On behalf of the Standing Committee on Public Works I present the second report for 2010 of the committee entitled Referrals made February to March 2010 (2nd report of 2010).
Ordered that the report be made a parliamentary paper.
by leave—This report addresses five works spread across four states and territories with a total estimated cost of $240 million. In every case the committee has recommended that the House of Representatives agree to the works proceeding. The works in this report are the construction of a Centre for Accelerator Science and extensions to the Bragg Institute and OPAL reactor buildings for the Australian Nuclear Science and Technology Organisation at an estimated cost of $62.5 million; fit-out of new leased premises for the Department of Climate Change and Energy Efficiency at the New Acton Nishi building in Canberra city at an estimated cost of $20.5 million; defence housing at Voyager Point, Liverpool in New South Wales by Defence Housing Australia at an estimated cost of $45.1 million; defence housing at Muirhead, Darwin in the Northern Territory by Defence Housing Australia at an estimated cost of $43.5 million; and construction of the Pawsey High Performance Computing Centre for Square Kilometre Array Science in Kensington in Western Australia by the CSIRO at an estimated cost of $66 million.
Turning first to Defence Housing Australia, the committee inquired into two projects that will provide new houses for members of the ADF. They will also provide new vacant building lots for private homes. The committee commends Defence Housing Australia for helping to address the shortage of residential land in Australian cities. DHA has also developed a new ‘troppo house’ designed for tropical Australia which will actively promote sustainable building skills in Darwin trades. The committee commends this.
The committee is still concerned by DHA’s approach to housing for people with disabilities. The report discusses how DHA can reverse the unfounded perception that such housing is inferior or substandard. Indeed, such housing is valuable and desirable because it breaks down physical barriers within homes and can be aesthetically pleasing. While only a small percentage of defence personnel directly require accessible housing, DHA should be considering building housing that is appropriate for the entire life cycle, allowing elderly family members to visit, for instance.
The committee also considered an office fit-out for the Department of Climate Change and Energy Efficiency in Canberra. Whilst the committee was not inquiring into the enveloping building, many submissions to the inquiry concerned the heritage and visual impact the building would have. The committee thanks those submitters for their contribution to the inquiry. Regarding the fit-out itself, the committee is pleased by its considerable energy saving and environmentally sustainable features. The committee commends the department for securing a fit-out that will be at the leading edge of office accommodation in Australia.
The committee also considered two science projects. Each will make a significant contribution to Australia’s research heft across an impressive range of fields. In the case of the Pawsey centre, the CSIRO is proposing to create a supercomputer facility in Perth. It would be available for the Square Kilometre Array radio telescope if Australia is chosen and, in any case, will be available on merit basis for research across Australia. As for ANSTO, the new Centre for Accelerator Science will significantly boost Australia’s research capacity and build on ANSTO’s specialised expertise in particle accelerators. The committee was again impressed by the diverse range of research areas this will support and commends ANSTO for its recent implementation of a 45-year plan to ensure sound strategic planning.
This report traverses varied ground and the committee thoroughly enjoyed the opportunity to inspect the varied projects being undertaken by Commonwealth agencies. I note that the committee has discussed some areas needing improvement, particularly risk management and costings. On this subject, I remind agencies that the committee has recently updated its manual of procedures. I strongly encourage all agencies to consult it as soon as possible so as to be up to speed with the detail the committee now expects in submissions.
I thank members and senators for their work in relation to these inquiries. I particularly thank the secretary of the committee, Sharon Bryant; inquiry secretary, Siobhan Leyne; senior research officer, Thomas Gregory; and Jazmine Rakic and Shaun Rowe. The committee secretariat serves the committee well. I commend this report to the House.
Bill and explanatory memorandum presented by Mr Swan.
Bill read a first time.
I move:
That this bill be now read a second time.
The Federal Financial Relations Amendment (National Health and Hospitals Network) Bill 2010 delivers a central component of the government’s health and hospitals reform.
This is a landmark economic reform which reshapes the Federation and places health funding on a sustainable footing now and well into the future.
It delivers a nationally funded health and hospitals system for Australians into the future.
A National Health and Hospitals Network will see the Commonwealth become the majority funder of public hospitals for the first time, and the sole funder of primary care and aged care.
In April this year, COAG, with the exception of Western Australia, reached an historic agreement to establish a National Health and Hospitals Network.
This is a direct response to the challenges of ageing and escalating health costs.
It will deliver tangible improvements to the health and hospital system to Australians right around the country.
It does this by dedicating a share of GST to health and the Commonwealth taking on a greater share of growth in health costs into the future. It achieves real efficiency gains through efficient pricing, better planning at the local level, clearer roles and responsibilities, and reducing waste and duplication.
Critical economic reform
This represents the most significant reform to Australia’s health and hospital system since the introduction of Medicare and one of the largest reforms to service delivery in the history of the Federation.
Reform of the health system is necessary so that future generations can enjoy world-class, universally accessible and affordable health care.
On current trends, health and hospital spending would have consumed the entire own-source tax revenue of state governments by 2045-46.
Our reforms are critical to addressing this challenge and ensuring the long-term sustainability of Australia’s health system and national finances.
We are also improving the system by ending the blame game and cost shifting, and providing national leadership while increasing control at the local level.
We are strengthening the whole system, by taking majority funding responsibility for the nation’s health and hospital system
That includes responsibility for 60 per cent of the efficient price for all public hospital services and full funding and policy responsibility for general practitioner and primary healthcare services, and for aged care.
We are delivering system-wide reform to strengthen governance, report on performance transparently, and put in place new national standards.
We are improving the way health services are delivered, through better access to high-quality integrated care focused on the needs of patients, prevention, and greater provision of care outside of hospitals.
We are providing better care and better access to services for patients right now, through $7.4 billion in new investments in better hospitals, better infrastructure, more doctors and more nurses.
Funding arrangements
This bill amends the Federal Financial Relations Act 2009 to implement the financial components of our National Health and Hospitals Network.
Changes to the federal financial arrangements between the Commonwealth and the states include the dedication of around one-third of GST revenue to health and hospital services.
This means that each time any Australian pays $1 of GST at the shops, 33 cents of that will be dedicated to the health and hospital system.
The bill also delivers our guarantee to fund a larger share of the growth in health costs—at least $15.6 billion over the period from 2014-15 to 2019-20.
The bill creates a National Health and Hospitals Network Fund through which payments will be made to the states or joint intergovernmental funding authorities in each of the states.
These reforms are critical for the long-term sustainability of our health system and of the nation’s finances for the future—not just the years ahead, but the decades ahead.
The bill preserves the existing federal financial relations arrangements for Western Australia until it becomes a signatory to the National Health and Hospitals Network Agreement.
Payment arrangements
The bill also provides for payments out of the National Health and Hospitals Network Fund.
No longer will the Commonwealth be signing a blank cheque for hospital funding with little sense of where taxpayers’ money is going.
Instead, the price the Commonwealth pays for hospital services will be determined by an Independent Hospital Pricing Authority.
Local hospital networks will be funded for the services they provide and funding will be transparently reported.
Commonwealth and state government funding for local hospital networks will be channelled through a single body, a joint intergovernmental funding authority to be set up in each state.
In some circumstances, such as in rural and remote areas, block funding will be provided through the states to ensure all Australians receive world-class health services.
These are critical reforms that will improve the transparency and accountability of our health and hospital system.
Impact on federal financial relations
The introduction of the National Health and Hospitals Network also represents a significant change to Australia’s federal financial relations.
The gap between state spending responsibilities and their revenue raising capacities will be reduced over time.
This will help to secure the funding base for health and hospital services into the future and reduce the reliance on less efficient state taxes, yielding productivity dividends across the national economy.
Roles and responsibilities between the Commonwealth and the states have been clarified, reducing duplication and improving coordination.
As a result, these reforms will put Australia’s federal-state financial relations on a more sustainable footing for the future and allow us to better manage health expenditure growth.
I am very proud that in our first term of government we are delivering fundamental reform of our health and hospital system.
Our investment in more doctors, more nurses, and more hospital beds—combined with this fundamental economic reform—will deliver the value for money, and the health and hospital services all Australians deserve.
Debate (on motion by Mrs Gash) adjourned.
Bill and explanatory memorandum presented by Ms Roxon.
Bill read a first time.
I move:
That this bill be now read a second time.
The National Health and Hospitals Network Bill 2010 is a historic bill that delivers one of the major components of the government’s health reform agenda. It is a key step forward in providing better health and better hospitals for all Australians. I am delighted to be following the Treasurer, who has just introduced the Federal Financial Relations Amendment (National Health and Hospitals Network) Bill 2010, which is also vital for these reforms.
This package of health reforms is the most significant change to Australia’s health and hospitals system since the introduction of Medicare. We are creating a national health and hospitals network that is funded nationally and run locally.
It is the culmination of work that began with the establishment of the National Health and Hospitals Reform Commission, as well as taskforces on primary health care and preventive health.
It follows an extensive consultation process that has seen the Prime Minister, other ministers and I road testing ideas with more than 100 local communities across Australia.
We are implementing major reforms to the funding and governance of our health system, to place it on a sustainable long-term foundation.
We are changing the way health services are delivered, through better access to services designed around patients’ needs, and a greater focus on preventive health and the provision of care outside of hospitals.
We are also investing in our health system and our health workforce, to deliver better care and better access to services for patients, now and into the future.
The bill I am introducing today is a key component of this overall health reform agenda. Before turning to the detail of this bill I will outline this agenda in some key areas: the capacity of our health system, better connecting care, access to services, preventive health, sustainability and of course quality.
Capacity
To ease the pressures on our health system, we need to increase its capacity and the services available. This means more doctors, more nurses and more beds.
The Rudd government is investing $1.2 billion as part of the National Health and Hospitals Network in doctors, nurses and allied health professionals. This will deliver 5,500 new or training GPs and 680 additional medical specialists over the coming decade. It will improve support for more than 4,600 full-time-equivalent nurses working in general practice, and help train and retain our valuable aged care nurses. And we will support 800 allied health professionals working and training in rural areas over the next four years.
We will also invest more than $1.6 billion for more than 1,300 new subacute beds, to reduce bottlenecks and capacity constraints in our system. These beds will be delivered in areas like rehabilitation, palliative care, and, importantly, mental health services, so that people can get the right care for their needs.
Better connecting care
As part of the National Health and Hospitals Network, the government will ensure that services are better connected and coordinated, reducing fragmentation and the blame game.
Local hospital networks will be established. They will be more responsive to local communities and new funding arrangements, such as the introduction of activity based funding, will provide strong incentives for better performance and reduced waste.
The Commonwealth will also take funding responsibility for 100 per cent of primary care, ending duplication and divided responsibilities. The government will establish Medicare Locals, which will work with local GP, allied health and community health providers, to drive local integration and coordination of services and improve access to care.
And, to bring the health system properly into the 21st century, the government will invest $466 million to establish personally controlled electronic health records, reducing mistakes and duplication, and ensuring that, with patients’ consent, doctors have the information they need, when they need it.
Better Access to Services
The National Health and Hospitals Network will also deliver better, more timely access to health services in local communities across Australia.
The government will establish a national after-hours GP and primary care service. This will enable anybody calling their GP out of hours to be referred to a nurse or a GP on the phone and, if necessary, referred to a local after-hours GP service coordinated by their Medicare Local.
The government will also invest $355 million in more GP superclinics and expanded GP clinics in about 450 locations across Australia. These will bring together in a single location services such as GPs, allied health and practice nurses, so that patients can more easily get the full range of care they need.
The National Health and Hospitals Network will also provide strong guarantees and targets to improve access to public hospital services—reversing the neglect from the Howard government ripping $1 billion out of our hospitals.
The Rudd government will invest a further $750 million so that emergency department patients will have a guarantee that they will be treated, admitted or referred within four hours, where clinically appropriate.
And an investment of $800 million for elective surgery will help back our target that 95 per cent of elective surgeries be delivered within the clinically recommended time, and a guarantee that patients facing excessive waits should have their elective surgery fast-tracked.
Preventive Health
Keeping people well and out of hospital is a critical component of the Rudd government’s health reform agenda: while we are improving our hospitals, we also need to reduce pressure on them and keep people out of hospital in the first place.
To achieve this, the government will take world-leading action to combat tobacco—which contributes to the deaths of 15,000 Australians a year. The government will introduce plain packaging for all tobacco products—a world first—in addition to raising tobacco excise, which is expected to result in 87,000 fewer smokers.
The government will also invest $449 million to improve care for people with diabetes—which is fast on the way to becoming one of the major burdens of disease. This investment will enable Australians with diabetes to have the option of signing up with a GP practice, which will be responsible for managing all aspects of their care in an integrated, coordinated way.
Sustainability
The Rudd government’s record of strong economic management has enabled us to make major investments in our health system. But if our health system is to be sustainable into the future, we have to provide it a secure funding base for the future.
To ensure this, the Commonwealth will take, for the first time, funding responsibility for all GP and primary care services and all aged care services. The Commonwealth will also become the dominant funder of Australia’s public hospitals, paying for 60 per cent of hospital activity and capital, as well as 60 per cent of training and research costs in public hospitals.
These changes will mean that one government will have dominant funding responsibility for all parts of the health system—ending the blame game and the perverse incentives for buck passing and cost shifting.
These changes are the most significant reforms to Commonwealth-state financial arrangements in decades, as my colleague the Treasurer today said when introducing a bill to enable the associated changes to Federal Financial Relations Act.
Quality
If we are to have a truly national health and hospitals network spanning Australia, it is essential to have strong safety and quality standards so that all Australians can be confident that they will receive consistently high-quality care wherever they live.
This bill provides for framework legislation to establish the Australian Commission on Safety and Quality in Health Care.
It is imperative that the government’s health reforms ensure that the Australian public receives safe, high-quality health care. The Australian Commission on Safety and Quality in Health Care will be established as a permanent body with an expanded remit to drive safe, high-quality care to ensure the appropriateness of services delivered in a particular healthcare setting, including primary care and mental health.
The commission will help reduce the harm caused by preventable errors, reduce healthcare costs resulting from unnecessary or ineffective treatment and have a positive impact on community trust.
The commission will formulate safety and quality standards, guidelines and indicators and work with clinicians, professional bodies and consumers to lead the drive toward practical health system improvements for the Australian public.
The commission will provide advice to the Commonwealth, state and territory health ministers about which of the standards are suitable for implementation by local hospital networks as national clinical standards addressing safety and quality matters. Local hospital networks will be responsible for implementing relevant national clinical standards addressing safety and quality matters once they are agreed between the Commonwealth and the states and territories.
These national clinical standards for safety and quality will clearly state the high expectations all Australians have of their health and hospital services.
The National Health and Hospitals Network Bill 2010 provides a framework for the establishment of the commission, including the expanded role for the commission in setting national clinical standards and strengthened clinical governance. It is intended that arrangements under this expanded role will be further developed in consultation with the states and territories and subjected to finalising financial commitments.
The commission will work collaboratively with the Commonwealth, states and territories in the performance of its functions. More detailed administrative arrangements for the commission will be underpinned through an agreement with states and territories, and all governments will also agree to the funding and work plan for the commission.
The permanent commission will be established from 1 July 2011, with existing arrangements for the commission to continue as part of the Department of Health and Ageing until 30 June 2011.
The existing, temporary commission has undertaken good work to lead and coordinate work to improve the safety and quality of health care, in areas such as clinical handover and communication, infection prevention in health care and medication safety.
The expanded role of the permanent commission would complement these activities with work on national safety and quality standards, guidelines and indicators.
At this stage, the Western Australian government has not yet signed the National Health and Hospitals Network Agreement and has chosen not to comment on an exposure draft of this bill. It is disappointing to the government that Western Australia is choosing to opt out of these important reforms, which will improve national clinical and safety standards. If Western Australia signs up to the reforms, Western Australian patients would benefit from high national standards and be assured that they will receive consistently high-quality care no matter where they are in the country.
Conclusion
The National Health and Hospitals Network Bill 2010 marks an important step forward in delivering on the Rudd government’s commitment to reform Australia’s health system for the future.
Establishing a permanent, independent safety and quality body formalises the government’s commitment to drive improvements in quality and safeguard high standards of care for all Australians.
It will help ensure that there is a more nationally consistent approach to the quality and safety of health care across Australia—as part of the National Health and Hospitals Network.
It will help deliver better health and better hospitals for all Australians.
I commend the bill to the House.
Debate (on motion by Mrs Gash) adjourned.
I move:
That consideration of government business order of the day No. 3, Aviation Crimes and Policing Legislation Amendment Bill 2010, and No. 4, Crimes Legislation Amendment Bill 2010, be postponed until a later hour this day.
Question agreed to.
Bill and explanatory memorandum presented by Mr Gray.
Bill read a first time.
I move:
That this bill be now read a second time.
The Financial Framework Legislation Amendment Bill 2010 is an omnibus bill that would, if passed, affect 31 acts, involving the amendment of 25 acts and the repeal of six acts.
