, who seems to want to bring to this House today only an attitude of negativity. We have heard not one idea from the member for Warringah that would put him forward, in any way, as a future Leader of the Opposition—which, I must say, I thought must have been behind his putting such an extraordinary item forward as a matter of public importance. This government will continue to pursue our vigorous reform agenda. (Time expired)
Today I want to give credit where credit is due. While there is no doubt that one of the Labor Party’s great skills is its ability to create myths and rewrite history, exaggerating its achievements and ignoring its failings, I will not be so churlish as to claim that previous Labor governments have failed to undertake any significant reforms. It has been said that the character of a government, in terms of its reformist zeal, is established in its first couple of years. It is during this time that a new government has a bank of goodwill from the voters, and a good government takes that opportunity to make some hard decisions that may be unpopular in the short term but will bring long-term benefits to the nation.
For example, the Hawke Labor government made some important economic reforms during its early years, and those reforms were supported by the coalition because they were in the national interest. They were reforms such as floating the dollar, deregulation of the financial sector and tariff reductions. Senior coalition figures have, rightly, given Labor credit for those reforms many times over the years. In contrast, the Howard government faced constant opposition from Labor to its reform agenda. Labor voted against virtually every reform of the Howard government—not just in its early years but throughout its four terms—even when Labor knew that the reforms were in the national interest.
If one judges a government and its appetite for reform by its actions in its early years, consider the coalition reforms: gun control; the implementation of the GST, which not only reformed our tax system but placed state funding on a long-term sustainable footing; reform of the waterfront to make Australia more internationally competitive; and the tough decisions to cut spending that ultimately led to the repayment of all Commonwealth net debt. The coalition took tough and often unpopular decisions and thus established the reform credentials of the Howard government very early in its life.
I ask members to compare this with the current Labor government. Last year, former Labor leader Mark Latham described the first 100 days of this government as a ‘circus of symbolism’. He said:
If a government lacks policy substance early on, it is unlikely to achieve much later in its term. Even Rudd’s strongest barrackers concede that he lacks an ambitious reform agenda.
Nearly 18 months later, those observations are even more pertinent, because all this government has delivered has been relentless spin and myth-making in pursuit of a short-term, populist political agenda. It has delivered reactive measures that will leave this country burdened by the biggest debt, with the fastest and deepest budget turnaround from surplus to deficit in Australian modern history.
What significant reforms has this government undertaken in its first two years that will make a long-term and positive impact on the Australian economy? While members ponder that imponderable, let me read from a speech:
Policy innovation and evidence-based policy making is at the heart of being a reformist government.
Policy design and policy evaluation should be driven by analysis of all the available options, and not by ideology.
We’re interested in facts, not fads.
In fostering a culture of policy innovation, we should trial new approaches and policy options through small-scale pilot studies.
Who made these strong commitments to using evidence based policy and trials, small pilot programs and innovation? It was none other than the current Prime Minister, who was speaking to the heads of government agencies in April 2008.
Now let us examine how well this Labor government has lived up to these big, lofty and worthy ideals. Take Labor’s campaign promise of a national broadband network. Labor promised to spend $4.7 billion on a network but, after it hopelessly mismanaged the tender process, it scrapped it. Rather than admitting that it had made a mistake and going back to the drawing board, it announced a new proposal to spend $43 billion for a broadband plan. But there was no cost-benefit analysis, no economic modelling, no business plan, no consideration of likely take-up and no consultation with key stakeholders. It failed every single aspect of proper public policymaking as well as ignoring the very lecture that the Prime Minister had given to public servants on evidence based policy.
Another reform was to be in industrial relations. But, instead of continuing the Keating and Howard governments’ decisions to deregulate labour markets, this government has moved to reregulate labour markets in a way not seen in this country for many decades—and at a time when Australia needs to be much more competitive than ever in the global markets. This would have to be the first national government since Federation to reverse a major economic reform. The government is pushing this country off a cliff, because no-one in government has released data or done analysis to show what the impact of this reregulation will be. Will it destroy productivity? Will it destroy jobs—in what sectors of the economy and what parts of the country? But all the Minister for Employment and Workplace Relations could point to was her divine intuition. She declared on the ABC last year:
We understand the economic effects of our industrial relations policy. We understood them on the day we released it last year.
Yet she refuses to share that understanding of the economic impact with the Australian people.
A third campaign was, of course, the Education Revolution. This same minister who did no economic modelling or analysis on the likely impact of turning the clock back 30 years in employment laws is now presiding over monumental waste and mismanagement in the school halls debacle. This minister committed almost $15 billion—now $17 billion—to the construction of school buildings without any cost-benefit analysis, with no consideration of whether schools wanted them or had other more pressing priorities and with no evidence that it would improve the learning environment or educational outcomes.
Reports abound of schools being forced to accept new halls, whether they wanted a hall or not; being given large grants for which they did not apply. We have had reports of schools saying that they do not know what they will do with the money, and schools marked for closure that received grants while other more needy schools have missed out. This waste, this mismanagement, this incompetence spells a lack of ministerial oversight, for which this minister is entirely responsible. No wonder the Auditor-General has had to step in. This is taxpayers’ money. This $15 billion, now $17 billion, debacle is taxpayers’ money. The Minister for Finance and Deregulation observed:
… when a government takes that tax dollar it has a very real responsibility to ensure it provides value in return.
This minister has no concept of value for money when it comes to the money the government takes off the Australian taxpayer. Last week the Secretary to the Treasury said:
Government spending that does not pass an appropriately defined cost-benefit test necessarily detracts from Australia’s wellbeing.
This government does not undertake cost-benefit analysis. This government does not undertake economic modelling. This government does not care that it is driving the country into an unsustainable level of debt from which it will not recover unless it raises taxes through the roof, which will also drive up interest rates, or—the old Labor standby—waits for the coalition to get back into government to pay off its debt and clean up the mess.
So let us stop this charade now. There is no education revolution. There has been no great education reform under this government. There has been no long-term reform. This government’s character has been exposed. This government is just like other Labor governments. It is a hollow government, populated by spin doctors from NSW Labor Right—which has so fundamentally failed the people of that state and now infects federal Labor. After almost two years, the character of this federal Labor government has been exposed—characterised by waste, mismanagement, an addiction to debt and an utter failure to embrace the economic reforms of governments of all persuasions over the last 30 years. (Time expired)
I have to say that I could not believe it when I saw this MPI. I thought: accusing the Rudd government of not having an agenda is like accusing the Liberal Party of being united. Accusing this Rudd Labor government of not having a reform agenda is like accusing the National Party of believing in climate change. It is like accusing Kyle Sandilands of having tact. If there is one thing that this government have been criticised for over the last 18 months it is that we are doing so much and reforming so much. There are arguments from the media and elsewhere that we are trying to tackle too much at once.
I was surprised that the opposition consider that the matter of public importance that the Australian parliament should debate today is the history of the last 25 years. I would have thought that a recitation of history would be best placed somewhere else. What it shows is that the opposition have given up the policy debate and they just want to look backwards. Well, if you want to look backwards, if you want to have a look at the last 25 years, then let us have a look at Paul Kelly’s book. At page 266, he says:
The origins of the economic model that defined Australia’s long expansion from 1991 to 2008 belong with Hawke and Keating. John Howard did not create the model; he adapted the model. Its creation lay with Hawke and Keating in the post-1983 reform era and this creation is one of Labor’s epic monuments.
What Kelly is talking about there are things like universal superannuation, floating the dollar, deregulating the financial sector, competition policy and reducing tariffs.
To be fair, the Howard government did have its own reform agenda—though we did not agree with most of it. Kelly’s major criticism in his book is a criticism of the Howard government’s failure to tackle reform in its last term. At page 276 he says:
Howard’s most serious economic failure [was] his refusal to maximise the boom year revenues in the cause of long-run reform and productivity gains.
At page 4 he says:
Howard had failed to value sufficiently investment in education and in human capital; he had been too slow in responding to global warming and too reluctant to better coordinate infrastructure investment.
There are three things there: education, climate change and infrastructure investment. It was the failure of the Howard government to invest in skills and infrastructure that caused 10 interest rate rises in a row because of capacity constraints in the economy. And it was the failure of the Howard government to do anything about climate change and its overzealousness when it came to reform in workplace relations that were the reasons that it was ultimately thrown out. It is these three areas—education, climate change and infrastructure—which form the cornerstone of the reforming agenda of this government.
Let us take them in order. First, climate change. This is one of the biggest reforms that any government will embark upon in the next decade. It is certainly the biggest issue that the 42nd Parliament of Australia has to grapple with. It has been developed over the last 18 months. And the opposition still do not have a position on it, not because they do not have a view but because they have 55 different views. I feel sorry, in a sense, for the Leader of the Opposition.
Oh, no!
Well, I do. He has a tougher job than Ban Ki-moon, the Secretary-General of the United Nations. It will be easier to get the countries of the world to agree on climate change than it will the Liberal party room. That is the problem that he has. They voted against the climate change legislation a couple of weeks ago because to do otherwise would have meant that the climate change sceptics would have attacked him in the party room and threatened his leadership. And they will vote for the same legislation when it comes back in a few months time because they are worried about a double dissolution. It has nothing to do with policy. It has nothing to do with long-term reform. It has nothing to do with the environment. It has nothing to do with the economy. It is all about saving the Leader of the Opposition.
Let us look at the second issue that Paul Kelly criticises the Howard government for, which is education. He says that the Howard government failed to invest sufficiently in education. Over the next four years this government will invest $62 billion in school education. That is double the amount that was spent on school education in the previous four years. Not just are we building infrastructure; we are building skills. And this is the key point here. This is what is going to drive the reform and drive productivity—the sort of productivity that Paul Kelly was talking about in his book. The sorts of things that I am talking about here are universal access to education, universal access to preschool for children aged four, 90 per cent of students finishing high school by 2015, halving the number of adults without a certificate III qualification or higher by 2020, increasing the number of 25- to 34-year-olds with a university degree to 40 per cent by 2025 and making sure that 20 per cent of university students come from poor or disadvantaged backgrounds by 2020. These are bold objectives and they are needed to reform the economy. They are needed to drive the sort of productivity that Paul Kelly talks about in his book.
The third issue of reform that he says the Howard government failed to deliver on was the coordination of infrastructure investment. How does what the Howard government did compare with what this government is doing? As soon as we came to office we appointed an infrastructure minister—the first time an infrastructure minister had been appointed. Within a few months we set up Infrastructure Australia, a new national body whose job it is to identify and implement projects that will benefit the whole Australian economy, not just a few marginal seats. And anyone who knows how the Australian economy operates knows just how important investment in our cities is. Seventy per cent of Australians live in our cities. They are responsible for about 80 per cent of economic development. But they were ignored by the Howard government. Cities are the engine room of our economy, which is why we are investing in infrastructure in our cities. That is why they form part of this government’s reform agenda.
How does all of that compare with the reform agenda that is being proposed by those opposite? We did not hear anything about that. We did not hear anything of that from the member for Warringah today. There was nothing on education, nothing on climate change and nothing on infrastructure. That is the great hypocrisy of this debate. We are apparently being criticised for not having a reform agenda when none exists on the other side. The only big reforms that the opposition have offered up are a tax on cigarettes and a discarded tax cut on fuel excise. Oh, and there is one more: a secret plan for a flat tax. Now, remember this one. Back in the eighties, Joh Bjelke-Petersen had this plan to become prime minister and he campaigned on a flat tax. And in the nineties we had Pauline Hanson here and she was campaigning for a flat tax. Now, in the 21st century, the Leader of the Opposition has a secret plan with a secret report, commissioned last year and due to be finalised at the end of last year by Henry Ergas, which includes a flat tax. The policy love child of Joh Bjelke-Petersen and Pauline Hanson is alive and well and living in the bottom drawer of Malcolm Turnbull’s desk.
Ugh!
I know it is a scary thought, member for Fowler, but we know it exists. We know that that is the only policy, the only reform agenda, that exists on the other side of the House—that plus an ongoing love affair with Work Choices.
Paul Kelly is right. The Howard government in its final term failed to reform, and now this opposition are frustrating this government’s efforts for reform. They failed to reform in the areas of education, infrastructure and climate change and now they are frustrating our attempts to reform. They are frustrating our attempts to implement a Carbon Pollution Reduction Scheme. They are frustrating our attempts to implement the stimulus package and they are opposing the Education Revolution. All they have left is a love affair with Work Choices and a flat tax. Next time you bring an MPI to this chamber, before you bring an MPI about an apparent failure by the government to have a reform agenda, get one of your own.
The Rudd government is very fond of reviews, white papers, green papers and committees, but the lack of a reform agenda can perhaps best be highlighted by the Minister for Agriculture, Fisheries and Forestry, who is fast gaining a reputation as a ‘gunna’. He is always gunna do something but never quite does so. The minister played an integral part in the Labor circus that masquerades as a government in our state of New South Wales. I am not surprised that, as a made man in the New South Wales right wing in the Labor Party, he has been distracted from implementing any sort of reform agenda in agriculture, fisheries and forestry—certainly no positive one. Prior to entering federal parliament, the minister was a member of the New South Wales Labor government, which is about as dodgy as a bucket of prawns after a week in the sun. Who would not wonder about the judgment of a person who owes their position to people like Joe Tripodi, Reba Meagher and Eddie Obeid.
What a trifecta.
Absolutely: quite a trifecta. Agriculture, fisheries and forestry industries have been lumbered with a party hack from the New South Wales Labor government, and it shows. Having spent $6 million of taxpayers’ funds on just two extremely important areas within his portfolio responsibility, namely drought and quarantine and biosecurity, he has done nothing in over 12 months to implement the Beale recommendations. The $4.7 million Beale report into quarantine and biosecurity has been sitting on his desk since 30 September last year. It has been ignored and very deliberately ignored. The only recommendation enacted has been to axe the 40 per cent AQIS rebate on export inspections. This new tax will cost our exporters dearly. The Austrade submission to the Senate Standing Committee on Rural and Regional Affairs and Transport inquiry into the removal of the rebate leaves no-one in any doubt as to the stupidity of such an action. Austrade notes that the removal of the 40 per cent fee rebate on the AQIS export certification functions increases costs for Australian exporters and could adversely affect the competitiveness of many of our exporters and ultimately impact trade growth in established markets.
The government’s decision to return to full cost recovery for this service has the potential to significantly impact on the category of exporter and in particular may have an adverse effect on regional exports and business development. The only reform actually introduced by the minister other than to cut his department’s budget by 32 per cent in the last budget is costing jobs and will reduce our competitiveness and have an adverse effect on regional exports and business development. Only last week the minister was forced to admit that AQIS had misled a Senate committee and blamed a data entry mistake for the claim that 8.8 tonnes of hamburger beef had come from New Zealand not China. Another of his reforms. Another day, another review. Perhaps if the minister actually enacted the Beale review recommendation to spend an additional $260 million per annum on our quarantine and biosecurity services, instead of cutting nearly $40 million from the budget and cutting 125 jobs, his department would not make such basic, fundamental mistakes.
What about Senator Penny Wong’s idea of reform? Senator Wong, the Minister for Climate Change and Water, has all but declared war on communities in the Murray-Darling Basin. Her idea of basic reform is to take an axe to the livelihood of the two million people who live in the Murray-Darling Basin. The Oxley column in the Land last week said it all. In a visit to the western Riverina, Senator Wong:
…went one further than the usual political tricks for avoiding or ignoring unpleasant questions—she specified that all queries be supplied ahead of time for vetting, before deigning to offer scripted answers for those regarded as acceptable. Welcome to open and accountable democracy …
The minister for agriculture is obviously junior to Minister Wong and junior to the minister for the environment. His reform is to cut his budget. His reform is to ignore reports which sit on his desk.
I thank the honourable member for Calare, who was formerly the honourable member for Parkes.
I am always pleased to hear the opposition talk about reform agendas, particularly when the honourable member for Warringah acknowledges that it was only on the back of the reforms of the Hawke and Keating governments that the Howard government was able to make any changes—changes, I might add, that were driven by a vicious ideology. Whether it was the waterfront being invaded by men in balaclavas or attacking the Australian worker through Work Choices, it was overwhelmingly rejected by the Australian people at the last election.
The people of Australia want real reform now, not a rant and rave from an aspiring Liberal leader. Time and again the former Howard government, of which the honourable member for Warringah was a key member, failed to initiate reform or respond with reform They rested on their laurels. They built up a budget surplus and then they failed to do anything about it. The coalition failed to act in important areas like infrastructure, health care or education. The Australian people would like to know why.
It has taken the election of the Rudd Labor government to set the reform agenda in many portfolio areas. Families, housing, community services, Indigenous affairs and the voluntary sector needed action. I am pleased that I am a member of the Rudd Labor government because it is delivering for the people of Australia in these key portfolios as well as in other areas. The Rudd government does not just talk about reform as if it is an abstract concept. Reform for the better is physical and real, and impacts on the lives of every Australian.
One major area of reform has been pensions. We have responded to the concerns of older Australians by first having an inquiry and then swiftly following up the recommendations, bringing the largest reform to Australia’s pension system in 100 years. Where did the honourable member for Warringah stand on this issue? He was nowhere to be seen. The coalition want the Australian people to believe they are a party of reform. Like Saul converted on the road to Damascus, the honourable member for Warringah wants to appear to be a champion of reform. However, let the honourable member’s own words on 2GB in February of this year convict him. He said:
Many pensioners are doing it tough, but a $35 a week increase is an enormous hit on the revenue. We’re talking here about possibly $6 billion a year. The economic circumstances of Australia are much different now than they were 12 months ago.
The coalition have never been interested in pension reform. In reality, they cannot see beyond the bottom line. The coalition were not interested when they were in government nor are they in opposition, except when they attempt to mischievously create embarrassment for the government. Hence, the coalition’s botched attempt to prematurely introduce a pensions bill into the Senate, an appropriation bill that even a student-at-law would have known had to be initiated in the House of Representatives. The Leader of the Opposition is certainly no student-at-law.
The Liberal Party talk about reform but they do not carry out reform. On 20 September 2009, some 3.3 million age pensioners, disability carers, wife or widow pensioners and veteran income support recipients will receive an increase in their pension payments. Pensions are not the only area of reform on the government’s agenda. A cracking pace has been set on reform for: carers; paid parental leave for families; improving existing social housing and building new stock to prevent homelessness—unlike the former government, who did nothing for the homeless people of this country; improving the lives of Indigenous Australians with more and better housing; improving health outcomes; ensuring children receive an education; and improving access to better community and social services. Healthcare reform is a priority on the Rudd government’s agenda. The honourable member for Warringah need only pick up a newspaper, read a media release or visit a website, like millions of other Australians do, to see the reform agenda of this government. The Rudd government is all about reform—reform which will better the lives of the Australian people.
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 with amendments; certified copy of the bill and schedule of amendments presented.
Ordered that this bill be considered immediately.
Main Committee’s amendments—
(1) Schedule 1, page 26 (after line 22), after Part 13, insert:
Part 13A—Inquiries into significant offshore incidents
Division 1—Amendment of the Offshore Petroleum and Greenhouse Gas Storage Act 2006
Offshore Petroleum and Greenhouse Gas Storage Act 2006
62A Section 7
Insert:
Commissioner means a person appointed under section 780A.
62B Section 7
Insert:
Commission of inquiry means an inquiry conducted, or to be conducted, by a person appointed under section 780A.
62C Section 7
Insert:
Royal Commission has the same meaning as in the Royal Commissions Act 1902.
62D After Part 9.10
Insert:
Part 9.10A—Inquiries into significant offshore incidents
780A Appointment of Commissioner
(1) The responsible Commonwealth Minister may, in writing, appoint a person to:
(a) conduct a Commission of inquiry into matters specified in the instrument of appointment relating to any or all of the following:
(i) a significant offshore petroleum incident;
(ii) any matters incidental to a significant offshore petroleum incident;
(iii) a significant offshore greenhouse gas incident;
(iv) any matters incidental to a significant offshore greenhouse gas incident; and
(b) report to the responsible Commonwealth Minister on the matters (including any recommendations relating to the matters) on or before a day specified in the instrument of appointment.
(2) The appointment takes effect on the day of effect specified in the instrument of appointment. The day of effect must not be earlier than the day on which the instrument is made.
(3) A copy of the instrument must be published in the Gazette.
(4) The Commissioner’s report is not a legislative instrument.
(5) For the purposes of this section, a significant offshore petroleum incident is a significant incident or occurrence that relates to any or all of the following operations in an offshore area:
(a) petroleum exploration operations;
(b) petroleum recovery operations;
(c) operations relating to the processing or storage of petroleum;
(d) operations relating to the preparation of petroleum for transport;
(e) operations connected with the construction or operation of a pipeline;
(f) operations relating to the decommissioning or removal of structures, equipment or other items of property that have been brought into an offshore area for or in connection with any of the operations mentioned in paragraph (a), (b), (c), (d) or (e).
(6) Paragraph (5)(f) does not, by implication, limit paragraph (5)(a), (b), (c), (d) or (e).
(7) For the purposes of this section, a significant offshore greenhouse gas incident is a significant incident or occurrence that relates to any or all of the following operations in an offshore area:
(a) operations relating to exploration for a potential greenhouse gas storage formation or a potential greenhouse gas injection site;
(b) operations relating to the injection of a greenhouse gas substance into the seabed or subsoil;
(c) operations relating to the storage of a greenhouse gas substance in the seabed or subsoil;
(d) operations relating to the processing, compression or pre-injection storage of a greenhouse gas substance;
(e) operations relating to the preparation of a greenhouse gas substance for transport;
(f) operations relating to the decommissioning or removal of structures, equipment or other items of property that have been brought into an offshore area for or in connection with any of the operations mentioned in paragraph (a), (b), (c), (d) or (e).
(8) Paragraph (7)(f) does not, by implication, limit paragraph (7)(a), (b), (c), (d) or (e).
(9) For the purposes of this section, a significant incident or occurrence includes circumstances in which a significant incident or occurrence nearly happened.
780B Hearings
(1) A Commissioner may hold hearings for the purposes of a Commission of inquiry.
(2) The hearings may be held at such places, whether within or outside Australia, as the Commissioner determines.
(3) Subject to this Act, the procedure at a hearing is to be such as the Commissioner determines.
780C Commissioner not bound by the rules of evidence
A Commissioner is not bound by the rules of evidence and may inform himself or herself on any matter in such manner as he or she thinks fit.
780D Departmental officers
(1) The Secretary of the Department may enter into an arrangement with the Commissioner of a Commission of inquiry to make APS employees in the Department available, for a period not exceeding the duration of the Commission of inquiry, to assist with the conduct of the Commission of inquiry.
(2) In performing functions and exercising powers to the extent reasonably necessary to assist with the conduct of a Commission of inquiry, an APS employee made available under such an arrangement:
(a) is subject to the directions of the Commissioner; and
(b) is not subject to the directions of the Secretary of the Department.
780E Application of the Royal Commissions Act 1902
(1) Subject to this section, the Royal Commissions Act 1902, other than sections 4 and 5, applies in relation to a Commission of inquiry, and to the Commissioner conducting it, as if:
(a) the Commission of inquiry were a Royal Commission; and
(b) the Commissioner were a member of a Royal Commission; and
(c) that Act bound the Crown in each of its capacities.
(2) This section does not make the Crown liable to be prosecuted for an offence.
(3) The regulations may, for the purposes of the application of section 9 of the Royal Commissions Act 1902 in accordance with subsection (1) of this section, provide for or specify matters of the kind referred to in subsection 9(2) of that Act.
(4) Section 9 of the Royal Commissions Act 1902, in its application in accordance with subsection (1) of this section, has effect as if those regulations were regulations made for the purposes of subsection 9(2) of that Act.
(5) Sections 10 and 15 of the Royal Commissions Act 1902, in their application in accordance with subsection (1) of this section, have effect as if references in those sections to offences against that Act included references to such offences as apply in accordance with subsection (1) of this section.
780F Conferral of inspection powers
(1) The Secretary of the Department may, in writing, determine that a specified person, or a person included in a specified class of persons, who is engaged by the Commonwealth to assist with the conduct of a Commission of inquiry has all the functions and powers of, or specified functions and/or powers of:
(a) a petroleum project inspector (other than a Greater Sunrise visiting inspector); and
(b) a Greater Sunrise visiting inspector; and
(c) a greenhouse gas project inspector; and
(d) an OHS inspector;
under this Act and the regulations.
(2) The person is taken, for the purposes of this Act and the regulations, to be:
(a) a petroleum project inspector (other than a Greater Sunrise visiting inspector); or
(b) a Greater Sunrise visiting inspector; or
(c) a greenhouse gas project inspector; or
(d) an OHS inspector;
as the case may be, in connection with the performance of those functions and the exercise of those powers.
(3) In performing those functions and exercising those powers, the person:
(a) is subject to the directions of the Commissioner; and
(b) is not subject to the directions of:
(i) the Secretary of the Department; or
(ii) a Designated Authority; or
(iii) the responsible Commonwealth Minister; or
(iv) the Safety Authority.
Identity cards
(4) The Secretary of the Department must issue an identity card to the person. The identity card must:
(a) specify the Commission of inquiry concerned; and
(b) contain a recent photograph of the person.
(5) A person commits an offence if:
(a) the person has been issued with an identity card; and
(b) the person ceases to be subject to a determination under subsection (1); and
(c) the person does not immediately return the identity card to:
(i) the Secretary of the Department; or
(ii) if the Secretary of the Department, by written notice given to the person, specifies another person to whom the card is to be returned—that other person.
Penalty: 5 penalty units.
(6) Subsection (5) does not apply if the identity card was lost or destroyed.
Note: The defendant bears an evidential burden in relation to the matter in this subsection—see subsection 13.3(3) of the Criminal Code.
(7) A person who is subject to a determination under subsection (1) must carry the identity card at all times when exercising powers, or performing functions, under this Act or the regulations as:
(a) a petroleum project inspector (other than a Greater Sunrise visiting inspector); or
(b) a Greater Sunrise visiting inspector; or
(c) a greenhouse gas project inspector; or
(d) an OHS inspector.
(8) Subsections 600(6), 606(5) and 681(5) do not apply to a person who is subject to a determination under subsection (1) if the person is exercising powers, or performing functions, under this Act or the regulations as:
(a) a petroleum project inspector (other than a Greater Sunrise visiting inspector); or
(b) a Greater Sunrise visiting inspector; or
(c) a greenhouse gas project inspector; or
(d) an OHS inspector.
(9) This Act has effect, in relation to a person who is subject to a determination under subsection (1), as if the identity card were the identity card of each of the following:
(a) a petroleum project inspector (other than a Greater Sunrise visiting inspector);
(b) a Greater Sunrise visiting inspector;
(c) a greenhouse gas project inspector;
(d) an OHS inspector.
(10) A determination made under subsection (1) is not a legislative instrument.
780G Application of laws relating to disclosure
A law of the Commonwealth that relates to the disclosure of information applies in relation to disclosure of information to a Commission of inquiry in the same way that it would apply to disclosure of the information to a Royal Commission.
Division 2—Other amendments
Archives Act 1983
62E Subsection 3(1) (definition of Commission of inquiry )
Repeal the definition, substitute:
Commission of inquiry means:
(a) the Commission of inquiry within the meaning of the Quarantine Act 1908; or
(b) a Commission of inquiry within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.
62F Paragraph 22(1)(b)
Omit “the Commission of inquiry”, substitute “a Commission of inquiry”.
62G Subsections 22(2) and (4)
Omit “the Commission of inquiry”, substitute “a Commission of inquiry”.
62H Paragraph 22(5)(b)
Repeal the paragraph, substitute:
(b) the Minister administering the Quarantine Act 1908 is taken to be the responsible Minister in relation to the records of the Commission of inquiry within the meaning of that Act; and
(c) the Minister administering the Offshore Petroleum and Greenhouse Gas Storage Act 2006 is taken to be the responsible Minister in relation to the records of a Commission of inquiry within the meaning of that Act.
Freedom of Information Act 1982
62J Subsection 4(1) (definition of Commission of inquiry)
Repeal the definition, substitute:
Commission of inquiry means:
(a) the Commission of inquiry within the meaning of the Quarantine Act 1908; or
(b) a Commission of inquiry within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.
62K Subsection 4(1) (subparagraph (a)(vii) of the definition of prescribed authority)
Omit “the Commission of inquiry”, substitute “a Commission of inquiry”.
62L Paragraph 13(3)(b)
Repeal the paragraph, substitute:
(b) records of the Commission of inquiry (within the meaning of the Quarantine Act 1908) that are in the custody of the Australian Archives are, for the purposes of this Act, taken to be documents of an agency and to be in the possession of the Department administered by the Minister administering the Quarantine Act 1908; and
(c) records of a Commission of inquiry (within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006) that are in the custody of the Australian Archives are, for the purposes of this Act, taken to be documents of an agency and to be in the possession of the Department administered by the Minister administering the Offshore Petroleum and Greenhouse Gas Storage Act 2006.