This is the sixth Financial Framework Legislation Amendment Bill since 2004 and builds on improvements to the Commonwealth’s financial framework that have had support from across the parliament.
This bill contains three major components, being the repeal of redundant special appropriations, the improvement of governance and accountability arrangements under the Commonwealth’s financial framework legislation, and the improvement of financial and governance arrangements for various specific bodies.
First, the bill would, if enacted, repeal 20 redundant special appropriations, including six acts entirely. This continues the government’s commitment to regularly review special appropriations, as stated in the government’s response of December 2008 to the report by the former Senator Andrew Murray, Review of Operation Sunlight: overhauling budgetary transparency.
Second, the bill would improve governance arrangements for various bodies operating under either the Financial Management and Accountability Act 1997 or the Commonwealth Authorities and Companies Act 1997, which are known colloquially as the FMA Act and the CAC Act respectively. In relation to bodies of an interjurisdictional nature, the proposed changes would allow for relevant state or territory ministers to request information about the operation of these bodies, along the lines of what can currently be requested by Commonwealth ministers. This recognises that interjurisdictional governance requires mechanisms to support, where appropriate, accountability to states and territories, as well as the Commonwealth. The specific changes affecting any particular agencies, however, would be stated in regulations, to enable full consultation and to calibrate the requirements on a case by case basis.
Third, the bill would improve the financial and governance arrangements for several specific bodies. These proposed amendments have been developed after consultation with relevant ministers, departments and agencies, consistent with the Australian government’s policy on governance arrangements.
Another change in the bill covers new delegation powers in the CAC Act, allowing ministers to delegate to a departmental secretary certain limited functions relating to the oversight of Commonwealth authorities and Commonwealth companies. Introducing specific delegation powers strengthens existing arrangements, clarifying the use of authorisations for obtaining budget estimates and monthly financial statements. The proposed delegation would also consolidate the existing ability of the Minister for Finance and Deregulation to delegate approval of the manner of investment of surplus money by certain Commonwealth authorities.
In particular, the bill would consolidate the Australian Institute of Criminology and the Criminology Research Council, while transferring them from governance under the CAC Act to the FMA Act. It would also transfer the governance of the Australian Law Reform Commission from the CAC Act to the FMA Act. Further, the bill would transfer the governance of the National Transport Commission to the CAC Act, bringing it into a recognised governance framework. And, last, the bill would abolish the Office of Evaluation and Audit for Indigenous Programs in recognition of this function now having been appropriately absorbed into the Australian National Audit Office.
Finally, the bill strengthens reporting to parliament of the Commonwealth’s involvement in companies. Currently, the CAC Act obliges responsible ministers to inform parliament when the Commonwealth acquires or disposes of an interest in a company. The bill would relocate this requirement more appropriately in part 5 of the FMA Act, which currently deals with investments, and allows for increased accountability in reporting to parliament, under the regulations of the FMA Act, on the types of companies and other bodies corporate that the Commonwealth might become involved with.
In summary, the bill removes unnecessary laws, regularises and consolidates various ongoing arrangements and emphasises the importance of the executive reporting to the parliament about activities that are being conducted through company structures.
I commend the bill to the House.
Debate (on motion by Mrs Gash) adjourned.
Bill and explanatory memorandum presented by Mr McMullan, for Mr Stephen Smith.
Bill read a first time.
I move:
That this bill be now read a second time.
Mr Deputy Speaker, I hope you will allow me a brief indulgence to say that moving the second reading of the Australian Civilian Corps Bill 2010 gives me an opportunity that is not exactly unique but very rare. I do not think that anybody since John Gorton has had the chance to have introduced, on behalf of the government, a bill in each House of the parliament. It is a very small privilege, for which I am grateful.
Australia is putting in place a new capability to assist countries in crisis.
The Australian Civilian Corps will deploy Australian expertise into countries experiencing or emerging from disaster or conflict to assist with stabilisation and recovery efforts.
The Australian Civilian Corps will complement Australia’s existing humanitarian support by helping governments and communities to achieve durable and sustainable growth and prosperity.
Through the corps, Australian expertise will be deployed overseas to help restore essential services and infrastructure and to help rebuild government institutions to establish economic and social stability.
The concept of an Australian Civilian Corps formally emerged from the Australia 2020 Summit in April 2008.
The government responded to the idea of ‘a deployable public service’ by agreeing to develop an Australian Civilian Corps.
This bill provides for the establishment and management of the Australian Civilian Corps.
To serve with the corps, civilian specialists will be engaged as a new category of Commonwealth employee.
They will be known as Australian Civilian Corps employees.
Australian Civilian Corps employees will be a unique category of Commonwealth employee, engaged for specified periods of work in crisis environments overseas before returning to their regular employment.
These employees will be drawn from a register of civilian specialists selected for their technical skills and ability to work in challenging environments overseas.
They will have expertise in areas such as public administration and finance, law and justice, engineering, health administration and community development.
They will be sought from all levels of government and the broader Australian community.
As Commonwealth employees, these individuals will be clearly identifiable as Australian government representatives overseas.
They will have the rights and protections afforded to Commonwealth employees, as well as the associated obligations.
The central purpose of the bill is to create an effective and fair employment and management framework for Australian Civilian Corps employees.
The bill provides for terms and conditions and other employment arrangements specifically designed for this kind of employment.
The Australian Civilian Corps will be administered by AusAID, in cooperation with other Australian government agencies.
The bill provides that the Director General of AusAID will be responsible for managing the Australian Civilian Corps.
The bill gives the director general, on behalf of the Commonwealth, the power to engage individuals as Australian Civilian Corps employees.
The bill also gives the director general the power to determine the remuneration and other terms and conditions of Civilian Corps employees.
These terms and conditions will be tailored to the particular requirements of the Australian Civilian Corps.
Australian Civilian Corps employees will be covered by the applicable minimum standards of employment under the Fair Work Act.
A set of values and a code of conduct for the Australian Civilian Corps will be prescribed by regulation.
The Australian Civilian Corps Values will set out the principles, standards and ethics to be embodied by the corps.
The Director General of AusAID will be required to uphold and promote the values.
The Australian Civilian Corps Code of Conduct will set out the standards of behaviour and conduct expected of Australian Civilian Corps employees.
Breaches of the code of conduct will be subject to disciplinary action.
It is important that civilian specialists can transition easily between Australian Civilian Corps employment and their regular employment.
The bill contains provisions to facilitate this transition, including a provision to enable employers to grant leave without pay to their employees so that they can serve with the Australian Civilian Corps.
The bill also enables the Prime Minister to issue directions to Commonwealth employers about the participation of their employees in the corps.
The Australian Civilian Corps will take part in assistance missions led by Australia and those in which Australia plays a major role as part of a regional or international community effort.
It will also be able to contribute to bilateral or multilateral efforts, including through the secondment of Australian Civilian Corps employees to bodies such as the United Nations.
The bill contains a provision to enable the Director General of AusAID to arrange such secondments.
Other employment arrangements also dealt with by the bill include assignment of duties, suspension and termination from employment.
The Australian Civilian Corps builds on Australia’s proud history of providing assistance in times of crisis, such as that provided in East Timor, the Solomon Islands and Indonesia.
The corps will enable Australia to make further contributions to stability in our region and beyond.
Australia will be better positioned to help vulnerable populations in times of great need and play its part as a good international citizen.
By creating an appropriate employment and management framework for the Australian Civilian Corps, this bill will help ensure the success of this important Australian initiative.
Debate (on motion by Mrs Gash) adjourned.
Bill and explanatory memorandum presented by Mr Clare.
Bill read a first time.
I move:
That this bill be now read a second time.
During the height of concerns confronting the international education sector last year, the Minister for Education asked the Hon. Bruce Baird AM to conduct a review of the Education Services for Overseas Students Act 2000 and its associated legislation that had originally been planned for 2012.
At that time the minister also introduced a number of amendments to the act to strengthen registration requirements and enable re-registration of all providers by the end of this year.
This interim step was necessary to reinforce the integrity and quality of Australia’s international education sector. When those amendments were passed in February the minister gave an undertaking to come back with further amendments at the earliest opportunity following the finalisation of the Baird review. This amendment bill is delivering on that commitment.
The Education Services for Overseas Students Act protects Australia’s reputation for delivering quality education services. It does this by establishing a regulatory regime for the provision of international education and training services and through this protects the interests of overseas students through the establishment of minimum standards and providing tuition and financial assurance.
The act also complements Australia’s migration laws by ensuring providers collect and report information relevant to the administration of the law relating to student visas.
Over recent months, the Minister for Immigration and Citizenship has announced a number of measures to improve the integrity of student visas. These include a review of e-visa processing and enhanced fraud detection, an increase in financial requirements a student must demonstrate to meet living expenses whilst in Australia, new legislative powers related to deferrals and suspensions, and higher assessment levels for packaged courses. In this regard the act plays a critical role in supporting and complementing Australia’s migration laws.
Since first written in 2000, the act has been amended several times to keep pace with change and is widely recognised as one of the best legislative frameworks for international education in the world. Unprecedented growth in recent years has created new pressure points in the sector which continue to play out. The emergence of a small group of providers who have responded to demand created through the unintended nexus between education and migration by offering substandard educational experiences has unfortunately damaged Australia’s good reputation and brand of education.
Nonetheless, Australia’s longstanding focus on educational excellence and the fact that our reputation is built on genuine quality standards are holding us in good stead during these demanding times. Despite the recent challenges faced by the sector as well as the affects of the global financial crisis and a high Australian dollar, enrolment numbers for international students in the 12 months to the end of April have increased by 4.2 per cent. While this is not the double-digit growth rates that were enjoyed in previous years, it is a strong testimony in support of the strength and the quality of Australian education and our ability to address emerging issues.
Following extensive consultation with the sector, Mr Baird reported back to the government in February this year with 19 recommendations for making the legislation stronger, simpler and smarter. One of the strongest messages was the need to have a clearer focus on the interests of students and that, given the size and diversity of the international education sector now, a one-size-fits-all approach to regulation will no longer suffice.
In general, the recommendations are about strengthening the registration process, more effective monitoring and enforcement, empowering students with information and improved complaints handling, ethical recruitment and a simpler, more robust consumer protection regime.
When the minister released the final report of the review on 9 March she indicated a staged approach to the government’s response, starting immediately with a number of the recommendations that build on recent changes to the act for implementation by 1 January 2011.
The government’s response to the remaining recommendations is currently being considered, with further consultation with the states and the sector planned in the coming weeks.
The Education Services for Overseas Students Legislation Amendment Bill which I am introducing today is the first round of changes to the act recommended by the review and will make adjustments to the legislation as well as to the Ombudsman Act 1976.
The dual focus of this bill is risk management and more effective enforcement.
The bill introduces provisions to further strengthen the registration process for approved providers.
Providers will have to demonstrate access to the financial resources to meet the objectives of the act; that they have a sustainable business model and that they have the capability, governance structures and management to deliver education of a satisfactory standard.
This will raise the bar of entry into the international education sector and is consistent with proposed changes to the Australian Quality Training Framework, announced by COAG in December last year for introduction in July 2010, to strengthen the gateway for all registered training organisations.
Building on the risk managed approach developed for the re-registration process currently underway, this bill will extend a risk management approach to all registrations at the point of registration and throughout the registration period.
The purpose is to better identify risk and ensure a consistent assessment of risk by all regulators and, in time, the national regulators being established for the vocational education and training and higher education sectors.
Together with the strengthened registration criteria, we want to ensure there are no high-risk providers entering the international education sector. We aim to set appropriate conditions on registration, including for ongoing monitoring to better manage risk.
This will enable better targeting and reduced duplication of compliance efforts and will shift the regulatory burden to those providers that present the greatest risk to the student experience and the reputation of the sector as a whole.
While registration criteria will apply to all providers, higher risk providers may have new Commonwealth imposed conditions placed on their registration, such as a cap on enrolments, annual financial statements or restrictions on the fees in advance that can be collected, as well as more frequent and detailed auditing. This in turn will create incentives for providers to reduce their risk by rewarding low-risk providers with less onerous monitoring regimes.
As part of this measure, consistent with common practice, when registering a provider the regulator will assess the provider’s risk profile and set a period of review and any conditions that are appropriate to manage the provider’s risk profile.
The Commonwealth will also be able to assess risk and apply risk based conditions at any time, rather than only as a result of compliance activity. As with re-registration, the details of the risk management approach, such as the broad indicators of risk and type of conditions that should apply, will be further developed in consultation with states and territories through ministerial council processes and the sector more broadly, prior to implementation.
The risk management approach will be supported by limiting a provider’s registration period to no more than five years. This will also help introduce consistency into the registration regime and allow the act to formally recognise and align with limited periods of registration for each provider set by the states under domestic quality assurance frameworks.
Amendments are introduced to strengthen the ability to take effective enforcement action by introducing financial penalties for a broader range of non-compliant behaviour and to enable regular publishing of targets and information on regulatory activities undertaken by the Commonwealth.
A perception raised during the Baird review consultations is that while the act is sound it is not adequately enforced.
Financial penalties are a tangible immediate action against providers for compliance breaches, reducing the need to go through lengthy court processes or potentially compromising a provider’s ability to continue operating.
There is existing scope for financial penalties to be extended for a range of noncompliance with the standards for ESOS providers in the national code. However, the amendments introduced in this bill identify specific offences within the act itself which should attract a financial penalty because they get to the heart of emerging issues confronting the international education sector, such as unethical recruitment activity and maintaining student records.
Similarly, by publicly setting and publishing targets and outcomes of regulatory activity, the sector and the rest of the world will know that Australia is serious about enforcement and it is committed to quality education and training.
This amendment is to allow the government to publish any actions taken under the enforcement and monitoring part of the act. The appeals of providers against the enforcement action taken will be no bar to the publication of this information. The publication will be corrected if the appeal is upheld.
Finally, the jurisdiction of the Commonwealth Ombudsman will be extended to include students of private registered providers. This is a key recommendation arising from the Baird review, but it was also proposed separately by Senator Hanson-Young earlier this year and included as a key measure in the International Student Strategy for Australia, developed through COAG. Currently, while these providers must provide access to an external complaints body (as required under standard 8 of the national code), students of these providers do not have recourse to a statutorily independent external body, such as an ombudsman, competent to hear and investigate their complaints in a consistent and quality assured manner.
By doing this, all international students, whether studying at a public university or a small private provider, will now have the same level of access to an external appeals body.
This will increase confidence in complaints-handling processes by both students and providers, lead to a greater acceptance of decisions and reduce lengthy and costly appeals processes for all parties.
The Commonwealth Ombudsman is well positioned to promote greater understanding of the complaints process and of provider obligations, as well as provide useful feedback to government on complaint trends to further inform policy.
Mr Baird recommended a number of other measures, including the development of a risk based approach to various costs associated with registration—for example, consumer protection and the collection of noncourse fees.
Tuition protection is a significant reform requiring a consultation regulatory impact process, and, also noting the need to align ongoing legislative reforms with the establishment of national regulators for VET and higher education, the minister has decided, therefore, that these recommendations will be taken forward in the next phase of the government’s response to the Baird review.
Timely passage of this legislation will ensure these measures can commence quickly to effectively respond to ongoing concerns and uncertainty in the international sector. The cooperation of the states and territories, along with the providers and many other stakeholders of the industry, will be required to implement these and any future recommended changes to the act.
I commend the bill to the House.
Debate (on motion by Mrs Gash) adjourned.
Bill and explanatory memorandum presented by Mr Clare.
Bill read a first time.
I move:
That this bill be now read a second time.
.Today I introduce the International Tax Agreements Amendment Bill (No. 2) 2010 to give the force of law to the second protocol to the tax treaty with Singapore which will upgrade the exchange of information provisions in that treaty to the internationally agreed tax standard.
The government is a global leader in the implementation of the international standard of tax transparency. In line with this standard, the upgraded exchange-of-information provisions in the protocol between Australia and Singapore will allow the tax authorities of both countries to exchange a wider range of information on a wider range of taxes.
In particular, the new provisions will provide that neither tax administration can refuse to provide information solely because it does not require the information for its own domestic purposes or because the information is held by a bank or similar institution.
The government is a global leader in promoting international cooperation to combat cross-border tax evasion including holding the chair of the Global Forum on Transparency and Exchange of Information for Tax Purposes, which is responsible for assessing and monitoring the effective implementation of the internationally agreed standard for exchange of information for tax purposes. The enhanced provisions in the second protocol to the tax treaty with Singapore are an important tool in Australia’s efforts in this regard, by increasing the probability of detection when taxpayers participate in abusive tax arrangements. The protocol will further facilitate the prevention of tax evasion by facilitating the exchange of information that predates the protocol.
The Joint Standing Committee on Treaties has considered this protocol and has recommended that binding treaty action be taken.
Full details of the amendments brought forward in the bill are contained in the explanatory memorandum.
I commend the bill to the House.
Debate (on motion by Mrs Gash) adjourned.
Bill and explanatory memorandum presented by Mr Clare.
Bill read a first time.
I move:
That this bill be now read a second time.
The Tax Laws Amendment (2010 Measures No. 4) Bill 2010 amends various taxation laws to implement a range of improvements to Australia’s tax laws.
Schedule 1 amends the GST Act 1999 to ensure that the appropriate GST outcome is achieved in all situations involving third-party payments.
The changes in schedule 1 further refine the GST law to ensure the correct GST outcome is achieved when supplies for which third-party payments are made change their taxable status along the supply chain. This amendment prevents the use of third-party rebates to achieve an unfair GST advantage. It also prevents too much GST being paid in other situations.
This amendment arose from recent changes to the GST act which takes effect on 1 July 2010. The effect of those changes was to create GST adjustments to ensure the correct GST outcome where payments are made to third parties in the supply chain.
The amendment will apply to third-party payments made on or after 1 July 2010.
Schedule 2 amends the income tax laws to provide a capital gains tax (CGT) rollover for taxpayers who replace an entitlement to water with one or more different water entitlements.
This rollover ensures that CGT is not a barrier to transformation. Transformation is the process by which an irrigator permanently changes their right to water against an operator into a statutory licence held by an entity other than the operator. Transformation facilitates water market trading and the efficient use of water resources.
This schedule also allows termination fees to be recognised when calculating a capital gain or capital loss on an asset, by including these costs in the asset’s cost base. This change applies to all assets and not just those relating to water.
Part 1 of schedule 3 to the bill makes minor policy refinements and technical amendments to the taxation of financial arrangements (TOFA), stages 3 and 4 provisions.
The TOFA stages 3 and 4 provisions cover both the tax treatment of hedges and tax-timing treatment in respect of financial arrangements other than hedges.
The TOFA stages 3 and 4 provisions include division 230 of the Income Tax Assessment Act 1997 and the consequential and transitional provisions inserted by the Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009. These provisions modernise the financial taxation system by better reflecting the economic and commercial substance of financial arrangements.
The TOFA stages 3 and 4 provisions represent a major legislative reform that affects a wide range of financial arrangements, including those of a complex nature. The amendments, which improve tax certainty and reduce compliance costs, are the result of the ongoing monitoring and consultation undertaken by the government to ensure that the TOFA stages 3 and 4 provisions operate as intended. Consultation has benefited from the participation of industry representatives and professional bodies.
Part 2 of schedule 3 extends the transitional period for the application of the debt/equity provisions to 1 July 2010 for upper tier 2 capital instruments issued before 1 July 2001. The amendment will allow the issuers of certain upper tier 2 instruments to transition into proper upper tier 2 regulations.
Part 3 of this schedule makes minor technical amendments to the foreign currency gains and losses provisions. The amendments extend the scope of a number of compliance cost-saving measures in the tax law as well as ensure that the provisions operate as intended.
Schedule 4 amends the income tax laws to make it easier for takeovers and mergers regulated by the Corporations Act, to qualify for the CGT scrip-for-scrip rollover.
These amendments carve out takeover bids that do not contravene key provisions of the Corporations Act and approved schemes of arrangement from having to meet the rollover requirement that the target entity’s interest holders can participate in the arrangement on substantially the same terms.
These amendments have been made in part because the income tax legislation does not need to regulate participation where the Australian Securities and Investments Commission already takes into account equality issues, including in relation to consideration, in administering its role in relation to schemes of arrangement.
These amendments ensure that the scrip-for-scrip rollover operates more effectively.
Schedule 5 implements the government’s 2010-11 budget measure to increase the threshold above which a taxpayer may claim the net medical expenses tax offset. The claim threshold will increase from $1,500 to $2,000 with effect from 1 July 2010.
The amendments will also introduce annual indexation of the claim threshold to the consumer price index. The first indexation adjustment will take place on 1 July 2011. These changes will help reduce the long-term cost to the budget of a rapidly growing expenditure and ensure the ongoing sustainability of the net medical expenses tax offset.
The amendments apply to the 2010-11 year of income and later income years.
Schedule 6 amends the list of deductible gift recipients, or DGRs, in the ITAA 1997. Taxpayers can claim income tax deductions for certain gifts to organisations with DGR status. DGR status will assist the listed organisations to attract public support for their activities.
This schedule adds one new organisation to the act—namely, One Laptop per Child Australia Ltd. The organisation was established in 2008 and aims to improve the lives of Indigenous children living in disadvantaged communities in rural and remote Australia. It is working to achieve this goal by giving remote Indigenous school children laptops. The laptops are designed to be durable, energy efficient and appropriate for children.
This schedule extends the period for which the Xanana Vocational Educational Trust can receive deductible gifts until 30 December 2010. The trust was established to provide vocational and technical training to the peoples of Timor-Leste.
Finally, this schedule changes the name of a DGR from the Clontarf Foundation Inc. to the Clontarf Foundation. The foundation dates from June 2000 and works to improve the health, employment, education and life skills of disadvantaged youths, predominantly Indigenous boys, through a number of Australian rules football academies in Western Australia.
Schedule 7 extends access to tax-deductible donations to all volunteer fire brigades. Volunteer fire brigades perform an important community service. Brigades aim to prevent, respond to and assist with recovery from a range of fire related emergencies, including preventing bushfires from reaching people in built-up communities.
Schedule 7 also adds three new general deductible gift recipient categories to the ITAA 1997. This widens the accessibility of tax-deductible donations to all entities that provide volunteer based emergency services, including volunteer fire brigades, and extends deductible gift recipient status to all state and territory government bodies that coordinate volunteer fire brigades and State Emergency Service units.
Full details of the measures in this bill are contained in the explanatory memorandum. I commend the bill to the House.
Debate (on motion by Mrs Gash) adjourned.
Bill and explanatory memorandum presented by Mr Marles.
Bill read a first time.
I move:
That this bill be now read a second time.
The National Measurement Amendment Bill 2010 is a bill to amend the National Measurement Act 1960. This legislation will make changes that have been deemed appropriate for the long-term operation of Australia’s new national trade measurement system.
The government is committed to reducing the regulatory burdens on Australian business and through the Council of Australian Governments is pursuing a business regulation reform agenda designed to advance Australia towards a seamless national economy.
A national trade measurement system is one of the regulatory hot spots identified by COAG as an area where overlapping and inconsistent regulatory regimes were impeding economic activity.
Trade measurement is the use of measurement as the basis for the price in a transaction. A trade measurement system is the infrastructure needed to ensure that a trade-measuring instrument is sufficiently accurate to give a fair result to a buyer and a seller. Trade measurement has a long history in human affairs. The earliest known systems of weights and measures, the precursors of trade measurement, date back to the Bronze Age—some 5,000 years ago—and the need for fair measures in trade is stated in the Bible, the Koran and the Magna Carta.
We are all familiar with everyday aspects of trade measurement, even if we do not realise it. Any purchase of, say, petrol, fruit and vegetables, or precious metals has a price set by the product’s weight or volume.
In Australia, an estimated $400 billion worth of trade based on some kind of measurement takes place annually, with around 75 per cent of transactions being business to business and 25 per cent being between business and consumers. Businesses and consumers have always placed a high degree of reliance on trade measurement systems to provide confidence in all transactions based on measurement.
Since—and indeed before—Federation, Australia has had separate trade measurement systems, one for each state and territory. Clearly, with the level of economic activity involved today, it is vitally important that 21st century Australia has a single efficient and uniform trade measurement system to give confidence across the nation to business and consumers. In the area of trade measurement we have an example of government establishing the infrastructure that makes it possible for markets to operate both efficiently and effectively in a country as large and geographically diverse as Australia.
The establishment of a national system of trade measurement on 1 July is one important part of the government’s business regulation reform agenda. The new national system will introduce significant deregulation benefits by reducing the previous eight systems of trade measurement in Australia down to one. The new national system will provide a net economic return to Australia and produce benefits to business and consumers by reducing regulatory burdens and compliance costs. These advantages will be gained through a simplified system which will operate with nationally consistent rules and charges.
Following the COAG decision of April 2007 to create a national system of trade measurement, amendments to the National Measurement Act 1960 were made in 2008 to give effect to that decision by providing the legal framework for a truly national system. This was well supported by Australian industry. The corresponding National Trade Measurement Regulations were made in September 2009.
In the period leading up to the start of the new system of national trade measurement, the National Measurement Institute (NMI), which will be responsible for the operation of the system, has begun an information and public awareness campaign—launched here in Parliament House on 20 May—aimed at consumers and the public in general. NMI is also providing information to relevant industries, industry associations, and consumer groups. Providing key groups with the information they need on trade measurement will assist in quickly building confidence in the new national system. I congratulate the Chief Executive of NMI and his staff for their dedication and hard work in developing the new system and its public awareness campaign.
In respect to legislating for a system of national trade measurement, the Commonwealth’s approach has been to incorporate key features of the model Uniform Trade Measurement Legislation (UTML) used by the states and territories, as well as consumer protection principles based on the states’ and territories’ fair trading legislation.
As has been the case in state and territory trade measurement systems, the government will perform an all-important inspection function in the new national system to ensure that traders and licensees are maintaining the accuracy of trade measuring instruments.
The Commonwealth legislation also includes improvements on the UTML, such as introducing provisions for the internationally accepted average quantity system (AQS) for packaging that may be used by industry on a voluntary basis. An AQS option was requested by Australian wine producers and major packers and this will bring additional efficiencies to these industries.
Indeed, the Australian Food and Grocery Council (AFGC) recently applauded the establishment of a national trade measurement system. The Australian Food and Grocery Council stated in a press release of 20 May that the adoption of an internationally competitive and uniform system of national trade measurement has been desired by industry for a decade and ‘will bring Australian requirements for weights and measures on prepackaged goods into line with other major OECD countries, including New Zealand and Europe’.
Although welcomed by industry as a whole, after the amendments to the National Measurement Act were made in 2008, some sectors of Australian industry expressed concerns about the application of a small number of the new provisions in the act. It turned out that the translation of the trade measurement provisions of the state and territory UTML into the Commonwealth environment has resulted in some unintended uncertainty for the measurement industry.
It is common for measuring instruments used for trade to be supplied, installed and verified—that is, tested to determine that the instrument works correctly—by different people and at different times. Therefore, it is often impractical and/or inappropriate for a measuring instrument to be verified until it is installed on site in the actual location where it will be used. In recognition of this, this bill amends offence provisions currently associated with the installation or supply of unverified measuring instruments. The penalty for the installation or supply of measuring instruments which are not of an approved pattern remains. The bill will also explicitly state that it is an offence to let for hire or loan unverified measuring instruments used for trade. The law should be completely fair and transparent in this respect.
The government takes seriously the concerns of industry and, on balance, has decided that there is a need to provide legislative certainty in this matter. These amendments will ensure that if a measuring instrument is installed prior to its verification but is of an approved pattern, then no offence will have been committed. Further, if a measuring instrument is sold to an intermediary before its final installation and use for trade, the strict liability provisions will not make the original supplier liable to prosecution for the supply of a measuring instrument in an unverified state.
The National Measurement Amendment Bill 2010 introduces amendments to the National Measurement Act 1960 which will make these circumstances clear in law. Other amendments will allow for the explicit recognition of prior knowledge and experience in making appointments of trade measurement inspectors, replace or redefine particular technical terms, and make some minor clarifications. These changes will assist by making greater efficiencies possible in the operation of the new national system of trade measurement.
The bill will also assist by making greater efficiencies possible in the operation of the new national system of trade measurement, by providing a greater role for the Chief Metrologist in determining various procedures of a technical nature that would be administratively complex and slow to be determined by legislative amendments.
This government has resolved to create a seamless national economy unhampered by unnecessary duplications, overlaps and differences in regulation. In particular, we are determined to remove those inconsistencies that create unnecessarily complex and costly burdens on business. This legislation is a further step in the pursuit of the government’s much-needed business regulation reform agenda.
I am pleased to introduce the National Measurement Amendment Bill 2010, a bill that will bring appropriate and desirable changes to the trade measurement provisions of the National Measurement Act 1960.
Debate (on motion by Mr Anthony Smith) adjourned.
Bill and explanatory memorandum presented by Mr Brendan O’Connor.
Bill read a first time.
I move:
That this bill be now read a second time.
The Rudd government is committed to a strong and effective aviation security regime for Australia.
Before turning to the legal reforms contained in this bill, I would like to place them in context.
On 18 December 2009, the government announced major reforms and a new model for the policing of Australia’s 11 major airports, to be led by the Australian Federal Police. This will involve a three- to five-year transition period and will strengthen major airport policing in Australia.
Under these changes, the Australian Federal Police will take full control of the community policing role at these 11 airports, replacing the current hybrid model involving AFP and state/territory police. The AFP will also move to a ‘fully sworn’ presence so that all AFP personnel deployed at the airport will have the same training and powers.
Having sworn AFP members policing these airports will maximise responsiveness and ensure our airports receive the highest quality policing.
There will still be close collaboration and intelligence sharing between Commonwealth agencies and state/territory police through joint aviation investigation teams and joint aviation intelligence groups.
We will be consulting the states and territories closely in implementing these reforms.
On 9 February this year, the Prime Minister announced a series of measures to strengthen international and domestic aviation security totalling $200 million over four years.
The government will provide $17.8 million to increase the number of firearms and explosive detection dogs at major international airports by 50 per cent.
The government will provide $12.3 million in 2010-11 to maintain the AFP presence at major airports.
$24.9 million will be provided to Customs and Border Protection to undertake a further phase of the Enhanced Passenger Assessment and Clearance (EPAC) Program. This will enable Customs to assess a larger number of passengers earlier and faster and share relevant data with intelligence, border management and law enforcement agencies in relation to visa applications and passenger risk assessment and response.
$11.4 million is to be provided for advanced data analysis and risk profiling to better identify and alert intelligence agencies of visa applicants who may present a national security risk.
A total of $54.2 million is being provided to assist industry to install cargo X-ray screening and explosive trace detection at selected locations; and $32 million is being provided to bring forward screening at a number of regional airports.
The government will provide $28.5 million to assist the industry to introduce a range of new screening technologies at passenger screening points.
It will also provide $18.2 million to strengthen engagement and cooperation in the Asia-Pacific region.
As well as this series of measures, the government announced in this year’s federal budget it will provide $759.4 million for policing at Australian airports over four years.
The funding supports the AFP presence at Australia’s 11 major airports, intelligence gathering and investigation capability, the AFP’s regional rapid deployment capacity and the air security officer program.
Legal framework
The Aviation Crimes and Policing Legislation Amendment Bill 2010 builds on these initiatives by modernising the laws relevant to aviation and airports, to provide necessary deterrence, penalties and powers.
Clear, effective and strong laws are a key element of airport security.
These laws apply to a critical sector of our society and our economy. Last year, for example, 33 million passengers moved through Sydney airport—where thousands of people work—and more than 24 million people passed through Tullamarine airport in Melbourne.
The Australian Federal Police and other agencies continue to meet complex challenges and threats within the aviation environment. To do their work effectively, the AFP need to be supported by appropriate laws that provide deterrence and recognise the gravity of aviation-related crimes.
The Aviation Crimes and Policing Legislation Amendment Bill 2010 has three components.
First, increased penalties are proposed for a number of offences in the Crimes (Aviation) Act 1991. Second, the bill creates three new aviation related offences and an associated updating of a definition. Third, amendments are proposed to ensure that existing policing powers are available in the airport environment.
I will detail each of these components in turn.
Aviation Crimes—Increased penalties
The first component of the bill concerns penalties.
Earlier this year the Attorney General’s Department reviewed the Crimes (Aviation) Act, which is now 19 years old. The act contains offences directed against aircraft and airports.
It became clear that there are a number of penalties in the act that do not reflect the seriousness of these offences.
For example, under the Criminal Code, a maximum penalty of 10 years imprisonment could apply to a person who is found guilty of making threats to contaminate goods. In comparison, under the existing provisions in the Crimes (Aviation) Act, a person who makes a bomb threat could only be imprisoned for a maximum of two years.
This is a very low penalty, given the very serious disruption and potential danger that such hoaxes can create, for example, if a flight is redirected as a result or if an airport has to be evacuated.
Under the amendments in this bill, the penalties in the act will now fall within four tiers. The severity of the penalty in each tier corresponds with the type of offence falling within each tier.
Life imprisonment (tier 1), the most severe maximum penalty, will continue to apply to offences such as hijacking or destroying an aircraft while it is in flight. The attempted terrorist bombing of the American flight NW253 would have fallen within this tier if it had occurred on an Australian interstate or overseas flight.
A maximum penalty of 20 years imprisonment (tier 2) will apply to very serious offences that pose danger or cause harm to whole groups of people, such as endangering an aircraft while in flight. The offences in this tier have had their maximum penalties raised from either seven, 14 or 15 years.
For example, assaulting a pilot, thereby impairing the operation of an aircraft, will now carry a maximum penalty of 20 years imprisonment, rather than the 14 years it currently carries. Endangering the safety of an aircraft on an interstate flight, for example, by attempting to seize control of the aircraft, would carry a 20-year penalty, not seven years.