Privacy Act 1988
62M Subsection 6(1) (definition of Commission of inquiry)
Repeal the definition, substitute:
Commission of inquiry means:
(a) the Commission of inquiry within the meaning of the Quarantine Act 1908; or
(b) a Commission of inquiry within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.
62N Subparagraph 7(1)(a)(vi)
Omit “the Commission of inquiry”, substitute “a Commission of inquiry”.
The question is that the amendments be agreed to.
Question agreed to.
Bill, as amended, 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; 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; 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.
Message received from the Senate returning the bill without amendment or request.
Bill returned from the Senate with an amendment.
Ordered that the amendment be considered immediately.
Senate’s amendment—
(1) Schedule 1, page 9 (after line 16), at the end of the Schedule, add:
14 At the end of Part 6-3
Add:
52EC Review of scheduling regime
(1) The Minister must cause an independent review of the operation of this Part to be conducted, with particular reference to the amendments to this Part made by the Therapeutic Goods Amendment (2009 Measures No. 2) Act 2009 (the amendments).
(2) The review must:
(a) start not later than 1 July 2013; and
(b) be completed within 6 months.
(3) The review must report on:
(a) the system of access controls for goods containing scheduled substances established by this Part;
(b) the outcomes of the administration of scheduled substances by the Secretary and by the committees established by this Part;
(c) the effect of the amendments on the therapeutic goods industry and on individual parties within the industry;
(d) whether there are adequate avenues for review of decisions made by the Secretary and by the committees established by this Part;
and may make recommendations for further changes to the scheduling regime.
(4) The review must be conducted by a panel which must comprise not less than three, and not more than five, persons with relevant expertise.
(5) As part of the review, the panel must invite and consider public submissions.
(6) The panel must give the Minister a written report of the review.
(7) The Minister must cause a copy of the report to be laid before each House of the Parliament within 15 sitting days of that House after the day on which the Minister receives the report.
I move:
That the amendment be agreed to.
The Therapeutic Goods Amendment (2009 Measures No. 2) Bill 2009, the third in a series of bills to implement long-awaited improvements to the Therapeutic Goods Act 1989, was passed with amendment by the Senate this morning. Senator Xenophon proposed a number of amendments to the bill; however, the Senate only agreed to an amendment which will introduce a requirement for an independent review of the new separate scheduling arrangements to commence within three years after they come into effect—that is, in 2013. The government envisages that the panel to conduct this review would comprise of persons with expertise in public health, legal matters, and wide industry experience. The government accepts this amendment.
Question agreed to.
Debate resumed.
The original question was that this bill be now read a second time. To this the honourable member for Aston 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 rise to speak on the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009. This is about Labor again trying to clean up the mess left behind by the Liberals when they were last in government. This bill arises from the Liberals’ decade in power when they did nothing about clear accountability issues, such as executive remuneration as it spiralled out of control.
It is about clearing up the mess that was left to us by the previous government through the period from 1996 to 2007. This is one piece of legislation that I believe has the overwhelming support of the Australian people. It is legislation that I am 100 per cent committed to. Working Australians have been outraged to hear time and time again of reports of executive salaries that have spiralled out of control—and doubly so when the executives got paid just before a company crashed or the company’s performance petered out on the stock exchange.
As usual, it takes a Labor government to fix up these excesses. The bill will amend the Corporations Act 2001 to strengthen the regulatory framework relating to the payment of termination benefits to company directors and executives. Whilst it is hard to fix all the issues because of their complexity, this bill puts in place solid reforms that will make company executives, CEOs and company directors more accountable.
The three key measures of this bill include lowering the threshold at which termination payments must be approved by shareholders, expanding the scope and provisions to include key management personnel for companies that are a disclosing entity and clarifying and expanding the definition of what constitutes a termination benefit.
I want to say upfront that there are thousands of decent, fair-minded company directors, CEOs and executives who care about the standards that they set. I know many people in the business world who have very high principles, who work very hard and who do give a damn about the people that they employ. But it is equally true that there are many motivated mainly by greed, who jack up their own pay at every opportunity—often at the expense of ordinary workers. There are people who hide this, who try to obscure their remuneration via all sorts of mechanisms.
The core elements of this bill are a clear indicator of this. Because of the behaviour of many executives, we are having to, as part of this bill, prohibit directors and executives who hold shares in their company from participating in shareholder votes to approve their own termination benefits. You would think that this sort of behaviour would not occur. You would think that people would see the clear conflict of interest and, of course, declare it and also exclude themselves from the vote. But that is not so. Greed overrides principles in the corporate sector of many companies on too often a basis.
As part of this legislation, we are introducing an express obligation on the recipient to immediately repay unauthorised termination benefits. We are introducing significantly higher penalties associated with unauthorised payments on termination benefits. These are provisions the former government should have immediately put in place when they saw the stories of excessive greed unfolding over a decade. But they did not. If the Howard government had not refused to act, these sorts of laws would have been in place during the collapses of the global recession that we are currently enduring, where we saw many major companies collapsing, with executives still walking away with truckloads of dollars.
These amendments are urgent as there is significant community concern about executive largess, particularly at a time when many Australian families are being hit hard by the global recession. The new laws will expand the definition of a termination benefit, including a requirement for a broad interpretation of the term ‘benefit’ and a requirement that the substance should prevail over its legal form.
We are trying to put an end to some of the slippery little schemes executives put in place to assist them. This will include, for example, amounts paid as voluntary out of court settlements. The changes do provide the powers to prescribe whether certain types of benefits are to be given in connection with a person’s departure from office. For example, a payment made in connection with retirement, loss of office or position includes the automatic or accelerated vesting of options and any payments in lieu of notice.
We are significantly increasing penalties for breaches as part of this legislation, with potential fines for individuals set at $19,800 and for corporations at $99,000. However, as is usual in laws of this nature, the new arrangements will not apply retrospectively to existing contracts. It will apply to all new contracts once this legislation gains royal assent.
Whilst there are many examples of good executives, there are also many examples of very average executives, with average principles. In Australia I have to make mention of outgoing Telstra Corporation Chief Executive, Sol Trujillo. Poor old Sol was totally committed to driving down costs. He and other executives threatened and browbeat the workforce, forcing individual contracts on workers and driving down conditions of employment. Then it was, ‘See you later, mate.’ He took a $3 million termination payment on top of his $13.4 million base salary. I thought that was outrageous. I think he thought he was being modest! That was when he was sacking thousands of workers and driving down their conditions of employment through the course of his reign in that office. He was not a particularly principled man in my view. He was out of touch.
When this issue comes up, we always hear the Liberals trot out the hoary old line that companies are forced to pay these salaries and benefits because the market determines executive pay. If we do not pay this, as their argument goes, we will lose our top executives. That is what the Liberals say. I believe that is absolute rubbish. I believe there are many highly qualified executives who are smart, honest, trustworthy and do want to work for Australian companies. My view is that the sort of person who wants these executive payments to continue has a question mark over them from the start.
What did Sol Trujillo achieve at Telstra for his $13 million a year plus? The answer in my view is virtually nothing. He made the service worse, none of the big reforms that were needed happened, and he intimidated and demoralised his workforce. He, like so many other brilliant executives, relied on the very blunt and very dumb management tool of sacking workers at every opportunity. There are plenty of recent other examples that we can draw upon. Sol was not alone in this. Pacific Brands sacked 1,800-plus workers but did not address the core problem, which required responses other than the simplistic sacking tool most highly paid executives often resort to. Pacific Brand’s CEO left with a golden handshake of $3.4 million as the company got worse and worse.
Everyone also knows the shocking excess of Mr Owen Hegarty of OZ Minerals. He got a bonus payment of $8.35 million, which from memory was around six times his normal base salary. I would have loved to see Mr Hegarty stand in front of everyday shareholders and argue his case. These examples, in all likelihood, would not have happened if we had put in place these legislative arrangements some time ago. At the very least, they would have had to go through a much more rigorous process to defend their salaries.
The Australian people overwhelmingly support what Labor is doing. Australians do not support amoral profiteering and thinly disguised greed. They support a decent day’s work for a decent day’s pay, as they have always done. This bill is about introducing fairness and proper process into all areas of the corporate world, and it is another example of a good Labor bill. I commend this bill to the House.
I rise to speak in support of the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009. This is one of the more important bills that I have had the opportunity to speak on. It is important that this parliament pass this bill because it is above all other things about restoring some sense of justice in the way in which our mixed market system operates. We have seen over the last period some of the excesses. We have also seen how some of those excesses have contributed to the global financial crisis and the global recession that has followed. There needs to be some alignment between the success and profitability of companies and the remuneration of those charged by the shareholders with responsibility of running those companies. There is no question about that.
There are fundamentally two reasons why the measures contained within this bill are necessary. The first one is that termination payments, the ones that we have seen, have been excessive. The second one is that, far too often, these payments have been no reflection of and have had no alignment to the profitability of the companies which those directors, executives or management personnel have been charged with the responsibility of running.
I saw an example in an article written by Clancy Yeates which appeared in the Age of 25 June this year, and I would like to quote that example. The article covered some of the aspects of this bill, but also dealt with what I believe are some of the more egregious examples of these so-called golden handshakes being awarded. In being awarded, they have made a mockery of the principle that there should be some alignment between good practice, performance and the rewards that are on offer for those involved in running these companies. The article says:
In April last year, Transurban paid departing managing director Kim Edwards $5.2 million two months before the company halved distributions and raised capital from shareholders.
So there we have a termination payment in the order of $5.2 million, made only a couple of months before the company which this particular individual was charged with the responsibility of running halved its distributions and then called upon shareholders to provide additional injections of capital. To me, there is something fundamentally wrong with a system that allows a decision of that nature to be taken, and taken without any shareholder involvement in approving it. There is another example cited in the article, relating to the architect of the ill-fated merger between Oxiana and Zinifex to create OZ Minerals. The individual concerned there was Mr Hegarty, who received $8.35 million when he resigned. By any community standard, these amounts of money are phenomenal.
I want to just put that into some context. If we go back to the most recent figures that were collected on this, in the 2006 Australian Bureau of Statistics census, we see that in my electorate of Lindsay the median household income—not individual income; household income—was $57,876 per year. Just to put that into some perspective: if you managed to pull in $57,000 and you worked for 42 years—assuming you worked from 15 to 67, as will soon be required—then we are talking about an income across your lifetime of $2.4 million. Clearly, there are some problems with trying to make an assessment of what a lifetime income would be, based on current year analyses. But we can see the scale of the discrepancy between what an average working person in my electorate can expect to earn through the course of their lifetime compared to the amounts of money that are involved in these one-off termination payments.
Let us also not forget that when an executive or director leaves a company with such a termination payment, more often than not they walk away with the capacity to continue to earn an income by various other means. So it is not as if this is a final payment to set them up into retirement. And even if it were, it would be a pretty generous one. But, in many cases, the individuals concerned go off and take up other appointments or posts and continue to generate incomes of a scale that is truly phenomenal.
I have had a look at figures for some payouts over the years. I see that when Chris Cuffe from the CBA group’s Colonial First State left in 2003, his final payout was $32.75 million. At the time, his base salary was $2.82 million. We see that the final payout to Peter Smedley of the Colonial group was around $20 million. John Ellice-Flint from Santos got a final payout of $16.8 million; his base salary was $1.5 million. These are extraordinary amounts of money. Mr Gilbertson from BHP Billiton got $12 million for six months service as the CEO, and a $1.5 million indexed annual pension, for life, for 32 years with the company. Well, at least he contributed 32 years with the company. But that is an enormous payout. His base salary was $2 million. Of course, his base salary is in the same ballpark as the lifetime earnings of a family on the median household income in my electorate. That is just to put this into scale.
I would like to turn to some of the substantive provisions of the bill. It is important to note that this bill is not about setting controls and prohibiting companies from paying termination payments that might be considered excessive. But it does require a lowering of the threshold at which those payments will need shareholder approval. The threshold will be reduced from what it is currently, which is seven times the annual remuneration package—which is a larger and more expansive definition than base salary—to one year’s average base salary.
Let us look at the justification for that—and I think that there are strong grounds for it. The first point to make is that I see—from having a look at some of the submissions that were made to the Senate Economics Legislation Committee that inquired into this matter—that there was universal agreement. There was consensus that the current level, of seven times remuneration, is excessive. So the regulations that have been in place, and certainly were in place for the entire period of the previous government, are now universally acknowledged to have been excessive. And some of the payments that I just read out were clearly made during the course of the previous government. It would be fair to say that there was not an appetite for any serious reform of these matters when the previous government was in place.
The 12-month threshold is also something that can be seen as referring back to the findings of a Labor minority report on an inquiry by the Parliamentary Joint Committee on Corporations and Financial Services in 2004. That minority report noted that termination payments for executives and directors exceeding one year’s salary should be subjected to shareholder approval. That was a benchmark that was set back in 2004, and clearly there are other justifications for setting it at 12 months.
I note that the Senate Economics Legislation Committee considered the comments of Treasury on this matter. Treasury referred to the RiskMetrics data which was released in November of last year which indicates that the average CEO across the S&P/ASX 100 companies receives just over $3.4 million, or 201 per cent, of their salary as a termination payment. Based on that data Treasury found that 20 of the 33 CEOs included in the sample that was considered by RiskMetrics would exceed the proposed new threshold, with the rate expected to decline for smaller companies. Treasury’s conclusion on this point was:
Based on this research, it would appear that between approximately 50 to 60 per cent of termination benefits would be captured by the new threshold, which Treasury considers to be an appropriate level.
I certainly consider it to be an appropriate level.
It is instructive to make the observation that Professor Peetz made in some of evidence that he gave to that inquiry. He reflected upon the disparity between even setting levels at one year and the requirements under the Fair Work Act that would apply to any other employee. Under the National Employment Standards, those provisions in the Fair Work Act provide that, in general, employees will be entitled to one to four weeks notice of termination or payment in lieu, depending on their length of service. So the disparity continues to be a very large one, and a little bit of perspective needs to be maintained by the people that argue that a threshold of 12 months base salary is too harsh or in some way draconian.
Another aspect of the bill is that it expands the scope of those company officers for whom such shareholder approval will be required. This is a very positive development. It expands the range of the individuals concerned to bring some alignment with the list of individuals that would otherwise need to be acknowledged in the remuneration report as part of the annual reporting process of companies. Another reform contained within this bill is the clarification and the expansion of the definition of a termination benefit. The essential underpinning of this element of the reforms is that the determination of the termination benefit is intended to be as broad as possible. Of course, there is also a provision to allow for a regulation-making power to specify particular types of payments as being included within that definition.
Another aspect of the bill involves a prohibition on retiree directors or key management personnel from participating in a shareholder vote in relation to the decision taken in relation to their own termination payment, unless, of course, they are exercising proxies on behalf of others. Notwithstanding these reforms, we will be retaining the existing requirements that the termination benefit be approved by a resolution passed at a general meeting and that the details of the benefit be sent out or accompany the notice of the general meeting—important notice requirements.
Another aspect of the reforms is that there will be a new express obligation introduced. The obligation will be imposed upon the recipient of a termination payment to repay the benefit where the termination benefit was paid in contravention of the requirement to seek shareholder approval. In the context of these reforms and in the context of the existence of these rules in the first place, it is only fair that there be such an express obligation. These reforms also increase the penalties for breaches of these provisions to $19,800 for individuals and $99,000 for corporations. Of course, the new provisions are not retrospective.
It is also important to reflect upon one of the arguments that are made by those opposing these reforms—that is, this measure in some way inhibits our ability to compete internationally in the global marketplace for business leaders. In this regard, I draw the House’s attention to an article by Clancy Yeates in the Sydney Morning Herald on 25 June this year which read:
But other research suggests the hunt for talent may not be as global as companies claim. A recent survey of 300 companies by the proxy advisers RiskMetrics found 57 per cent of chief executive replacements came from within the company, with 18 per cent recruited from overseas.
Those figures certainly tell a slightly different story about the source from which individual executives are recruited. The suggestion that this in some way is going to inhibit our international competitiveness is a claim that is vastly overblown.
It is important to remember that, in the context of economies throughout the globe coming to terms with this common problem of executive salaries and the excessive nature of some of the payments that have been made, there will be continued global cooperation to ensure that, in the end, there are standards that are applicable not just in this country but throughout the world to ensure that there is some alignment between performance and reward.
In conclusion, I would make the following observations in relation to the opposition’s stance on this particular matter. If the shadow minister has telegraphed the view of the opposition, as I think he has, the opposition believes that these proposals are too harsh and too draconian, but, at the end of the day, they are unlikely to oppose them. Maybe I am giving the opposition too much credit in this regard, but that was certainly my impression from listening to the shadow minister’s comments earlier. Even though there is now an acknowledgement from those on the other side that the seven times threshold for the remuneration of an executive or director was excessive, there was absolutely no effort on the part of those on the other side to take any action in their 11½ years in office—and I have to say that some of the more outrageous payments were made during the period of the previous government. So there was no effort. I see that the shadow minister is strenuously objecting, but the fact that these requirements continue to exist on the statute book today tells a very simple story, and that is that those on the other side failed to correct what was clearly an anomaly—and some would say it was a loophole.
We are seeking to redress this anomaly with this bill, and I am confident that it will have the support not only of the House but also of the other place. It is important that we take these steps and that they be complemented by the work of the Productivity Commission and the government’s response to that inquiry. What we are talking about here is restoring some sense of fairness to the way in which our economy operates and ensuring that, while those who contribute to a company’s profits do receive due reward for their contribution, there is some alignment between their contribution and the profitability of the company they are involved with.
I would like to thank all the honourable members who have taken part in the debate on the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009. The global financial crisis has highlighted the importance of ensuring that remuneration packages are appropriately structured. There is, quite understandably, increasing community concern about excessive pay practices, particularly at a time when many Australians are being hit by the global recession. Clearly, shareholders need to be empowered to reject excessive termination payments that are not in the company’s best interests.
The reforms in this bill will substantially improve the current framework relating to termination benefits in a number of ways. This bill will substantially reduce the threshold for shareholder approval, which will give shareholders the ability to scrutinise and reject excessive termination benefits. It will also expand the scope of individuals covered by the regulatory regime, improve the integrity of the shareholder vote, facilitate the recovery of unauthorised termination benefits and substantially increase the relevant penalty provisions.
The reforms have been the subject of extensive consultation, which the government has been responsive to. It is true to say that there were concerns raised in relation to the original regulations that were issued, but many of those issues have been worked through in a constructive fashion between the government and concerned stakeholders. The final regulations supporting the bill were issued by me last week following wide-ranging public consultation. The regulations provide a definition of ‘base salary’, clarify and expand the types of benefits that are or are not subject to shareholder approval and prescribe the circumstances in which a benefit is given in connection with a person’s retirement.
The government has responded to shareholder concerns by deciding not to change the timing of shareholder voting arrangements. We are confident that these reforms will ensure Australia’s continuing international competitiveness. Globally there are no consistent requirements covering the payment of termination benefits. Australia’s approach ensures that our regulatory regime remains at the forefront of international best practice.
I now turn to the amendment moved by the member for Aston and his comments in the second reading debate—and I am glad that he is in the chamber. The member for Aston said at the beginning of his remarks that the bill is in many ways sound. He then used his 20 minutes to argue that it was not sound. So I am not sure where he is coming from. I recognise that the opposition has many positions on some issues, but it is unusual for a shadow minister to outline many positions in one speech.
My attention has also been drawn to the comments of coalition senators in the consideration of this bill by the Senate Economics Legislation Committee—and I always read very closely the Senate committee reports on legislation that I am responsible for. The coalition senators said:
… we are aware that:
They are critical of the government for going down this road. But perhaps most interestingly they say:
Coalition senators share the view of many that presented or submitted evidence to the inquiry that the bill has elements of regulatory overreach.
If that is the position of the coalition, that is fine; if that is where they stand, that is fine. But I find it very difficult to align the comments of the member for Aston and the coalition senators with the position of the Leader of the Opposition. On 27 February 2009 the Leader of the Opposition said:
We have proposed a very simple, concrete reform which would deal with this—
he is talking about executive pay—
and that is to make senior executive salaries only able to be increased or varied with the approval of shareholders.
He went on to say:
Now, at the moment the senior executives’ remuneration package goes to the shareholders and they can give an advisory opinion on it but it’s not binding. We say change the law so that the shareholders vote.
The Leader of the Opposition added:
All you need to do is change the law so the senior executives, the chief executive and say the next two or three people, their salaries must be approved by the shareholders. Yes or no, if the shareholders approve it well, it’s their company, they can pay their staff, high and low, what they wish.
So the Leader of the Opposition says: ‘Put it all to shareholders. Let’s put the whole lot to shareholders: the complete remuneration package, everything they get paid, including the termination pay.’ Then coalition senators say: ‘This is regulatory overreach. This is a knee-jerk reaction. What is the government doing?’ Who is running this party, Madam Deputy Speaker? I ask you. Is it still the policy of the opposition to put all remuneration of the directors and senior executives before shareholders? Is that still opposition policy? If so, will somebody please send an email to coalition senators? Will somebody please let them know so that they do not make ridiculous statements like this in dissenting reports on government legislation? Will somebody please tell the shadow minister so that he does not move amendments which conflict with his leader’s position? His leader’s position is that all remuneration should go before shareholders.
Madam Deputy Speaker, I raise a point of order. I ask the minister to come back to the bill before the House.
Minister.
I know the shadow minister does not want to hear this but it is an important point. The member for Wentworth, who is to my knowledge still the Leader of the Opposition—he was at two o’clock, last time I checked—has the policy that all remuneration should go before shareholders. The shadow minister, the member for Aston, has an amendment which waters down the government’s position and which says that less should go before shareholders than what the government’s position is. So who do we believe: the Leader of the Opposition or the shadow minister? I actually think the shadow minister is not a bad bloke, but where does the coalition stand on this policy? Is it the Leader of the Opposition’s or the shadow minister’s position? I am not sure which is the case and the House cannot know.
Perhaps when this goes into consideration in detail the member for Aston could enlighten the House as to whether the position of the Leader of the Opposition that I outlined a few moments ago is still coalition policy. It was that all executive remuneration goes before shareholders: salary, benefits, termination benefits. The government has said: ‘We don’t accept that. We don’t think that is a good idea.’ Dare I say we think that is regulatory overreach. We think that probably would not work. So we have come up with a modest but important measure to deal with what we see as a significant mischief, which is excessive termination pay, termination pay which is not linked to company performance. The community, with some just cause, gets very concerned when they see executives leaving a company that has been in difficulty—and often the chief executive or other executives must take some responsibility for that—and yet they get very substantial payments, without approval by shareholders.
The government has said: ‘Why don’t we reduce the level of executive termination pay that needs to be put to shareholders from seven years of total remuneration to one year of base pay? If the company really feels that payments higher than that are justified, if the company really feels that it can be warranted and explained to their shareholders, then put it to the shareholders.’ We are not saying they cannot do it, we are not saying we are going to outlaw it, we are not putting on a cap. We are saying, ‘Convince shareholders.’ The member for Aston has foreshadowed an amendment in consideration in detail which states, ‘We think we should make it total remuneration, not just base salary.’ So he would reduce the number of things which go to shareholders for a vote. Base pay at this level often represents about 30 per cent of total remuneration, so this would be a substantial watering down of the government’s position, and we will not accept the opposition’s amendment today. The opposition may well have to consider their position in the other place and they may well have to consider to vote for this legislation as it stands or to vote it down. Their position will be open for scrutiny by the Australian people.
We hear, as I say, many positions from the opposition on many things, but in my view this one takes the cake. The Leader of the Opposition is, as we all know, prepared to say anything and do anything for a cheap, populist stunt. He came out earlier this year and said: ‘I am tough on executive salaries. I will ensure, if I am Prime Minister of Australia, that they all get put to a vote; every last cent of an executive’s remuneration will need to be put to a vote of shareholders.’ And his shadow minister moves an amendment today to water down what we think is a moderate and sensible measure. We do realise you need to strike a balance here. You do need to ensure that Australia remains internationally competitive when it comes to attracting executives. But what we need to do is not go into regulatory overreach, as those opposite would propose to do, by putting it all to shareholders—or maybe it is their position tonight not to do as much as we would do. I am really not sure.
This is a controversial matter, and I recognise that people have people have different views. I recognise that the Australian Institute of Company Directors supports the opposition’s position. That is fine. Or can I say they support the member for Aston’s position. I do not think they support the member for Wentworth’s position. I somehow think that the company secretaries support the government’s position that this is an appropriate reform and that the regulations have dealt with their concerns. The company secretaries have said that the regulations deal with their concerns and they support the passage of the legislation. So it comes down to this: if a company thinks that executive termination pay higher than one year’s base salary can be justified, then put it to shareholders. Let the shareholders decide. The opposition tonight, at seven o’clock on 9 September, have a position that shareholders should decide less than they would be able to decide according to the government’s position. The opposition’s position up until recently was—and somehow or other, in their warped logic, it may continue to be their position—that all executive remuneration should be put to shareholders. But how you could achieve both positions at once is really quite beyond me.
The original question was that this bill be now read a second time. To this the honourable member for Aston has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The immediate question 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.
Bill—by leave—taken as a whole.
by leave—I move amendments (1) to (3), as circulated in my name, together:
(1) Schedule 1, item 1, page 3 (lines 6-7), omit the item, substitute:
1 Section 9
Insert:
total remuneration has the meaning specified in regulations made for the purposes of this definition.
(2) Schedule 1, item 31, page 9 (line 13), to page 10 (line 25), omit the item, substitute:
31 Subsections 200F(3) and (4)
Repeal the subsections, substitute:
(3) This subsection applies if the relevant period for the person is less than 1 year. The amount worked out under this subsection is:
where:
estimated annual total remuneration is a reasonable estimate of the total remuneration that the person would have received from the company and related bodies corporate during the relevant period if the relevant period had been 1 year.
Note: The relevant period for the person is defined in subsection (5).
(4) This subsection applies in every other case. The amount worked out under this subsection is:
(a) if the relevant period is 1 year—the total remuneration that the person received from the company and related bodies corporate during the relevant period; or
(b) if the relevant period is more than 1 year but less than 2 years—the average annual total remuneration that the person received from the company and related bodies corporate during the relevant period, worked out as if:
(i) the relevant period were 2 years; and
(ii) the person’s annual total remuneration for the second year were a reasonable estimate of what the person would have received as total remuneration after the first year of the relevant period had the relevant period been 2 years; or
(c) if the relevant period is 2 years—the average annual total remuneration that the person received from the company and related bodies corporate during the relevant period; or
(d) if the relevant period is more than 2 years but less than 3 years—the average annual total remuneration that the person received from the company and related bodies corporate during the relevant period, worked out as if:
(i) the relevant period were 3 years; and
(ii) the person’s annual total remuneration for the third year were a reasonable estimate of what the person would have received as total remuneration after the second year of the relevant period had the relevant period been 3 years; or
(e) if the relevant period is 3 years or more—the average annual total remuneration that the person received from the company and related bodies corporate during the last 3 years of the relevant period.
(3) Schedule 1, item 37, page 11 (line 4), to page 12 (line 11), omit the item, substitute:
37 Subsections 200G(2) and (3)
Repeal the subsections, substitute:
(2) This subsection applies if the relevant period for the person is less than 1 year. The amount worked out under this subsection is:
where:
estimated annual total remuneration is a reasonable estimate of the total remuneration that the person would have received from the company and related bodies corporate during the relevant period if the relevant period had been 1 year.
Note: The relevant period for the person is defined in subsection (6).
(3) This subsection applies in every other case. The amount worked out under this subsection is:
(a) if the relevant period is 1 year—the total remuneration that the person received from the company and related bodies corporate during the relevant period; or
(b) if the relevant period is more than 1 year but less than 2 years—the average annual total remuneration that the person received from the company and related bodies corporate during the relevant period, worked out as if:
(i) the relevant period were 2 years; and
(ii) the person’s annual total remuneration for the second year were a reasonable estimate of what the person would have received as total remuneration after the first year of the relevant period had the relevant period been 2 years; or
(c) if the relevant period is 2 years—the average annual total remuneration that the person received from the company and related bodies corporate during the relevant period; or
(d) if the relevant period is more than 2 years but less than 3 years—the average annual total remuneration that the person received from the company and related bodies corporate during the relevant period, worked out as if:
(i) the relevant period were 3 years; and
(ii) the person’s annual total remuneration for the third year were a reasonable estimate of what the person would have received as total remuneration after the second year of the relevant period had the relevant period been 3 years; or
(e) if the relevant period is 3 years or more—the average annual total remuneration that the person received from the company and related bodies corporate during the last 3 years of the relevant period.
The coalition has proposed these amendments because we believe they will improve this bill. I appreciate the remarks that the minister made, saying that he thinks I am a good bloke. I think he is a good bloke as well. I appreciate that. You are right when you say I am a good bloke. I must say it is true. It is one of the most accurate things you have said.