A maximum penalty of 14 years imprisonment (tier 3) would apply to offences that are generally against aircraft or aviation environments, such as disrupting a major airport or destroying its facilities, which currently carry maximum penalties of seven or 10 years.
For example, damaging the runway or air traffic control facilities at Sydney airport would carry a maximum 14 years imprisonment rather than the current seven or 10 depending on the circumstances.
Imprisonment for up to 10 years (tier 4) would apply to offences such as hoaxes and taking control of an aircraft which currently carry maximum penalties of two and 10 years respectively. For example, making a bomb threat to an airport would constitute an offence that would carry a prison sentence of up to 10 years.
Determination of the proposed penalty for each offence has been undertaken in line with considerations spelt out in the Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers.
Details of the relevant benchmarks against which each penalty in the act have been set are in the explanatory memorandum to the bill.
The second component of the bill concerns new offences and definitions. The bill inserts three new offences into the Crimes (Aviation) Act. These new offences are designed to cover gaps that existed in the coverage of the existing offences.
There will be a new offence of assaulting an aircraft crew member. This offence will carry a maximum penalty of 10 years imprisonment.
While there is already an offence in the act directed against the assault of a crew member, it can only be applied if the prosecution can prove that the assault has impeded the operation of the aircraft. The new offence provision will not require this.
This offence has been particularly welcomed by the aviation sector during consultations with them.
There will be a new offence directed against the reckless endangerment of the safety of an aircraft which is likely to cause death or serious harm. This offence will carry a maximum penalty of 14 years imprisonment.
This offence builds on the existing offence contained in the act of endangering an aircraft. The new offence, however, deals with more serious actions, and where the effect of the act in question is a likelihood of causing death or serious harm. Firing a weapon on board an aircraft would come within this offence, even if no-one was hit.
The final new offence concerns possessing dangerous goods on board an aircraft which are likely to endanger life or cause serious harm. There is currently an offence concerning dangerous goods but not one where the effect is likely to endanger life or cause serious harm. The penalty for this offence is consistent with other provisions where the risk of serious harm can be shown.
The bill also updates the definition of ‘Commonwealth aerodrome’ in the Crimes (Aviation) Act to replace a repealed cross-reference and to make clear the airports to which these offences in the act apply.
Consultations have been held with key stakeholders on the amendments to the Crimes (Aviation) Act, including airlines, airports, state and territory governments, the Law Council of Australia and unions representing employees in the sector. The responses that have been received have been overwhelmingly supportive and welcoming of these measures that they are seen as an improvement to our existing aviation security regime.
On 18 December 2009 the government announced a decision to accept the ‘Federal Audit of Police Capabilities’ recommendation to move to an ‘all-in’ policing model at Australia’s eleven major airports.
Under the ‘all-in’ model, the AFP will become responsible for airport policing and security at 11 major airports, subject to the retention of mechanisms for close cooperation with state and territory police including joint airport investigation teams and joint airport intelligence groups.
This new model will be implemented over a three- to five-year period in close consultation and cooperation with the states and territories.
An ‘all-in’ model led by the Australian Federal Police will provide a nationally integrated airport-policing service and a continued counter-terrorism first-response capability at our major airports.
This bill contains amendments that support the move towards an ‘all-in’ policing and security model. It amends two acts—the Commonwealth Places (Application of Laws) Act 1970 and the Australian Federal Police Act 1979—that impact on the powers of AFP members to investigate offences when committed at certain airports.
The amendments to the Commonwealth Places (Application of Laws) Act overcome a technical anomaly in the act that prevented the AFP from using some of their standard arrest and search powers for state offences that occur at the airports that are classified as Commonwealth places.
For example, if a murder, assault or theft occurs at Sydney or Melbourne airport, this is a state offence that applies as Commonwealth law because these are Commonwealth places. These amendments will ensure standard AFP powers—such as arrest and search—are available in response. Handling of these cases is also governed by protocols between the Australian Federal Police and state and territory police.
The amendment to the AFP Act removes doubt as to the legal basis for AFP members to be appointed as members or special constables of state and territory police forces. The bill also makes clear the legal basis for AFP members to be appointed as members of police forces or other law enforcement agencies of foreign countries.
Conferral of special constable status is an important tool for cooperation between police forces, and gives a member of a force the powers of another police force, subject to appropriate controls and accountabilities. The amendments make clear that AFP members can participate in these arrangements.
Special arrangements will be required for Cairns airport, which is not a Commonwealth place, and this has been raised with the Queensland government. One aspect of these arrangements will be the continued capacity for AFP members to be sworn in as special constables of Queensland Police—which the proposed AFP Act amendments will support. A possible second element of these arrangements would be for Queensland to legislate for AFP members to be able to access relevant powers—the government has written to the Queensland government to progress this idea.
The government has moved to strengthen aviation security in Australia through changes to the arrangements that are in place, through the funding that is provided, and through cooperation with other countries, states and territories and the private sector.
This bill represents a further strengthening of Australia’s aviation security regime and will ensure that Australia’s law enforcement agencies are supported in their work to meet the complex challenges of policing in the airport and aviation environment. I commend the bill to the House.
Debate (on motion by Mr Anthony Smith) adjourned.
Bill and explanatory memorandum presented by Mr Brendan O’Connor.
Bill read a first time.
I move:
That this bill be now read a second time.
The bill strengthens law enforcement agencies’ powers to gather, examine and use evidence to investigate and prevent the commission of criminal offences. It builds on measures in the two serious and organised crime acts passed by parliament earlier this year. Before I outline the specific measures in the bill, let me put these legislative changes in context.
The Rudd government is taking concerted action to detect, disrupt and deter organised crime. Organised crime costs the Australian community an estimated $15 billion each year. As was recognised in the Prime Minister’s first National Security Statement, it is also a significant national security threat.
The government developed the first Organised Crime Strategic Framework to ensure law enforcement and intelligence agencies work better together to combat organised crime. The framework recognised that we must ensure that our law enforcement agencies have the powers they need to tackle the flexible, evolving and resilient organised criminal networks operating across state, territory and national borders.
The bill enhances the powers available to the Australian Federal Police. It also provides the Australian Crime Commission chief executive officer with powers, similar to those of the Australian Federal Police Commissioner, to deal appropriately with staff who engage in serious misconduct and corruption.
ACC Act Amendments
Dismissal powers
Given the powers that ACC staff are able to exercise and the information that they have access to, it is important that this agency is able to effectively deal with any ACC staff member who engages in serious misconduct and corruption.
This bill will amend the ACC Act to provide the ACC CEO with similar powers that the AFP commissioner has to deal with police who engage in serious misconduct and corruption.
The proposed changes will combat instances where there has been a serious abuse of power, a serious dereliction of duty, or any other seriously reprehensible act by a staff member of the Australian Crime Commission. The changes are not designed to replace the usual Public Service processes for dealing with misconduct, but are only to be utilised in exceptional circumstances where the normal processes are not appropriate given the serious nature of the misconduct or corruption.
This will ensure the ACC CEO is able to protect the reputation of the organisation and to properly deal with staff who threaten the ability of the ACC to carry out its key law enforcement functions.
The bill will require the ACC CEO to report to the minister and the ACC board each time the new power is used. This will ensure that the minister and the board have an appropriate level of oversight of the use of the power by the Australian Crime Commission’s chief executive officer.
The making of the declaration will be a reviewable decision under the Administrative Decisions (Judicial Review) Act 1977, to ensure the correct use of the power.
The bill will also allow the ACC to use already lawfully intercepted telecommunications information in investigating members of staff alleged to have engaged in misconduct or corrupt behaviour. This also mirrors powers currently available to the AFP.
Telecommunications interception warrants will still only be available for the investigation of a serious offence, which is generally an offence that carries a penalty of at least seven years’ imprisonment. The amendments will only allow information already lawfully obtained in the course of investigating a serious offence to be used to investigate the misconduct of a member of the staff of the ACC if it is also relevant for that purpose.
The bill requires the government to review these new provisions after two years of operation to ensure they have operated as the government intended, to allow the CEO of the ACC to deal appropriately with the most serious cases of misconduct and corruption.
ACC Examiners
The bill will also amend the ACC Act to allow for the appointment of part-time examiners, consistent with the Organised Crime Strategic Framework goal of ensuring law enforcement agencies are appropriately equipped to carry out their tasks.
The ACC currently has four full-time examiners. However, the need for an examiner can fluctuate depending on the status of a particular investigation or operation. As a result, the need for examiners cannot be estimated with any certainty.
The appointment of both full-time and part-time examiners will allow for greater flexibility in the appointment and utilisation of examiners and ensure the ACC can approach examinations in a more strategic way. The amendments will also ensure broader geographic cover of examiners as part-time examiners could be appointed in different regions of Australia.
The amendments also include appropriate safeguards to guard against any conflicts that may arise between a person’s role as an examiner and other employment they may engage in.
Crimes Act amendments
The bill will also improve the ability of law enforcement officials to gather and examine evidence in light of rapid technological advancements. The bill includes a number of amendments to address operational impediments identified by the Australian Federal Police.
Searches of persons under warrant
The Commonwealth has comprehensive provisions in place to enable effective and efficient searches of electronic equipment found during searches of premises such as a house or office under warrant.
To address the increasing availability and use of portable electronic and data storage devices such as laptop computers, mobile phones and USB drives, the bill includes amendments to help police deal effectively with these items if they are located during a search of a person under a warrant.
A key improvement will be the ability to seek an order from a magistrate requiring a person to assist with accessing data from equipment moved or seized under a warrant in relation to a person. For example, if police were investigating online child pornography, they could apply for an order requiring a suspect to provide their password or assist with transforming encrypted data into an intelligible form. Data may only be accessed to determine whether it constitutes evidential material.
Orders
The bill will also ensure that a seized item or document produced under the Crimes Act does not need to be returned if it would be likely to be used in the commission of a terrorist act, a terrorism offence or a serious offence.
The bill will empower magistrates to make orders preventing the return of such items or documents in limited circumstances. Such orders can currently only be made for items seized under terrorism related stop and search powers in the Crimes Act. These amendments will ensure the Crimes Act deals consistently with all items seized and documents produced.
The bill also improves safeguards relating to orders in relation to seized things and documents produced.
Before applying for an order, an officer will be required to take reasonable steps to discover who has an interest in the thing or document and notify them of the proposed application. The magistrate must then allow a person with an interest to appear and be heard in determining the application.
Fingerprint and photograph amendments
The bill will also amend the Crimes Act to provide the Australian Federal Police with a standing power to take fingerprints and photographs of persons in lawful custody. This will bring the Commonwealth into line with the majority of the states and territories by allowing the AFP to take fingerprints and photographs as part of the process of dealing with an arrested person.
The amendments will provide police with an efficient and reliable way of confirming the identity of suspects to assist in the management of suspects and offenders. It will also improve processes for establishing and maintaining records of arrested persons, which will in turn ensure that these records are admissible in court proceedings.
The amendments will only apply where the person has been arrested in relation to an offence that is punishable by a term of imprisonment of 12 months or more. This will ensure that fingerprints or photographs can only be taken in relation to offences which are generally considered to be serious or indictable and not in relation to minor offences.
Existing protections in the Crimes Act will continue to cover arrested persons, including provisions that ensure that the taking of identification material is properly authorised and that any material taken is destroyed if the person is not charged with an offence.
These amendments will not apply to other forms of identification material such as DNA.
AFP Special Payments
The bill will also amend the Australian Federal Police Act 1979 to allow the Australian Federal Police Commissioner to authorise a payment in special circumstances that arise out of, or relate to, a person’s engagement as an AFP employee. For example, where an AFP member is injured in the course of work while deployed overseas, the AFP Commissioner would be able to authorise the payment of costs involved in the spouse travelling overseas for such a purpose. The commissioner would also authorise a payment to the family of an AFP member who dies in the course of work.
This amendment will bring the AFP into line with the Commonwealth Public Service, and would avoid the delays presently faced by AFP employees when applying for payments.
Payments under the new AFP provision would be subject to the same conditions and limits as those authorised under the Public Service Act provision. Specifically, the payments would be limited to $100,000, and would be subject to any conditions attached by the AFP Commissioner.
Conclusion
The reforms in this bill reflect the government’s continuing commitment to strengthening our agencies’ capabilities to fight serious and organised crime.
This bill builds on a range of measures the government has already implemented to prevent, disrupt and investigate organised criminal activity.
I commend the bill to the House.
Debate (on motion by Mr Anthony Smith) adjourned.
I move:
That standing order 4 be amended as follows:
I am pleased to move this amendment to the standing orders today and to speak on this amendment. This amendment seeks to amend the standing orders to formalise the inclusion of an Indigenous welcome to country ceremony at the first meeting of a new parliament after a general election. This amendment represents the government’s implementation of recommendations made to it in an inquiry by the Procedure Committee.
The Rudd Labor government is committed to working with Aboriginal and Torres Strait Islander people to progress reconciliation, and it is a key element of the government’s objective of closing the gap in Indigenous disadvantage. The Rudd Labor government has invested in measures to support this commitment and reset the relationship with Aboriginal and Torres Strait Islander people.
The Rudd government’s commitment was shown when, in February 2008, as the first order of government business in the 42nd Parliament, the Prime Minister apologised to Australia’s Indigenous people for the treatment they received as a result of policies of previous federal governments. I note that the then Leader of the Opposition, the former member for Bradfield, Brendan Nelson, joined with the Prime Minister in that apology.
On 20 December 2007, even before the first sitting of this parliament, the Prime Minister and the government began work which was directed towards reducing Indigenous disadvantage when the Council of Australian Governments agreed to important Closing the Gap targets. These include: within five years, all Indigenous four-year-olds in remote Indigenous communities having access to a quality early childhood education program; within the decade, halving the gap in infant mortality, halving the gap in reading, writing and numeracy achievements by Indigenous children, and halving the gap in employment outcomes for Indigenous Australians; and, within a generation, at least halving the gap for Indigenous students in year 12 or equivalent attainment rates by 2015, and closing the gap in life expectancy between Indigenous and non-Indigenous Australians. With the leadership of the Prime Minister, these important targets were agreed upon to ensure that all governments are held to account for the progress and achievement of these goals. Since the agreement of the COAG targets and the national apology, all Australian governments have committed more than $4.6 billion in health, housing, early childhood and economic participation funding to achieve these goals.
The government has made progress. As at 11 June 2010, 100 houses have been completed under the National Partnership Agreement on Remote Indigenous Housing across Australia. A further 316 are underway, with an additional 422 refurbishments of existing homes in poor condition. By April 2010, nine new creches had been constructed in the Northern Territory, including at Lajamanu, Peppimenarti, Robinson River, Areyonga, Docker River, Papunya and Yarralin. Fifty-four child and maternal health services have been approved for funding, of which 46 are in operation. The Remote Air Services Subsidy Scheme is ensuring access for remote communities to these vital services.
Last year, as a result of extensive consultation with more than 100 remote Indigenous communities in the Northern Territory about the redesign of the Northern Territory Emergency Response, the Rudd government introduced legislation to the parliament to reinstate the Racial Discrimination Act in the Northern Territory, which had been suspended by the Howard government. I am pleased to say that this legislation has now carried the parliament. In the 2009-10 budget the Rudd government provided $10.8 million for the continued operation of Reconciliation Australia, to promote respectful relationships between Indigenous and non-Indigenous Australians. Reconciliation Australia leads community-level education and awareness about reconciliation, and encourages commitment to reconciliation at the corporate, school, organisational and individual levels. Additionally, the Reconciliation Action Plan program has been particularly successful amongst these sectors, with over 300 organisations signing on each year and commitments of around 2,000 new jobs for Indigenous people.
Being welcomed onto country by traditional owners is now acknowledged as an important gesture by many Australians. The Rudd government was pleased to have a welcome to country to open this parliament. That event received bipartisan support. This change to standing orders has bipartisan support. It is an important gesture to Indigenous Australians to acknowledge what is the oldest living culture on the planet. It is a matter of respect and it is something that should give pride to all Australians. We were indeed very proud to be members of the House of Representatives when the Prime Minister delivered the national apology on behalf of all Australians. This resolution will ensure that welcome to country has a formal place in the opening of all future parliaments, and I commend the motion the House.
I will not delay the valedictory speech of the member for Chifley unnecessarily, suffice to say the opposition will not be opposing this motion. I do make a couple of points. Firstly, it is quite unnecessary to include welcome to country in the standing orders as part of the opening of the parliament. As the Leader of the House mentioned, a welcome to country ceremony formed a part of the opening of this parliament, and it is a matter for the government how the ceremony for the opening of parliament should be conducted. Therefore, it is quite unnecessary to include it in the standing orders. It is the prerogative of the government to alter the standing orders if it so wishes, and to include matters that it thinks are important. That is what is happening with this particular motion.
The opposition does not raise any objection to this, but we would also make the point that, while the Leader of the House said that this was part of the important task of bridging the gap, I do not believe, and nor would many members of the opposition, that a welcoming ceremony at the opening of parliament will make the slightest difference to the health, education, employment, housing or welfare outcomes of Indigenous Australians. Given the circumstances, and that it is the prerogative of the government to introduce such a measure, we certainly would not be churlish enough to oppose it. We do not believe it will make any difference to the outcomes for Indigenous Australians in this country, but we are quite prepared to see it passed.
Question agreed to.
Bill returned from Main Committee without amendment, appropriation message having been reported; certified copy of the bill presented.
Ordered that this bill be considered immediately.
Bill agreed to.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
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 received from the Senate and read a first time.
Ordered that the second reading be made an order of the day for the next sitting.
I move:
That order of the day No. 1, government business, be postponed until a later hour this day.
Question agreed to.
Debate resumed from 13 May, on motion by Dr Emerson:
That this bill be now read a second time.
Before calling the member for Chifley, I understand it is the wish of the House that there should be no points of order taken during his contribution.
I start by thanking my family, who are in the gallery today. To my wife, Robyn: thank you for all your love and support and bringing our children up single-handedly! You have always been my rock and the love of my life. I appreciate that I have over 25 years worth of accumulated jobs to do around the house, but I beg of you not all in one year!
To our wonderful children, Michelle, Stephanie, Ben and Courtney and their partners, Jason, Scott and Katie: I cannot sufficiently convey the depth of joy and pride you inspire in us as your parents. Robyn and I are blessed to have wonderful grandchildren. To Kayleigh, Blake, Ellie, Braydon, Declan, Lachlan, Cody and Nathan, who could not be here: you are the light of our lives.
I also thank my mum, who is at St Hedwig’s home, and my late father, who may have been somewhat eccentric—this may go some way towards explaining my own behaviour! I used to joke that I had my in-laws about as close as I wanted them in Perth, Western Australia, but I very much miss Ruth and Jim Moloney, who have passed on. Our families exaggerate our successes, cushion our disappointments and often unfairly bear the brunt of any adverse publicity. Where and what would we be without them?
Our staff make us look better than we really are. I have too many to be able to name them here, but in my electorate I thank Rose Maccarone, David Field, Nicole Seniloli and Barbara Williams. Barbara has been with me for 10 years. I also thank all my former staff. In Canberra I thank Anna George—who everyone knows runs the show—Joy Brogan and Matthew Tredwell. The whip’s office can sometimes get a little willing, and Anna is a sea of calm. Anna is a magnet for the caucus children, and I sometimes wonder how we get any work done at all!
I have worked very closely with Jill Hall throughout my time as whip, and she has provided me with invaluable advice and support on a whole range of issues. I also thank Michael Danby, who was our deputy whip when we were in opposition, and Chris Hayes, who is our deputy whip in government. We have been a whips team. Jill and Chris run the second chamber, still confusingly called the Main Committee, and I thank them and their staff.
It has been a privilege to serve the caucus and leader as Chief Government Whip. As Chief Opposition Whip you work closely with the Manager of Opposition Business, and as Chief Government Whip you work closely with the Leader of the House. I thank Julia Gillard in her former role as Manager of Opposition Business and especially her successor in government, Anthony Albanese, for the opportunity to work closely with them. I thought Anthony and I made a pretty good team as leader and whip. I also mention Jo Haylen, his right-hand person.
I very much enjoyed working with Kim Beazley when he was leader again in 2005. I commend the Leader of the House for moving on the very first sitting day of this government the motion to provide proxy voting by the chief whips for nursing mothers who are members of parliament. If anything denotes the change in this parliament since its inception as an old men’s club, it is this resolution.
I also thank Henry Thomson, the PLO, and his team. They seamlessly keep the legislation flowing into the chamber as well as to the occasional minister! I thank my counterparts, Kerry Bartlett and now Alex Somlyay. Whips constantly make handshake agreements and our word is our bond. We also deal with the human side of the parliament and face common challenges.
When I was first elected in 1984 the parliament had been expanded. New temporary accommodation had been provided in the rose gardens with the building of a covered walkway. This was intended for the new members, of whom I was one, but as these suites were considerably larger than the dog boxes in Old Parliament House they were snapped up by the more senior members. It was my first brush with seniority, but I have always been pleased that I spent some time in the old parliament building.
The flashiest bit of equipment members were provided with was an electric IBM typewriter. But I was determined to be ahead of the game and brought in my apple 2E computer, which had about as much memory as a modern day calculator. I eventually bought an interface for about $1,000 to connect the computer to the electric typewriter. This allowed me to produce about 300 letters at a time, which took a couple of days and produced a wondrous noise throughout. I used my computer for the Bass by-election when Neville Wran resigned and happily got the result out ahead of time. Unfortunately, though, we lost the seat of Bass in that by-election. Eventually we were provided with computers in both our electorate offices and Parliament House, although we had incompatible word-processing software. One of the word-processing packages was, by the way, called ‘whips’.
Speaker Joan Child, as she then was, appointed me as the inaugural Chair of the Presiding Officers Information Technology Advisory Group and later the inaugural Chair of the Parliamentary Education Office Advisory Committee. Prior to entering parliament, I was employed by Telstra and had resisted the invitation to become involved in communications. That did not last long, and I was involved in a minor deregulation with John Saunderson and Knockers—Neil O’Keefe—while working for former Minister Gareth Evans. We were known as the gang of three. My job was to ensure that Knockers did not stray over to John, and I was mostly successful.
In 1991, I was appointed to chair the Ministerial Advisory Committee on Telecommunications Reform, which comprised all sections of the industry. I was proud of the fact that we were able to achieve consensus and I wrote the industry paper. Kim Beazley sent me all around the country to address meetings of union delegates and the Western Australian state caucus. The experience was most character forming.
I never did make the front bench but was appointed Bob Hawke’s parliamentary secretary. It was not the happiest of times for Labor, but my appointment was an extraordinary privilege. When Paul Keating was elected Prime Minister, I was appointed Parliamentary Secretary to the Minister for Defence, Robert Ray. Working in Defence was no doubt the happiest period of my career. The industry report we produced in record time was warmly welcomed, but I fear never implemented—perhaps because it was warmly welcomed!
I have always enjoyed parliamentary committees, which generally reveal the best side of members of parliament, irrespective of their party affiliation. The first committee I ever chaired was the Standing Committee on Employment, Education and Training, which was somewhat ironic given that my parents were invited to withdraw me in 5th year—or year 12 today. It sounds so much nicer to say that, rather than that you were expelled. The restless years, which was about retention rates, and Student financial assistance were two reports I was proud of. For the latter report, we commissioned cartoons to enliven what could have been a somewhat turgid report.
Two of the reports by the Defence Subcommittee I set great store on were From phantom to force, a radical report restructuring the Army, and that of the Military after next inquiry into officer training. Bronwyn Bishop still calls it ‘that dreadful Price report’. The Human Rights Subcommittee report on detention centres followed up on one by the Joint Committee on Migration, which did not contaminate their findings by interviewing detainees. The report caused a furious attack on coalition members of the committee by Minister Ruddock. It did lead to the closure of the notorious punishment Juliet Block at Port Hedland, whose existence the department had vigorously denied. I hope one day to see all the in camera evidence taken by the committee made public.
I have been involved in a number of inquiries concerning child support and family law, and chaired one of them. Kevin Andrews and Belinda Neal served on that committee. We set up a hotline to the committee in my room manned by committee members and staff. The telephone traffic was so great that the stand-by PABX lit up like a Christmas tree and the trunk lines from WA were totally congested. We brought down an interim report, Thanks for listening, which was a common theme from all corners.
It is important for members of parliament to see things for themselves and listen to the views of their constituents. I have always tried to do that. Some time ago I was a recipient of some unexpected advice from an environmentalist in a letter dropped in my letter box:
Mr Price
What are you doing with the manure? It’s good for your plants but bad for the people around the area to inhale the rotten smell & also polluting the environment, don’t you know that it is damaging the ozone layer, you should know that.
You are a politician with no brains. Why don’t you get the manure and stick it right up your fat arse you stupid politician.
Well, naturally I did object to the use of the word ‘fat’ and I thought the suggestion somewhat impractical.
You are often asked what is your best achievement for your electorate. I would nominate the campaigns with Richard Amery MP and others to have a public senior high school firstly at St Marys and then at Mount Druitt, and the establishment of the University of Western Sydney after the then state Labor minister said we would never get one.
I would describe myself and Con Sciacca as early adopters as far as the member for Griffith is concerned. I have been on an incredible journey to see him elected first as Leader of the Opposition and then in 2007 win the federal election against a formidable opponent. I would like to thank the PM and Therese for their friendship and for the opportunity to be a small part of the support team. The Rudd government has been a good one and I am in awe of the tremendous job that the Prime Minister and the team performed in getting Australia through the world economic crisis. I am chuffed at the tremendous impact Building the Education Revolution is having on government and non-government schools in my electorate.
I was delighted that the last opening of the parliament saw the first Indigenous welcome, which, given what the Leader of the House has just done, will be a part of every opening of the parliament, as well as the apology to the stolen generations. Both were highly emotionally charged and moving events. I could go on. We have a good ministry and a very talented backbench, none better in my opinion than the classes of 2004 and 2007.
I need to thank my Chifley Labor Party members for their tremendous steadfast support, encouragement throughout my time and their forbearance when they did not agree with me. There are so many to thank but I mention Tom Kenny, secretary of the FEC, who has held that position for more years than I care to remember. I would also like to thank the community, who are proud and very direct people and who, in my opinion, are the salt of the earth. The Indigenous elders have been very kind to me. I cannot mention them all—Uncle Wes and Uncle Greg and Aunty Gloria and Aunty Mavis to mention just a few—but I thank them all. I thank the Holy Family parish and in particular Father Paul Hanna and Coral McLean. You provided inspiration and a spiritual well which I dipped into frequently. I think I can have a glass of water now! I thank my group for the opportunities I have had and I thank Senator Forshaw as we have worked well together supporting each other for a long time. There are many people who assist us in our work—the cleaners, the gardeners, Comcar drivers, the clerks and officers of the parliament—and I thank you all.
I have spent the majority of my time in government and served under three Labor prime ministers, a rare privilege for a Labor member. They say if you want a friend in politics get a dog. I have formed friendships here but I will not out them—and I did it without acquiring a dog. As I bid you farewell I hope that I have left the odd footfall and fingerprint to signify that Price was here. If it is said that I was a good bloke, a good Labor man and a good member I am well satisfied. As a long chapter in my life draws to a close I face a new one undaunted. Thank you all for the journey.
Debate (on motion by Mr Albanese) adjourned.
Debate resumed from 26 May, on motion by Mr Bowen:
That this bill be now read a second time.
In continuation, the measures in the Tax Laws Amendment (2010 Measures No. 3) Bill 2010 apply to the most severely disabled people in the country. The one thing they and their families should be able to rely on is assistance from the Commonwealth and at least clear, unambiguous tax treatment of the one device available to assist families to make preparation for the future care of their dependants. The disability community has fought hard for change and has come to welcome any relief and assistance. Although this bill provides slight relief in the tax treatment of special disability trusts, it fails the test of clarity.
Administration of the trusts is so complex, I have been told, that major trustee organisations such as Perpetual Trustees will not manage them. For instance, money can be used from the fund for expenses related to the beneficiary’s medical care but not for ordinary household maintenance. When put into practice, this means power bills cannot be paid from trust funds but recharging an electric wheelchair can, so the trustee must determine the precise individual power units used to charge a chair and contribute from the trust that exact amount to the power bill. As a concept, special disability trusts are a worthwhile vehicle for carers to ensure that their dependants have the care and accommodation they require to live their lives. But the criteria surrounding such trusts have made them complex and impractical. We must approach the subject with a renewed focus and keep foremost in this debate the individuals whose lives are affected.
The bill before us will extend the allowable uses of trust funds to the maintenance of special disability trust properties, which will avert some of the problems, such as that just described, in administering the trusts. But there is a slight difference between a recommendation made by the Senate and the proposal in this bill. Recommendation 6 of the Senate Standing Committee on Community Affairs report advocates for a broader allowable application of funds, being day-to-day expenses which maximise the beneficiary’s health, wellbeing, recreation and independence—not just their maintenance.
The importance of this distinction is highlighted in a recent appeal by Mr Brian Broughton as trustee of his daughter’s special disability trust. In evidence to the Social Security Appeals Tribunal, correspondence between Mr Broughton and Centrelink regarding authorised expenditure shows that Centrelink strictly applied the definition of maintenance costs. It raises the question: is the definition of maintenance wide enough to encompass positive changes to a special disability trust property that other homeowners can carry out? Can trust funds be used to create a garden or an extension that previously did not exist? It can be argued that such improvements would maximise the beneficiary’s wellbeing or independence but strictly would not be maintenance as the items did not previously exist. Whether such a narrow view is adopted will largely depend on the guidelines issued to Centrelink as to what are accepted expenditures. As a matter of common sense, I would urge that the guidelines issued adopt the widest possible meaning.
Related to recommendation 6 of the report is the government’s intention to create a discretionary spending category. Up to $10,000 a year can be spent on any miscellaneous items for the beneficiary. In part, it circumvents the current prescriptive ‘allowable uses’. The change is welcome, but there appears to be no rationale for the limit. The Senate’s recommendations do not mention any such limit. In fact, with recommendation 6 the Senate has essentially endorsed that any day-to-day expense, as long as it is constructive for the beneficiary, should be allowed.
Flexibility to meet the needs of the beneficiary should remain core to the policy, and I worry that this arbitrary figure will constrain the beneficiary, especially as there is no mention of it being indexed. It is quite possible that the figure is designed to limit the potential losses in what would be a very rare case of a trustee misusing funds. The trustee’s expenditure of SDT moneys, though, is overseen by Centrelink, with, as I understand it, comprehensive audits at least once a year. The potential for misuse of funds is minimal. Flexibility for a trustee to expend funds to care for the beneficiary in the manner they believe best should outweigh the unlikely possibility of abuse. The government should ensure that the $10,000 cap is at least indexed, or increased, if not entirely removed.
Taxation of the trust’s income is another area of discontent. Ray Walter, a passionate campaigner for disability equality, points out that all funds contributed to the trust by family members are after tax. He contends that taxing the money again is simply double dipping. The intention of the fund is to maximise its growth to cover the ever-increasing cost of health care and living expenses, relieving the public purse. Stunting the trust’s growth through taxing already taxed money is antithetical to its concept. Exempting SDTs from tax, at least until after the winding up of the trust following the death of the beneficiary, would certainly help the long-term growth of funds.
Currently, funds distributed to the beneficiary are taxed at the applicable marginal rate, and unexpended income retained by the trust is taxed at 46.5 per cent. The current model has been rightly recognised as too harsh, and the report recommended that unexpended income should be taxed at the individual’s marginal tax rate. The concept of taxing unexpended trust funds at a marginal rate has been widely endorsed, but the mechanics of bringing about this change have created a great deal of uncertainty.
A discussion paper released by Treasury on taxing special disability trusts details the proposed methodology of assessing both the individual and the trust’s tax. First, the net income of the trust, whether expended or not, is worked out at the appropriate marginal rate. This is payable by the trustee. Then the individual combines any personal income with the net trust income and claims an offset for the tax payable by the trust. When the tax-free threshold is factored in, plus other low-income offsets, the situation becomes more confusing. To make matters worse, only the first of the discussion papers actually computed the amount of tax payable, albeit in a puzzling manner. The discussion papers released since do not work out the actual tax payable or even mention tax-free thresholds. Example workings from my office have been sent to Treasury in an effort to determine how the tax will actually apply. Frankly, we are unsure whether the individual will be burdened by more tax or the situation will be improved.
But perhaps the most devastating financial pitfall of the trust is the application of capital gains tax. A trust may purchase a property for the beneficiary to live in, but, if the property is found to be unsuitable and sold, the beneficiary’s principal place of residence is subject to capital gains tax, as it is held in the trust. Bear in mind that these are the most disabled people in our community, who in most cases cannot manage their own affairs. Even transferring a property into a trust exposes the transferrer to capital gains.
A potent example is that of Kevin and Olive McGarry, living in Kardinya in WA. The couple previously purchased a property for their disabled daughter to live in when the time came that they could no longer care for her. The self-funded retirees have been hit by the global financial crisis and need income support. But, as the second house intended for their daughter is held in their names, they exceed the asset test and are ineligible for financial assistance. Transferring the property to a disability trust for their daughter would allow Kevin and Olive to claim support so they can meet their own day-to-day needs, but it would also leave them with a liability to pay $45,000 in capital gains tax—a bill they cannot afford. To get by, the option they are faced with is selling the home so they can diligently invest for their daughter’s future.