What I do not appreciate from the minister is his remarks in terms of understanding policy positions. I think it is important for the House to remember that this is the same minister who has quite an interesting policy history. I remember Fuelwatch, GroceryWatch and employee share schemes—three policies that the minister said were vital and were critical for the Australian people to have. Of course Labor walked away from all three policies after the minister realised that his particular bills and policies would not work. This is another example of where this minister is going along with the bill where he has not thought through the implementation and practical consequences. The reason we are proposing this—and I call upon the minister to apply his logic, because he is a logical person—is that, if this bill goes through without the coalition’s amendments, base salary and therefore total executive remuneration will increase.
If the minister is happy to see total executive remuneration increase, to see shareholders having to carry the burden of even higher fixed costs in the companies of which they hold shares—if that is his intent—then that is what is going to happen if he does not accept these very sensible amendments. If he wants to reduce the multiplier from seven years to one year that is fine but to put that multiplier against base salary will only increase base salary. The minister referred to the Senate Economics Legislation Committee. There was a lot of evidence at that committee inquiry, and the bulk of the evidence—by far the majority of the evidence—substantiated our position on this.
The government likes to quote organisations like the Business Council of Australia when it suits them. They like to quote the Australian Institute of Company Directors when it suits them. They like to quote the Australian Bankers Association when it suits them. But I notice the minister is not quoting them tonight. This is because, in their evidence, they all supported the coalition’s premise that, unless you make these amendments, executives are going to receive substantial increases in their base salaries. Therefore, the objective of this bill would be defeated. Moreover, the other dynamic is that this bill is in relation to termination payments—in other words, when the executive leaves. International experience reveals what is going to happen. I know the minister has had his problems with policy development—and I have given three examples—but I can tell him, I used to work in corporate life. Another thing that will happen here is that organisations will just put the bonus on the front end, on the way in. So, instead of having a golden handshake they will have a golden hello or a golden welcome cheque—a sign-on bonus—and, again, executive remuneration will go up.
If the purpose of this bill is to empower shareholders, to make sure that executives are paid in accordance with company performance, why would you take away the at-risk component? Why would you allow the guaranteed or fixed component, the base salary component—the salary that the executive gets regardless of the performance of the company—to increase? And why would you allow the opportunity for an executive to get a golden hello, which is not based on performance, even before they have started to work in the organisation?
Our amendments are logical. What we are saying is that our amendments will preserve the link between executives having their remuneration based on the actual performance of the company. That is aligned with the shareholders’ interests. At the end of the day, that is a very important point of corporate governance that must be maintained—executives’ interests being aligned with shareholders’ interests. If you are an executive in a business and you know, regardless of the performance of the company, that you are going to get a whopping base salary, what interest is there for you to make sure that the company performs? (Time expired)
The member for Aston has just had the opportunity to explain to the House how on earth it could possibly be consistent or logical for the coalition to propose this amendment tonight if it remains its position that all executive remuneration should go to shareholders. He had the opportunity. He talked about lots of things. He talked about other policies. But what he did not talk about was this policy. How is it consistent for the member for Aston to argue that fewer things should go to the shareholders and for the member for Wentworth to argue that everything should go to shareholders? How could that possibly work? The member for Aston has had his opportunity to outline it to the House—I asked him to do it in my remarks. He has failed to do it. He failed to do it because it cannot be done. He failed to do it because it is internally inconsistent. It is illogical. There is no possible way that the opposition could argue that every dollar of executive remuneration should go to shareholders for approval—except the bits they do not think should go to shareholders for approval by moving this amendment.
The member for Aston said he supports moving from seven years to one year. But what he is doing is increasing one year by stealth. He is increasing the base. He is saying that what should be considered is broader than base salary; therefore, he says it should be total remuneration. What that does is very considerably increase the threshold before shareholders have to approve of it; therefore, far fewer decisions will go to shareholders for approval. He, by stealth, is undermining the intent of this legislation. So we will not be supporting and accepting the opposition’s amendment, because it makes no internal sense. It is inconsistent with their previous policy positions and will, by stealth, undermine the policy objective of this legislation.
The minister wants to come in here and talk about consistency. Really! This is the minister with the failed Fuelwatch, the failed GroceryWatch and the failed employee shareholder scheme. I understand. I could be wrong—the minister could clarify this—but I do not think this minister has ever actually had a job outside of politics. I do not think this minister has ever had a job in which he would have been paid a base salary and performance pay. To my knowledge—and I could be wrong—the minister has never had a job in the corporate world. That is part of the reason why we have policies coming before the parliament such as Fuelwatch, GroceryWatch and employee share schemes. The point I am making about this bill is that I am applying logic to it. What I am saying is that executive pay is made up—
Madam Deputy Speaker, I rise on a point of order. I ask the shadow minister to come back to the purpose of the bill and the matters that we are debating.
That is right; the same standing order applies to the minister. What we are saying is that in the real world, Minister, what is going to happen is that shareholders’ interests will not be satisfied by this particular bill as it stands. That is what is going to happen, because in the real world a portion of executives’ pay is base salary but the vast majority of it is short-term and long-term incentives. That makes up their total remuneration package. What one wants is the vast majority of their remuneration package to be subject to performance. You do not want the base salary, the guaranteed component, not to be subject to performance—to be guaranteed pay every fortnight or every month—but that is what is going to happen with this bill. Instead of an executive getting 30 per cent base salary and 70 per cent based on performance, what will happen is that it will be the other way around. They will get 70 per cent as base pay—it will not matter how the company performs; the base pay will be ratcheted up—and the minority of the salary will be based on performance. How can that possibly be in the interests of shareholders? What shareholders want is their company to perform and the people who are running the business to be paid on the actual performance of the business. Minister, that is what happens in the real world and that is what is going to happen.
The same point is: how can it possibly be in the interests of shareholders for golden haloes to start happening instead of golden handshakes? You might think that you are going to get rid of this problem, but what is going to end up happening is that Australian executives are going to get paid more guaranteed remuneration in their hand every month as a result of this bill. Minister, what we are trying to do here is to say to you: ‘You want to reduce seven years to one? Fine; absolutely. But if you go to total annual remuneration what will happen is that you will keep the link between the performance of the company—therefore, the shareholders’ interests will be satisfied—and the executives’ pay, which will be based on the performance of the company.’ Your bill, Minister, is going to take that link away. There will be no incentive for the executives to ensure the company performs well, because what will be in it for them? They will have their guaranteed huge base packages. Base salaries will go up because executives will want certainty and companies will just pay them more. If companies do have to pay them a termination payout, the base salaries will be so huge that they will not need to go to the shareholders. They will have so much scope because the base salaries will be enormous and so they will not have to go to the shareholders. So in fact what you are doing is diminishing shareholders’ power—and I am sure that is not the intent of the bill. All we are saying is use your logic, look at this sensibly and say that this is a way in which the objectives that the government is seeking can actually be achieved.
I will end my remarks there. I will not speak on the bill again but I implore the minister to consider our recommendations in good faith.
Very briefly: the member for Aston has had 10 minutes to explain to the House how the two positions are consistent. He has abjectly failed to do so—he did not address the issue again. This just underlines the policy bankruptcy of this opposition. He knows it. We will oppose the amendment.
Question put:
That the amendments (Mr Pearce’s) be agreed to.
Bill agreed to.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Message received from the Senate returning the bill without amendment.
Debate resumed from 19 August, on motion by Mr Albanese:
That this bill be now read a second time.
In the few minutes before we adjourn let me briefly touch on this Telecommunications Legislation Amendment (National Broadband Network Measures—Network Information) Bill 2009 The legislation itself is not that controversial but, by golly, the project is. This is about the National Broadband Network, the sound bite that never had the sound public policy to support it. It is now in its second incarnation and yet the fog and mystery of what this will actually look like is still as thick and as vivid as it ever has been.
This bill, though, is to extend the show-and-tell provisions that oblige certain parties to provide information to facilitate the government’s work in this area. Essentially, the original bill was to provide factual information about the existing network’s structure to enable telecommunications companies and other bidders on NBN version 1 to actually cost their proposals and submit a proposal under the request-for-proposal process. That shambolic request-for-proposal process never concluded. Now, in a fit of trying to ensure that the National Broadband Network has a second incarnation, we see the government opting to go it on its own, to go its own way.
What this bill seeks to do is to extend the range of parties that would be obliged to provide information in this show-and-tell exercise, the time over which those requests can be made and the duration for which that information can be retained and applied. So you now see another show-and-tell episode. It is more show, it is a longer running series and there is more involved but the government has still learnt very little about how to go about handling enhancement to the broadband infrastructure in this country. It seems as though—like the last time—if it were not for the coalition, Senator Conroy would have dug himself into a bigger hole. We bailed him out of his own self created problems last time, and I suspect that this will happen again.
What we have got here is a bill which the coalition feels has some serious deficiencies. Our concerns about the bill have been addressed in some amendments that I will touch on later. This concern, though, is entirely in keeping with the serious concerns the coalition has about the government’s entire approach to its proposed National Broadband Network. While we, like most people, support improved broadband services, enhanced availability and more affordability for those services, we, like many, are yet to be convinced that the government’s latest proposal can or will be delivered and at what cost, given its massive price tag and its potential contribution to Australia’s debt levels. This is the first piece of legislation since the government’s NBN mark 2 was announced in April that this parliament has been in a position to consider.
The bill seeks to amend part 27A of the Telecommunications Act in order to require telecommunications carriers and utilities to provide information about their existing networks to the Commonwealth to assist with the planning of the government’s NBN for both the duration of the implementation study and for a 10-year period should any rollout actually occur. I point to the implementation study phase, which is where the government is busily trying to work out what it is on about. This is sort of a cart-before-the-horse exercise where there has been much fanfare, many big public statements, plenty of press releases and much in the way of sound bites and publicity but, as I said earlier, not the sound public policy to back it up.
At least this implementation study phase is a clear acknowledgement that the government has little idea about what it is doing. It is the government’s intention that carriers and utilities will have the opportunity to provide requested information on a cooperative or commercial basis. However, the bill gives the minister the power to issue a legislative instrument to compel the provision of network information. The minister has the scope to define the information request and to make rules in relation to storage, handling and destruction of this information in order to protect its confidentiality and security. We know that the security regarding the NBN generally is the subject of some discussion. The AFP, before the House of Representatives Standing Committee on Communications, made that very point in a public hearing today. It made its position clear that much more work needs to be done to ensure the security of the NBN network if and when it ever materialises.
In 2008 a similar bill was considered and passed that required telecommunications carriers to provide specific infrastructure information to the Commonwealth for the RFP process under NBN mark 1. I was very familiar with that as I was shadow minister at the time. While we did not oppose the legislation, we did Senator Conroy’s work for him. We did raise concerns about disclosure and safeguarding of information. We undertook the consultation that Senator Conroy and the federal Labor government failed to take with key stakeholders and we raised and put forward a number of very worthwhile amendments, many of which the government conceded were a positive step forward and embraced in its final response. But, sadly, these obvious failings in that approach have reappeared here again where, if it was not for the Senate and its inquiries, the consultation that should have been part of the development of this legislative proposal would not have been done.
On April 7 2009, the government announced that it had abandoned its election commitment for fibre-to-the-node broadband and the associated request-for-proposal process. I always call that RFP a ‘request for a policy’ because there has never been one about how to implement some of these bold statements. The government then announced that it would establish a company to own and operate a fibre-to-the-premises broadband network with a potential price tag—in crayon drawing numbers—of $43 billion. How fascinating! The international telecommunications community, the best minds in the world, struggled under the government’s confused and shambolic process. The government decided that it knew best about how to roll out a national broadband network when all of the companies involved in that business apparently did not know as much as Kevin Rudd and the federal Labor government.
In light of these changed goalposts, this bill seeks to amend the existing provisions of the act to include the provision of information by utilities as well as telco carriers for the purposes of NBN mark 2. The bill proposes that the information of carriers and utilities be utilised not only for the implementation study but also potentially by the NBN company itself or its potential subsidiaries or partners for any actual rollout of the network over the next 10 years. I hope I can continue my remarks at another time.
Debate interrupted.
Order! It being 7.30 pm, I propose the question:
That the House do now adjourn.
Tonight I want to speak about the government’s innovative social inclusion agenda and to inform the House of a remarkable example of social inclusion in action within my electorate of Calwell. I want firstly to congratulate the Rudd Labor government and in particular Minister Julia Gillard and Senator Ursula Stephens for their work in advancing the social inclusion agenda. Almost everything that this government does has significant implications for social inclusion. The economic stimulus, the Community Infrastructure Program and skills and job development are all vital for genuine social inclusion. But a specific focus through the social inclusion portfolio is also important and can have very real impacts on our communities.
To that end, the Prime Minister and the Deputy Prime Minister launched the inaugural meeting of the Australian Social Inclusion Board in 2008 in my electorate of Calwell. The venue for that occasion was the Hume Global Learning Centre. The event was significant but so too was the location. I have often said in this House, as have many of my colleagues, that education is the key to addressing structural disadvantage. Social inclusion therefore begins in our centres of learning at the community level.
A wonderful and unique example of a genuine community centre of learning, and hence of social inclusion, is the Hume Global Learning Centre in my electorate. Some 16 years ago, Hume City Council set up a Safe City Task Force to look into ways of improving the municipality. It, and particularly the suburb of Broadmeadows, suffered from the stigma of a range of social problems. Instead of looking at the problem from a punitive point of view, the group looked at ways to improve the quality of life through social inclusion. In this task, I wish to acknowledge the visionary leadership of Mr Frank McGuire.
The task force concluded that learning was central to life improvement. They also noted that Broadmeadows did not have a public library, something that now seems absolutely extraordinary. They recommended that the council pursue the idea of giving the community not only a public library but a proper centre of learning, an iconic building that would visibly celebrate learning. What followed was an exercise in cross-government cooperation which turned this dream into a reality. This is how the Hume Global Learning Centre was born. The Age newspaper chipped in also, and hence the public library that occupies the upper storey of the centre is now called the Age Library. In the last 12 months a new service called Ideas Lab has opened in the centre, and it is funded by IT companies such as Microsoft, Cisco and Intel. With the assistance of a grant through the government’s Community Infrastructure Program, a second major learning centre will now be built in Craigieburn, a rapidly growing community in the municipality with a hunger for learning and a community education facility. If anyone could possibly think that the previous lack of a library in Broadmeadows was due to a lack of interest or demand, they need only look at the usage figures. The Hume Global Learning Centre has attracted over 70,000 visitors in the last month alone, and over 1.2 million items were borrowed in the last financial year.
The ‘learning for all’ strategy incorporates the Hume Global Learning Village, a unique learning community network that actively engages local people in learning at all levels. The Hume Global Learning Village currently boasts nearly 600 members, including universities, TAFE colleges, schools, early childhood educators, registered training organisations, neighbourhood houses, community groups and individuals. The village’s stated aim is to:
… work together to create a community that embraces learning as the key to individual and community wellbeing.
As such, both the global learning centre and the global learning village are community-driven programs designed to share, develop and celebrate learning.
Community-driven programs feature a regular bilingual storytelling time for preschool children in the library. This service is incredibly important in linking recently arrived parents and those with limited English skills to the community, to publicly provided services and to other parents and their children. It also helps children develop their language and social skills. The Hume global learning model is unique and is studied by others from around the nation and even internationally. According to the learning community manager, George Osborne, the secret behind its success is:
It is a community that needs it, a council who gets it, and a management structure that works.
I want to congratulate the founder of the Hume Global Learning Village, Mr Frank McGuire; the manager of Hume’s learning community, Mr George Osborne; and the Hume City Council. (Time expired)
All politics is local, but rarely is it more personal than with the moves in the last couple of weeks to deny homebirthing in this country an equal status with midwifery. Just a fraction of Australians birth at home. I would have thought that after the events of earlier this week, when 2,000 mums rallied at the front of Parliament House—and there were obviously meetings that preceded that all over this country—a message might have got through to our Minister for Health and Ageing to treat homebirths with the respect that they deserve as a completely valid way of birthing in a modern age and a developed economy. But, alas, that is not the case.
There was a small concession made on Friday as if to try and take some of the wind out of the rally, but that was far from what happened in reality. These mums know that at the moment they are isolated from, initially, the recommendations from the National Maternity Services Review, isolated from any form of indemnity cover and, of course, left out in the cold as far as community midwifery goes because they are not being supported through the entire birthing cycle for a mum. That means interrupted care and going back into what is often a clock-in, clock-out hospital maternity system which many mothers have taken a decision to move away from. Not everyone in Australia makes that choice, but we know that in every country in the world there is an option to do so and not a government system that works against it.
We know from Cochrane Collaboration, the non-governmental group that collects, collates and meta-analyses research from all over the world, that there is no significant difference in safety for low-risk mums between delivering at home and in a hospital. We also know that, more importantly, women should have a right to both choices in a developed economy and finally that, in fact, in hospitals themselves there are often worse outcomes for mums because of the far higher levels of intervention, and most people will relate to that.
Before I go further, though, I want to recognise that homebirths have played a really important cultural role as well. New Zealand has had this system in place for two decades. Australia has not taken the same steps. Homebirthing has had a very powerful impact on our hospital maternity services because they are a counterweight, a cultural counterpressure, that highlights that we do not always need to fall back on interventions and in a hospital we do not always need to be interrupting the care; we do not always need to be swapping midwives at every shift. That force has come predominantly from the homebirthing movement. That must be acknowledged and often is not.
For many of us here, however, what is more important than anything is the ‘perfect baby’ syndrome. We want to do everything we can to have the safest possible outcome, and for homebirthers that rankles because they can say that, in nearly 300,000 deliveries performed in New Zealand, there have only been six cases where there has been an indemnity related claim made. That is very important information when we consider that question here in Australia and the cost and the actuarial context. We have figures from overseas about safety, which I have already outlined. But still we heard from my good colleague Senator Claire Moore at the rally at the start of the week that there was a need for more information and more evidence. I guess for homebirthing, having had the tried and true models rolled out all around the world, it is actually very hard for very, very rare incidents to be measured accurately or powerfully with high levels of evidence in a relatively small population like Australia and in a country of our size. It is very difficult to perform those studies, so rightly we turn to European economies where they have conducted nationwide cohort studies in which 530,000 births have been analysed. The evidence comes out very clearly that homebirth has a role where it has hospital support. What Australia got was a two-year moratorium from the health minister, which was a duck and weave; we can see that.
More concerning is between the lines. There was very, very powerful and promising good-faith negotiation that models in South Australia, and to a lesser extent in Western Australia, might form the basis for a national plan that would include homebirths and make them part of the community midwifery program in this country. Alas, that has all fallen through and it is a source of great disappointment for those who have worked so hard to have homebirths treated on at least an equal footing. These people are calling for a single maternity care system where everyone who is involved is registered as part of the midwifery profession, where indemnity is provided to those practitioners and where the support, the continuity, the good faith, is extended out to homebirthing. We know that that is not occurring at the moment and we will see more of this community action. This issue is not over yet and let this be a warning to the health minister that this will be a fight of great fervour, of almost evangelical zeal, because it is an issue of choice. It is an issue of right for mums in a developed economy to provide a safe birthing environment nationwide.
Tonight I want to talk about Brian Raymond Peters, Gary James Cunningham, Malcolm Harvie Rennie, Gregory John Shackleton and Anthony John Stewart, all deceased and all known to us in Australia as the Balibo Five, as well as Roger East, another Australian based journalist, deceased. The six of them were killed, murdered, in East Timor.
Today the Australian Federal Police confirmed that they are undertaking a formal investigation into the deaths of all of the Balibo Five. The report has said that they have told the families that the investigation is underway. The reason that I want to talk about it is that it is a matter of public importance in Australia but it is also one that I have had a lot to do with personally in two countries—Australia and East Timor. The case is known to us, so I do not need to go through the facts of it, but when I was living and working in East Timor and an inquest got underway in New South Wales into the death of Brian Peters it required witnesses who had seen what had happened in 1975 in Balibo to come to Australia.
As we know, the way the procedure works is that Australia seeks cooperation in a criminal matter with another country. That was given by Timor Leste—East Timor—and that job fell to me. I accompanied the witnesses to Australia, along with the then Prosecutor-General, Longuinhos Monteiro. We accompanied the witnesses because it was a different country, a different legal system and a whole range of things like that. I sat through a lot of the inquest into the death of Brian Peters. Some of that I will not talk about because I am not too sure how much of that is in the public domain and some of those witnesses were not identified.
I sat through the inquest and I know a lot of the families of the journalists who were murdered in East Timor in 1975. Some of the families wanted the investigation by the Australian Federal Police to happen, so I know that they will be very comforted and very pleased that it is happening because, as a family member, that is precisely what one would want. If one of your family members had been murdered, that is precisely what you would want: you would want to know that the wheels of justice were turning. Also, it is a matter for the Australian Federal Police. It shows that in Australia justice and the rule of law work, and it is great that we live in a country where the rule of law prevails.
I would also like to say that the finding, under section 22(1) of the New South Wales Coroners Act, reads:
Brian Raymond Peters, in the company of fellow journalists Gary James Cunningham, Malcolm Harvie Rennie, Gregory John Shackleton and Anthony John Stewart, collectively known as ‘the Balibo Five’, died at Balibo in Timor-Leste on 16 October 1975 from wounds sustained when he was shot and/or stabbed deliberately, and not in the heat of battle, by members of the Indonesian Special Forces, including Christoforus da Silva and Captain Yunus Yosfiah on the orders of Captain Yosfiah, to prevent him from revealing that Indonesian Special Forces had participated in the attack on Balibo. There is strong circumstantial evidence that those orders emanated from the Head of the Indonesian Special Forces, Major-General Benny Murdani to Colonel Dading Kalbuadi, Special Forces Group Commander in Timor, and then to Captain Yosfiah.
For the families who heard that finding, that had been one of the questions that had always been an issue: were they caught in crossfire? For the families, it was the first time they had had a judicial statement that said differently.
The other thing that I would like to say is that the Indonesia of 1975 is a very different Indonesia to the Indonesia of 2009. I know that this is one of those issues that can raise some complexities between countries. There are three countries ostensibly involved in this but a lot of countries, as they are democratising and dealing with their changes, deal with these issues themselves. It has taken us a long time. This happened in 1975. It is now 2009. It has taken Australia a long time to actually start to deal with this issue. I am pleased for the families and pleased for justice that this is underway. One of the other things that I would say to the families is— (Time expired)
A few Sundays ago I organised a public meeting with the residents of Coombabah and specifically Hansford Road. There were over 200 people in attendance, all local residents concerned about the future of their suburb and their street. The issue is that at the end of the street there is a nursery on which a developer intends to build, with the support of the National Rental Affordability Scheme, or NRAS, a 135-unit apartment building.
Hansford Road in Coombabah is home to many older Australians. Many of them have lived in the area for a very long time and they are understandably concerned about a large development of this kind. They are also concerned about maintaining the character of their local area. The site in question is zoned for only 60 units and for buildings a maximum of two storeys high. The proposed development of 135 units will set a precedent for three-storey buildings in the area and will double the intended capacity of the site. Adjacent to the proposed site, even a two-storey building is currently a rarity. The residents are worried about traffic congestion both during construction and after. They are worried about parking problems. They are worried about the impact on their close-knit community.
In addition to these concerns there is another reason the meeting was so well attended. These residents want their voice heard and feel like they have not been given a fair hearing to date. The community has asked me to give to the nation a very simple message: they do not want this NRAS development approved. These people feel like they have been left in the dark. They have received no information packs. There has been no doorknocking in the area. Their state MP keeps passing the buck, claiming it has nothing to do with them, when the residents know full well that any NRAS application will not go ahead without the state government’s stamp of approval.
In addition, NRAS has no facility with which members of the public can contribute to any debate on whether a development funded by the scheme should go ahead. Any NRAS application is not open for public comment and can be approved prior to local government approval. I feel this process does not do this community, or any community, justice. The approval process happens behind closed doors in meetings between the state and the federal government, and those most vulnerable to the change cannot have their voice heard.
I have organised a petition calling on the House of Representatives to address these inadequacies of the Rudd government’s NRAS legislation. The petition has received great support and will be tabled in this place in the coming months. The petition draws to the attention of the House that applications for a development requesting assistance under NRAS may be approved regardless of whether local government approval has been sought or received for that development and can be approved without community consultation. The petition also calls on the House to amend the NRAS legislation to ensure that local government approval is acquired for any development before applications can be submitted and that all applications are available to the public for comment prior to any consideration for an NRAS application.
This development could potentially receive an annual NRAS subsidy of $1 million. That is no small change. The minister is looking to pump $1 million a year for 10 years into a small community that is vulnerable to change. I would have thought that the minister would want and would have asked for the support of the local community before this occurred. I call on the minister to take a good, hard look at what is happening in Coombabah in the electorate of Fadden and to take a good, hard look at the impact of the lack of transparency and consultation in the NRAS application process. A community does not throw its arms in the air in frustration without due cause. Changes need to be made to the NRAS process and they need to be made now, giving the people of Coombabah the forum they rightly deserve.
On 11 June 2007 Queensland’s oldest provincial newspaper, the Queensland Times, wrote this:
HAVE you heard the Irish joke about the Malaysian student who went to Dublin to study medicine and ended up a much-loved GP in Riverview?
It isn’t a joke, of course. It’s the life story in a nutshell of Dr Harry Ratnam, who has been awarded an Order of Australia Medal for his service to medicine in the area of general practice and to the community of Ipswich.
Harry is a wonderful, beloved doctor in the Ipswich area. On 15 August 2009 I was pleased to be present at the naming of a park after him at Henty Drive, Redbank Plains. It is 18 hectares in area, 1.8 kilometres of Goodna Creek. It is an important urban link area and is part of the Ipswich City Council’s nature conservation strategy. It was great to be there with Dr Harry, as he is well known in Ipswich. Present also were the member for Oxley and also the Mayor of Ipswich, Mr Paul Pisasale, and the Deputy Mayor, Mr Victor Attwood. Maha Sinnathamby, the founder of the Springfield Land Corporation and the satellite city of Springfield, was there. A good friend of Harry, he spoke movingly and brilliantly about the contribution of Harry to the life of the Ipswich community.
Harry is an extraordinary man. As I said, he was born in Malaysia and completed the early part of his schooling in Kuala Lumpur and subsequently finished his education in Dublin. After completing high school he entered the Royal College of Surgeons and Physicians. He graduated in June 1977. After graduating he was invited by the Agent General of Queensland in England to migrate to Australia but for family reasons—and they were very personal family reasons—Harry went back to Malaysia, where he stayed for four years and during that time found the love of his life, Raji.
Harry and Raji arrived in Australia in 1981 and in February 1982 they set up a practice in Riverview in the federal electorate of Blair. The park is in the federal electorate of Oxley neighbouring. Harry is now the longest serving GP in the area. They made Ipswich their home, raised two children and have lived there for 28 years. Raji is the manager and the power behind the throne and she manages Harry’s medical practice.
Harry has demonstrated loyalty, compassion, commitment and humanitarianism to the people of Ipswich. He is the longest serving general practitioner in Riverview. He looks after residents in Riverview, Goodna, Gailes, Camira, Collingwood Park, Ebbw Vale, Bundamba and Raceview. He started providing medical services to the Salvation Army Riverview Gardens in 1991 and he is much loved down there.
In 2004 he received special mention in the Queensland parliament for his dedicated work and I think it is appropriate to mention him in the federal parliament in 2009. In 2004 he received the Ipswich Centenary Medal for volunteer services to the community. In 2005 he was appointed inaugural director of the after hours family care medical service and continues to do this role. In 2007 he received the Order of Australia, OAM, for services to medicine in the area of general practice and to the community of Ipswich. He is a member of the conduct review committee of the Ipswich City Council. He is a standing member of the medical advisory committee. He also happens to be the GP for the Mayor of Ipswich. Mayor Paul Pisasale said the park was named after Harry as:
… a mark of respect to a man who has served this community for more than 35 years as a general practitioner.
His efforts in the Ipswich community have been so good he received an order of Australia medal in 2007 for his services …
The Deputy Mayor of Ipswich said this of Harry:
I nominated the name of the park in celebration of the work done in this area by … Harry …
With the growth in this area Harry’s services need to be honoured. Harry, we thank you for your wonderful humanitarianism to Ipswich, for your love of the community and your love of your patients. The fact that there were hundreds of people there that day for your park’s naming demonstrates the affection with which the Ipswich community holds you. Well done, Harry.
On Tuesday we recognised White Balloon Day and the important work that Bravehearts do in preventing child sexual assault in remote, rural and regional areas. Our attention was similarly and shockingly drawn to this issue when the Northern Territory Board of Inquiry into the Protection of Aboriginal Children from Sexual Abuse issued their 2007 Little children are sacred report. In that report we learned of the destructive and evil influence of pornography in remote Indigenous communities—particularly for children who are exposed to this material as the report says:
… as a way to encourage and prepare children for sex or grooming.
In response to our collective sense of outrage, despair and resolve, the Howard government acted with the Northern Territory intervention and banned pornographic material from these communities. As I said when the current government introduced further legislation on these matters, none of us are immune from the evil impact of pornography. Therefore, we should especially not be blind to the impact of this material on all Australian children, regardless of where they live or whether they are Indigenous to this land.
The home should be the safest place for a child—a safe haven, a sanctuary for love, care and development and a place where they are not violated or at risk of being violated physically, emotionally and indeed spiritually. We have laws in this country at state and federal level that serve to protect children from the predatory behaviour of those who use pornography as a tool to corrupt and exploit children for their own selfish and base purposes.
We have also taken, in this place and others, steps to protect children from child pornography and have moved to afford new protections that relate to new media and technology. However, one area we have overlooked is to protect against the failure of parents themselves, who either negligently or knowingly expose children to R18+ material or category 1 and category 2 publications. In fact, our laws specifically exempt parents who allow their children to be exposed to this grade of material from any sanction.
Now I am all for parental responsibility and allowing parents to bring up their child according to the values they hold dear as a family. I am not an advocate of the nanny state. However, when those values place a child at risk or contravene our values more broadly as a society, our laws should and must draw the line. It is not acceptable knowingly or negligently to expose a child to pornographic material, whether you are a parent of that child or not. To do so, in my view, is child abuse—it is an assault on their innocence and on their psychological and sexual wellbeing that has long-lasting impacts.
In an outstanding paper delivered by Federal Magistrate and Adjunct Professor to the School of Law at the University of Western Sydney, Dr Tom Altobelli, to the recent World Congress on Family Law and Children’s Rights in the UK he recounted a case heard in the Federal Magistrates Court in February 2007. The court heard shocking testimony of the display of sexualised behaviour of a five-year-old boy towards his two-year-old younger brother, as a result of his exposure to pornographic material he had found on his father’s computer. The testimony read:
Sam—
not his real name—
stated that he saw people with no clothes on the computer. Sam described getting hot in the head when he thinks about doing things stating ‘My head feels hot inside and I don’t like these feelings’.
The case further heard that both parents had been aware of Sam’s access to this material for two years. Sam and all children like him deserve better. They deserve to be protected and they look to us in this place and parliaments across Australia to provide that protection.
A recent Australian study reported children saying they felt sick, yuck, disgusted, repulsed and upset after having seen or experienced pornography on the internet. Longer term exposure puts one at greater risk of developing sexually deviant tendencies, committing sexual offences, experiencing difficulties in one’s intimate relationships and accepting the rape myth. These influences are more pronounced for boys than girls, but sadly it is our daughters who are ultimately objectified and abused as a result of pornography.
If adults and parents wish to expose themselves to this material, that is their business; it is a free country. But even those who would defend an adult’s right to porn would surely not oppose any restriction or sanction placed on parents who knowingly or negligently exposed their children to this abuse.
In this country we have rules that protect our children from the dangers of firearms in the home. Any ammunition must be stored in a locked and separate container which is very solid. Failure to meet these requirements attracts a jail sentence. If we can protect our children from guns, then we should also be aware of the loaded gun that is lying around in the homes of thousands of Australians on computers, on coffee tables, in bathrooms, in bookcases within easy reach and access of their child, who will suffer the consequences of their exposure to pornography for years to come, potentially for the rest of their lives.
Some may consider my warning alarmist, but if we are serious about protecting our children, we cannot comfort ourselves that pornography only destroys the lives of young Indigenous Australians. All of our children are at risk—we must do all we can to protect them, and do it now.
I would like to associate myself with the remarks made by the member for Cook.
Order! It being 8.00 pm, the debate is interrupted.
The following notices were given:
to present a Bill for an Act to establish the Australian National Preventive Health Agency, and for related purposes.
to present a Bill for an Act to amend the law relating to social security, veterans’ affairs and higher education, and for related purposes.
to move:
That the House:
I was the first politician in this parliament to speak out against the proposed youth allowance changes. That was on the day after the budget, and since then I have lodged a 2,000-signature petition in this parliament. I have asked Deputy Prime Minister Gillard and her Labor government to withdraw the changes to youth allowance which would make it harder for rural and regional students to move to the city to attend university. Now the Labor government has done a backflip that supposedly helps 5,000 current gap year students but makes it harder for 61,000 future students to access youth allowance. That is some win, I say with some irony.
These changes do not go far enough. They will see some current gap year rural and regional students able to qualify for youth allowance but do nothing for the current year 12 students. To make it worse, Minister Gillard has deferred the beneficial changes of the legislation for 30 months, making rural and regional students scapegoats. The budget estimated over 30,000 young people would miss out on the youth allowance with those original changes, but Minister Gillard says her backflip will help just 5,000 students. What about the other 25,000? Even if a country student who has to leave home to attend university does qualify for youth allowance, the accommodation allowance of $4,000 in the first year and $1,000 for the years after is pitiful. Who can get accommodation and live on $20 a week? This is a joke and shows how much the minister is out of touch.
For these mostly regional students, the changes that were to come into effect on 1 January now will not apply until 30 June 2012. It will cost the budget $150 million. To pay for this, Labor has delayed the most generous earnings threshold by 18 months. The earnings threshold at which youth allowance would be reduced was to rise from $236 a fortnight to $400 a fortnight from next year, but now that will not happen till July 2012. In total there are 272,840 students receiving youth allowance, of whom about 61,000 are estimated to earn above the new threshold each year.
Labor is making rural students a scapegoat, pitting them against working students. I give the Labor government notice that my campaign for the interests of students and their families in rural and regional areas is not over. Labor will be responsible for the biggest disaster affecting rural students in Australia’s history. This is not Labor’s mantra of a clever country; it is more like a dumb government.
Today I want to talk about the virtues of the Building the Education Revolution, which is happening in my electorate of Chisholm. Chisholm is an electorate high within the education sphere. We have two very large and world renowned universities. We have one of the country’s most pre-eminent TAFEs and a smaller TAFE that does great work in industry. Chisholm is also home to 46 schools, some of them phenomenal schools producing great results. In my electorate I am blessed to have some terrific private schools and also some phenomenal state schools who turn out some of the state’s best TER results. Indeed, around this time of year my office is undated with calls from frustrated parents who cannot get their children into Mount Waverley Secondary College, Glen Waverley Secondary College or Box Hill High School. I think this is unfair. I think every parent should want their children to go to the school that is near them and that every school should be an excellent school.
I am really pleased that the BER will be assisting Ashwood College, a great local high school. Indeed, it was the high school I grew up next door to, but my parents decided that I had to travel miles away to a Catholic school instead of going to the local state school. It is a phenomenal institution that has been doing phenomenal things for a long time. Under the science and language learning centres initiative, we have recently announced that Ashwood College will receive $1,970,000 in funding to construct a new science centre.
I was delighted to be out at the school the other day with Principal Kerrie Croft and the two school captains, who are madly studying for the final run of SACs and end-of-year exams towards the inevitable TER result that determines where they may go next year. Both were great advocates for their school and were lamenting that, as we announced this terrific science centre, they are leaving the environment and will not actually get to enjoy it. The science centre will include two science laboratories, one environmental science laboratory, two multipurpose rooms, a prep room and an outdoor learning court. Ashwood College has an exceptional record in promoting science and this new building will provide numerous possibilities for the staff and students at the school.
Sadly, the rest of the school building has been allowed to run down. It is like a lot of infrastructure in the area. My family moved into the area when it was first developed over 40 years ago, and the school was built just prior to that. The school will also get some National School Pride money, which will go towards revamping its canteen. That does not sound like a great thing but it is a really important thing for the school community. The canteen fronts the gate and it looks terrible for people walking by. People say buildings are not important to schools, but they really are. Buildings are important in giving the impression to the rest of the community that we take pride in these environments.
The learning outcomes of Ashwood College have been terrific. It runs a phenomenal arts and music program and I have been delighted to be present at many of their school events. I am absolutely delighted they have got this money. (Time expired)
Last month the Cronulla RSL Memorial Club celebrated its 65th year of service to our local community. Among the celebrations was a lunch organised to show its appreciation to its many life members. As an honorary member of that club, I was disappointed that I was unable to be there on that occasion due to my duties here in this place.
The Cronulla RSL Memorial Club had very humble beginnings. During the war years the sub-branch of the Returned Soldiers and Sailors Imperial League leased part of the Cecil Ballroom and the Cecil Casino buildings for the purpose of club rooms. These venues were used for dances that raised funds for activities that were consistent with the club’s objectives and as meetings rooms where the returned soldiers could gather.
In February 1944 the returned soldiers and sailors held a special meeting that approved the formation of a soldiers club. The first president of the new club was the late Mr Edward (Ted) Dewe. Other names involved in the establishment of the club were sub-branch stalwarts, Alan McKenzie, William (Billly) McDonald and Ray Prior. These men were determined to establish a place where returning servicemen could carry out their meetings and pursue sport and recreation, supporting each other in the process. August 1944 marked the official opening of the soldiers club by the Sutherland shire president.
In 1948 the club was renamed the Cronulla RSL Memorial Club. The Sutherland Shire Council played a significant part in the RSL club’s search for a permanent home. The Gerrale Street site was acquired by the club with the generous support of the council. It was not until 16 May 1953 that a permanent home for the club was opened. This building, which is still in use today, although it has been enlarged and altered to meet modern needs, has commanding views of the Bate Bay area, which are absolutely breathtaking. It was officially opened by the then New South Wales Governor, Lieutenant General Sir John Northcott. The current club premises stand as a testament to the wisdom, leadership and hard work of the members of the Cronulla RSL sub-branch.
A sad occasion for the club has been the recent passing of its longest serving life member, Don Collumbell. I was privileged to meet Don last year, when I listened to him talk about his experience as a POW in World War II, and I was able to pay tribute to him in our main chamber just last year in honouring his service. I join with the club in marking the passing of a great Australian in Don and agree that he will be sorely missed by all in our community and indeed our nation. Don’s funeral service was held at the Woronora crematorium and there was a large attendance of Don’s mates and good friends from the club.
The fabric of the Sutherland shire community is truly privileged to be the home of the Cronulla RSL club and the associated sub-branch. I would particularly like to congratulate the club president, Mr Terry Crowe, members of the club board, the club CEO, Graham Smith, and his staff for the wonderful job they do in running this great local institution.
Today I would like to recognise two outstanding women in my electorate who have recently been awarded a place on the Women Tasmania’s honour roll for 2009. They are Sandra Anne French, whose honour was awarded for service to the community, and Merma Kelly, whose honour was awarded for service to multicultural affairs. Sandra is a long-term Burnie councillor. Indeed, she was the first female to be elected mayor of that council, in 1990. She has been serving on the council since 1985. She migrated to Tassie with her family in 1957 and gained her Tasmanian Teaching Certificate from the Launceston Teachers College and then spent over 20 years teaching in a number of our schools, and we have been grateful for that. Her passion for the community is outstanding. She has represented the interests of a variety of health organisations, including National Heart Foundation Tasmania, Cancer Council Tasmania, the Rural and Clinical Medical School and the North-West Medical Research Board. She has played a major part in the local chamber of commerce and on Arts Council Burnie, the Burnie Historical Society, the Rotary Inner Wheel, the Girl Guides Association of Tasmania and the Abbeyfield Society Australia, amongst many others. She has been actively involved in sports.
Merma Kelly migrated to Australia from the Philippines. Hers was the first Filipino family to arrive in Smithon, in the far north-west of my electorate. That is where she settled with her family in 1981. She has been a driving force in bringing together support groups and friendship groups, particularly the Australia-Filipino Friendship Group in Northern Tasmania, and she was a founding member of the continuing Bayanihan Group, which I attend every year. They put on magnificent festivals and make you feel very welcome, as I am sure all colleagues here would appreciate, having experienced similar cultural experiences with the Filipino community. In 1993, Merma was appointed to the Tasmanian Women’s Consultative Council to represent migrant women’s issues. She is also a founding member of the Circular Head International Friendship Group and has been a volunteer at the Wyndarra Centre, in the Circular Head community. She was awarded the 2001 Local Hero Award as part of the Centenary of Federation celebrations in Circular Head. In 2009 she was appointed to the Tasmanian Advisory Council on Multicultural Affairs for her work. I thank both women for their outstanding contributions. (Time expired)
I rise today to confess that I share something in common with Senator Conroy: I and families in my electorate and those who obviously support Senator Conroy’s side of politics would all like to see internet filtering done in a way that best serves Australia and protects our children online. We all know that, just like pool fences, we cannot expect parents to be monitoring their children every second of every day on the internet. But today we have what is effectively a failing evaluation of internet filtering and potentially a step in the wrong direction by handing over the decision making of families to government to decide what we can and cannot look at on the internet.
Internet service providers do just what posties do. They direct and redirect internet and email traffic. Asking them to actually determine what is in all of this transmitted information is a bit like asking the postie to have a peek inside an envelope before he pops it into the letterbox. Not only would it be costly and potentially slower; it would really raise the question of liberty and the ability to transmit information and to determine at one’s own front door what our families can and cannot do on the internet. That is not for one moment to say that there are not sites that need to be stopped. That merely says our focus needs to remain on funding organisations like Taskforce Argus and those doing other good work around the country to apprehend these internet villains using the resources available. They should be funded appropriately.
What is the government’s plan? First of all, they may well determine for us what is inappropriate. That raises many questions. A leaked ACMA black list revealed that half of the sites that were being proposed were not even related to child pornography. On their list were You Tube links, poker sites, Wikipedia entries, euthanasia and religious sites, the website of a tour operator and even a dentist.
So, with the greatest of respect, I think that, given the rights, the capabilities and the resources, families can make decisions about sites for themselves, and we need to fund the appropriate groups to deliver advice to them. NetAlert was there. The one thing that Senator Conroy did achieve was to snuff out NetAlert—the one product that was there. It was freely available to every family so that they could use the best technology provided by the government to supplement their own safety arrangements. That is gone. So we have actually gone backwards in that respect.
Let us look at the United Kingdom, where British Telecom has optional, not compulsory, internet filters. In Canada, parental controls have been returned but they are not mandatory nor are ISPs obliged to adopt them. Norway, Sweden, Finland and New Zealand have no compulsory filters. Even the most hardcore internet cyberlibertarians would not resist the idea of an optional filter, but that is not what is being discussed here.
My final plea to the government is: support the AFP’s high-tech crime commission unit, support task force Argus and support the other efforts that are being made to apprehend the true villains who are operating outside of emails. They are operating in chat rooms and peer-to-peer networks and are completely free from the kind of technology that is being considered by the government. Let us have a real and genuine evaluation of this technology for our families— (Time expired)
I rise this morning to put on record my support for and, indeed, strong praise of the small business advisory service that is being run under the auspices of the Wynnum and Districts Chamber of Commerce. We all know that small business is the lifeblood of this country; it is the major employer. It is not only the life but also often the soul and the hub of many of our community areas, and the Wynnum and Districts areas, particularly the suburbs of Wynnum and Manly, are no lesser examples of that than many other areas across the country.
Wynnum is a very old suburb of Brisbane. It has a long tradition. It is on the bay side of Brisbane, and a lot of small businesses there have developed out of the fishing industry and also the tourism industry. People might buy fish and chips, have a cup of coffee or take a tour on the bay. The Wynnum and Manly areas have a strong tradition of small business in the Brisbane city area, and I think that is testament to this very successful tradition.
The Wynnum and Districts Chamber of Commerce was the only chamber of commerce to be a beneficiary of a $100,000 grant from the federal government to set up a small business advisory service within the Brisbane city area. This is a very important service that is being provided not just to my electorate of Bonner but across the whole city. Within Bonner itself, this service is significant. We have many small businesses. There are around 4,000 small businesses that have fewer than 20 people and there are 12,400 microbusinesses that employ no-one at all. So it was very important that this particular area received a service that could provide many of the supports that are currently missing for small business, particularly for people who are just starting up a business or who are finding it difficult to keep their business going during this financial crisis.
Mentoring, planning, planning advice and development services, loans and banking products, marketing plan preparation, legal services, accounting services, leasing guidance, regulatory compliance advice, staff training programs and seminars are all being provided through this service, under the excellent management of Peter Baines. In fact, a total of 454 businesses have been assisted.
Businesses do not necessarily run just in the normal business hours of the day and therefore the people who run them are very busy people and their time is often stretched, What is very special about this service is that these people can access it by ringing or visiting the unit at a time that suits them. They can pick up the phone and talk to somebody who has some level of expertise and knowledge and will be able to assist them.
I am particularly pleased about the business ambassadors’ program that is being run along the lines of the Golden Gurus, which was suggested at the 2020 summit. (Time expired)
I want to address a number of issues in relation to paramedics and the push for a Grantville ambulance centre. Madam Deputy Speaker, as you would know, paramedics in Victoria serve a tremendously important role. The MICA paramedics do not just take people to hospital; they also bring advanced medical care in times of emergency to those in need. I saw this recently at the Rosebud RSL when, during a speech, one of the members of the audience suffered a serious health issue, and their life to a certain extent was in the balance. The paramedics from MICA arrived within a matter of minutes. They provided life-saving emergency care, and a life was preserved and protected as a result.
Against that background, it has been deeply distressing for the paramedics and for those who rely on and support the paramedics to know that there has been an issue in Victoria which has threatened that service. What we have needed is a career structure for the MICA paramedics. What we have also needed is an appropriate pay structure. These people, who are committed and dedicated, had been forced to the point of resigning en masse today. As of late last night there was a resolution, as I understand it. The nature of that resolution will become clear as we go on, but my understanding is that the career structure has been promised. We will watch with great vigilance to see that the paramedics of the Mornington Peninsula, Westernport, the Bass Coast and all of Victoria do actually get access to that career structure. It is a shame that it was brought to this point, where dedicated professionals had to threaten to withdraw their services permanently. I am pleased, however, that there seems to be some resolution and will be vigilant in pushing that through.
That brings me to a subset of this issue, which is Grantville, a town on the eastern side of Westernport Bay. It is a beautiful town of 3,000 permanent residents, with thousands more holidaying in the region throughout the year. It is rated as one of the highest need areas for ambulance support within Victoria. Let me just deal with some of the facts. The nearest ambulances are far too far away. Wonthaggi is 35 kilometres or half an hour’s drive away, if there is an immediate dispatch. Cranbourne is 45 minutes away, if there is an immediate dispatch. What we need and what we will campaign for is very clear: we want to see that there is an ambulance stationed at Grantville. This is about thousands of people in one of the areas with the highest rating of need in Victoria. The time for a Grantville ambulance centre or station is now, and we will continue the campaign. (Time expired)
I will declare my conflict of interest. Being married to a MICA paramedic who did not have to resign today, I am rather happy.
Students in Longman are fortunate in that they are blessed with both state and federal governments determined to see that they are able to acquire skills necessary for them to participate in building Australia’s future. The Rudd government’s allocation of $1.36 million for the Building Construction Trade Training Centre at Morayfield State High School has been complemented by the Bligh government’s investment of $1.8 billion to build the College of Civil Infrastructure and Construction at nearby Caboolture State High School. I was pleased to take part in the official opening of the new college on 21 August, joining the state Minister for Education, Geoff Wilson, and the member for Pumicestone, Carryn Sullivan. This is the first training facility built under the Bligh government’s Schools Industry Trade Centres Program and represents the realisation of the vision of the Skills Formation Group for Civil Construction.
I want to congratulate Caboolture State High School and, in particular, school principal Norm Fuller for the realisation of this fantastic diversification project at the school. The steering committee included representatives of the civil construction industry, notably McIlwain Civil and Boral, and the Moreton Bay Regional Council. This collaboration has ensured that young people looking for a career in civil construction will be able to develop their skills working on equipment that has currency within the industry and within a simulated industry space. The Rudd government has contributed to that outcome with a $305,000 grant from the National Training Infrastructure Program. That money has been used to purchase new machinery that forms part of the industry standard remit of the college—machinery such as the mini-excavator and the posi-track ‘bobcat’ proudly displayed during the opening ceremonies.
Speaking at the opening and representing the civil construction industry, Keith McIlwain referred to his industry as ‘horizontal builders’ and the ‘creators of sustainable community assets’. This industry requires skilled workers and this is an important opportunity to renew and revitalise that workforce. Through school based apprenticeships or traineeships, a combination of study and work placement in industry, skills in occupations such as bitumen surfacing, bridge building, concrete construction, plant operation, pipe laying and road building will be imparted to students. These skills are indispensable in infrastructure projects. The college will also prepare students aiming for tertiary study in engineering and related fields. Young people transitioning through the college will in essence be fast-tracked on pathways leading to a trade or professional engagement within an industry that is central to nation building. With that comes the satisfaction that their work will have ensured a better standard of living for future generations of Australia.
The Bligh government is to be commended for recognising the role that schools can play in preparing young Queenslanders for the jobs we need in the near future, as infrastructure projects are rolled out across the country, and for its backing for Caboolture State High School. I want to thank the Deputy Prime Minister, Julia Gillard, for the federal government contribution of $305,000 which has provided for the new machinery that is so important to positive practical outcomes for students.
This week is Blood Donor Week in this year, 2009, the Year of the Blood Donor—a year when the Australian Red Cross Blood Service is running educational campaigns aimed to raise awareness of the link between donors and recipients. Why? Because giving blood saves lives: one single blood donation can save three lives. The Red Cross Blood Service vision is to share life’s best gift by the provision of quality blood products, tissues and related services for the benefit of the community. One in three people will need blood in their lifetime, but only one in 30 Australians currently gives blood.
In Australia, 26,000 donations each week are needed to meet the demand and in Western Australia 3,000 donations are needed every week to meet hospital demand. That is why the current marketing and communications process is so important, as is the initiative of partnering with organisations and businesses that have large numbers of employees and will actively encourage their employees to donate blood during work time. Any group, organisation, corporation or business can take up this opportunity, and I would strongly encourage them to do so through the Club Red group program.
Individuals and groups can donate at the Red Cross Centre in Bunbury in my electorate, but a collection service is also provided in towns such as Harvey, Collie and Busselton. Everyone at the centre is extremely efficient and welcoming of those donating blood, as I and my staff members found last week when we donated blood. The care and consideration made sure it was a painless experience. In Bunbury in the last 12 months there were 2,636 whole blood donors who on average made two donations each, totalling 5,143 whole blood donations collected.
The majority of red blood cells go to people with cancer as well as those who have suffered traumatic accidents or burns or are undergoing surgery. The plasma is used to make 16 different products and contains very important proteins, nutrients and clotting factors which help both to prevent and to stop bleeding. Plasma is frozen and used in immunisations against chickenpox, hepatitis B and tetanus, for haemophiliacs and for a range of other purposes. The platelets are used to help clot the blood and seal wounds in surgical and cancer patients. My father had acute myeloid leukaemia and had to have regular transfusions, only made possible by the generous blood donors and the work of the Red Cross Blood Service. We need to keep donating blood because all blood components have a short shelf life, creating the need for a constant blood supply. I am aware that platelets last only up to five days, red cells up to 42 days and plasma up to one year.
Could I use this opportunity to encourage every individual who is capable of donating blood to consider becoming a blood donor. A gift of blood is a gift of life for at least three people. Please donate your blood to the Red Cross Blood Service.
I rise today to speak about the valuable commitment that our veteran associations and sub-branches give to a large number of returned soldiers and their families in my electorate of Forde. I want to particularly mention a few today. One is the Australian Peacekeepers and Peacemakers Veterans Association, the APPVA. Next Monday, 14 September, is Australian Peacekeepers Day. This date commemorates the world’s first ever peacekeepers deployed in the field, in Batavia, Java, under the auspices of the UN Good Offices Commission, UNGOC, to the former Dutch East Indies, which is now Indonesia. I have previously spoken about a constituent in my electorate, Bob Whiley, who is committed to ensuring that we remember the service, courage and sacrifice of those who have died since peacekeeping operations began in 1947. I applaud Bob Whiley for his continued efforts to ensure that our local community understands the importance of a memorial for those brave Australian peacekeepers.
The only current peacekeeping memorial in this country sits in my electorate of Forde on the Carl Heck Boulevard. When I talk about memorials of national significance, I continue to be frustrated that we do not necessarily capture well, understand and commemorate our military history and our veterans. With the assistance of dedicated members of the Australian Peacekeepers and Peacemakers Veterans Association and now with the outcome of a national memorial to our peacekeepers through the Australian Peacekeeping Memorial Project, the APMP, the community will continue to remember and pay tribute to our many Australian personnel. I will speak at length on another occasion about the planned peacekeepers memorial in Canberra.
Further, there is the Australian Army Training Team Vietnam Association, otherwise known as the AATTV. The Australian Army Training Team Vietnam was the first unit of the Australian Army to arrive in Vietnam in 1962 and the last to leave in 1972. This unit consisted entirely of volunteers who advised, trained and commanded local forces in the Vietnam War. The AATTV will continue to be remembered as the most highly decorated unit for its size in Australian history. The AATTV memorial at the Australian Army Land Warfare Centre, Canungra—and I have sung the praises of Canungra in the past in this parliament—is referred to as the home of the Australian advisor.
On the 2nd of August this year I had the pleasure of being part of the 47th anniversary of that particular group. My company on that day included the former Governor-General, Major General Michael Jeffery, who is the patron, our Minister for Veterans’ Affairs, Alan Griffin, Major General John Hartley, who is the Australian president, and John Gibson who is the association president in Queensland. It was a real pleasure and an honour to be part of that. That was on the day when it had just been announced that the last remaining airmen of those who had lost their lives in Vietnam had been found. It was poignant and emotional to hear the veterans say that we had finally brought our last boys home. It was really good to know that, as a community and as a group, they are remembering the services that all our veterans have rendered for this country.
Debate resumed from 7 September, on motion by Mr McClelland:
That this bill be now read a second time.
When I was speaking previously on the Access to Justice (Civil Litigation Reforms) Amendment Bill 2009 I was talking about the overarching obligation found in section 37M, which is the centrepiece of the case management reforms. The legislation here talks about a statutory basis for case management. That is important because, in the past, judges and registrars have been in the position where they have had rules and regulations but those things do not really have resonance. Matters are supposed to be dealt with under statute. From time to time, in my many years of experience as a lawyer, those rules and regulations have borne little resemblance to what was envisaged, I am sure, by the lawmakers when the legislation was passed in the first place. I previously pointed out the example of the Family Court and the Federal Magistrates Court, where there are two separate rules which are supposed to be exercised under the one particular piece of legislation—namely, the Family Law Act—and exercised in the same jurisdiction. It is simply a nonsense.
So a statutory basis for case management is very important. Making sure it is streamlined, effective and efficient is extremely important. What we need are just determinations of these sorts of things—an efficient disposal of the court’s caseload. Nothing infuriates litigants more than turning up to court, having solicitors and barristers there, having all their witnesses there, having prepared affidavits and being ready to go and then, all of a sudden, the other side acts in a way which is contrary to the spirit of the negotiation and settlement of the litigation, resulting in the case going away. Another example would be where, in similar circumstances, a judge is not properly allocated to the hearing. In such circumstances what we really need is for there to be a costs imperative and for courts to actually carry out those costs orders. I think it is really important that, where that type of conduct occurs, a court order can be made for cost orders not only against litigants but also against lawyers.
I have been involved in many cases, many mediations, many arbitrations and many alternative dispute resolution procedures in which the other side was simply not fair dinkum about settling the case. Parties really prepare to try and resolve cases, but what happens is that the other side frustrates it and the matter goes away. This incurs an enormous amount of cost. I have been in circumstances where it has cost litigants thousands and thousands of dollars to prepare; the other side does not have the bona fides and goodwill to settle the matter; the matter goes away; it costs the client a lot of money; and there is no costs order awarded to that person against the other party or their lawyers who, many times, are sloppy and inefficient in their preparation for the mediation, the arbitration or the conciliation conference. What we are talking about here is statutory authority for a court to be able to consider imposing costs for any failure to comply with the overarching duty. That is a really good thing for the efficient disposal of case management and litigation in our courts.
We need to settle disputes efficiently, quickly and with the least amount of costs. One of the important reforms here is the possibility of a costs order when a party unreasonably rejects an offer of settlement of part or all of the proceedings. That is an important punitive measure which can be imposed upon a party who frustrates another party in litigation.
There are issues here which can be resolved by case management. For example, matters can be dealt with on the papers. There are times when a great cast of witnesses can be seen sitting outside a court. You do not need many witnesses on many occasions, particularly in small litigation. If a judge can direct that one or two witnesses are needed or that the matter can be dealt with in chambers or on the papers, or by way of affidavit, that is a good way to dispose efficiently and expeditiously of court proceedings. In this legislation we are talking about a culture change in the way we deal with legislation. So this is a very important law reform.