The McGarry’s situation is not the only example. Mr O’Hart, also from WA, bought a property, in his name and his wife’s name in 1988, for their severely disabled daughter to live in. To transfer that property into a special disability trust, an accountant has calculated that Brian and Jean O’Hart will both be liable to pay over $63,000 in capital gains tax—a total of more than $126,000—to simply swap a name. Brian and Jean are self-funded retirees. The cost of transferring the property is prohibitive. But they are extremely worried about ensuring their daughter has appropriate accommodation in the future.
Affected trustees and family members of disabled individuals have described the situation to me as perverse and unfathomable. The Building trust report specifically mentions the adverse application of capital gains tax. Recommendation 5 calls for a property transferred into a special disability trust to be exempt from capital gains. I echo the words of Ray and Wendy Walter in their submission to the inquiry, where they ask:
Do you believe it is fair, just and reasonable that some people with disabilities have been singled out to be the only members of our community to pay Capital Gains Tax on the sale of their place of residence?
The reforms before this House today represent only a handful of the changes that carers and trustees have been calling for. In its report, the Senate highlights a number of further areas in need of reform. Recommendation 8, for example, calls for the first home owner grant to be applicable to properties bought by a special disability trust. As many beneficiaries have no testamentary capacity due to their disability, they are unable to purchase a property in their own name and therefore are unable to receive the grant. Allowing first home owner grants to be extended to beneficiaries would remedy the inequality. But so far no indication has been given that this will be pursued. As I said in my speech at the beginning last night, this is positively discriminating against people with a disability, and I think it is a very unsatisfactory state of affairs.
Similarly, special disability trust beneficiaries are not eligible for other benefits afforded to first home buyers, such as home saving accounts. Although not specifically mentioned in the Senate recommendations, there is no reason why people with a disability should be excluded from these measures simply because the money is held in a trust. Special disability trusts were envisaged to help the beneficiary, and I do not think it was ever intended that they should exclude measures available to those in the wider community without a disability.
Recommendation 7 of the Senate report also calls for unexpended funds from the special disability trusts to be able to be contributed towards superannuation. The recommendation does not suggest the measure to be mandatory, giving trustees the flexibility to determine whether it is suitable for the individual’s circumstances. We should find a way to accommodate ways so that people with a disability can contribute to their superannuation through the trust system.
In closing, I would like to recite the words of Ray and Wendy Walter, from their submission to the Senate inquiry. They say:
Working together we believe we can find the best possible solutions to provide a better quality of life for those members of the community with a disability.
The removal of the barriers … we believe can be done at little … cost to the Commonwealth and would be a huge step forward … bringing hope and providing some peace of mind to families who can see little light at the end of—
a very dark—
tunnel …
I look forward to working with my colleagues in this House to promote greater changes for the benefit of people with a disability. (Time expired)
First of all I would like to thank those members who contributed to this debate on the Tax Laws Amendment (2010 Measures No. 3) Bill 2010. In particular I appreciate the contribution of the member for Pearce. The amendments contained in schedule 1 will freeze indexation of the superannuation co-contribution income thresholds for a period of two years. They will also permanently maintain the co-contribution matching rate at 100 per cent and the maximum co-contribution payable at $1,000. These changes will generate budgetary savings while at the same time maintaining a generous dollar-for-dollar incentive for low- to middle-income individuals to make additional voluntary contributions to superannuation. These changes should also be seen in the context of the new low-income earners government contribution, which will directly boost the retirement savings of individuals on incomes of up to $37,000 through a contribution of up to $500.
Schedule 2 amends division 820 of the Income Tax Assessment Act 1997 to adjust the thin capitalisation calculations for authorised deposit-taking institutions. In January 2005 Australia amended its accounting standards by adopting the Australian equivalent to International Financial Reporting Standards. This had flow-on tax and prudential consequences for authorised deposit-taking institutions. Transitional provisions have applied to insulate authorised deposit-taking institutions’ thin capitalisation calculations from these changes by allowing such entities to elect to use the accounting standards that applied immediately before January 2005.
These amendments effectively continue that transitional treatment for three types of assets. They are treasury shares, the business insurance asset known as the EMVONA asset, which is the excess market value over net assets, and capitalised software costs. This measure formed part of the government’s 2009-10 budget announcement and achieves the government’s specific objective of clarifying the operation of the law in this area and more generally reducing compliance costs and improving the tax law.
Schedule 4 amends the Taxation Administration Act 1953 to empower the Director-General of Security and the Director-General of the Australian Secret Intelligence Service to declare that Commonwealth tax laws do not apply to specified transactions in relation to specified entities if they are satisfied that is necessary for the proper performance of their agency’s functions. These amendments remove the possibility of conflicts arising between Australia’s national security interests and obligations imposed by Commonwealth tax laws.
A declaration has the effect of preventing tax liabilities, obligations and benefits from applying in relation to the specified transactions. Therefore, there will be no obligation to provide information about those transactions to the tax authorities and no requirement for tax authorities to seek that information. Consequently, information that bears on the operational activities of Australia’s security and intelligence agencies will not be disclosed. Exercise of this power will, of course, be overseen and validated by the Inspector-General of Intelligence and Security, who will report on an annual basis to the Parliamentary Joint Committee on Intelligence and Security.
The amendments in schedule 4 deliver on the government’s commitment to help support people with severe disabilities, their families and carers. This measure will help families and carers to provide financially for the care and accommodation needs of people with a severe disability. Under the new arrangements, the unexpended income of a special disability trust is taxed at the principal beneficiary’s personal tax rate rather than automatically at the top personal tax rate plus the Medicare levy. These amendments are part of the government’s broader response to the treatment of special disability trusts. I note that the member for Pearce was talking on a range of matters concerning this legislation, not all to do immediately with this schedule but to do with her general concerns that not enough is being done to improve the operation of special disability trusts. I personally have some sympathy for her observations, and I thank her for her contributions in the past to improve the workings of these operations. I also note that she wrote to the Walter family, and I too thank the Walter family for the work they have done. I recognise that more needs to be done in this area to improve the operation overall of special disability trusts.
However, some of the other parts of the government’s response include broadening the eligibility requirements for beneficiaries, extending the allowable uses for the trust and granting a capital gains tax exemption for main residences. With these measures we want to make it easier for parents, friends and carers to support a person with a disability. We are aware of the enormous burden carried by families and carers in this country and how heavily our social obligation to care for people with a disability falls upon this dedicated group. Carers, particularly those who look after an adult child with a disability, are often described as ‘saints’ or with the phrase ‘I don’t know how they do it’. I would like to suggest that they are not saints. They are just ordinary people who do an amazing job out of a DNA-hardwired love and out of the knowledge that, if they do not do it, it will not get done.
This government has increased the amount it pays to carers, but I acknowledge that this is still just an early improvement and that the desperation and need is still out there. In fact, the 2005 Australian Institute of Health and Welfare analysis of the Commonwealth, State and Territory Disability Agreement funded services revealed a high level of unmet need. Noting that its estimate of community access to services was conservative, the analysis found that unmet need for accommodation and respite services was 23,800 people and unmet demand for community access services was 3,700 people. I do believe that they are conservative numbers. I also believe that it is appropriate to continue to try and improve the operation of special disability trusts to reward people who choose or who have the capacity to invest in the future of their adult child with severe or profound disabilities and that action in itself actually supports the distribution of the remaining funds available for disability services to those whose families are not in the same position to assist their loved ones themselves.
The vast reservoir of goodwill and love possessed by carers has helped Australia cope up until now, but I do recognise that there is a limit to human endurance. There are 1.5 million people in Australia with a severe or profound disability and there are nearly 500,000 people who are full-time carers of a person with a disability. Demographers predict that the number of people with disability will rise to 2.3 million by 2030, while the number of carers drops. Our current systems are a scattered patchwork and are too often constrained by rationed budgets rather than the actual needs in the community. I recognise the work of the previous government and former Minister Patterson in creating special disability trusts, but this government did also recognise upon election to office that the take-up had been very small. We have made some modest changes, which were the source of considerable debate, and the schedule will reflect some of those changes.
I also happen to believe that a national disability insurance scheme, which the Rudd government has asked the Productivity Commission to investigate, may offer the hope for a better system which intervenes earlier, which provides services when they are needed and which gives long-term certainty to parents and carers of a person with a disability. That anxiety which ageing carers and parents face of wondering who will look after their adult child with significant needs is not a question which can be satisfactorily answered at this stage by the nation. We are currently spending, at all levels of government, over $22 billion on disability services, payments to carers and the Disability Support Pension. I do not believe that we are getting sufficient value for the money. We are paying a lot of money for an inefficient system. Whilst I do not believe that amount of money should be reduced, I do believe we can do better with it. We need to see whether more timely interventions can be made to improve the quality of the lives of people with a disability and their families. It will be up to the Productivity Commission to independently crunch the numbers on this scheme to see whether it is indeed feasible or possible, but I do believe the principle of some kind of insurance scheme for people with a disability is the best chance. We have to improve a system that will provide real support for the growing number of people with disability in this country.
Of course a disability trust, as I have said earlier, is not an appropriate solution for all families but, for those who can take advantage of them, this bill is important. One of the most difficult aspects, as I have said, for a parent who is caring for an adult child with a serious developmental delay is not knowing what will happen to their child, whom they love, when the carer dies or when the carer is no longer able to provide the care required. It is not to our credit as a nation that we cannot guarantee the answer to that question. To make it easier for families to provide some stability and some certainty for the future through a disability trust is one of the good things which is achieved by this bill. We will certainly study very carefully the contribution of the member for Pearce and those families who have worked hard to improve the operation of the special disability trust to see what further work is required.
Turning to schedule 5, it amends the definition of a managed investment trust, or MIT, to more closely align the definition of withholding tax with the definition of the MIT capital account treatment. This measure extends the definition of an MIT to cover certain wholesale managed investment schemes and government owned managed investment schemes, commonly referred to as wholesale funds. The definition will apply for the purposes of the MIT capital account election rules recently passed by this parliament. The amendments will ensure that the rules apply appropriately to both retail funds and wholesale funds that are widely held collective investment vehicles undertaking passive investments while ensuring that any changes to the definition for withholding tax purposes do not unfairly disadvantage existing investors and funds. These amendments will support the Australian funds management industry by limiting the operation of the MIT withholding tax rules to funds that carry out their investment management activities in Australia. The changes made by this schedule are in line with the government’s objective to secure Australia’s position as a pre-eminent financial services centre. This bill deserves the support of the parliament. I commend the bill to the House.
Question agreed to.
Bill read a second time.
Bill—by leave—taken as a whole.
by leave—I present a supplementary explanatory memorandum and move government amendments (1) to (20), as circulated, together.
(1) Schedule 5, item 4, page 14 (lines 22 to 24), omit paragraph 12-400(1)(c), substitute:
(c) a substantial proportion of the investment management activities carried out in relation to the trust in respect of all of the following assets of the trust are carried out in Australia throughout the income year:
(i) assets that are situated in Australia at any time in the income year;
(ii) assets that are *taxable Australian property at any time in the income year;
(iii) assets that are *shares, units or interests listed for quotation in the official list of an *approved stock exchange in Australia at any time in the income year; and
(2) Schedule 5, item 4, page 14 (line 28) to page 15 (line 19), omit paragraphs 12-400(1)(e) and (f), substitute:
(e) at the time the payment is made:
(i) the trust is covered by section 12-401 (trusts with wholesale membership); or
(ii) if the trust is not covered by section 12-401—the trust is registered under section 601EB of the Corporations Act 2001; and
(f) the trust satisfies, in relation to the income year:
(i) if, at the time the payment is made, the trust is registered under section 601EB of the Corporations Act 2001 and is covered by section 12-401—either or both of the widely-held requirements in subsections 12-402(1) and 12-402A(1); or
(ii) if, at the time the payment is made, the trust is so registered and is not covered by section 12-401—either or both of the widely-held requirements in subsections 12-402(1A) and 12-402A(1); or
(iii) if, at the time the payment is made, the trust is not so registered and is covered by section 12-401—the widely-held requirements in subsection 12-402(1); and
(g) the trust satisfies the closely-held restrictions in subsection 12-402B(1) in relation to the income year; and
(h) if the trust is covered by section 12-401 at the time the payment is made—it satisfies the licensing requirements in section 12-403 in relation to the income year.
(3) Schedule 5, item 4, page 16 (lines 18 and 19), omit “paragraph (1)(e) and subparagraph (1)(f)(i)”, substitute “paragraphs (1)(f) and (g)”.
(4) Schedule 5, item 4, page 16 (line 20), omit paragraph 12-400(4)(a), substitute:
(a) the trust is created during the period:
(i) starting 6 months before the start of the income year; and
(ii) ending at the end of the income year; or
(5) Schedule 5, item 4, page 16 (line 24) to page 17 (line 13), omit section 12-401, substitute:
12-401 Trusts with wholesale membership
A trust is covered by this section at a time if, at that time:
(a) the trust is not required to be registered in accordance with section 601ED of the Corporations Act 2001 (whether or not it is actually so registered) because of subsection 601ED(2) of that Act (no product disclosure statement required) or because it is operated or managed by an entity covered by subsection 12-403(2) (Crown entities); and
(b) the total number of entities that had become a *member of the trust because a financial product or a financial service was provided to, or acquired by, the entity as a retail client (within the meaning of sections 761G and 761GA of the Corporations Act 2001) is no more than 20; and
(c) the entities mentioned in paragraph (b) have a total *MIT participation interest in the trust of no more than 10%.
(6) Schedule 5, item 4, page 17 (line 14), omit “for unregistered MIS”, substitute “ordinary case”.
(7) Schedule 5, item 4, page 17 (lines 15 to 25), omit subsection 12-402(1), substitute:
(1) The trust satisfies the requirements in this subsection in relation to the income year if, at the time the payment mentioned in paragraph 12-400(1)(a) is made, the trust has at least 25 *members.
(1A) The trust satisfies the requirements in this subsection in relation to the income year if, at the time the payment mentioned in paragraph 12-400(1)(a) is made:
(a) units in the trust are listed for quotation in the official list of an *approved stock exchange in Australia; or
(b) the trust has at least 50 *members (ignoring objects of a trust).
(8) Schedule 5, item 4, page 17 (line 26), omit “paragraph (1)(a)”, substitute “subsection (1) and paragraph (1A)(b)”.
(9) Schedule 5, item 4, page 18 (lines 1 to 4), omit subparagraphs 12-402(2)(c)(i) and (ii), substitute:
(i) work out the *MIT participation interest in the trust of each entity mentioned in subparagraph (a)(ii); and
(ii) for each of those entities, multiply the total of its MIT participation interest in the trust by 50 and round the result upwards to the nearest whole number; and
(iii) work out the total of the results of subparagraph (ii) for all of those entities;
(10) Schedule 5, item 4, page 18 (line 7), omit “This section”, substitute “This subsection”.
(11) Schedule 5, item 4, page 18 (lines 16 to 19), omit paragraph 12-402(3)(e), substitute:
(e) an entity that is recognised under a *foreign law as being used for collective investment by means of pooling the contributions of at least 50 members of the entity as consideration to acquire rights to benefits produced by the entity, if the members of the entity do not have day-to-day control over the operation of the entity;
(f) an entity, the principal purpose of which is to fund pensions (including disability and similar benefits) for the citizens or other contributors of a foreign country, if:
(i) the entity is a fund established by an *exempt foreign government agency; or
(ii) the entity is established under a foreign law for an exempt foreign government agency; or
(iii) the entity is a *wholly-owned subsidiary of an entity mentioned in subparagraph (i) or (ii);
(g) an investment entity that satisfies all of these requirements:
(i) the entity is wholly-owned by one or more *foreign government agencies, or is a wholly-owned subsidiary of one or more foreign government agencies;
(ii) the entity is established using only the public money or public property of the foreign government concerned;
(iii) all economic benefits obtained by the entity have passed, or are expected to pass, to the foreign government concerned;
(h) an entity established and wholly-owned by an *Australian government agency, if the capital of the entity, and returns from the investment of that capital, are used for the primary purpose of meeting statutory government liabilities or obligations (such as superannuation liabilities and liabilities arising from compensation or workcover claims);
(i) an entity of a kind similar to an entity mentioned in the preceding paragraphs of this subsection as specified in the regulations.
(12) Schedule 5, item 4, page 18 (lines 26 to 32), omit paragraph 12-402(4)(b), substitute:
(b) do not treat an object of the trust as a member of the trust;
(ba) if the trust is mentioned in subparagraph 12-400(1)(e)(i) (trusts with wholesale membership)—do not treat an individual as a member of the trust (other than an individual who became a member of the trust because a financial product or a financial service was provided to, or acquired by, the individual as a wholesale client (within the meaning of section 761G of the Corporations Act 2001));
(13) Schedule 5, item 4, page 18 (lines 36 and 37), omit “For the purposes of subparagraph (1)(b)(i) and subsection (4), apply these rules”, substitute “The rules are as follows”.