Many cases should be dealt with by a single judge exercising full court jurisdiction, but unfortunately a lot of litigation prescribes that matters should be dealt with by a full court and not a single judge exercising that jurisdiction. There is also some confusion from time to time in case management as to whether in fact a judge or a full court has authority to say, ‘This case should be dealt with in this way.’ With respect to interim hearings or interlocutory matters there can be some degree of uncertainty as to whether an appeal from those matters is dealt with by way of a single judge exercising full court jurisdiction or, indeed, whether the full court itself is required. There can be confusion in cases of consent orders which are handed up before the full court. I have been in cases before where you do a full court appeal and then, all of a sudden, you require the presence of the full court to hand up consent orders when you have come to an agreement. That is a terrible cost to the taxpayer and also to litigants. The matter should be able to be resolved efficiently in chambers. The reforms here allow for those sorts of things. We do not want a situation where litigants can choose neither judge nor in fact the method by which litigation is prosecuted or carried out. We want to be in a position where justice is seen to be done. The reforms here go a long way to limiting that.
We also need directions about the length of submissions. I have seen submissions of 100 pages or more. Judges ought to have the statutory power to say, ‘I want a 10-page submission on the matters of law and of fact which are relevant to the case.’ That is what should happen. Also, we do not need, for example, a barrister or solicitor to stand for a day making submissions. Imagine the cost to the taxpayer of having a lengthy litigation, having a judge sit there and listen to a lawyer speak for days on end making submissions. I have seen that happen. I think it is important that we have a statutory basis for the judge to say, ‘I want written submissions.’ Many times judges will do this but there is not really a statutory basis for this reform, so this is a very important change.
Often matters should be dealt with in chambers. This is common in civil litigation—for example, in the District Court and the Supreme Court in Queensland—but the same culture is not dealt with in federal courts. It is very rare that a federal magistrate or a Family Court judge will do this sort of thing. Even in circumstances where, under the legislation and the rules of, say, the Family Court, a judge can interview a child in chambers, that is not carried out, often because a social worker prepares a report dealing with the family and dealing with the child and the report goes to the judge. Even in circumstances where there are rules and regulations to permit these things to be dealt with in chambers, that is not actually done. So anything that gives judges a statutory obligation or discretion to do this is a good thing to reduce the cost of litigation.
There are also changes that will enable the Federal Court and the Family Court to manage their resources, not just in improved case management but also to clarify who is in charge. We have a situation where we have courts with the same jurisdiction and the same legislation, but they do not deal with the same registry. The same access point and administration should be there. We have the power to give authority to the chief justices, for example, in the Magistrates Court, the Federal Court or the Family Court to actually run the show. We have had judge administrators who run the operation of the court, and it is funny because it changes from time to time. We should be a position where the Chief Justice, whoever he or she is, actually runs the operation of the court. I think that would be a good thing in all circumstances.
What we need are better services, better administration, better case management, specific powers, specific responsibility given to our judges, a statutory basis for case management, and a statutory basis for the administration of our courts system clarifying the powers of chief justices of the Family Court, or the Magistrates Court or the Federal Court. We need effective discharge of the operation of the business of our court system, which will be good for taxpayers across the country and good for taxpayers in my electorate of Blair. It is also good for those poor people who are subject to litigation and who have to go through the process and engage themselves in emotional and costly disputes on issues that they never wished to have in court in the first place. I commend the bill to the House.
I thank the House for the opportunity to make a contribution to the debate on the Access to Justice (Civil Litigation Reforms) Amendment Bill 2009. As a person who practised as a lawyer for many years, I would say ‘The cost of litigation is money well spent,’ but in the interests of the community it is important that, as elected representatives, we try to make sure that there is access to justice at an affordable rate.
The cost of litigation in civil matters is a matter of concern to the community because it has now got to the stage with court and legal costs that many people have to walk away from their legal rights simply because they are unable to fund access to those legal rights. Sometimes it might mean that a person who does in fact take action might win the case but might ultimately be out of pocket. Of course, one can never be quite sure as to what the result is going to be in a case, and it is possible that, if someone sought to pursue his or her legal rights, the case might be unsuccessful and the litigant might be responsible for not only his or her own costs but also there could well be an award of costs against the person who lost the case, and that happens quite regularly.
There is no panacea, however, to fix this obvious problem, and everyone accepts it is a problem. It would be great if it were possible to solve litigation in an easy, quick and certain way to make sure that people’s rights were fully enforceable and that people could receive redress where they were legally entitled. Of course, the court system aims to achieve this. Successive governments over the years have seen access to justice as being a very important matter of equitable decency in our society. Having said that, the cost of litigation continues to go up, and it used to be very difficult for me, as a lawyer, to advise people that at times it simply was not worth pursuing what was clearly a case which ought to have been litigated.
The cost of litigation is one that has always impacted on the abilities of a party seeking to right a legitimate wrong. It has always impacted on the ability of a person to enforce his or her legal rights.These cases are fought, often, by people who believe that they are aggrieved. They can take considerable time, and are therefore particularly costly, as rival parties put forward their legal arguments and present evidence and witnesses in the pursuit of victory.
With this in mind, the bill aims to modify the Federal Court of Australia Act 1976 so as to, among other things, focus the Federal Court on resolving disputes more quickly. This in turn will help to reduce the costs of litigation and also improve the accessibility of legal avenues to those in a financial position that might otherwise preclude them from taking action to enforce their rights. The bill aims to preserve, however, the overarching demand that justice will be served.
It is important for courts to remove inefficiencies where possible. While the courts largely manage how they look after their cases, it is always important that the parliament encourage courts to do proper management so that it is possible to resolve cases as expeditiously as possible. This bill seeks to improve the situation—and certainly its passage will improve the situation—but it is possible that there could be disagreement between the courts and the battling parties as to what constitutes time-wasting, which procedures might be regarded as frivolous and which items of business genuinely needed to be allowed to run, as long as this is done in the interests of achieving justice.
With all that said, the provisions of this bill aims to encourage efficiencies by focusing the court, barristers, solicitors and opposing parties to seek to resolve their dispute as quickly as possible. This provision takes into account some recent high profile cases between warring major commercial companies. The lengthy and regular delays in these cases tie up considerable government and court resources—not to mention the resources of the parties—and contribute to major inefficiencies and massive cost blowouts.
The bill will give the courts the ability to allocate resources according to actual and legitimate needs, taking into account the complexity of the particular case. The efficiency with which the court operates will be supported and improved by further changes outlined in this bill. The bill includes changes that promote reforms to case management and general procedures, that place upon the courts an obligation to seek genuinely a resolution to a particular case and that give powers to the courts so they can issue specific directives to achieve a resolution of a particular case so that the court is able to avoid any unnecessary delays.
The bill also introduces a legal framework to which the courts can refer when issuing directives to ensure that a particular case is dealt with within the law as quickly as possible and that the courts themselves have a legal foundation on which to base their directives. These directives could include: limiting the number of documents that can be tended as evidence, limiting the number of witnesses, referring the matter for alternative dispute resolution, penalties for failing to observe these directives and penalties incurred by those parties who fail to abide by the overarching purpose of resolving a matter within the law as quickly and as fairly as possible.
Schedule 2 of the bill aims to provide a more streamlined appeal process—one that is less confusing and supports the objective of resolving disputes as quickly and as inexpensively as can be expected. These provisions include having a single judge who can make a ruling on a matter, taking away the ability of a party to choose for a matter to be heard by a judge or a full court and clarifying appeals processes from interlocutory decisions.
Schedule 3 provides for amendments that aim to enhance the public view of the justice system. It outlines modifications to the Federal Court of Australia Act 1976, the Family Law Act 1975 and the Federal Magistrates Act 1999 to clarify the powers of the chief justices of the Federal Court, the Family Court and the Chief Federal Magistrate. The bill makes provisions that widen the responsibilities of the heads of these courts to ensure that the business of the courts is effectively discharged.
The Access to Justice (Civil Litigation Reforms) Amendment Bill 2009 is a genuine effort by the government and by the parliament to bring about justice expeditiously and to remove delays. If it works it will enhance the public view of the court system. All of us have heard cases where judges are slow, where people cannot get their cases before a court and even when they are before a court the case seems to drag on forever, with financially debilitating results. This bill is not a panacea. It will not solve all of the problems but it is certainly a step in the right direction. I commend the government for introducing the bill at this time.
I rise today to speak in support of the Access to Justice (Civil Litigation Reforms) Amendment Bill 2009). I must say at the outset it is somewhat daunting to be surrounded, in the speaking list, by those who are practising or have practised in the law profession.
This bill represents a continuation of the fine tradition of Labor governments taking innovative actions to improve the accessibility and affordability of Australia’s legal system. Attorney-General McClelland is to be complimented on the vigour with which he has pursued reforms to the Australian legal system. His proposed restructuring of the federal court system to amalgamate the Federal Magistrates Court within the Federal Court and Family Court is a sensible initiative which will maximise the effectiveness of both the Federal Court and the Family Court and build in opportunities for simpler matters to be resolved by appropriate legally targeted judicial officers.
The Attorney has also been instrumental in having the regulatory reform stream of COAG adopt a project to truly nationalise the Australian legal profession and create a truly national legal services market. This initiative has considerable benefits for legal consumers through removing the complexity arising from multiple regulatory regimes applying to lawyers and their clients and through streamlining the current 55 separate bodies throughout Australia that have some role in regulating the way in which legal services are provided and the way in which lawyers operate their businesses.
I am very pleased to note that chairing the consultative group for this COAG legal profession reform project is the former Attorney-General in the Keating government, Professor the Hon. Michael Lavarch. This is very appropriate, given Professor Lavarch’s own record. As Attorney-General in this parliament, he pursued vigorously the cause of access to justice.
I recall, as a state member of parliament, the 1995 Justice Statement delivered by Prime Minister Keating, which embodied a range of reforms and initiatives championed by Professor Lavarch and I should mention also the member for Denison, the Hon. Duncan Kerr MP, who was the Minister for Justice at that time.
Like the current bill, these reforms had as their aim a system of justice which was cheaper, faster and fairer for average Australians when they required the services of lawyers or the intervention of dispute resolution mechanisms such as the courts. One of the initiatives taken in the Justice Statement was the creation of the National Alternative Dispute Resolution Advisory Council. NADRAC was one of the few initiatives contained in the Justice Statement which survived the pillage of the early years of the Howard government and continues as an important body in promoting both the uptake of alternative dispute resolution and the standards and principles which underline such ADR systems. I note that NADRAC will play an important role within the frame of the proposed bill.
Other matters pursued by the Keating government include items such as the corporate law simplification program, a major expansion in the funding of community legal centres and family counselling services. The same Justice Statement embodied the resources given to the Human Rights and Equal Opportunities Commission to undertake its landmark report into the Stolen Generations. This report, of course, led to the Bringing them home report which has proven to be such a significant milestone in furthering the cause of reconciliation and understanding within the Australian community.
Accordingly, it is only fitting that we have a current government and Attorney-General continuing the tradition of past Labor governments to be truly innovative in the cause of improving Australia’s legal system. It cannot be emphasised enough that the Rudd government has a strong commitment to ensuring access to justice for all Australians. This bill will assist in reducing the cost of litigation through the introduction of a new, overarching purpose with which both litigants and their lawyers must comply and will ensure that people will be able to resolve their disputes quickly, efficiently and fairly. This bill will ensure that our system of justice is accessible to all, not just the wealthy.
In 1996, Lord Woolf, an English Law Lord, produced a report on access to justice. I want to read into Hansard two passages from that report, as they eloquently outline the principles and the problems in relation to access to justice. Lord Woolf said:
These principles and problems are universal. Costs of litigation, for instance, are lacking proportionality. In this second reading speech the Attorney cited two cases where costs to the litigant and also to the public—the taxpayers who fund the court system—were disproportionate, to say the least.
The costliest of those cases, known as the C7 case, was the subject of a presentation by Justice Sackville to the New Zealand Bar Association International Conference held in Sydney in August last year. In that speech, Justice Sackville, a strong advocate for proportionality, commented on the expenditure of in excess of $200 million on a case where what was at stake in the proceedings was a similar amount—that is, about the same amount of money that they might have returned from the expenditure of that $200 million—saying at the time that it ‘bordered on the scandalous’. In considering this, people might like to also contemplate the fact that the sum of around $250 million was all that was spent by political parties and candidates in the 2009 federal election, where the stake—that is, government of Australia—was not inconsiderable. The C7 case, on the other hand, grew out of television rights for football games.
The excellent Bills Digest produced for this bill by the Parliamentary Library provides us with a simple and succinct overview of the provisions of the bill. Those provisions go to case management, jurisdictional appeals and judicial responsibilities. These were covered in depth by the member for Blair, who spoke a little while ago, but they are worthy of a further brief mention. Firstly, the bill amends the Federal Court of Australia Act 1976 to introduce case management and procedural reforms which will facilitate judges more actively managing cases before the courts and should bring about cultural change in the approach to resolving disputes.
Case management provisions are centrepieced by the insertion of a new provision in the Federal Court Act 1976—new subsection 37M(1), which provides ‘that the overarching purpose of civil practice and procedure provisions is to facilitate the just and legal resolution of disputes as quickly, cheaply and efficiently as possible’—the very principles about which Lord Woolf spoke. The amendments will also clarify the kinds of directions the court can make to control the progress and conduct of proceedings. Where parties or their lawyers fail to act consistently with the overarching purpose or fail to observe the court’s directions, the court will have discretion to make an order for costs against the parties or their lawyers personally. In addition, the current section dealing with costs will be amended to clarify the kinds of cost orders that can be made.
Secondly, the bill amends the Federal Court of Australia Act 1976, the Family Law Act 1975 and the Federal Magistrates Act 1999 to clarify the powers of the Chief Justices of the Federal Court and the Family Court and the Chief Federal Magistrate to ensure the effective discharge of the business of the court. The amendments identify specific powers and responsibilities to the head of each federal court to make arrangements regarding the constitution of the court in particular matters, assigning case load to judicial officers and ensuring judicial officers have appropriate access to annual health checks, short-term counselling services and judicial education. The amendments will also clarify the role of the head of court in determining where judges sit.
Thirdly, the bill amends the Federal Court of Australia Act 1976 to provide for a more streamlined and efficient appeals pathway through the Federal Court and civil proceedings. These amendments will assist the court in managing its resources by providing greater flexibility in dealing with appeals and related applications. They also remove confusion for litigants about appeals pathways from interlocutory decisions and confirm the courts’ powers to manage appeals appropriately and efficiently. These are sensible reforms that will align our courts with the eight principles outlined by Lord Woolf in his report on access to justice in the United Kingdom and help counter in our system the seven defects he also identified.
In concluding my comments today, I want to repeat the words of former Prime Minister Paul Keating, who, in launching the justice statement in 1995, said: ‘If we can create a justice system which is simpler, cheaper and more accessible, we will extend our democracy and strengthen belief in it. We will increase our respect for our laws and the ideas and principles on which they are based.’
Given the commonality of Labor’s 1995 justice statement and Lord Woolf’s report on access to justice, one can only speculate as to the reasons the Howard government may have had for not moving forward on this and making Australians wait 13 years for these sensible changes. The member for Fisher, in his contribution a moment ago, recognised the problems that exist that this bill is designed to overcome. They existed in 1995 when the justice statement was made. They existed in 1996 when the Howard government came to power. It is a tragedy that we have had to wait until 2009 for these to be remedied.
Access to justice is important. We need our courts to be able to provide real, affordable access to all citizens, not just pay lip-service to it. The legislation which governs federal courts needs to encourage and assist real, affordable access. The Access to Justice (Civil Litigation Reforms) Amendment Bill 2009 goes a long way to achieving those aims and for that reason I am very pleased to support this legislation. This bill will amend the Federal Court of Australia Act 1976, the Family Law Act 1975 and the Federal Magistrates Act 1999, which are the acts of this parliament that establish the three federal courts: the Federal Court, the Family Court and the Federal Magistrates Court.
This bill is consistent with a very considered program that the Rudd government has undertaken and that the Attorney-General has prosecuted that is directed at reform of our court system and reform of procedures within our court system, all directed to ensure that all citizens have as full access as possible and that all citizens have access which is affordable, and that public resources are not devoted in a disproportionate way to the resolution of disputes. It is consistent with the approach that the government has announced already in relation to the abolition of the Federal Magistrates Court, a matter which has already been reported on and which a number of other speakers on this legislation have commented on, and is still a work in progress. The purpose of course of abolishing the Federal Magistrates Court is to achieve an overall federal court restructure that the government believes will reduce litigation costs and facilitate faster resolution of disputes.
What this bill does is to insert, first of all, in the Federal Court of Australia Act some provisions which will improve the authority of federal judges to case manage litigation that is in the civil jurisdiction of the court. Case management is itself a relatively new term. It is intended to convey the notion that no longer should we allow civil disputes to be entirely managed by the parties to those disputes and their lawyers so that the rules of court are simply there to be used and manipulated in a way which the parties think suits their interests, without limit, without regard to cost and—as was the traditional view—without direct interference or direct control by any judge. Case management takes issue with that traditional approach and says that judges of the court, and magistrates in the Federal Magistrates Court, are entitled to, and indeed should, in the public interest manage litigation coming before the court so as to ensure that the resolution of disputes is achieved within the shortest possible time and with the least possible cost—and by cost I mean not only cost to the parties but cost to the public purse.
It has been thought, ever since the decision of the High Court in the State of Queensland v JL Holdings, that the interests of justice being the touchstone of civil litigation in our courts were a reason for limiting the power of judges to engage in case management. I note, as have other speakers on this bill, that one of the intents of these amendments is to ensure that that decision of the High Court is not able to be raised, as it has been since the decision was handed down in 1997, as a bar to judges engaging in vigorous case management, to judges seeking to shape and control the way in which disputes are conducted in their courts.
I note that the Law Council of Australia, the peak body for Australia’s lawyers, has provided a submission to the Senate Legal and Constitutional Affairs Legislation Committee directed at this access to justice bill. In it, the Law Council has broadly welcomed the reforms. It is worth quoting from the submission because the Law Council of Australia represents all of Australia’s lawyers. It is the peak body for Australia’s lawyers and represents over 50,000 lawyers across the country. It is in a position to provide perhaps as informed a comment as it is possible to provide in relation to legislation such as this. The Law Council’s submission said:
The Law Council broadly welcomes the reforms which are the subject of the Bill. It is clearly an attempt by the government to encourage more efficient and cost effective civil litigation, and that is a laudable and non-contentious aim.
The submission goes on to say:
The costs of lengthy and inefficient litigation are carried not only by the parties themselves but also by taxpayers who fund the operation of the justice system. Judicial salaries, court officer and registry staff salaries, and court premises costs are incurred unnecessarily by litigation that is not efficient or cost effective. If inefficient litigation monopolises court resources then those that cannot afford protracted litigation are prevented from accessing the justice system.
I will pause there to say that what the Law Council is saying in its submission is correct. If litigation becomes so expensive in terms of time, resources, fees paid to lawyers, fees paid to courts or fees and costs that are incurred in paying all of the other many people who are involved in protracted litigation, if that becomes prohibitive, then we will have a situation where there is indeed a denial of access to citizens. Some have mentioned in their speeches on this bill a notorious case, the C7 litigation. Others have mentioned the Bell case. I could mention a range of very, very lengthy commercial proceedings that have unfolded in recent years in the Federal Court and state supreme courts. Certainly, the supreme courts in Western Australia, New South Wales and Queensland, as well as the Federal Court, have seen trials—some of which I have participated in, I have to say—that have gone on for many months. They occupy dozens of court days—sometimes over 100 court days—and many lawyers, with consequent great expense. One has to ask, when one looks at litigation of that scale, whether it is even remotely affordable to ordinary citizens and whether the higher courts of this country have become, for the purposes of civil litigation, the preserve of the rich, large corporations and governments, which is not the kind of access to justice that anyone would wish to see.
I will quote again from the Law Council’s submission because it does very much commend the thrust of this legislation. The Law Council said:
The Law Council recognises that the traditional system of adversarial justice, in which pre-trial procedures are left entirely in the hands of the parties, is no longer considered an efficient model of dispute resolution. It is now well accepted that courts and judges have a role in actively participating in and managing this process. Yet there remain a minority of cases in which litigants may attempt to exploit the procedures available to them, such as discovery, to achieve an advantage regardless of cost or proportionality. Case management procedures, ADR—
alternative dispute resolution—
and other proposals all have … a role to play in improving the efficiency of litigation.
In referring to ‘a minority of cases’, the Law Council is really talking about the cases that we have all seen in recent years where litigation is almost used as a tool of commerce, rather than as a true dispute resolution mechanism, and where resort to the higher courts is used as a club in the jungle of commerce in Australia. That is of course not an appropriate use of the court system.
There is a passage in the judgment of the majority in the State of Queensland v JL Holdings case, which I mentioned a moment ago, that is most often cited when people raise the case in courts as a basis for resisting the involvement of a judge in serious case management. This is the passage from the judgment of 1997:
Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties. In taking an opposite view, the primary judge was, in our view, in error in the exercise of her discretion.
That kind of statement of principle, if taken to its ultimate conclusion, leads to judges being deprived of the opportunity of imposing what might perhaps be seen as arbitrary limits or what might perhaps be seen as a strict control on litigation. Judges are deprived of the ability to manage in that way. There does come a point at which the pursuit of some ideal of justice at all costs—and I mean justice at all costs—has to be the subject of some limits. I appreciate that this probably raises some quite deep philosophical questions about where the court system should strike a balance. But what this legislation does is empower judges to resist the suggestion that court procedures are entirely in the hands of the parties and empower judges to impose control on the conduct of litigation in their courts.
It is probably worth mentioning by way of example that, of the reforms that have been introduced in the last two or three decades in Australia in the higher courts, one of the most important has been the introduction of court ordered mediation, which is a form of alternative dispute resolution—there are others. Mediation, in a traditional sense, has always been thought to be a form of dispute resolution which only works on a consensual basis. In other words, if the parties are not both or all willing to engage in a mediation process then it is a process which is not likely to succeed. For that reason, it was long thought that a process which required the parties to attend mediation because a judge ordered them to attend was a process that was not likely to achieve effective results. The experience since the introduction of court ordered mediation, which is now employed as a matter of course in all higher courts—the Federal Court, the state Supreme Courts and the Family Court—has been that, far from not producing satisfactory outcomes, in the majority of cases where mediation is ordered settlements are produced, and they are settlements which are satisfactory to the parties.
It is the embrace of alternative dispute resolution processes in the last two or three decades that is in part recognised by this legislation, which will, as I have said already, empower judges to direct litigation in their courts. It will empower judges to set deadlines, to require tasks to be completed, to vary directions that have previously been made and to refer cases to a range of alternative dispute resolution processes—all of which ought to be within the power of judges and all of which ought to be able to be exercised without being met by a complaint that in some way a judge exercising that kind of case management power is not in the interests of justice.
There are a range of other reforms introduced in this legislation. Another reform is to limit the interruption of civil cases that can occur by appeals against interlocutory orders made by judges. There are some provisions in this bill which will ensure that the opportunity to interrupt the flow of civil litigation by appealing against an interlocutory order is a great deal more limited than it has been in the past.
The legislation contains a range of incremental reforms. Whether or not the reforms are going to lead, as hoped, to more real and affordable access for citizens to federal courts—the Federal Court of Australia, the Family Court and the Federal Magistrates Court—is something that will need to be judged over time. Simply changing court procedures, empowering judges and changing rules that apply to litigation in the superior courts is not of itself something that can be seen to immediately produce the increased access to justice which is the intended result. But I am confident that over time the reforms which are contained in this bill will greatly improve access to justice in matters that are within the jurisdiction of the three federal courts—one of which, it is hoped, will soon go out of existence. But these reforms will improve access to justice in the federal courts. They will be able to be judged over time and indeed should be re-examined, perhaps in a few years, to ensure that the intent of the reforms has in fact been achieved. I commend the bill to the House.
in reply—I would like to thank members for their contributions to the debate on the Access to Justice (Civil Litigation Reforms) Amendment Bill 2009. They have been excellent contributions, some made on the basis of very valuable experience, as the previous speaker was able to demonstrate. The Access to Justice (Civil Litigation Reforms) Amendment Bill 2009 forms a key part of the Rudd government’s agenda to improve access to justice.
The amendments in the bill will streamline procedures in the Federal Court and assist in reducing the cost and complexity of litigation. The bill is bringing about a cultural change in the way litigation is approached from well before the parties go through the doors of the courts and throughout the litigation. Whilst access to justice is about more than court proceedings, this cultural change is an important step to improve access to justice for all court users—that is, obviously, the litigants, lawyers and members of the court, including court staff.
The bill contains a number of important reforms to enable the court to more effectively manage large and protracted litigation. These amendments have been developed in close consultation with the Federal Court and I would like to acknowledge the hard work that the court has done in the development of these reforms. They seek to address the increasing demands that are placed on finite resources. I note that the Federal Court submission to the Senate Standing Committee on Legal and Constitutional Affairs states:
These amendments will help achieve the Court’s goal of an effective and accessible system of justice where people are able to resolve their disputes quickly, efficiently and fairly.
Other amendments will enhance public confidence in the administration of justice. They clarify the role of the heads of court and broaden their responsibilities to ensure the effective discharge of the business of the court.
In terms of case management, as I said when I introduced the bill, this bill will ensure the parties and their lawyers are encouraged to work towards narrowing the issues in dispute and of course where possible resolving them in the simplest possible manner. The new overarching purpose of civil procedure provisions is to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible.
The High Court’s recent decision in Aon Risk Services Australia Limited v Australian National University supports the active case management powers introduced by this bill. The High Court stated:
In the past it has been left largely to the parties to prepare for trial and to seek the court’s assistance as required. Those times are long gone. … It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.
When I say that the decision supports the active case management powers of course I am not saying that the court considered these specific provisions. But I think that quote which I have just read out supports in principle the thrust and purpose of the legislation that we are proposing. In a similar vein, Chief Justice French made the very telling point that undue delay can undermine confidence in the rule of law. He said:
… the adversarial system has been qualified by changing practices in the courts directed to the reduction of costs and delay and the realisation that the courts are concerned not only with justice between the parties, which remains their priority, but also with the public interest in the proper and efficient use of public resources.
It has been suggested by some that active case management in this bill may require additional judicial resources. I disagree with this. Obviously it is important to provide adequate resources to the courts but actively managing cases, we believe, will lead to efficiencies and better use of existing judicial resources.
In terms of appeals, the bill also provides for a more consistent and simplified approach to appeals. These amendments will not only enable the courts to have great flexibility in dealing with appeal procedures but also assist litigants by removing confusion arising from current case law. Importantly, these amendments will provide for the efficient use of resources by eliminating unnecessary steps in litigation. Each step of course has its own cost implications for clients. This will ensure that the court’s time is not spent unnecessarily hearing appeals from minor procedural decisions.
On this point, I want to respond to a criticism of the bill that has been made. It has been said that by removing the right to appeal interlocutory decisions relating to security for costs there is not an adequate protection for litigants’ rights. To address that, to ensure that there is adequate protection, a safeguard is being introduced to ensure that litigants will not be disadvantaged by the proposal to remove appeal rights in relation to a limited number of interlocutory decisions, including a decision relating to new section 24(1AA). This safeguard will provide that an interlocutory decision, including a decision relating to that section, may be listed as one of the grounds for appealing a final decision, even if there is no appeal pathway from that particular interlocutory decision. This in turn will ensure that there will still be an appeal pathway open when the appeal pathway for a decision under section 24(1AA) is removed. Similar legislative provisions which limit appeal rights against interlocutory decisions, including decisions in relation to security for costs, already exist. For example, section 94(2F) in the Family Law Act 1975 provides that power.
In terms of judicial responsibilities, Australia has a federal judiciary of the highest calibre. The amendments I have introduced concerning the powers of the chiefs of our federal courts will further enhance public confidence in the justice system. We are blessed with people of very high calibre serving in those offices, and obviously in the future that will remain the case. The amendments give the head of each federal court the responsibility to ensure the effective discharge of the business of the court. The bill ensures that judicial resources of courts can be adequately managed and allocated according to need by assigning judges to particular locations.
I would now like to address some specific comments raised by the opposition, including by the shadow minister. The shadow minister referred to a submission by the Law Council of Australia to the Senate Standing Committee on Legal and Constitutional Affairs, which is currently inquiring into the bill. The first criticism is that the duty imposed on lawyers by the bill goes too far. The government believes a cultural change in the way litigation is conducted can be achieved only if the court, the parties and their legal representatives are all on the same page. Obviously in this parliament we cannot dictate culture but we can set the legislative framework that influences the development of culture. We believe there would be little merit in imposing a duty on parties, like the one introduced by new section 37N, if their lawyers were not also obliged to comply with the duty in some way. We would go so far as to say that in some instances, unfortunately, a client may need some additional impetus on the part of their lawyers to aim at resolving disputes when it may not necessarily be in the lawyers’ financial interests for that matter to be so resolved. I should indicate and stress that that propensity on the part of some lawyers is one that is diminishing. I think that by and large the culture in the legal profession is to do everything they reasonably can, firstly, to keep their clients out of court and, secondly, if involved in litigation, to resolve those matters as quickly, effectively and cost-efficiently as possible. Nonetheless, I think that reality suggests that there are some who could reform their ways, and in some senses this legislation will give some solace to their clients that the expectation will be on all participants in the process.
The proposed provisions do not go as far as the New South Wales legislation in respect of a similar issue. Section 56(4) of the New South Wales Civil Procedure Act 2005 provides that:
A solicitor or barrister must not, by his or her conduct, cause his or her client to be put in breach of the duty ...
The provisions in the bill help avoid a situation where the lawyer is torn in two different directions by their duty to follow their client’s instructions and the duty to comply with the overarching purpose. Therefore the bill—and obviously I am talking about the provisions before this parliament—strikes, we believe, an appropriate balance in relieving a lawyer from those two different obligations.
The Law Council also argues that new section 37N(1) abrogates settlement privilege. New section 37N(1) requires the parties to conduct all aspects of the proceedings, including settlement negotiations, consistently with the overarching purpose. Normally, settlement negotiations are privileged. They will remain so following the introduction of this bill. Concerns have also been raised that, when the court is deciding whether to make a cost order under new section 37N(4), the court may have to inquire into the way the settlement negotiations were conducted, and the settlement privilege will be abrogated—or so the argument has been presented. We believe that this will be unnecessary. The court only needs to be satisfied that a reasonable attempt has been made to settle the dispute in accordance with the overarching purpose, which would not require full details of the settlement negotiations to be given as evidence.
Finally, the Law Council argues that the proposed power of the court to limit witnesses goes too far. New section 37P(3)(c) allows the court to make a direction limiting ‘the number of witnesses who may be called to give evidence, or the number of documents that may be tendered in evidence’. It is said that this provision overrides the parties’ prerogative to make decisions of this type. This concern really comes back to the key purpose of this legislation and the balance of private and public interests which must be struck in the conduct of litigation. Litigation is not a plaything of the parties or something that can be exploited to their advantage by the party with the greatest resources. Significant judicial and public resources are made available to resolve matters, and it is important that these resources are used to best effect. Unnecessary witnesses and submissions simply add to the time taken to resolve matters and to the costs to the court, the parties and ultimately the taxpayer. These case management reforms are about achieving a cultural change in the way litigation is conducted and ensuring that the court has the active case management powers required so that the overarching purpose can be applied to all proceedings. It will be open to the parties to make submissions about the number of witnesses they require to make their case and the number of documents they wish to tender. The new provision does not prescribe what the limits should be. This will be determined on a case-by-case basis by the presiding judge, who may indicate to the parties whether they have been persuaded in respect of a particular matter and require no further persuasion in respect of that particular item.
This bill highlights the Commonwealth’s commitment to improved civil justice outcomes for all Australians. Making the best use of our court resources is an important factor in achieving better outcomes. This bill will ensure that matters before the Federal Court are to be resolved by the simplest means possible. This is an important step in strengthening the civil justice system and creating a legal framework that provides fair and effective access to justice for all. In short, while it is the case that legal practitioners both serve their client and are officers to the court, the culture that we are promoting is that all participants in the justice system will be servants of the justice system as a whole. The amendments support many practices in place in the court and reflect the commitment of Australia’s federal judiciary to excellence.
Question agreed to.
Bill read a second time.
Ordered that the bill be reported to the House without amendment.
Debate resumed from 25 June, on motion by Mr Martin Ferguson:
That this bill be now read a second time.
I would like to take this opportunity to speak to what I would certainly classify as another climate change related bill because of my interest in this area but also, importantly, because of the impact climate change has on my electorate. Corangamite and its surrounding area is one of the areas most affected by climate change—economically and in a geographic sense. The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009and cognate bill respond to the amendment of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003. The amendments can be described as technical and minor policy changes to one of the biggest policy issues confronting us today.
The bills streamline requirements, provide clarification and reduce the overall regulatory burden on the industry. That, of course, is very important. Whilst we absolutely have to bring about change to reduce climate change, we also have to bring about change that does not bog down the industry in regulatory regimes where people and industry end up being mired in red tape. Measures to address climate change have to happen in a fast and efficient way. It is worth noting that it would be very easy to get bogged down in excessive regulation. We are dealing with a relatively new industry when we talk about greenhouse gas storage. We are talking about significant infrastructure—hundreds of millions of dollars of investment in pipelines and the like—and we want to make sure that the regulatory environment is simple and easy to follow, with clear regulations. So with these reforms we are setting up the necessary framework to provide business with what it wants, which is clarity and certainty when it comes to regulation.
The changes proposed here come from three different aspects of work undertaken by the department over a period of time. There are no adverse impacts on the industry when it comes to these bills and I do not believe there are any additional costs. A number of the changes relate to alternative arrangements for pipelines commencing from 1 January. These arrangements will be set out in revised regulations to come into effect next year. Pipelines are being treated on the same basis as other facilities under the safety regulations. This will see the removal of the pipeline management plan and the pipeline safety management plan from the regulations. The removal of consent to operate a pipeline is a part of the overall changes which will take effect from 1 January 2010.
There are several other changes such as providing an expedited consultative process on the granting of access authorities and making the joint authority the decision-maker in relation to the declaration of locations and the granting of scientific investigation consents, designed to streamline current arrangements. Moving the power to vary coordinates based on the current datum, from regulations into the legislation, will streamline the regulatory processes. Other changes are to remove several inconsistencies and ambiguities arising from amendments made in the Senate.
These bills provide clarity and, for some, simplicity in the regulation of a new industry. It is likely that some greenhouse gas storage activities will take place in my electorate of Corangamite and right along the southern coastline of Victoria. I note the member for Gippsland, who has significant petroleum not far from where he lives. In my view, carbon capture is not a silver bullet that will resolve the carbon pollution problem that we currently face. But it may be an important step in helping with carbon pollution abatement for the period ahead in which we rely upon coal whilst we move to more sustainable energy generation processes. This legislation is integral to making sure the framework exists to develop and implement this important carbon capture and storage process. Doing nothing, which many might suggest is the right way to go, is a risk that I believe will threaten our economy and, of course, our sustainability.
In my electorate, areas such as the Great Ocean Road, the surf coast and parts of the Bellarine Peninsula surrounding Port Phillip Bay will be adversely threatened by sea level rise. As I said earlier, I want to again put on the record a few important facts about my region and the effects of climate change. The Great Ocean Road is an icon of Australia and the engine room of our local tourism economy and will be largely impacted by sea level rise. It will be breached in many places if sea level rise does take place, as we expect. Huge swathes of the Bellarine Peninsula will be inundated. Current areas of the mainland will be cut off, forming a ribbon of islands, particularly in the Queenscliff, Point Lonsdale, Ocean Grove and Barwon Heads area where there are parts of that coastline. Also, there are private properties that will reside in harm’s way if there is sea level rise. Key public infrastructure facilities such as caravan parks and other private properties will be inundated and lost. Many private homes will also be lost as a consequence of sea level rise. That is why it is important that we get the regulations and the operation right for greenhouse gas storage, because it is those climate change gases that we need to remove from our atmosphere to avoid the worst aspects of climate change and sea level rise.
In Victoria, particularly within my region, we are among the largest emitters of carbon dioxide and other greenhouse gases per head of population as a consequence of the nature of the industries that we have. It is important that we take advantage of the opportunities for offshore greenhouse gas storage to ensure that industries in my region and across the nation can take up alternative arrangements whilst we go about creating new opportunities from new industries. Victoria is very well placed to take advantage of this legislation. We have a very substantial gas industry, particularly off the Bass Strait, and I think there are significant opportunities for Victoria to play a role. I certainly wish the industry in Victoria and across this nation all the best in responding to these particular challenges. I commend these bills to the House.
I rise to speak in relation to the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009, which seeks to correct omissions in the act that came into effect last year and make a number of technical corrections.
The bill has been in development since 2005, under the previous coalition government, and has enjoyed bipartisan support. The act authorises the transportation by pipeline and injection and storage of greenhouse gas substances in deep geological formations under the seabed. I have spoken previously to offer my general support for this legislation and the process it seeks to facilitate, which is the sequestration of greenhouse gases, primarily carbon dioxide. In doing so, I made the point that the Gippsland Basin—and the member for Corangamite touched on this as well—is likely to play a critical role in the development of these new technologies.
For those who are unfamiliar with the Gippsland Basin, it is a major contributor to our nation, and the legislation has particular relevance to my region. The Longford gas plant, which is located about 10 kilometres from the city of Sale, is responsible for supplying most of Victoria’s gas requirements and about 20 per cent of Australia’s oil and gas supplies. I grew up in the city of Sale and I well remember the impact of the oil and gas industry when it came to my home town.
This year marks the 40th anniversary of the joint venture partners Esso-BHP and their work in Bass Strait. There was a function quite recently—on 29 April this year, as I recall—which was attended by the Minister for Resources and Energy and the shadow minister, to commemorate this occasion. It really was an auspicious occasion for the Gippsland region—the former member for Gippsland, the Hon. Peter Nixon, was in attendance, and I wish him well—because it marked a critical date in our community’s development.
It is hard to imagine the Gippsland region today without the discovery of oil and gas in the early sixties, such has been the profound contribution of the industry to the economy of the region and to the cultural and social life of the Gippsland community. Esso has been a longstanding benefactor of the community, with a range of donations to community and sporting activities, perhaps most notably the Wellington Entertainment Centre in Sale, which has been completed in the last few years.
I do not seek to give the House a comprehensive history lesson on the Bass Strait oil and gas fields, but it is important in the context of this debate. The offshore drilling began in 1960, when BHP was granted petroleum exploration permits. In 1967 Kingfish 1 was drilled and encountered Australia’s largest oilfield, with 1.2 billion barrels recoverable. By the end of 1969, 11 fields had been discovered and the first five were in production. After this initial phase of very high success rates, the new Esso-BHP discoveries were limited throughout the early 1970s to Cobia, Sunfish and Hapuku.
There have been many more wells drilled. Notably, though, West Tuna in 1984 was the last of the giant oil discoveries by the Esso-BHP joint venture partners. There have been several smaller discoveries since, and there are now 24 offshore platforms and installations in Bass Strait, which feed a network of about 600 kilometres of underwater pipelines and keep the oil and gas flowing 24 hours a day. While production will continue for many years to come, the depleted sections of the basin are of particular interest for carbon storage, the subject of the legislation before the House today.
I make these points to highlight my view that, when it comes to dealing with the complex issues and claimed impacts of climate change and when it comes to the government’s Carbon Pollution Reduction Scheme, Gippslanders have a very keen interest in the outcome. We are very much at the pointy end of this debate. They are our jobs that will be directly affected in the oil and gas industry, in agriculture and, most significantly, in the power industry in the Latrobe Valley.
As I indicated in my maiden speech, if we are prepared to give the planet the benefit of the doubt and we accept that climate change is real then we are going to need a strong and sustainable economy to deal with the challenges it presents. In my region there are forecasts of storm surges and sea level rises. While I may personally doubt the extent and veracity of some of those claims, if those scenarios are accurate it will cost billions of dollars to relocate public infrastructure and mitigate the damage in low-lying coastal towns.
I liken the issue to household insurance: I do not expect my house to burn down but I will take out insurance every year just in case. In relation to the climate change forecasts, I have some serious doubts about some of the claims but I am not prepared to rule them out completely and I am prepared to take action that is proportionate to the threat. My insurance in this regard is to support practical and sustainable action which is good for the environment, but I am not prepared to sacrifice our economic future in the process. We need to tackle these challenges from a position of economic strength, which draws into sharp perspective the reckless spending spree of the Rudd government. I fear the government’s debt and deficit binge has left the cupboard bare.
In relation to the legislation before the House, Gippsland will need to be at the forefront of research and development to successfully capture and store carbon in the future. As the technology is developed on an industrial scale, it is likely that Gippsland and the Latrobe Valley will be key players. Studies have shown that the Gippsland Basin has the capacity to store very large volumes of carbon dioxide. In the context of the brown coal industry, there are obviously enormous gains to be made in the future, but it will take time; it is not going to happen overnight.
What concerns me is the enormous rush with which the government is trying to ram through its flawed CPRS legislation. I do not believe there has been enough time to explain the potential impacts on regional communities. As I have said before in this place, carbon capture and storage may be the big ticket item which provides the answer to the issues facing the brown coal power generators but we are several years away from achieving the desired result. I agree with the previous speaker, the member for Corangamite, when he said it is not a silver bullet. I believe there will be a suite of solutions. I am very confident in the capacity of engineers and scientists at work on finding technology-based solutions for many of the challenges we are facing from climate change.
I do not believe it is in anyone’s interest to jeopardise the economic viability of the power generators in Latrobe Valley by moving too fast or by placing too heavy a burden on their operations. I note the presence of the Minister for Resources and Energy in the room. It was great to see the minister in Longford for the commemoration of the 40th anniversary of the Esso-BHP joint venture partners’ activities. I have met with the power generators in Latrobe Valley and I understand the government has too, but was anyone actually listening on the government’s side of the table? Was anyone actually listening to the concerns that were being raised by the generators?
Let me set the scene for House about the importance of the power industry in Latrobe Valley. It is the most important industry in the region, bar none. Latrobe City commissioned an independent report into the economic importance of the Latrobe Valley coal and electricity industry. It reported back in August last year and it makes quite compelling reading. As a local member, I fully understand the significance of the following figures. It is estimated that the value added in Latrobe City from the coal and electricity industry sectors is $802 million per year, or 21.2 per cent of the gross regional product. There are 125 people employed in the coal mining sector and 1,705 people employed in the electricity supply sector. The flow-on impacts of such a major industry is obviously very significant to the entire region in terms of the training opportunities it provides to young people and the contracting opportunities for the private sector. It is just a critically important industry for the future of our region.
We have a vast reserve of brown coal in Latrobe Valley and it has underpinned the economic growth of Victoria. We are proud of the contribution the Latrobe Valley has made to the wealth of this nation and it is vital that it is allowed to continue in the future. One of the frustrating aspects of the debate on climate change is that the pride in our achievements in providing a base load power supply to the community over many decades has now been eroded to some extent. The media coverage of Latrobe Valley smokestacks on a nightly basis is actually quite disappointing for the people who live in the community. They are very proud of the contribution they have made to making Australia the great nation it is today through the supply of a cheap and reliable form of energy. I continue to encourage my community to be proud of their achievements in the past and to also look forward with confidence in the future. It is a cautionary note for the government, I believe, in how it handles the issue of climate change in the communities which I believe are being portrayed unfairly as the villains in the whole debate.
The shadow minister touched on the many of the issues that have been raised by the Energy Supply Association of Australia in its negotiations with the government regarding the issue of the CPRS and the legislation before the House. The association says there are four critical issues which are not adequately addressed in the current CPRS design. I will not go through them all in complete detail but the essence of their arguments relates to that need for certainty in the ongoing financial viability of the existing assets. In an environment where there is global economic uncertainty and the generators are seeking to refinance billions of dollars to continue their operation, there needs to be sufficient information for investors to commit to long-lived capital assets.
The industry is trying to engage with the government and so is the opposition. We do have time to get this right and the government must take the time to fully inform the community about the impact of this legislation. For example, the CEO of Loy Yang Power, Ian Nethercote, has cautioned that previous reports could be seriously underestimating the real impact on electricity prices. There is a lot riding on these very complex issues around the CPRS and the legislation before the House today. We must not get ahead of ourselves and place Australian jobs at risk.
Just last month we had the release of one of the most alarming reports yet about the impact on jobs. The report, Securing SMEs in Australia’s low carbon future, should be ringing alarm bells across the nation, particularly in regional areas. I am concerned that we have not had a single word of caution from those opposite, particularly from the regional MPs. The member for Charlton, and now the Minister Assisting the Minister for Climate Change, Mr Greg Combet, seems to have undergone a complete transformation. Once the great champion of working families, now he stands in this place and very rarely mentions the impact of the CPRS on jobs, particularly in his own community.
I am concerned that regional Labor MPs in the coalmining seats are silent on this issue. There is not a peep out of them. It is the silence of the lambs. It is as if some of them are told: ‘Come here, turn up, sit down, shut up and vote when we tell you to.’ I am very disappointed that some of them are not prepared to at least raise the concerns that their regional constituents are putting to them. I have a completely different view about my role as a representative of a community which has a strong dependence on the coal industry and brown coal fired power generators. You cannot come here and be the Marcel Marceau of government. You need to get up and speak out on behalf of your constituents.
If we rush down the path of the Rudd government’s model, we run the risk of sending our jobs overseas to countries which do not have an emissions trading scheme, and our economic circumstances will deteriorate. We must stand up for jobs in our regions. We need to be in a position of financial strength to mitigate any impacts of a changing climate. I fear that under this government’s current approach we will be sending jobs overseas and there will be an increase in total global emissions at the same time. We will be poorly placed to undertake mitigation measures if they are ever required.
I will go back to the report on the CPRS and its impact on small and medium sized businesses. This report is independent. It was released by the Australian Chamber of Commerce and Industry. As I said, the findings are alarming. I will quote a couple of the key results. The report states:
Our findings show that the CPRS will generate additional costs that would erode firm profitability at marked levels of between 4 to 7 percent on average. In some cases, we found that the impact of additional carbon costs could erode firm profitability entirely. Erosion of firm profitability at these average levels could be significant enough to change investment incentives.
It further says:
Over time, relatively higher domestic transport and freight costs will stimulate a geographic realignment towards increased urbanisation and reduced rural and regional economic activity.
… … …
The anticipated geographic realignment may create second- and third-order effects that increase the economic impact from covering transport fuels in the CPRS. For instance, structural unemployment is likely to rise due to a draining of economic activity from more remote regions.
As I said, there are some alarm bells in these comments from the ACCI. The reflection on increased urbanisation touches on an issue that I believe is probably an unintended consequence of the government’s handling of the CPRS. But it basically warns that we risk a depopulation of regional Australia. I, for one, would hate to see that happen. Judging by the actions of some Labor governments at state level and the federal government’s handling of issues such as the water buybacks, I fear that the view is that it is much easier to manage a population if they are not living in rural and regional locations. It is a real concern for all MPs from regional localities.
I will now reflect on a report that came directly to this place through the Senate Select Committee on Climate Policy. The recommendations enclosed within its report also reflect heavily on the legislation we have before the House and the opportunity we have to take the time to get this right. Among its recommendations, the Senate committee on climate policy’s report makes the point very clearly that there is a need to accurately model the impact of the CPRS in the context of the changed global financial circumstances and the impact they will have on individual regions. The committee says:
The committee considers the modelling undertaken by Treasury to be inadequate and recommends that the Government direct Treasury to undertake further modelling.
It lists a whole range of areas where modelling is required. It goes on to say:
The committee recommends that the CPRS legislation not be passed in its current form.
Obviously, that was prior to the CPRS legislation being knocked back, in the previous sitting weeks. But I think it is still relevant when we look at what is going to happen in the next few months. We are looking at what technology or opportunity is there for climate change mitigation. We also need to look at how this is going to play out in the world scheme of things. Do we wait until we get some indication from the global community in relation to where it is prepared to move on total global emissions? I would certainly suggest that we should be waiting and taking the time to get it right.
I call on the government to commission the modelling on the impact on individual regions that is referred to by the Senate committee report. I fear that without that modelling we are flying blind. I also fear that we are misleading our communities by not telling them what the true impacts are. There is a general consensus in the community that there is an issue with climate variability. Call it climate change or call it what you like, but there is a general acceptance in the community that looking after the environment is a very important initiative and something that we are all very conscious of. But I do not believe that we have ever actually come clean with the community and told them what the costs are going to be or what the real impacts are going to be for some of the regional communities. As I said earlier, the Gippsland and Latrobe Valley region is very much at the pointy end of any decisions that are made about our agricultural industries, the oil and gas sector and the power sector.
I believe we need to keep a very firm sense of perspective in this debate regarding these issues of energy security and, in the case of the legislation before the House, regarding carbon capture and storage technology. Given that our nation’s contribution to global greenhouse gas emissions is less than two per cent, we need to be extremely mindful of the international effort. How far is the international community prepared to go in partnership with Australia? I believe that any policy which results in job losses in my region will have an adverse impact on every part of community life. The government must take time to accurately model the likely impacts and come clean with the Australian public. We need to be telling Australians what the costs will be in terms of potential job losses, energy prices, fuel prices and the overall cost of living.
I am concerned that the Prime Minister stands in this place and talks about saving Kakadu and the Great Barrier Reef, but he never talks about the cost. It is a ridiculous proposition in any case. As if Australia acting alone can actually achieve anything that will come remotely close to saving Kakadu or the Great Barrier Reef given our total contribution of less than two per cent to total global emissions. It is farcical for the Prime Minister to stand in this place and make those claims. We cannot act alone if we are serious about trying to save these icons, if indeed they are even jeopardised—and that is a whole different argument we can have.
The community accepts that we need to take action, but acting alone and ahead of the world without any global commitment to the reduction of emissions is a farcical situation. I call on the Prime Minister to start being more honest with the Australian community about what can really be achieved by Australia taking action in this manner and what the costs will really be. It may be sacrilege for those opposite but there are many people who have a more pragmatic and practical approach to this issue and they do not blindly extol some of the virtues of the extreme green religion. They are prepared to act prudently and not sacrifice Australian jobs in the process. I would rather see this debate focus on the issues which all Australians can support rather than this juvenile typecasting of being either sceptics or true believers.
There is overwhelming sentiment and goodwill in the community for action to protect and sustain the environment for future generations to enjoy some of these great attractions that we have across our nation. There is no question that Gippslanders are no different from other Australians in this regard. We are passionate about our local environment. We have magnificent beaches, forests and local waterways. We are very practical people and we have thousands of people involved as volunteers in groups like Landcare who are getting their hands dirty and doing the practical environmental work that is required despite the cuts in funding by the Rudd government. It was amazing to listen to the Minister for Agriculture, Fisheries and Forestry in this place yesterday shamelessly promoting the 20-year anniversary of Landcare, yet not even referring to the massive cuts in the number of Landcare facilitators across Victoria which have occurred on his watch.
As I mentioned in my previous contribution to the House, the real practical environmentalists are in our regional communities. Farmers and landholders are investing in whole-of-farm plans to reduce nutrient run-off into local streams and undertaking a range of practical works. We have many industries that are interested in technology to clean up their operations. I think the brown coal power industry will obviously be partners in anything that comes out of the legislation before the House today. But there is still a great deal of confusion about climate change and the government’s proposed response with the emissions trading scheme. We do need a proper debate and a fair, open and honest debate in language that people can understand exactly what we are talking about.
I refer to the contributions of other members in relation to this legislation, particularly the member for Werriwa, who pointed out that there will not be just one approach to these very complex issues. I agree wholeheartedly. To use country parlance, I suggest that there is more than one way to skin a cat. There will be a suite of measures required in terms of carbon capture and storage, storing more carbon in the soil and developing all the renewable energy forms, which have general support of the House given the passage of the RET legislation quite recently. Just like the member for Flinders who spoke extensively about a range of other options for sustainably managing the environment, I believe there are many options which need to be fully explored in addition to this carbon capture and storage legislation. We need to be acting responsibly, and in my mind that includes protecting our energy security and our baseload power supply from the Gippsland-Latrobe Valley region and acting in a way that protects jobs in the future for the Gippsland community. I commend the previous speakers and the minister for his interest in the legislation. His attendance in Gippsland earlier this year was much appreciated by the community. I also commend the former minister for the work that he has done in this area. I thank the House.
The honourable member for Gippsland made a speech here and there, not facing up to some of the real problems. I would just like to point out to him that, whereas the Howard government did not do anything, this government has put $2 billion on the table to try to find some solutions. He talked about his own electorate and the significance of his own electorate, but there was nothing about helping to protect and look into the future for the coal and gas industry.
The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2009 propose to amend the Offshore Petroleum Greenhouse Gas Storage Act 2006 and the Offshore Petroleum Greenhouse Gas Storage (Safety Levies) Act 2003. They have been introduced as a result of recommendations from the House of Representatives Standing Committee on Primary Industries and Resources report entitled Down under: Greenhouse gas storage, which was on the review of the draft of the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill. I commend the minister, who is with us, for giving the committee the opportunity to do that work. I think the parliament and the country are well off for that look at the legislation occurring. It is a shame that more of the legislation that comes before the parliament does not get to the committee system. I think we would have better legislation if it did.
During the inquiry the committee looked to ascertain whether the bill established legal certainty for access and property rights for the injection and long-term storage of greenhouse gases in offshore Commonwealth waters, which of course is pretty significant for the Gippsland electorate and the offshore areas of it. I commend the honourable member for Gippsland for taking an interest, but I think he should get totally behind these bills and totally behind the issue of solving the problems of greenhouse gas storage. Eighty per cent of the energy of Australia comes from coal, and we need to make sure that we have the solutions and can take advantage of the opportunities that coal presents our country.
The legislation seeks to provide a regulatory framework and regime that will enable management of GHG injection and storage activities in a manner which will respond to community and industry concerns. It will provide a predictable and transparent scheme to manage the interaction between GHG injection and storage operators with pre-existing and co-existing rights including, but not limited to, those of petroleum and fishing operators, should these come into conflict. It will also provide certainty for investment in injection and storage activities as well as establish a legal framework that provides a model that can be adopted nationally.
The amendments are technical, with some policy changes which streamline requirements, provide clarification or reduce the overall regulatory burden on industry. These changes result from three reviews of different aspects of the offshore petroleum regulatory system which have been conducted by the Department of Resources, Energy and Tourism over the past two years. I must say that I am impressed with the minister’s grasp of the technical side of these bills. It is an area that is very complex.
A number of the changes relate to altered arrangements for pipelines—which, I understand, commence on 1 January 2010. These arrangements will be set out in revised regulations to come into effect next year. They will see pipelines being treated on the same basis as other facilities under the safety regulations. This will see the removal of the pipeline management plans and pipeline safety management plans from regulations. As such, the pipeline safety management plan levy will become a safety case levy. This change in levy arrangements is set out in these bills, with amendments to both the Offshore Petroleum Greenhouse Gas Storage Act 2006 and the Offshore Petroleum Greenhouse Gas Storage (Safety Levies) Act 2003. The removal of consent to operate a pipeline is part of these overall changes and will also take effect from 1 January 2010.
There are several other changes such as providing an expedited consultation process on the granting of access authorities and making the joint authority the decision maker in relation to the declaration of locations and the granting of scientific investigation consents. These are designed to streamline current arrangements. Moving the power to vary coordinates based on the current datum, from regulations into the act, is also to streamline regulatory processes. This should not slow down the decision-making process by making decisions on the nomination of blocks and declaration of location joint authority matters. These amendments create a consistent and agreed approach on what is a key matter in the development of a petroleum title. I understand from discussions that the ‘datum’ consists of the coordinates of the title and they move in a very slow, small way. But over time, and some of these leases go for decades if not more, then the boundaries of the leases change, thus these amendments deal with these changes.
The changes to the greenhouse gas storage provisions of the act are to remove several inconsistencies and ambiguities arising from amendments made in the Senate. These changes are purely technical and make no policy changes to greenhouse gas storage related operations. I believe these particular changes came about after the Senate made some amendments in the legislation’s passage through that place and, in the interests of bipartisanship, amendment (13) just tidies up the language to make the provisions operate more properly. So the change to penalty provisions in schedule 3 of the act is to make sure that offences can be successfully prosecuted. As they stand, the provisions may mean that intent needs to be proved in order for a prosecution to be successful. This is a difficult task for health and safety provisions. The amendments will remove the need to prove intent. Removal of data management plans and changes to the timing notification of a petroleum discovery reduce some of the regulatory burden on industry.
A few of the other amendments are to make processes clearer or provide national consistency. These include ensuring that any occupational health and safety offences that occurred from 1 January 2005 until the act came into force on 1 July 2008 are covered by transitional provisions, that Western Australian petroleum legislation is included in schedule 3 of the Administrative Decisions (Judicial Review) Act 1977 Act and that the maps in the act are updated to show Australia’s new offshore boundaries.
This legislation sets the groundwork for the establishment of a national GHG storage industry in Australia. If these go through successfully with the amendments that tidy the whole thing up, it will allow us to lead the world in the implementation and development of the CCS. A GHG storage industry can only be successful, both commercially and in the mitigation of CO2 emissions, if the technology to capture CO2 is implemented widely. Since the majority of our emissions derive from the coal fired energy generation sector, it is important that this sector begins to make faster headway with regard to capture. It may mean that industries reliant on carbon-intensive energy sources will only remain viable in the long term if they invest in CCS technology. I also think that some of these amendments will help the minister with initiating independent inquiries into operational issues such as the blow-outs that occur within the sector, such as the problem that is occurring in the East Timor Sea with the West Atlas rig, which has had a blow-out. I commend the minister for his efforts to resolve that issue and for his efforts to make sure the environment is affected in the least possible way. I certainly hope that this legislation brings us to a position where we can make sure that we have the powers to investigate and look at the reasons why these issues occur. I believe this legislation will take us into a whole new area of greenhouse gas storage and will encourage investment in the new technology. I commend the bills to the House.