(14) Schedule 5, item 4, page 19 (after line 13), after section 12-402, insert:
12-402A Widely-held requirements for registered MIT—special case for entities covered by subsection 12-402(3)
(1) The trust satisfies the requirements in this subsection in relation to the income year if:
(a) one or more entities covered by subsection 12-402(3) have a total *MIT participation interest in the trust of more than 25% at the time the payment mentioned in paragraph 12-400(1)(a) is made; and
(b) at no time in the income year does an entity (other than an entity covered by subsection 12-402(3)) have a MIT participation interest in the trust of more than 60%.
(2) For the purposes of paragraphs (1)(a) and (b):
(a) if:
(i) an entity covered by subsection 12-402(3) has a *MIT participation interest (the first interest) in the trust; and
(ii) another entity covered by subsection 12-402(3) also has a MIT participation interest (the second interest) in the trust;
disregard the second interest to the extent that it arises through the existence of the first interest; and
(b) if an entity that is not a trust has a MIT participation interest in the trust because it holds interests in the trust indirectly, through a *chain of trusts—do not treat a trust in the chain of trusts as having a MIT participation interest in the trust.
(3) For the purposes of paragraph (2)(b), treat an entity covered by subsection 12-402(3) as an entity that is not a trust.
(4) For the purposes of paragraphs (1)(a) and (b), apply the rules in subsection 12-402(6).
(15) Schedule 5, item 4, page 19 (after line 13), after proposed section 12-402A, insert:
12-402B Closely-held restrictions
(1) The trust satisfies the requirements in this subsection in relation to the income year unless, at any time in the income year, any of the following situations exist:
(a) for a trust mentioned in subparagraph 12-400(1)(e)(i) (trusts with wholesale membership)—10 or fewer persons have a total *MIT participation interest in the trust of 75% or more;
(b) if paragraph (a) does not apply—20 or fewer persons have a total MIT participation interest in the trust of 75% or more;
(c) a foreign resident individual has a MIT participation interest in the trust of 10% or more.
(2) For the purposes of paragraphs (1)(a) and (b):
(a) if an entity covered by subsection 12-402(3) has a *MIT participation interest in the trust—treat that entity as not having a MIT participation interest in the trust; and
(b) if an entity that is not a trust has a MIT participation interest in the trust because it holds interests in the trust indirectly, through a *chain of trusts:
(i) if the entity is covered by subsection 12-402(3)—do not treat it as having a MIT participation interest in the trust; and
(ii) do not treat a trust in the chain of trusts as having a MIT participation interest in the trust.
(3) For the purposes of paragraph (2)(b), treat an entity covered by subsection 12-402(3) as an entity that is not a trust.
(4) For the purposes of paragraphs (1)(a) and (b), apply the rules in subsection 12-402(6).
(16) Schedule 5, item 6, page 20 (line 32) to page 21 (line 5), omit subitem (2).
(17) Schedule 5, item 6, page 21 (line 6), omit “(3) The amendments made by this Schedule”, substitute “(2) Subject to items 7 and 8, the amendments made by this Schedule”.
(18) Schedule 5, item 6, page 21 (line 10), omit “(4) The amendments made by this Schedule”, substitute “(3) Subject to items 7 and 8, the amendments made by this Schedule”.
(19) Schedule 5, page 21 (after line 12), at the end of the Schedule, add:
7 Transitional—trusts that were managed investment trusts etc. for income year starting before 26 May 2010
(1) This item applies if:
(a) apart from this item, a trust is not a managed investment trust in relation to an income year; and
(b) the income year is the 2010-11, 2011-12, 2012-13, 2013-14, 2014-15, 2015-16 or 2016-17 income year.
(2) The trust is a managed investment trust in relation to the income year if:
(a) the trust is a managed investment trust (within the meaning of section 12-400 in Schedule 1 to the Taxation Administration Act 1953 immediately before the commencement of this Schedule) in relation to the income year; and
(b) in relation to an income year starting before 26 May 2010, the trust:
(i) was a managed investment trust (within that meaning); or
(ii) would have been a managed investment trust (within that meaning) if the trustee of the trust had made the first fund payment in relation to the income year in that income year and before 26 May 2010.
(20) Schedule 5, page 21 (after line 12), at the end of the Schedule, after proposed item 7, add:
8 Transitional—substituted accounting periods
(1) This item applies if the first income year mentioned in subitem 6(1) starts after the first 1 July after the day on which this Act receives the Royal Assent.
(2) For the purposes of working out liabilities to pay amounts in accordance with Subdivision 840-M of the Income Tax Assessment Act 1997, apply the following rules:
(a) treat the income year of an entity (the actual income year) ending immediately before that first income year as being the following 2 income years of the entity:
(i) an income year (the first notional income year) that starts at the start of the actual income year and ends immediately before that 1 July;
(ii) an income year (the second notional income year) that starts on that 1 July and ends at the end of the actual income year;
(b) do not apply the amendments made by this Schedule in determining whether the entity is a managed investment trust in relation to the first notional income year;
(c) apply the amendments made by this Schedule in determining whether the entity is a managed investment trust in relation to the second notional income year;
(d) for the purposes of determining rates of taxation applicable for the purposes of that Subdivision, treat the first notional income year and the second notional income year as both being the income year following the first income year mentioned in subparagraph 4(1)(a)(i) of the Income Tax (Managed Investment Trust Withholding Tax) Act 2008.
These amendments will deliver more certainty around the definition of a managed investment trust by clarifying the operation of the rules, taking into account general financial sector industry practice. Doing so will advance the government’s commitment to secure Australia’s place as a leading financial services centre in the region and more generally improve the competitiveness of the Australian funds management industry by making the reduced withholding tax rates available on distributions from a wider range of funds. These changes will ensure that, while continuing to attract and retain foreign capital, the Australian funds management industry will continue to be supported and enhanced.
This objective is achieved through a number of targeted amendments. Firstly, a substantial proportion of the investment management activities undertaken in relation to the assets of the fund connected with Australia are now required to be carried out in Australia. That is in amendment 1. Secondly, amendments (2), (5), (7), (8), (13), (14) and (15) expand the widely held rules for registered trusts to more appropriately recognise the nature of certain widely held members, including through reducing the wholesale member requirement from 30 to 25 wholesale members for wholesale trusts. These changes will better reflect industry practices.
Amendment 11 expands the list of entities considered to be widely held, including foreign pension plans, sovereign wealth funds and certain government agencies, and widely held foreign equivalents of a managed investment scheme. A regulation-making power has been included to provide for further expansion of the list if warranted. Furthermore, a start-up period of 18 months is provided, during which a trust may be treated as a managed investment trust prior to meeting the widely held requirements in amendment 4. This extended period more appropriately facilitates new trusts to enter the managed investment industry without suffering a competitive disadvantage. Finally, the transitional rules have been significantly enhanced in a number of ways, including extending its period of application to seven years. That is in amendments (16) to (20).
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.
Debate resumed from 13 May, on motion by Dr Emerson:
That this bill be now read a second time.
I am pleased to talk on the Tax Laws Amendment (Foreign Source Income Deferral) Bill (No. 1) 2010. This bill concerns the foreign investment fund measures of the Income Tax Assessment Act. The FIF measures, as they are called, are one of three components of the accruals taxation system, which has as its broad objective to tax Australian residents on an accruals basis on their share of income derived by certain foreign entities—income which has not been comparably taxed in an offshore jurisdiction. The three parts of the accruals taxation system are the controlled foreign company, or CFC, rules; the transferor trust measure; and the foreign investment fund measures about which this bill is concerned.
The FIF measures are designed to counter tax avoidance opportunities that remained after the earlier introduction of the controlled foreign company and transferor trust measures. So they were the third measure implemented. The FIF measures apply where a foreign company or trust, though not controlled by Australian residents, is an attractive investment vehicle because it allows for the accumulation of income offshore in low-tax or tax-free countries, thereby allowing the investor to minimise or to defer payment of Australian tax.
The FIF measures also apply to Australian residents who have invested offshore in life bonds or life policies that have an investment component. So these measures apply to Australian residents who have an interest in a foreign company or trust at the end of a year of income and those who held a foreign life assurance policy at any time in the income year. There are a large number of exceptions to the foreign investment fund measures. That describes the measures in general.
Turning to this bill in particular, it implements changes to the FIF rules and the deemed present entitlement rules. These changes were announced by the government in the 2009-10 budget on 12 May 2009. I should note that the legislation before the House follows on from initiatives of the previous coalition government and therefore explain at the outset that we see this as entirely noncontroversial. The existing attribution rules which apply were introduced in 1992 and were based on the rules developed in the 1960s by the United States of America. The former coalition government recognised that those rules had become outdated and that the global economy had significantly changed since those rules were introduced.
The former coalition government announced on 10 October 2006 that the Board of Taxation would conduct a review of the attribution rules. The terms of reference for the review were: to identify ways to reduce the complexity and compliance costs associated with the current foreign source income anti-tax-deferral regimes, including whether the regimes can be collapsed into a single regime; and to examine whether the anti-tax-deferral regimes strike an appropriate balance between effectively countering deferral and unnecessarily inhibiting Australians from competing in the global economy. In September 2008 the board provided its report to the current government. On 12 May 2009 the then Assistant Treasurer announced a number of changes to the tax law in response to the Board of Taxation’s review. This bill implements some of the changes announced at that time.
The amendments in this bill are based on the recommendations made by the Board of Taxation to reduce compliance costs for affected taxpayers. The bill abolishes the foreign investment fund rules and the deemed present entitlement rules contained within the Income Tax Assessment Act 1936 and is largely consistent with the operation of the tax law prior to the introduction of the FIF and deemed present entitlement rules in 1992.
The amendments in this bill will mean that resident taxpayers who are beneficiaries holding interests in foreign trusts will apply the normal trust tax rules that are contained in division 6 and the transferor trust provisions in division 6AAA. The Board of Taxation argued that the abolition of the foreign investment fund rules would significantly reduce compliance costs for Australian managed funds and would enhance global competitiveness and attractiveness to foreign investors. The Board of Taxation argued that their recommended changes would also significantly reduce compliance costs for Australian companies and superannuation funds. They are clearly important initiatives.
As I said, the coalition initiated this piece of legislation and we therefore support it. We recognise the good work that the Board of Taxation does. We think there is actually scope for it to do more and to involve itself in some of the difficult aspects of tax law and tax provisions that the tax office and the profession deal with on a day-to-day basis. I commend this bill to the House.
I too rise to speak on the Tax Laws Amendment (Foreign Source Income Deferral) Bill (No. 1) 2010. At the outset I want to congratulate the Assistant Treasurer and also the Treasury and the Board of Taxation for the work they have done in this area. This amendment bill does a range of things. In particular it amends the Income Tax Assessment Act 1936 to repeal the foreign investment fund, FIF, and the deemed present entitlement, DPE, rules. The schedule also makes consequential amendments to the Income Tax Assessment Act and the Superannuation Industry (Supervision) Act 1993 that are required as a result of the changes in the foreign investment fund and the deemed present entitlement rules.
The repeal of the FIF and the DPE rules were announced, in the 2009-10 budget, as part of a wider reform program that we have taken on in terms of Australia’s foreign source income and anti-tax-deferral attribution rules. The wider program has been initiated by the government since 2007 to ensure that we have the appropriate regulations and rules in place to protect consumers but at the same time, very importantly, ensure we do not have unjustifiable avoidance by a range of people of taxation responsibilities in this country. We are ensuring through these good reforms that people pay the appropriate amounts—their fair contribution—to the tax system and on behalf of all taxpayers. We are certainly trying to make sure that, while we do that, we do not put in place specific burdens or compliance costs or extra hurdles for small business. It is important to get that balance right. We acknowledge that in a whole range of areas. It is not limited to this particular amendment bill, although it is certainly an important element of it. You will see it in a whole range of reviews, from the Henry review in terms of general taxation right across the board to what Jeremy Cooper is doing in terms of superannuation.
Mr Cooper is due to report by the end of this month. There are some significant changes, amendments and reforms that can come out of that review. I look forward very much to that report being handed to government on 30 June because of the significant contribution that superannuation makes in this country and the very important role it will continue to have in the future—and I might speak a little more about that in relation to this specific bill before us in a moment. The changes in this bill will mean a modernising of Australia’s financial services sector, looking specifically at the issues of foreign income sources and how to most appropriately deal with income that is received by Australian residents and nonresidents from any foreign source they have.
It is also important to note that while these changes are of a technical nature they are quite significant. They form part of some major steps that we are taking as a government to modernise our internal systems and to make sure that Australia remains competitive on a global platform. We need to remain competitive after these sorts of changes. We need to continue the good work to ensure that Australia becomes a financial services hub.
I want to take the opportunity to congratulate Mark Johnson on his review and the government on its response. There is great potential growth in the financial services sector in the future of this country. We will export our widely regarded skills and expertise in these areas. The Johnson review covered a whole range of opportunities for Australia in the future. It has been a big part of my interest and the work that I have been doing in chairing the Parliamentary Joint Committee on Corporations and Financial Services. We need to ensure that any of the reforms that we make and any of the changes that come about have a focus on Australia being a financial services hub. We need to be an exporter in the areas in which we are very strong. We are well regarded internationally in terms of our capacity and skills. In fact, Australia rates about fifth largest in terms of funds under management in the world. We are recognised for the capacity that we have, our expertise, our good corporate governance and our ability to deliver in all of these areas. We ought to take the opportunity and convert it into a stronger and larger export market.
To do those things, you need to take reform right across a particular sector and not reform just one area. That is what we are doing with the bill that we have in front of us. What these reforms will deliver is significant compliance change and cost savings. They will also simplify what is a complex set of rules, rules which normally stream across a range of particular acts. It is important to get those right, and we have done that here. The changes will consolidate two acts in particular, one from 1936 and one from 1997—the income tax acts. These changes will bring us a significant step closer to consolidating those two acts.
Over time—as is the nature of things—communities, industries and sectors have changed. This has led to a whole range of inefficiencies, unforseen consequences and other problems that were not part of the debate at the time of the inception of those particular acts. What that means is that the operation of the attribution regime has become highly inefficient. In the light of that rising global interaction—it is a very different global market—and technological chance, an extensive range of exemptions now apply. Those exemptions operate to accommodate a range of those changes. But exemptions are not the best method or the most appropriate way to solve these problems. Those exemptions set up a compliance cost burden on people who operate in this area, particularly on people who manage funds. It is a disadvantage to Australian fund managers. For some time there have been discussions about what those disadvantages mean. They involve not just extra cost but the loss of business for Australian fund managers.
From a government perspective, there is always concern about making sure that people pay their fair share of taxation. You always need to review specific areas to make sure that people are making their obligations. A foreign investment fund relates to either a foreign trust or a foreign company. They can be foreign investment funds or foreign life assurance policies as well. They were designed in the first instance to reduce tax. We want to reduce tax avoidance opportunities for Australian residents who accumulate passive income in offshore investment funds over which they have no control. They are often in low-tax regimes or even tax-free countries. There needs to be a balance. People should be able to legitimately use specific funds or other mechanisms but should not use them to deliberately and unjustifiably reduce their tax liability in Australia or defer their tax liability without any justification.
These changes will apply to a taxpayer who was an Australian resident any time in a particular income year and who had either an interest in a foreign investment fund at the end of that income year or at any other time during that income year or an interest in a foreign life assurance policy at any time during that income year. However, instead of the usual income year period, a taxpayer may elect a different time period. That needs to be understood in context. While in Australia we have a financial year spanning 1 July to 30 June, it is the case in other jurisdictions—other countries—that different periods apply. Some use a calendar year; others use other time periods. So we need to take that into account in the way that we formulate our rules and the measures that we put in place.
In these anti rollup fund measures, we have specifically replaced the foreign investment fund rules and targeted the most abusive of deferral cases, such as accumulation funds located in low-tax jurisdictions that reinvest low-risk returns. The anti rollup rule is scheduled to be introduced into parliament later this year. I look forward to its introduction and its support by the opposition. I know that the review of this area, which started in October 2006, was taken on board by the previous government. We are supportive of that review. The Board of Taxation took on that review and also released a positions paper and several other issues papers on these matters.
Finally, in 2008, the board released its report to the Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, under the Rudd government, and we have acted upon that. We have taken that advice, we have gone through the consultation process and we have taken on board what is some good regulatory change. The board recommended that the Foreign Investment Fund provisions be repealed and replaced with specific anti-roll-up fund measures, which targeted very specifically accumulation funds that reinvest interest-like returns. It also recommended that closely held fixed trusts should also be brought into the controlled foreign company rules, the CFC rules, and that the deemed present entitlement rules should also be repealed. They are the two main elements of this amendment.
What the board’s recommendations demonstrate is the desire for us to increase our attractiveness as a financial services hub. We need to do that in a range of ways. Tax-withholding interest, for example, is one. We want to make sure that we look attractive as an investment destination, encourage Australian businesses to be more productive and competitive, and reduce compliance costs for managed funds, industry and other investors. This is a massive opportunity for Australia. This is an area where we can make enormous change in the future and really grow what is a vibrant high-employing sector in Australia—the financial services sector.