I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009and a related bill, and in particular on the amendments that the government plans to introduce to allow quick and independent inquiries into operational incidents which occur in offshore petroleum facilities. These incidents can lead to disruptions in the supply of energy, to environmental damage and, most significantly for me, to injuries and deaths amongst offshore workers. These amendments will enable thorough investigation of incidents and allow governments, regulators and the oil and gas industry to learn why they happened and how they can be prevented.
This government has done more to deal with issues in terms of offshore petroleum health and safety than its predecessor. My old organisation, the Australian Workers Union, has been involved in the forefront of the fight for health and safety for their members, along with the right to a fair wage and the right to negotiate collectively. Its members, including current national secretary Paul Howes, Victorian secretary Cesar Melhem, Rod Currie, Terry Lee, John Clarence, Dave Healy, ‘Red’ Turner, George Parker, Dennis ‘Thomo’ Thomson, Yossi Berger, Colin Fisher, Jim Ward and Tony McDonald have all spent many years promoting the issue of better safety, which is being partly dealt with in these amendments.
I have seen the devastation and the irreplaceable loss that happens when a person in the prime of life does not return from a day at work. The grief of their family is endless. They will never let a day pass without asking, ‘What if?’ or ‘How could this be allowed to happen nowadays?’ Too often we have seen the technology and the expertise to create safer workplaces but what is lacking is the will. The fight to ensure that workers return home from their shifts on a rig with their health intact is one which relies on strong regulation and cooperation across all parts of the industry. I believe this bill will establish inquiries that will save lives. In Australia in recent times we have seen two incidents at least, the Varanus Island gas explosion in 2008 and the Montara oil field leak, that will require this kind of investigation. The recent joint executive inquiry into the Varanus Island gas explosion continues to be held up, I believe, by legal action. It is clear that the current model does not let us get a complete picture of the matters surrounding this incident.
The Varanus Island explosion thankfully did not cause loss of life but it did cause huge disruptions to the supply of gas in Western Australia. However, we only need to look overseas to see the potential dangers of incidents at offshore facilities. Just after 9 pm on 6 July 1988 in the British North Sea, offshore and onshore health and safety changed forever. After the Piper Alpha disaster, no-one could any longer say that they did not know that productivity too often pushed safety matters into the background. One hundred and sixty-seven offshore workers were killed by a series of explosions that ripped through oil production platforms in the northern sector of the British North Sea. The death toll was aggravated by ineptitude, complacency and a lack of leadership. Emergency lighting failed. Hardly any torches were available to the crew. Each of the lifeboats was located in the same section of the platform which also happened to be inaccessible, and no provision had been made for an alternative escape route to the sea. Most people on that platform gathered at the emergency muster point, the accommodation module, which due to its location above the gas compression module also happened to be one of the areas of the platform most exposed to fire and explosion. The accommodation module, constructed from wood and fibreglass, quickly began to burn. The water deluge system, the platform’s main defence against fire, failed. Two life rafts failed to inflate. The standby safety vessel, a converted fishing boat, had no medical supplies to treat survivors that were pulled from the sea, and the Tharos, Occidental’s state-of-the-art floating fire engine, could not muster sufficient water pressure to reach the flames. Those who ignored the company’s emergency procedures and management instructions and sought their own escape routes actually improved their chances of survival.
Occidental’s senior management had been warned by their own consultants that the platform would not withstand prolonged exposure to high-intensity fire. It was a warning that they chose to ignore after conducting a cost-benefit analysis. Managements on the other platforms connected by the same pipeline chain, the Tartan and the Claymore, declined to shut down production until they had approval for a costly closure of the pipeline from senior management onshore. As a result, the blaze was fed with oil until the order for closure belatedly arrived. The lessons of this tragedy were still not learnt or, if learnt, not acted upon when, in 2005, an incident at the BP Texas City refinery killed 15 workers.
Offshore platforms are intrinsically vulnerable workplaces, and we must never forget that. Minimally, every platform manager ought to be compelled to have a good knowledge of such catastrophes or they simply will be repeated. Each platform must have an effective health and safety committee and a good number of highly trained OH&S trained workers’ representatives on each shift. We need everything we can get if we are to stop another catastrophe.
The recent incidents in Australia have demonstrated that existing investigatory powers are not sufficient. An inquiry for the purposes of determining the operational, human and regulatory factors that contribute to serious incidents or ‘near misses’ would inform regulators and operators. I sincerely hope—and I support the work that is being done at NOPSA—that the age of our offshore helicopter fleet, which services the rigs and carries workforces to and from them, remains uppermost in the minds of our safety regulators. Helicopters, in my experience, are repeat killers in offshore tragedies. The Rudd government intends that the findings of any such commission of inquiry will be made public, subject to the disclosure and privacy provisions of other legislation. This will enable the lessons learnt from the incidents to be considered and understood by as many organisations as possible, both in Australia and overseas.
Following the Beaconsfield tragedy, there was a study of 12 royal commissions into workplace disasters, including offshore disasters, and the research demonstrated that the royal commission findings and commissions of inquiry findings were consistently the same—the problem is that we simply forgot the lessons. So the struggle for safer workplaces is one that never ends. We also need to act to shore up the gains made in the past and improve safety in the future. As I have said, it is often a struggle of memory against forgetting—remembering the lessons learnt and the lives lost. It is a struggle against the slow spread of complacency and the temptation to take shortcuts in this most important and wonderful of industries. I believe that, in a world where we can beam pictures back to earth from the surface of Mars, create machines scarcely bigger than atoms and unlock the mysteries of the DNA code, it should not be too much of a challenge to improve safety in the offshore hydrocarbon industry.
This bill and the amendments being proposed, with the ongoing proactive leadership of our Minister for Resources and Energy, are a step towards a more sensible and effective way of responding to offshore incidents, and I commend it to the House.
in reply—Firstly, I would like to express my appreciation of members on both sides of the House for their constructive contributions to the debate on this bill, the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009, which is highly technical in nature. As members have detailed to the House, the bill seeks to make minor policy and technical amendments and, importantly, reduce the regulatory burden on the offshore petroleum industry—a key sector of the Australian economy—as well as streamline and clarify administrative processes. The amendments also remove ambiguities and make some minor technical corrections. Before going to some of these issues, I would like to touch on a range of issues discussed by members during their contributions to the debate.
In this House, unlike the other house, there is broad support for carbon capture and storage. That is because I think it is appreciated that, whilst there are differences between the government and the opposition on how we put a price on carbon in place, it is understood that technology created the problem and it will be technology that provides the solution. Carbon capture and storage is the intent of the legislation before the House. It clearly represents a major challenge in the same way in which other parts of the government’s clean energy strategy represent a major challenge.
The government is not putting all its eggs in one basket. We have to invest in a wide-ranging basket of technological breakthroughs for the purposes of moving to a low-emission economy. Central to that is not only carbon capture and storage, which is part of our broad-ranging clean energy strategy, but also, for example, our Solar Flagships program aimed at achieving potentially the biggest investment in solar energy in the world. Clearly, our objective through that program and also the introduction of a renewable energy target side by side with our renewable energy program is to make a breakthrough on what is best described as reliable baseload energy. That effectively means, in the renewables sector: solar thermal, potentially geothermal, perhaps biomass in some areas or, alternatively, a breakthrough on wave power.
So I simply say that from the Australian government’s point of view we understand that there is a huge challenge ahead of the Australian community, but it is also our responsibility as a well-endowed community to invest in solving not only our own problems but also the problems of the global community because we are a major exporter of coal. I therefore complement the Prime Minister for the establishment of the Global Carbon Capture and Storage Institute, which is well supported by a range of nations and, importantly, well supported by industry.
The bill before the House to which I will seek to move amendments is about putting in place a regulatory framework that creates an opportunity for investment in carbon capture and storage in Australia. There was some criticism from the opposition about the cost of these programs and that potentially more money is required. Of course we would all love to be able to devote more money to technological change, but I remind the House that we are in the middle of a global financial crisis. Whilst the clean energy strategy and the potential investment in technology is part of our response to that, so was our requirement to assist in stimulating the economy through support for people on fixed incomes and families and our requirement to invest in infrastructure, including schools programs and road and rail networks around Australia. At least I can say that there is now a real financial contribution by government, in association with the private sector, with respect to the need to take this technology debate forward.
Putting that aside, I acknowledge the good support for the bill and the amendments, which I have discussed with the member for Groom, from the opposition’s perspective, as the opposition’s shadow minister. I also note the supporting remarks by the member for Hasluck and the support for the government’s action in releasing a retention lease discussion paper, which is underlined by the concept of ‘use it or lose it’, which gives a very strong message to some international petroleum companies that we are not going to have our resources warehoused whilst they develop resources in other places throughout the global community.
The member for O’Connor interestingly raised a question going to the safety provisions concerning negligence and their reference to ‘absolute liability’. Can I say in response to the member for O’Connor, who has always had a detailed interest in the petroleum industry, that the bill provides that the fault element that applies to the conduct and result elements of these offence provisions is negligence. Further, these provisions provide a regulatory regime that is enforceable and is consistent with fault elements of the Occupational Health and Safety Act 1991. The penalties set out for these offences do not change under these amendments and are themselves consistent with the Occupational Health and Safety Act and other Commonwealth legislation such as the Therapeutic Goods Act 1989. I ask him to consider that response because he did raise a genuine issue.
There was good support for the thrust of the legislation from the members for Werriwa, Flinders, Solomon, Canning and Corangamite. I also acknowledge the support for the bill from the member for Gippsland. I had the opportunity recently to attend the 40th anniversary of the petroleum industry in the Latrobe Valley, a highly successful industry with a terrific safety record.
In terms of the Latrobe Valley, if we make the necessary breakthrough in the development of CCS from a technological point of view—and I know this is an issue of concern to the community at the moment—the Latrobe Valley could potentially have a very, very bright future. The reason is that considering the issue of carbon capture and storage—and the government recently released potential leases for storage offshore in the Bass Strait—goes to the proximity of the Latrobe Valley to those storage areas offshore and the shorter distances for the purposes of the construction of the necessary pipeline infrastructure. One should remember that, in terms of potential storage, you also need to put in place necessary investment in pipeline infrastructure. The Latrobe Valley, whilst it represents a significant opportunity from a brown coal point of view, is also well placed in its proximity to storage areas to have a very bright future, provided that we make the necessary breakthrough on carbon capture and storage, and I am confident that we will.
I also listened with interest to the support for the legislation of the member for Lyons, who is Chair of the House of Representatives Standing Committee on Primary Industries and Resources. Not only do I appreciate his support; I also well understand his desire from a committee point of view for ministers to refer further bills to the House committee structure for proper consideration and amendment. I have a view that all too often the House has deferred to the Senate in the consideration of legislation. It is time that we again seize our responsibilities in terms of real work through our own committee structure not only on the legislation that is currently before the House but also on a range of other legislative proposals.
The member for Maribyrnong correctly raised a detailed consideration of the importance of occupational health and safety in this industry not only in Australia but also internationally. I am pleased to say that historically we have had an extremely good health and safety regime in Australia, but one can never be complacent. That will take me in due course to some amendments to this bill before the House later today.
I also give notice that during the committee stage I will be introducing government amendments to the bill which will address recently identified oversights in the greenhouse gas storage provisions of the act. The purpose of the amendments is to correct an oversight in the provisions establishing a process for enabling the responsible Commonwealth minister to give a direction to the designated authority with respect to the exercise of the designated authority’s powers to approve and register transfers of and dealings in petroleum titles.
I also give notice that during the committee stage—and I must say that I have discussed these with the shadow minister for resources and energy, the member for Groom, and I appreciate the opposition’s support—I will be introducing government amendments to the bill which will provide for a standing power enabling the responsible minister to appoint a commissioner to undertake a commission of inquiry into the operational, human and regulatory matters specific or incidental to a significant offshore petroleum or greenhouse gas storage incident. This power is limited to where a significant offshore petroleum or greenhouse gas incident has occurred and where it would be appropriate to consider operational, human and/or regulatory issues related to the incident.
The purpose of these amendments is to correct an administrative gap in the provisions of the act for the investigation of these matters. Recent incidents involving uncontrolled release of hydrocarbons jeopardising human and environmental health and essential infrastructure have demonstrated that the existing investigatory powers are insufficient. An inquiry for the purpose of determining operational, human and regulatory factors would inform regulators and operators of causal factors contributing to significant incidents relating to offshore oil and gas exploration, development, production, greenhouse gas storage and/or decommissioning. This power will enable the government and industry to learn from incidents and be better prepared to prevent similar incidents occurring in the future.
I thank members for their support and their thoughtful contributions to what is a complex debate. In doing so, I commend this bill to the House.
Question agreed to.
Bill read a second time.
Bill—by leave—taken as a whole.
As foreshadowed in my remarks, I present a supplementary explanatory memorandum and a further supplementary explanatory memorandum to the bill. I seek leave of the Main Committee to move government amendments (1) and (2) as circulated on sheet BE207 and government amendment (1) as circulated on sheet BE225, together.
Leave granted.
I express my appreciation to the House for its cooperation and I move:
(1) Clause 2, page 2 (at the end of the table), add:
5. Schedule 1, Part 15 | Immediately after the commencement of Part 1 of Schedule 4 to the Offshore Petroleum Amendment (Greenhouse Gas Storage) Act 2008. | 22 November 2008 |
(2) Schedule 1, page 28 (after line 3), at the end of the Schedule, add:
Part 15 Registration of transfers of, and dealings in, petroleum titles
Offshore Petroleum and Greenhouse Gas Storage Act 2006
69 Section 7
Insert:
referable title, when used in Chapter 4, has the meaning given by section 467.
70 Section 467
Insert:
referable title: a title over a block or blocks is a referable title if the block, or any of the blocks, is the subject of:
(a) a greenhouse gas assessment permit; or
(b) a greenhouse gas holding lease; or
(c) a greenhouse gas injection licence.
71 Paragraph 474(c)
Before “2 copies”, insert “if the title is a referable title—”.
72 At the end of section 474
Add:
; or (d) if the title is not a referable title—a copy of each of the following:
(i) the application;
(ii) the instrument referred to in paragraph (a);
(iii) the document referred to in paragraph (b).
73 At the end of subsection 475(1)
Add “of a referable title”.
74 Subsection 478(6)
After “under subsection (2)”, insert “in relation to the transfer of a referable title”.
75 Subsection 478(7)
Omit “The responsible Commonwealth Minister”, substitute “If the application is for approval of a transfer of a referable title, the responsible Commonwealth Minister”.
76 Subsection 489(4)
Omit “An application for approval of a dealing”, substitute “If a dealing relates to a referable title, an application for approval of the dealing”.
77 At the end of paragraphs 489(4)(a) and (b)
Add “and”.
78 After subsection 489(4)
Insert:
(4A) If a dealing does not relate to a referable title, an application for approval of the dealing must be accompanied by:
(a) a copy of the application; and
(b) a copy, or an additional copy, of the instrument referred to in subsection (1); and
(c) a copy of any supplementary instrument.
79 After paragraph 489(5)(a)
Insert:
(aa) the dealing relates to a referable title; and
80 At the end of section 489
Add:
(6) If:
(a) a dealing (including a dealing referred to in section 468) creates a charge over some or all of the assets of a body corporate; and
(b) the dealing does not relate to a referable title; and
(c) a person applies for approval of the dealing; and
(d) the application is accompanied by 2 copies of each document required to be lodged with the Australian Securities and Investments Commission under section 263 of the Corporations Act 2001 in relation to the creation of the charge;
the person is taken to have complied with:
(e) subsection (1); and
(f) subsection (4A) in so far as that subsection requires a copy, or an additional copy, of the instrument referred to in subsection (1) to accompany the application.
81 Subsection 490(1)
After “particular”, insert “referable”.
82 Subsection 493(6)
Omit “The Designated Authority must not”, substitute “If that title is a referable title, the Designated Authority must not”.
83 Subsection 493(7)
Omit “The responsible Commonwealth Minister”, substitute “If that title is a referable title, the responsible Commonwealth Minister”.
84 Subsection 499(4)
Omit “A provisional application for approval of a dealing”, substitute “If a dealing relates to a referable title, a provisional application for approval of the dealing”.
85 After subsection 499(4)
Insert:
(4A) If a dealing does not relate to a referable title, a provisional application for approval of the dealing must be accompanied by:
(a) a copy of the provisional application; and
(b) a copy, or an additional copy, of the instrument referred to in subsection (1); and
(c) a copy of any supplementary instrument.
86 After paragraph 499(5)(a)
Insert:
(aa) the dealing relates to a referable title; and
87 At the end of section 499
Add:
(6) If:
(a) a dealing (including a dealing referred to in section 468) creates a charge over some or all of the assets of a body corporate; and
(b) the dealing does not relate to a referable title; and
(c) a person makes a provisional application for approval of the dealing; and
(d) the provisional application is accompanied by 2 copies of each document required to be lodged with the Australian Securities and Investments Commission under section 263 of the Corporations Act 2001 in relation to the creation of the charge;
the person is taken to have complied with:
(e) subsection (1); and
(f) subsection (4A) in so far as that subsection requires a copy, or an additional copy, of the instrument referred to in subsection (1) to accompany the provisional application.
88 Subsection 500(1)
After “particular”, insert “referable”.
(1) Schedule 1, page 26 (after line 22), after Part 13, insert:
Part 13A—Inquiries into significant offshore incidents
Division 1—Amendment of the Offshore Petroleum and Greenhouse Gas Storage Act 2006
Offshore Petroleum and Greenhouse Gas Storage Act 2006
62A Section 7
Insert:
Commissioner means a person appointed under section 780A.
62B Section 7
Insert:
Commission of inquiry means an inquiry conducted, or to be conducted, by a person appointed under section 780A.
62C Section 7
Insert:
Royal Commission has the same meaning as in the Royal Commissions Act 1902.
62D After Part 9.10
Insert:
Part 9.10A—Inquiries into significant offshore incidents
780A Appointment of Commissioner
(1) The responsible Commonwealth Minister may, in writing, appoint a person to:
(a) conduct a Commission of inquiry into matters specified in the instrument of appointment relating to any or all of the following:
(i) a significant offshore petroleum incident;
(ii) any matters incidental to a significant offshore petroleum incident;
(iii) a significant offshore greenhouse gas incident;
(iv) any matters incidental to a significant offshore greenhouse gas incident; and
(b) report to the responsible Commonwealth Minister on the matters (including any recommendations relating to the matters) on or before a day specified in the instrument of appointment.
(2) The appointment takes effect on the day of effect specified in the instrument of appointment. The day of effect must not be earlier than the day on which the instrument is made.
(3) A copy of the instrument must be published in the Gazette.
(4) The Commissioner’s report is not a legislative instrument.
(5) For the purposes of this section, a significant offshore petroleum incident is a significant incident or occurrence that relates to any or all of the following operations in an offshore area:
(a) petroleum exploration operations;
(b) petroleum recovery operations;
(c) operations relating to the processing or storage of petroleum;
(d) operations relating to the preparation of petroleum for transport;
(e) operations connected with the construction or operation of a pipeline;
(f) operations relating to the decommissioning or removal of structures, equipment or other items of property that have been brought into an offshore area for or in connection with any of the operations mentioned in paragraph (a), (b), (c), (d) or (e).
(6) Paragraph (5)(f) does not, by implication, limit paragraph (5)(a), (b), (c), (d) or (e).
(7) For the purposes of this section, a significant offshore greenhouse gas incident is a significant incident or occurrence that relates to any or all of the following operations in an offshore area:
(a) operations relating to exploration for a potential greenhouse gas storage formation or a potential greenhouse gas injection site;
(b) operations relating to the injection of a greenhouse gas substance into the seabed or subsoil;
(c) operations relating to the storage of a greenhouse gas substance in the seabed or subsoil;
(d) operations relating to the processing, compression or pre-injection storage of a greenhouse gas substance;
(e) operations relating to the preparation of a greenhouse gas substance for transport;
(f) operations relating to the decommissioning or removal of structures, equipment or other items of property that have been brought into an offshore area for or in connection with any of the operations mentioned in paragraph (a), (b), (c), (d) or (e).
(8) Paragraph (7)(f) does not, by implication, limit paragraph (7)(a), (b), (c), (d) or (e).
(9) For the purposes of this section, a significant incident or occurrence includes circumstances in which a significant incident or occurrence nearly happened.
780B Hearings
(1) A Commissioner may hold hearings for the purposes of a Commission of inquiry.
(2) The hearings may be held at such places, whether within or outside Australia, as the Commissioner determines.
(3) Subject to this Act, the procedure at a hearing is to be such as the Commissioner determines.
780C Commissioner not bound by the rules of evidence
A Commissioner is not bound by the rules of evidence and may inform himself or herself on any matter in such manner as he or she thinks fit.
780D Departmental officers
(1) The Secretary of the Department may enter into an arrangement with the Commissioner of a Commission of inquiry to make APS employees in the Department available, for a period not exceeding the duration of the Commission of inquiry, to assist with the conduct of the Commission of inquiry.
(2) In performing functions and exercising powers to the extent reasonably necessary to assist with the conduct of a Commission of inquiry, an APS employee made available under such an arrangement:
(a) is subject to the directions of the Commissioner; and
(b) is not subject to the directions of the Secretary of the Department.
780E Application of the Royal Commissions Act 1902
(1) Subject to this section, the Royal Commissions Act 1902, other than sections 4 and 5, applies in relation to a Commission of inquiry, and to the Commissioner conducting it, as if:
(a) the Commission of inquiry were a Royal Commission; and
(b) the Commissioner were a member of a Royal Commission; and
(c) that Act bound the Crown in each of its capacities.
(2) This section does not make the Crown liable to be prosecuted for an offence.
(3) The regulations may, for the purposes of the application of section 9 of the Royal Commissions Act 1902 in accordance with subsection (1) of this section, provide for or specify matters of the kind referred to in subsection 9(2) of that Act.
(4) Section 9 of the Royal Commissions Act 1902, in its application in accordance with subsection (1) of this section, has effect as if those regulations were regulations made for the purposes of subsection 9(2) of that Act.
(5) Sections 10 and 15 of the Royal Commissions Act 1902, in their application in accordance with subsection (1) of this section, have effect as if references in those sections to offences against that Act included references to such offences as apply in accordance with subsection (1) of this section.
780F Conferral of inspection powers
(1) The Secretary of the Department may, in writing, determine that a specified person, or a person included in a specified class of persons, who is engaged by the Commonwealth to assist with the conduct of a Commission of inquiry has all the functions and powers of, or specified functions and/or powers of:
(a) a petroleum project inspector (other than a Greater Sunrise visiting inspector); and
(b) a Greater Sunrise visiting inspector; and
(c) a greenhouse gas project inspector; and
(d) an OHS inspector;
under this Act and the regulations.
(2) The person is taken, for the purposes of this Act and the regulations, to be:
(a) a petroleum project inspector (other than a Greater Sunrise visiting inspector); or
(b) a Greater Sunrise visiting inspector; or
(c) a greenhouse gas project inspector; or
(d) an OHS inspector;
as the case may be, in connection with the performance of those functions and the exercise of those powers.
(3) In performing those functions and exercising those powers, the person:
(a) is subject to the directions of the Commissioner; and
(b) is not subject to the directions of:
(i) the Secretary of the Department; or
(ii) a Designated Authority; or
(iii) the responsible Commonwealth Minister; or
(iv) the Safety Authority.
Identity cards
(4) The Secretary of the Department must issue an identity card to the person. The identity card must:
(a) specify the Commission of inquiry concerned; and
(b) contain a recent photograph of the person.
(5) A person commits an offence if:
(a) the person has been issued with an identity card; and
(b) the person ceases to be subject to a determination under subsection (1); and
(c) the person does not immediately return the identity card to:
(i) the Secretary of the Department; or
(ii) if the Secretary of the Department, by written notice given to the person, specifies another person to whom the card is to be returned—that other person.
Penalty: 5 penalty units.
(6) Subsection (5) does not apply if the identity card was lost or destroyed.
Note: The defendant bears an evidential burden in relation to the matter in this subsection—see subsection 13.3(3) of the Criminal Code.
(7) A person who is subject to a determination under subsection (1) must carry the identity card at all times when exercising powers, or performing functions, under this Act or the regulations as:
(a) a petroleum project inspector (other than a Greater Sunrise visiting inspector); or
(b) a Greater Sunrise visiting inspector; or
(c) a greenhouse gas project inspector; or
(d) an OHS inspector.
(8) Subsections 600(6), 606(5) and 681(5) do not apply to a person who is subject to a determination under subsection (1) if the person is exercising powers, or performing functions, under this Act or the regulations as:
(a) a petroleum project inspector (other than a Greater Sunrise visiting inspector); or
(b) a Greater Sunrise visiting inspector; or
(c) a greenhouse gas project inspector; or
(d) an OHS inspector.
(9) This Act has effect, in relation to a person who is subject to a determination under subsection (1), as if the identity card were the identity card of each of the following:
(a) a petroleum project inspector (other than a Greater Sunrise visiting inspector);
(b) a Greater Sunrise visiting inspector;
(c) a greenhouse gas project inspector;
(d) an OHS inspector.
(10) A determination made under subsection (1) is not a legislative instrument.
780G Application of laws relating to disclosure
A law of the Commonwealth that relates to the disclosure of information applies in relation to disclosure of information to a Commission of inquiry in the same way that it would apply to disclosure of the information to a Royal Commission.
Division 2—Other amendments
Archives Act 1983
62E Subsection 3(1) (definition of Commission of inquiry )
Repeal the definition, substitute:
Commission of inquiry means:
(a) the Commission of inquiry within the meaning of the Quarantine Act 1908; or
(b) a Commission of inquiry within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.
62F Paragraph 22(1)(b)
Omit “the Commission of inquiry”, substitute “a Commission of inquiry”.
62G Subsections 22(2) and (4)
Omit “the Commission of inquiry”, substitute “a Commission of inquiry”.
62H Paragraph 22(5)(b)
Repeal the paragraph, substitute:
(b) the Minister administering the Quarantine Act 1908 is taken to be the responsible Minister in relation to the records of the Commission of inquiry within the meaning of that Act; and
(c) the Minister administering the Offshore Petroleum and Greenhouse Gas Storage Act 2006 is taken to be the responsible Minister in relation to the records of a Commission of inquiry within the meaning of that Act.
Freedom of Information Act 1982
62J Subsection 4(1) (definition of Commission of inquiry)
Repeal the definition, substitute:
Commission of inquiry means:
(a) the Commission of inquiry within the meaning of the Quarantine Act 1908; or
(b) a Commission of inquiry within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.
62K Subsection 4(1) (subparagraph (a)(vii) of the definition of prescribed authority)
Omit “the Commission of inquiry”, substitute “a Commission of inquiry”.
62L Paragraph 13(3)(b)
Repeal the paragraph, substitute:
(b) records of the Commission of inquiry (within the meaning of the Quarantine Act 1908) that are in the custody of the Australian Archives are, for the purposes of this Act, taken to be documents of an agency and to be in the possession of the Department administered by the Minister administering the Quarantine Act 1908; and
(c) records of a Commission of inquiry (within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006) that are in the custody of the Australian Archives are, for the purposes of this Act, taken to be documents of an agency and to be in the possession of the Department administered by the Minister administering the Offshore Petroleum and Greenhouse Gas Storage Act 2006.
Privacy Act 1988
62M Subsection 6(1) (definition of Commission of inquiry)
Repeal the definition, substitute:
Commission of inquiry means:
(a) the Commission of inquiry within the meaning of the Quarantine Act 1908; or
(b) a Commission of inquiry within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.
62N Subparagraph 7(1)(a)(vi)
Omit “the Commission of inquiry”, substitute “a Commission of inquiry”.
These government amendments, dealing firstly with the supplementary explanatory memorandum, add to the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009, a new part 15 which amends the greenhouse gas provisions of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. The amendments provide for approval and registration of transfers of and dealings in petroleum leases. The affected parts of the act are part 4.3, transfer of titles, part 4.6, dealings relating to existing titles and part 4.7, dealings in future interests.
The purpose of the amendments is to correct an oversight in the provisions of the existing legislation that establish a process for enabling the responsible Commonwealth minister to give a direction to the designated authority—this in respect of the designated authority’s powers to approve and register transfers of and dealings in petroleum titles. The error I refer to was the failure to limit the class of petroleum titles to which the new process was to apply. The greenhouse gas amendments made by the Offshore Petroleum and Greenhouse Gas Storage Act 2008 applied the process to all petroleum titles, whereas the intention was that it would apply only to petroleum titles which had a specified geographical relationship to an existing greenhouse gas title. These amendments therefore, firstly, define the class of petroleum titles to which the process applies; secondly, confine the provisions which establish the process to transfers of and dealings in petroleum titles of that class; and, thirdly, reduce the number of copies required to be lodged with other applications. The amendments will remove an unnecessary and unintended regulatory burden on industry and will remove unnecessary administrative work for officials in the states and in the Northern Territory and the Commonwealth.
I go to the further supplementary amendment to the bill. These amendments were foreshadowed in my ministerial statement in the House on Monday and are being provided to provide for a broad-ranging major incident investigation power. In my ministerial statement I also advised that, depending on the passage of these amendments, I intend to announce arrangements for an investigation of the Montara well blow-out incident in the Timor Sea. The need for both a review of regulatory investigatory powers and consideration of a properly resourced and empowered independent safety investigation capacity was identified by Mr Kym Bills and Mr David Agostini in the June 2009 report of their inquiry into offshore petroleum and safety regulation. This report was conducted following a gas explosion referred to by the member for Maribyrnong on Varanus Island last year, which led to considerable industry and community disruption in the state of Western Australia for many months. I consider that we as a community are very lucky that there was no loss of life or serious environmental damage, but the accident did seriously impair the reliable supply of energy to the Western Australian economy with a loss of 30 per cent of gas at the worst possible time.
Therefore, the Bills-Agostini report was released at the meeting of the Ministerial Council On Mineral and Petroleum Resources held in Darwin on 9 July this year. The said ministerial council has undertaken to consult with the industry and respond to the detailed findings and recommendations of the inquiry by the end of November 2009, with a view to introducing appropriate legislative amendments in early 2010. I am determined that the government meet that commitment.
Whilst this is the first well blow-out—that is, the Montara well blow-out—in offshore Australia (Extension of time granted) since 1984 and around 1,500 wells have been drilled safely over the last 25 years, there is no room for complacency. The oil and gas industry is one of the engine rooms of growth in the Australian economy and it is critical to providing energy security for the nation. It is also an industry that can be hazardous to people and the environment when things go wrong. That is why our industry standards, practices, regulations, operators and regulators must be world class. There is no room for complacency, despite our proud record to date. The Australian community rightly expects no less from all of us.
As I said in my closing remarks to the main discussion of the bill, these amendments provide for a standing power enabling the responsible minister to appoint a commissioner to undertake a commission of inquiry into the operational, human and regulatory matters specific or incidental to a significant offshore petroleum or greenhouse gas storage incident. These powers are potentially going to become more and more important because I consider that, in a very short period, the industry will double and then treble in size as a result of major investment in the industry in Australia. For those reasons, the power is also appropriately limited to where a significant offshore petroleum or greenhouse gas incident has occurred and where it would be appropriate to consider operational, human and/or regulatory issues related to that incident.
The purpose of the amendments is to correct an administrative gap in the provisions of the act for the investigation of these matters. Recent incidents involving uncontrolled release of hydrocarbons, jeopardising human and environmental health and essential infrastructure, have demonstrated beyond any doubt that the existing investigatory powers are insufficient. An inquiry for the purpose of determining operational, human and regulatory factors would inform, and appropriately so, regulators and operators of causal factors contributing to significant incidents relating to offshore oil and gas exploration, development and production, and greenhouse gas storage and/or decommissioning.
In conclusion, this power will enable the government and industry to learn from incidents and be better prepared to prevent similar incidents from occurring in the future. I extend my appreciation to the opposition for the manner in which they have engaged in constructive discussion as to the nature of the bill before the House, including the amendments, especially the amendments going to the investigatory powers of the government, over recent days. I commend the bill and the amendments to the House. They are exceptionally important in terms of health and safety for the Australian workforce, but they are also central to Australia’s economic future because the petroleum industry is going to grow in significance.
Question agreed to.
Clause, as amended, agreed to.
Bill, as amended, agreed to.
Ordered that the bill be reported to the House with amendments.
Debate resumed from 19 March, on motion by Mr Martin Ferguson:
That this bill be now read a second time.
Question agreed to.
Bill read a second time.
Ordered that the bill be reported to the House without amendment.
Debate resumed from 24 June, on motion by Mrs Elliot:
That this bill be now read a second time.
The National Health Security Amendment Bill 2009will amend the National Health Security Act 2007 to widen controls over the security of biological agents that could be used as weapons, agents known as security sensitive biological agents or SSBAs. It will enable the Minister for Health and Ageing to respond immediately to secure public health and safety in the event of an SSBA related disease outbreak. It will establish new controls on the handling of biological agents and the responsibilities of those who do handle them by extending the provisions of the legislation to suspected security sensitive biological agents, requiring those dealing with material that is not known to be a dangerous agent but is suspected of being dangerous to treat as if it were an SSBA. Additionally, inspectors involved in monitoring entities and facilities dealing with such biological agents will be given search and seizure powers by these amendments.
The National Health Security Act, passed by parliament in 2007 under the previous coalition government, was the culmination of lengthy consultations and negotiations between the Commonwealth and state governments dating back to 2002. After fatal anthrax attacks in the United States and subsequent white powder hoaxes in Australia, the Council of Australian Governments agreed to review the security of hazardous materials including harmful biological materials. A mandatory national regulatory system was decided upon as the most effective means of minimising the security risks posed by SSBAs. The phased implementation process was agreed and, after legislation was passed in 2007, the first regulation of tier 1 biological agents came into effect at the end of January this year. Security sensitive agents listed on tier 1 include anthrax, botulinum toxin, Ebola virus, foot and mouth disease and ricin, amongst others. Regulation of tier 2 agents is due to come into effect at the end of January 2010. These security sensitive biological agents, the likes of yellow fever virus, cholera and typhoid, are considered less likely to be a threat to Australia.
The amendments to the legislation now before the House are a result of consultations between government and entities that deal with security sensitive biological agents over the 18-month period between the passage of the national health security legislation through the parliament and the introduction of the tier 1 regulations this year. In government, the coalition delivered the National Health Security Act as part of our commitment to enhancing Australia’s capability to protect the health of the nation and to respond to naturally occurring epidemics or to terrorist attacks involving chemical, biological or radiological agents. At the time, it was recognised that further measures would be needed to enable national responses to health emergencies and mass casualty situations.
These amendments respond to some of those difficulties. They will empower the minister to respond immediately to an SSBA related disease outbreak. The minister will be empowered to relax or suspend some or all of the regulatory requirements relating to such dangerous biological agents. The minister will be able to impose new conditions to ensure protection of public health and safety and will be able to take action by legislative instrument which can take effect immediately and be varied or revoked to suit rapidly changing circumstances. It will not be the subject of the usual provisions of the Legislative Instruments Act.
The opposition notes that this does raise some concern about parliamentary oversight of decisions that could be critical not just to the situation unfolding but to the nation as a whole. The Senate Standing Committee for the Scrutiny of Bills has noted this situation and asked the minister to advise how the parliament can scrutinise any emergency arrangements put in place. The committee has also noted that these amendments could have the effect of altering the obligations of an entity without notice or without an opportunity for review and, again, has asked that the minister provide advice on the reasons for these changes.
It should be noted that entities involved with or representing those that handle security sensitive material have voiced no concerns about the provisions of this legislation. The minister’s responses to these questions are expected to be tabled in the Senate today and we look forward to scrutiny of that response. While the legislation provides for immediate action, the fact that the action is pursued via the means of a legislative instrument does allow for parliamentary scrutiny; albeit, in these circumstances, post the event. Neither the act nor the bill makes specific reference to the legislative instruments not being disallowable, and the instruments do not fall within the types of instruments that are not disallowable under the Legislative Instruments Act 2003. On the basis that legislative instruments made by the minister under this legislation would be disallowable, we provide our support to that arrangement.
What must be kept in mind are the circumstances in which these powers would come into play; that is, they would involve a serious threat to the nation requiring an immediate response. The coalition notes that the legislation does provide certain protections. The minister may only make a legislative instrument under this legislation if satisfied on two key matters: firstly, that there is a threat involving such an agent to the health or safety of the public, the economy or the environment; and secondly, that the making of the legislative instrument would help to reduce that threat.
Additionally, the minister must consider relevant expert advice before making a legislative instrument to deal with an SSBA threat. That advice must come from the Chief Medical Officer, the Commonwealth Chief Veterinary Officer and another expert with scientific or technical knowledge of security-sensitive biological agents. And the minister must only act after taking advice from the Secretary of the Department of Health and Ageing that the legislative instrument would help in reducing the threat posed by SSBAs to the public, the economy or the environment.
The government argues that the extreme nature of a threat posed by an SSBA-related incident warrants delegation of legislative power to ensure an immediate response can be made to an emergency disease situation. Commonsense would acknowledge that in the circumstances of a biological threat to our country or any part of it, the government must be able to use all means at its disposal to negate the threat. On that basis, the coalition will support the legislation.
I rise to speak on the National Health Security Amendment Bill 2009.Firstly, to do so, I just want to take you back to 1995 and one of the movies that you might have been watching at the time—if you had time to watch movies. Outbreak was a movie that starred Dustin Hoffmann, Rene Russo, Morgan Freeman, Cuba Gooding Jr, Patrick Dempsey, and even Donald Sutherland and Kevin Spacey. I clearly remember the opening scene because it was an interesting way for a Hollywood action film—which is basically what it was—to show something happening when there was actually nothing happening.
The opening scene started with the camera following a virus through the air, up through an air vent, into a cinema and eventually you see someone coughing when they catch the virus. It is a hard thing for Hollywood to show nothing happening. It is sort of like showing paint drying or the National Party embracing climate change. It is hard to see anything happening. But this movie showed it. They subtly introduced the idea of a fictional Ebola-like virus called Motaba and then showed how the military and civilian agencies react to containing its spread.
I will now move away from Hollywood to the legislation before the chamber: a bill to amend the NHS Act to enhance Australia’s ability to secure certain biological agents that could be used as weapons. I am thankful for this legislation because it has added to my collection of acronyms. I will call security sensitive biological agents SSBAs so your collection of acronyms is expanded as well. They are divided into two tiers: tier one agents obviously pose a greater risk, and tier two agents are rated as less likely to pose a security risk. It is a particularly horrible list. It starts with anthrax and goes on to Botulinum toxin—I am sure the member for Banks is not familiar with this Botulinum toxin—which is the most lethal toxic protein. However, when it is purified you can use it as Botox. And I am sure the member for Banks is not familiar with that! There is the Ebola virus, the foot and mouth disease virus, Ricin—a derivative of which, known as sarin, was used on the Tokyo subway by the Aum cult and killed 12 people. Ricin is 500 times stronger than cobra venom. There is also SARS. Smallpox claimed up to 500 million lives in the last century. In 1947, the Soviet Union established a smallpox weapons factory. These things have been around—and on our minds—for the last century or so. They are significant. The plague has taken 200 million lives since the sixth century, having peaked in the 1300s. All school kids would have studied the times when fleas on rats spread along the trade routes, and so the plague struck. More recently, in 1940, the Japanese used it in China and dropped bombs containing fleas. I am not sure how it worked out, but these diseases have been used as weapons. To name but a few, tier two agents include things like African swine fever, sheep pox and goat pox, botulism, lumpy skin disease virus—which I do not know much about, but it does not sound very pleasant—salmonella, other types of cholera, and yellow fever.
The regulatory scheme that the government is proposing for SSBAs currently includes stringent requirements relating to notification of the types and locations of SSBAs, along with standards that must be met by organisations—such as universities and labs—that handle SSBAs. Over the past year and a half, the government has worked closely with these organisations and other experts to ensure a smooth implementation of this regulatory scheme. When you see that list, you understand why. A number of areas have been highlighted where improvements to the scheme might be made, and we have responded accordingly. The proposed amendments enable the Minister for Health and Ageing to respond immediately and appropriately to the challenge of safeguarding public health and safety in the unlikely event of an SSBA related disease outbreak. The proposed changes enable the suspension of certain existing regulatory requirements and the imposition of new conditions to ensure that adequate controls are maintained. In the movie Outbreak you see how a government could overreact in such circumstances. In Australia it is important that we get the processes and regulations right.
The amendments also ensure that the minister has access to all relevant information about how to deal with an SSBA—the right sort of technical expertise, advice from the chief veterinary officer—coming from Queensland, we have seen how important that is with the recent Hendra virus outbreak—the chief medical officer et cetera. The amendments will also extend reporting controls to biological agents suspected to be SSBAs. This measure will clarify the obligations of entities at the early stage when they are handling a biological agent and, after having performed all the usual testing procedures for that biological agent, there is a positive presumptive indication for SSBA. The new provisions will require an entity to report its handlings and transfers of suspected SSBAs. It also requires entities to comply with all the standards for suspected SSBAs. Thirdly, the bill will enhance the investigation powers available under the NHS Act, which means that inspectors can monitor warrants, including seizing evidential material, doing so appropriately and storing material appropriately. The new measure also introduces defence related warrants that provide powers to search premises and seize evidential material.
As I said, we do not like to think about these diseases being used for improper purposes, but unfortunately there are some people out there in the world who would consider it. In fact, when you go through the list of countries that have dabbled in using these agents for warfare, it is quite scary. Importantly, this increase in investigation powers provided to authorities in Australia is complemented by necessary safeguards to ensure that there is a proper use of those powers. This includes safeguards such as authorisation by a magistrate and provisions governing return of seized property and compensation for any damage.
This bill also makes some less significant but equally important amendments to improve the operation of the legislation and provide greater clarity for those people who have to work with SSBAs. I am particularly interested in this because in my electorate of Moreton, at Coopers Plains, Queensland Health Scientific Services—which used to be called the John Tonge Centre—will be at the front line should anything happen such as an outbreak of SSBAs. These changes relate to requirements to report certain events involving SSBAs to local police, any minor changes to annual and biannual reporting of information recorded on the national register, new capacity to cancel the registration of an entity or its facility if they are no longer handling SSBAs, and amendments to the definition of biological agents so that bacteria and viruses that do not have the capacity to spread rapidly but may still be highly dangerous are captured. The proposed changes have been the subject of extensive consultation with relevant experts, including entities working with SSBAs, intelligence—which is very important, obviously—security agencies, the public, animal health laboratories, and state and government agencies. I commend the legislation to the House.
I rise to speak on the National Health Security Amendment Bill 2009. I do so because I believe very much in the best possible security for the health of Australians, especially with regard to any biological agents that could be used as weapons in the future. This bill’s intent is to amend the National Health Security Act 2007 in order to widen the controls over the security of biological agents, known as security-sensitive biological agents, or SSBAs. The National Health Security Act was introduced to the parliament by the coalition. It was passed in 2007. That act was designed to provide a national system of public health surveillance in order to enhance the capacity of the Commonwealth and the states and territories to identify and respond to public health events of national significance. That included the occurrence of certain communicable diseases as well as certain releases of chemical, biological or radiological agents, or the occurrence of public health risks or overseas mass casualties. Specifically, the act and the lengthy consultations that preceded it originated from the 2002 anthrax attacks in the USA. It was through that act that the National Notifiable Disease List was established. That was to comprise diseases that would constitute a public health risk if they broke out. The federal minister must consult with the Commonwealth Chief Medical Officer and each state or territory health minister regarding that list.
It is worthwhile to reflect on the security-sensitive biological agents that have been included in tier 1, under part 3 of the National Health Security Act 2007. As I understand it, the agents in tier 1 are abrin; Bacillus anthracis; botulinum toxin; Ebola virus; foot-and-mouth disease virus; highly pathogenic influenza virus, infecting humans; Marburg virus; ricin; rinderpest virus; SARS coronavirus; variola virus, also known as smallpox; and Yersinia pestis, the plague. Most of those are familiar to us here in Australia because they are all extremely dangerous and have been reported at various times in the media. By way of example, Ebola virus first emerged in 1976 in Zaire and Sudan. In Zaire the mortality rate for that outbreak was around 90 per cent. Transmission occurs when bodily fluids are transferred. In Africa the virus spreads quickly within communities because of mortuary rituals and hygiene issues. However, due to the difficulty of moving around Africa, the Ebola virus does not spread easily beyond the initial communities affected. Sadly, most people die before they can come in contact with other communities.
Another example is the SARS coronavirus, or severe acute respiratory syndrome, which between November 2002 and July 2003 spread from Guangdong Province in China to 37 other countries. It was described as being near pandemic, killing almost 800 of the more than 8,000 people who contracted SARS. Unlike the Ebola virus, which affects everyone who comes into contact with the bodily fluids of the infected and which has a common morbidity rate of between 50 and 90 per cent, 50 per cent of those who died from SARS were actually over 65 years old, while just one per cent of the deaths were of those under 25 years of age.
Finally I will speak of the variola virus, also known as smallpox. It was estimated that in the 20th century as many as 300 million to 500 million people lost their lives to the disease. However, in December 1979 the World Health Organisation declared that the smallpox virus had been eradicated through successful and long-term vaccination programs. It remains the only human infectious disease that has been completely eliminated, and that is a testament to the efforts of medicine and science. Nevertheless, given the history and deaths involved with smallpox, vaccinations continue and some places in the world appropriately keep watch for its re-emergence.
It is because of the risk of transmission and the potency of these agents that the National Health Security Act 2007 was deemed necessary, following the review of hazardous biological materials by the Council of Australian Governments in April 2007. Following on from the act and the regulations, security-sensitive biological agent standards were developed and released last year. The standards of handling security-sensitive biological agents are, of course, of vital importance because, as we have seen in the past, there have been examples of laboratory errors that allowed unplanned exposures to these agents.
In 1979 in the USSR city of Sverdlovsk, now Yekaterinburg, what has now been described as an accidental release of anthrax infected 94 people, with 68 dying. In 1978 the last person to die of smallpox was a medical photographer who contracted the disease at the University of Birmingham’s medical school. In March this year in Germany a female scientist accidentally pricked her finger with a needle used to inject Ebola into mice. She was given an experimental drug, and the incubation period passed, luckily, without her showing any symptoms, although it is uncertain as to whether she actually contracted the Ebola virus in the first place. What these and many other incidents show is that scrutiny of handling procedures and scrutiny of research or storage facilities is critical to ensure that these agents are contained safely whilst also recognising the need to conduct research into vaccines and better understanding the threat involved.
Within that context, I will now turn specifically to the National Health Security Amendment Bill 2009. The bill is meant to change three points in the current legislation: firstly, to empower the ministers to suspend regulations to deal with an emergency health threat; secondly, to extend current regulations to suspected SSBA, if required; and thirdly, to provide search and seizure powers for inspectors. With regard to the first point of empowering the minister to suspend regulatory obligations of the National Health Security Act 2007, this amendment is needed in order to provide an appropriate and immediate response to an emergency disease situation. This change will permit the minister to make a legislative instrument if there is a threat involving a security-sensitive biological agent that would impact upon the health or safety of people, the economy or the environment, where that legislative instrument would help in the reduction of that threat. The amendment would also allow the instrument to be varied or withdrawn immediately if required.
The second main point of the amendments is to allow control to be placed upon agents that are suspected of being security-sensitive biological agents. This change will bring in mandatory reporting, testing to confirm the agent and destruction requirements by the laboratories that deal with the suspected security-sensitive biological agent. The fines involved for failing to conform or failing to destroy suspected agents will be similar to those for not acting on known agents.
The final main point of these amendments is to allow coercive and extensive powers for inspectors under the National Health Security Act. Currently they have powers under the Gene Technology Act 2000 to obtain search and seizure warrants, but this amendment will allow similar powers under the National Health Security Act. It will allow inspectors to seize material and be assisted by other persons such as the police, all the time using necessary and reasonable force. It will also allow them to ask questions and ask for the production of documents, which will involve those being asked to answer and produce those documents. Warrants regarding the investigation of suspected offences can be obtained over the telephone or via fax from a magistrate in times of critical circumstances.
Considering the risks and threats posed by security-sensitive biological agents, I certainly appreciate the need for this bill and I support it. The reality is that Australia is at some risk from all tier 1 listed agents and we must constantly review the threat and our procedures. I say ‘some risk’ because, when you examine the aspects of each of the listed agents with regard to exposure, modes of infection, treatment and prevention as well as biological warfare or terrorist applications, they all have limitations. Nevertheless, by being ever vigilant and strengthened by a strong inspection and compliance regime, we can further reduce the threat levels.
This is all the more necessary because, as we know through the events of recent history, in the same time frame in which we seek to defeat these biological and toxic threats through science and medicine, somewhere around the world there are terrorists who are looking to use these agents to their own advantage. I say again that we will always be in need of maximum vigilance and I am pleased to support this bill, as I will any future bill that supports the safety and health of this nation and its people.
This morning in the House I spoke on amendments to the Aviation Security Act 2004. Those amendments were about enabling regulations to be made to designate security-controlled airports, a particular category of airport according to their risk profiles; allowing unannounced inspections of businesses involved in air cargo; allowing the secretary of the department to enter into enforceable undertakings with the aviation industry participants as a remedial measure; and expanding the scope of compliance-control directions to cover the operation of security-controlled airports and screening authorities. Right now I am speaking on another important piece in the policy jigsaw that helps to ensure our nation’s security, the National Health Security Amendment Bill 2009.
Friday will be the eighth anniversary of the September 11 attacks on the Twin Towers in New York and the Pentagon in Washington. I happened to be in New York a week before September 11 and went and saw the Twin Towers. Like most people, I will never forget what happened on September 11, and I felt a particular connection because I was there only the week before. Next month will be the seventh anniversary of the terrible Bali bombings that killed 202 people, including 88 Australians. The threat of international terrorism to our nation and our way of life remains very real. It was only a month ago that a plot was uncovered that allegedly involved an attack on Holsworthy barracks in Sydney.
We require a comprehensive and flexible policy response to the ever-changing nature of international terrorist organisations. Terrorism does not confine its targets to life and property. Terrorism is an attempt to terrorise, to destroy a public sense of security and confidence. Residents on the Central Coast, where my electorate is, need to have confidence in the security of their nation and the integrity of our borders. This bill today is a part of the policy response required to hamper the will of those evil few that wish to cause harm to Australian citizens and our way of life. The Attorney-General’s portfolio Security environment update 2007-08 outlines the government’s approach to the threat of terrorism and says:
The Australian government is working to ensure our national security framework remains comprehensive and adaptable to changes in our security environment. Terrorism remains a serious threat to Australia’s security. Strong cooperation between the Commonwealth, State, Territory and local governments is vital to countering this threat, but businesses and the broader Australian community also have an important role to play. To ensure that Australia’s security framework continues to achieve the goal of protecting Australia from terrorism, our arrangements must be sustainable and supported by appropriate resources.
The National Health Security Amendment Bill 2009 amends the National Health Security Act 2007 to make arrangements for the safe handling of security-sensitive biological agents, SSBAs, that could be used as weapons. Three main changes to the act are proposed, along with a number of less significant but important changes.
The bill amends the NHS Act to enhance Australia’s ability to secure certain biological agents that could be used as weapons. The regulatory scheme for SSBAs currently includes stringent requirements relating to notification of type and location of SSBAs, along with standards that must be met by organisations handling SSBAs. Over the past year and a half, the government has worked closely with organisations that handle SSBAs and other experts in the field to ensure smooth implementation of the regulatory scheme. A number of areas have been highlighted where improvements to the scheme might be made. This bill enhances the regulatory scheme for SSBAs in three important ways.
First, the proposed amendments enable the Minister for Health and Ageing—who I acknowledge is here at the moment—to respond immediately and appropriately to the challenge of safeguarding public health and safety in the event of an SSBA related disease outbreak. The proposed changes enable the suspension of certain existing regulatory requirements and the imposition of new conditions to ensure that adequate controls are maintained. The proposed amendments also ensure that the minister has access to all relevant information, including advice from the Secretary of the Department of Health and Ageing, the Chief Medical Officer, the Chief Veterinary Officer, and others with scientific or technical expertise in SSBAs.
Second, the amendments will extend reporting controls to biological agents suspected to be SSBAs. This measure will clarify the obligations of entities at early stages of handling a biological agent when, after having performed all the usual testing procedures for that biological agent, there is a positive presumption of identification of an SSBA. The new provisions will require an entity to report its handling of suspected SSBAs including transfers of those agents and will require entities to comply with new SSBA standards for suspected SSBAs.
Third, the bill will enhance the investigation powers available under the NHS Act. The NHS Act currently provides inspectors with monitoring warrants which do not extend to seizing evidential material. This new measure introduces offence related warrants that provide powers to search premises and seize evidential material. Importantly, this increase in investigation powers is complemented by necessary safeguards to ensure proper use of the powers. This includes safeguards such as authorisation by a magistrate and provisions governing the return of seized property and compensation for damage.
The bill also makes some less significant, but equally important, amendments to improve the operation of the legislation and provide greater clarity for those working with SSBAs. These relate to requirements to report certain events involving SSBAs to local police, minor changes to annual and biannual reporting of information recorded on the national register, new capacity to cancel the registration of an entity or its facility if they are no longer handling SSBAs, and amendments to the definition of biological agents so that bacteria and viruses that do not have the capacity to spread rapidly, but may still be highly dangerous, are captured.
The proposed changes have been subject to extensive consultation with relevant experts including entities working with SSBAs, intelligence and security agencies, public and animal health laboratories, and state and territory government agencies. Powers of entry, by occupiers’ consent, to search premises, and anything on premises, for evidence that inspectors reasonably suspect may be on the premises are also captured in this bill. There are also powers allowing entry, by offence related warrant, to search premises and gather the kinds of evidence specified in the warrant—and, if inspectors find that kind of evidence, there is power to seize, inspect, examine, measure and conduct tests on, or take samples of, such evidence. There are also certain powers to operate electronic equipment on the premises relating to obtaining evidence, such as seizing equipment and disks, tapes and other storage devices; putting evidence into documentary form and removing such documents from the premises; and transferring evidence onto tape, disk or other storage device which can be taken off the premises.
It is noted that inspectors under this act are not law enforcement officers. It is recognised that exceptional circumstances should exist before granting non-law-enforcement personnel, such as inspectors under the NHS Act, significant powers associated with offence related warrants. It is considered that such exceptional circumstances exist in this case because the biological agents that are the subject of this legislation are, by their nature, highly dangerous. There are significant security issues that arise from breaches of the SSBA regulatory scheme and any breaches have the potential to cause extensive damage to public health and safety, the environment and the economy.
It is proposed that the services of the inspectors appointed under the Gene Technology Act 2000 will be retained for the purposes of the NHS Act. These inspectors already exercise powers related to offence related warrants under the Gene Technology Act 2000. They are experienced in cautiously and appropriately exercising such powers. To further ensure the powers are exercised with care, the Department of Health and Ageing will develop an internal governance framework for inspectors made under the SSBA regulatory scheme addressing issues relating to accountability, training, resources and risk management strategies.
While it is acknowledged that where such powers are conferred to non-law-enforcement officers it is important that there be processes built in to ensure proper accountability for the exercise of these powers, it is noted that such processes have, in fact, been built into the act and the bill. For example, it is noted that under sections 63(1) and 63(3) of the act itself anyone appointed by the secretary, in writing, as an inspector must be a person who is appointed or employed by the Commonwealth and whom the secretary is satisfied has appropriate experience and skills. Under section 63(2) of the act, an inspector must comply with any directions of the secretary when performing functions or exercising powers under the act. Another example is that, in such circumstances, an inspector is, and would continue to be, required to show his or her identity card to occupiers of premises.
It is also noted that there do not appear to be provisions specifically about challenging the exercise of inspectors’ powers in the bill. However, this may be explained by reference to the context in which such inspections would occur: highly dangerous biological agents with a potential for extensive damage to public health and safety in the event of a breach of the SSBA regulatory scheme. It is also noted that the government has stated that DoHA will develop an ‘internal guidance framework’ for such inspections which will address such matters as accountability and risk management strategies.
In conclusion, the legislation is part of the government’s ongoing response to the national security threat facing our nation. Residents of my electorate on the Central Coast need to have confidence in the security of their nation and in the integrity of our borders. This legislation is part of a comprehensive strategy to achieve both real security outcomes and confidence in our security structures to keep our citizens safe. I commend the bill to the House.
I am pleased to have been given the opportunity to briefly sum up today’s debate on the National Health Security Amendment Bill 2009. I want to thank the members for Dickson, Moreton, Cowan and Dobell for their contributions to the debate. As you can tell from the member for Dobell’s contribution, it is an important issue and people are concerned to make sure that we can respond to new and emerging threats. In fact, that is exactly what this bill does, to ensure that we enhance Australia’s obligation to secure certain biological agents that could be used as weapons.
I think that in his presentation the member for Dobell summed up the three main purposes of the legislation, so I do not need to go back over that ground other than to say that the government is determined to make sure that we are well prepared and able to take action. These changes ensure that the minister responsible will be able to respond immediately and appropriately to any challenge which requires the safeguarding of public health and security in the event of an outbreak, whether it is ebola virus, foot and mouth disease, or some security-sensitive biological agent in the future. The changes enable the suspension of certain existing regulatory requirements and also the imposition of new conditions to ensure that adequate controls are maintained, but the appropriate flexibility is provided.
We welcome the opposition’s support for this bill. We think that the measures introduced appropriately enhance the existing regulatory scheme and underline the government’s commitment to protecting all Australians through maintaining controls on biological agents that could be used as weapons. I commend this bill to the House.
Question agreed to.
Bill read a second time.
Ordered that the bill be reported to the House without amendment.