It is good to note that in the short 2½ years that this government has been in power we have taken on board many reviews in this area. While some outside may think these reviews are in some way independent—and they all are absolutely independent—they are also strategically linked. We can look at the work my committee, the Parliamentary Joint Committee on Corporations and Financial Services, has done, the extensive work that Henry has done through the independent tax review, the work that is being done by Jeremy Cooper on superannuation or, just as importantly, the work being done by Mark Johnson on Australia as a financial services hub. If you take all of those together and look at the very strategic financial services path that this government is setting for Australia, you can actually make sense of all of these. It is important to get them right.
There is one more report that I have not mentioned, which probably ties all these in together really well, and that is the Intergenerational report. Significantly, the reports states that by 2050—in a mere 40 years time—Australia will have twice as many 65-year-olds as we have today. Frighteningly, depending on which way you look at it, there will be four times as many 85-year-olds—we will be living longer. It is also important to note that today there are five people in the workforce for every person aged over 65 years of age, but by 2050 the number of people in the workforce aged over 65 will only be 2.7. If governments today do not take heed of those warnings, then we are being derelict in our responsibilities to the people of Australia. If you take that information and look at the reform agenda that this government has put in place—fiscal responsibility, balancing budgets, sustaining health budgets into the future and making sure you do not just govern for the present but also govern for the future—then you can start seeing the link between those significant reviews we have done, some of the reforms we have already put into place and ensuring that we have the appropriate regulation in place. There should be not too much or too little but just the right amount you need to get the job done properly. You should reduce the compliance costs on small business—those regulatory burdens.
Hear, hear!
I congratulate the Minister for Competition Policy and Consumer Affairs, who is in the House here, for the work he has been doing in reducing the compliance costs and burdens for small business. They are the backbone of Australia—there is no question of that. Whether it is corner shop type small businesses, small manufacturing businesses, Australian fund managers or people working in the financial services sector, if we can reduce their compliance costs, reduce their burdens, give them more opportunities to export their skills and services and provide mechanisms to put downward pressure on costs and fees—to make it more affordable for ordinary Australians—then I think we are on the right track. That is exactly what we have been doing. That is exactly what our agenda is. When people question how all of these things link, that is the explanation I give them about what our agenda is and where specifically we are trying to head into the future.
The amendment we have put forward today is one of a number of amendments that I have spoken on this week. This week is an important week—it is the last week of the sitting before we go to the winter break. It is good to see that the government has had the capacity to deal with these very important reforms. I know some of these reforms may not seem too sexy to some members of parliament or even ordinary members of the community who may not be quite aware of the importance of some of these technical changes, but these amendments very much will form part of ensuring Australia’s future sustainability in a whole range of areas, such as the way we are managing budgets and ensuring that we can maintain health budgets into the future. I do not know how many members of parliament have understood just how much the underlying costs of health actually represent. If the federal government does not do something today, by 2026 the complete budgets of every state and territory in this country will be consumed by health spending alone. I think it is an important point to note because you need to make decisions today that will have a massive impact into the future, and that is exactly what we are setting about doing. We are doing that through a whole range of different methods: increasing people’s retirement security by increasing compulsory superannuation contributions from nine per cent to 12 per cent, looking at better forms of taxation through a resource tax to make sure that all Australians share the wealth of this country and sharing in the potential that exists there today through better taxation methods.
In summing up, I thank the House for the opportunity to say some words on the amendments of this bill. While on their own these amendments may not seem that important, they certainly are to the people they affect. The legislation is an important part of Australia’s strategic direction into the future, to make sure we have the right balance. I think we have that, and I commend the bill to the House.
Thank you for your contribution. I now call and recognise the member for Herbert and would remind everyone that this is the member for Herbert’s valedictory speech and that we do not take points of order, particularly on relevance.
I well remember, some 14½ years ago, making my first speech in this place. It was great because I was on the other side of the House—over there. Unfortunately, I am not going to get back there, but many of my colleagues will, in a short amount of time.
What a privilege it is to wear this green pin. I think all of us wear it with pride. It does not matter which side of the House we are on, we wear it with pride. We know and understand what it means.
My wife Margaret and my daughter Kylie have joined me here. In partnership with Margaret, I judged it was time to stand aside and allow renewal in the seat of Herbert. And that is a good thing, because the party needs others of ability to come along and bring new ideas. For a busy member of parliament, as you all know, there is never enough time to pursue so many personal interests, but I will now have that time. I will be able to sit and watch question time from Townsville!
It was such a privilege to have worked with John Howard, Peter Costello and the team of the coalition, as we managed the difficult task of fixing the economic and social problems of Australia after the last Labor government. The next coalition member for Herbert will be part of the team that has to fix the mess that is being created by the current Labor government.
It has been an honour to serve the people of Townsville. For 25 years now, as both the member for Herbert and also as councillor for Division 9 on Townsville City Council, I have been deeply grateful for our community and the support that they have given to me.
I have particularly enjoyed the work done, at all levels, with the men and women of the Australian Defence Force. Whether the role is in war fighting, humanitarian assistance, peacekeeping, training or mentoring, Australia can be mighty proud of the professionalism of the ADF.
I have also invested considerable time in Australia’s youth, through the Left Right think tank. It has been just so rewarding. Left Right was formed by Richard Newnham and Thom Woodroofe. It is an inspiring movement of young Australians dedicated to empowering all young people to contribute to public policy. Richard, you will be watching today and I want you to know that as CEO your energy, vision and leadership has been outstanding. You are truly a great young Australian and your parents, John and Susie, must be so proud of your achievements.
Colleagues, I leave my job knowing that many of my achievements in Herbert have made such a difference. Major initiatives have included the Townsville Ring Road and the Douglas Arterial, which many of my colleagues say is the ‘Peter Lindsay highway’. Such works as the Woolcock Street extension and the Woodlands to Veales Road upgrade, including the Mount Low Parkway intersection have been achievements.
I turn now to James Cook University. Back in 1997 I literally saved the university from financial ruin. The books were in a dreadful state but we were able to sort that out at the time with the help of Dr David Kemp. If you go out to the university you find that almost one-third of the university has been established under my watch and through my advocacy: the medical school and places; AIMS@JCU; Allied Health school; biotechnology places; Lightspeed; the communication facility, the pharmacy building and places; the microscope and mass spectrometry facility; veterinary science building and places; agricultural science places; a second medical school building and additional places, and the establishment of the Australian Tropical Sciences and Innovation Precinct. I am pretty proud of that.
In terms of the environment, I was part of protecting the Great Barrier Reef for generations to come through the world acclaimed Green Zones process. And hasn’t that been successful? All of the research now shows that it has worked and has produced more fish stocks for the fisherman and has locked up and protected our magnificent Great Barrier Reef for ever. I had Magnetic Island confirmed as a World Heritage listed area. The have been many Green Corps projects and a refurbishing of Reef HQ and so on. And I secured Townsville as one of the first of two Australian solar cities. I thank Ian Macfarlane for helping me do that.
In terms of Defence, you just would not know Lavarack Barracks now. There has virtually been a complete redevelopment of the largest defence base in Australia. There have been significant numbers of new Defence homes built, hundreds of new single-soldier accommodation units, redevelopment of port facilities for the LHDs that are coming along and the transfer of a new battalion to Townsville. Where is Dana Vale, the member for Hughes? I took the Third Battalion of the Royal Australian Regiment from her! There has been massive redevelopment at the RAAF base in Townsville and at 5 Aviation Regiment at the Air Force base in Townsville.
I move to a disappointment. I certainly got one of the first Australian technical colleges in Australia built in Townsville. It proved to be the best in the country, and then the Labor Party came along and defunded it. They say, ‘We’re into skills training.’ They were into skills training by defunding the best technical college in the country! That is a disappointment.
In terms of health, we have established the Townsville after-hours GP service and I got funding for a bulk-billed MRI scanner at the Mater Hospital.
In relation to the community, we handed over Jezzine Barracks. We had a huge community program to do that. I think the parliamentary secretary at the time ultimately said, ‘Lindsay, how did you do that?’ because we handed over $45 million worth of defence land to the community and, on top of that, probably about another $25 million to redevelop that bookend of the Strand, and that is being done now. We secured funding for the Tony Ireland Stadium at Riverway and the redevelopment of the Murray Sports Complex. The member for Berowra is here; he will remember the first family relationship centre in Australia and the first Federal Magistrates Court in Northern Australia, and I thank him for his assistance in achieving that.
I would like to think I have made a difference, and others will judge that. I certainly take quiet pride in the part I played in the Howard government’s courage to take on the difficult issues. We have only got 11 of the class of 1996 here now: Don Randall is one, as are Danna Vale, Bruce Billson, Bob Baldwin, Jo Gash, Fran Bailey and Joe Hockey. We balanced the budget. We eliminated government debt. Do you remember the difficulties in doing that? We restored Australia’s AAA credit rating. We reformed superannuation. We liberated industrial relations. We swept away a raft of taxes, we cut capital gains and income taxes, and we built the Future Fund. Under the Howard government, unemployment was at record lows and the incidence of industrial disputes was the lowest in Australia’s history. What a mighty record. The Howard years saw higher wages, more productive workplaces, higher pensions, better living standards, more funding for health, education, defence and transport, better border protection—that rings a bell!—and an economic resilience that was the envy of the developed world which did not happen by accident. It was a great distinction to be a part of that decision process.
I would like to thank the people of Townsville for the opportunity to represent them in five Commonwealth parliaments. This is the third longest period of service by any member of Herbert since Federation, and Herbert was a Federation seat. Together we have achieved so much, with Townsville today being a confident, go-ahead city in which people enjoy living and working. That is of course why I proudly carry the tag of ‘the member for paradise’.
I do have some regrets—for example, when I see the debate going on in Townsville now in relation to health. The government comes in and says, ‘We’ve got this great new program for health,’ but what the government does not say is, ‘It’s not going to start till 2014,’ and we worry if it is going to start at all then. We need a PET scanner in the north. We have got to fly our patients to Brisbane at the moment, which is wrong. The government says, ‘We’re going to give you a PET scanner but, by the way, not till 2014.’ If there is a change of government, we will deliver a PET scanner immediately. Next week, construction will commence on the building that will house the PET scanner, and that is at Mater Park Haven Hospital. It will be ready. If there is a change of government, we will fund that PET scanner and it will be up and running as soon as we can buy a machine and install it—and that is how it should be.
Then there are the GP superclinics. I do not know how many of my colleagues have been promised GP superclinics. Remember the last election? ‘We’ll have a GP superclinic in Townsville and, by the way, we’ll have a family medical centre for Lavarack Barracks, the first of two—one in Darwin, one in Townsville—and we’ll build it straightaway.’ That promise is gone; it was canned. It translated into: ‘We’ll put Defence into the GP superclinic.’ So when do you think we will get a GP superclinic? Not in this term.
2020?
The member for Sturt says 2020; I do not know whether it will happen by then. That is a bit early, Member for Sturt!
Aim high!
Yes! Thanks, Member for Boothby. We have got to push that along. If there is a promise made to the people that they are going to get a GP superclinic, it should in fact be implemented.
Mr Deputy Speaker Sidebottom—and, Mr Speaker, if you are listening—here is something for you. This is a regret: question time. Question time in the House of Representatives is when the opposition has the opportunity to hold the executive accountable. Former Labor Prime Minister Paul Keating once said that question time was a courtesy extended to the House by the executive branch of government. But the philosophy of the Westminster system is that there has got to be a time when the opposition can ask a question and expect an answer. That is not happening. Day after day, we waste two hours in this place. It is a farce. Why do we come in here? We ask a question and then we get 15 minutes of blah, blah, blah back across the table. That is not democracy in action. That is not responsible government. Why is the government hiding from answering the questions? Senator Alan Ferguson, the former President of the Senate, took quite an interest in this as well. There has to be a reform of question time in the parliament. We need relevant answers and we need short answers. We could well look at models in other systems. The Indian system, the New Zealand system, the British system and the Canadian system all work far better than ours, and it is my view that currently question time is not a very good use of time whatsoever.
I have a second point about the parliament that is a great disappointment to me. It is only a small matter. When I first came to this place—and those who have been here for some time will know this—if you had visitors from your electorate or other special guests and the parliament was not sitting, you could bring them onto the floor of the parliament. Right now you can go onto the floor of the House of Commons, you can go onto the floor of the Indonesian parliament, you can go onto the floor of the New Zealand parliament and you can go onto the floor of the United States congress. You can go into the UN General Assembly; you can go into the Security Council and sit in the president’s chair. But you cannot bring your constituents onto the floor of the Australian parliament. This is the people’s parliament; why shouldn’t you be able to? What is the problem? Why shouldn’t a member of parliament be able to conduct a group onto the floor of the parliament and talk about this great democracy that we have in Australia? I ask the Speaker and the President of the Senate to review that, please.
The other thing I worry about in Australia is bureaucracy. I saw an instance of this at my local GP recently. I was getting a swine flu injection, and I cheekily said, ‘Can I have a jellybean please?’ They said, ‘We don’t give out jellybeans anymore.’ When I asked why, I was told, ‘Well, it’s a health and safety issue—you might choke.’ So they don’t give jellybeans to kids! What is happening to our country when you cannot give a kid a jellybean?
Listen to this. For as long as anybody can remember, the Air Force cadets have paraded on the apron in front of Air Movements at RAAF Townsville. The cadets have always been resplendent in their uniform, all ironed and creased up properly and inspected. Because somebody has decided there is a workplace health and safety issue, they now have to wear orange safety vests and earmuffs in case their hearing gets affected. But there are no aircraft on the tarmac, because the RAAF controls its own tarmac. Wouldn’t it be better for somebody to actually say, ‘Look, this seems a bit silly; why don’t we just get air traffic control to say, “There will be no aircraft on the tarmac during this parade”?’ Bureaucracy has gone stupid in Australia. We are all part of that. Think about the Australian Army cadets who went to Bundoon, where the SAS train, for a camp. They could not use the refrigerator. Why couldn’t they use the refrigerator? Because nobody had done a risk assessment on using a refrigerator. They were not allowed to use it. This is stupidity. I have a whole range of other examples, but I do not have time to go through them.
I want to thank a few people in the time that is left to me. To my own staff, who are in the gallery today—Robin, Hawk, Lori, Matthew, Sharyn and Ella—thank you so much for the support that you have been able to give to me for such a long time. My thanks go to the staff of the parliament, and in particular to those in Broadcasting. Many of you will not know about Broadcasting, but down in mushroom corner, in the basement, we have Sharon, John, Eric, Phil, Ferg, Karlie and of course Mr Nightcart. Mr Nightcart’s surname is actually Cathcart, but he has this great nickname. He is a legend—thank you, Ken, for the fun we have had over the years. In IT and communications we have Ann Mackinnon and her staff, and Andrew Pang. In committees, Siobhan Leyne will be watching this now—you are the most impressive inquiry secretary that I have ever seen in any committee in my time. Thank you for your support.
As for colleagues, Ian Macdonald and George Brandis are in the senators’ gallery. Ian, you got me into this—it was you who did it. You have been such a good friend and mentor for so many years now, so thank you so much. Thanks also to Brucey Billson—I am not allowed to say ‘Brucey Billson’—Greg Hunt, Gary Nairn, Mal Washer and Alex Somlyay and his staff, and Nathan is sitting over there. Thank you all for your support. I wish our party and its leaders well. Tony, thank you for coming. I know Julie has something else she has to do at this time. Thank you to my colleagues for coming, and I wish all of you every success at the next election. We need you, Tony, and we need the team back here sitting on the other side.
I thank also my former staff. Katherine is in the gallery—thank you, Katherine. There are Ross Jordan, Joe Nyhan, Robert Hardie, who is over here, and Mr Snuffleupagus, who is watching in Brisbane at the moment—g’day to you. We also have our support people, the HRG staff and the great people at Qantas. We have had a terrific time. I would like to thank my electorate committee, branch members of the Liberal-National Party and so many friends who have supported me and worked tirelessly on five tough election campaigns.
I am blessed to have lived long enough to witness the arrival of my first grandchild, Jessica, and to have her youthful laughs forever etched on the grooves forming on my face. So many have never laughed, and so many have died before seeing their children have their children. I can say no and mean it. I can say yes and mean it. As you get older, it is easier to be more positive. You can care less about what other people think. I do not question myself anymore; I have earned the right to be wrong. I like getting older. It has set me free, and I like the person I have become. While I am still here I am not going to waste time lamenting what could have been or worrying about what will be.
In the last 60 seconds, I am going to bawl. To Margaret and Kylie, and my son Mark—isn’t this ridiculous; 15 years in the parliament and I am bawling!—thank you so much; I love you so much. I am a softie. Thank you.
I begin by acknowledging the service to this House of the member for Herbert, and extend my best wishes to him and his family for their future.
I rise to speak on the Tax Laws Amendment (Foreign Source Income Deferral) Bill (No. 1) 2010. Schedule 1 of the bill amends the Income Tax Assessment Act 1936 to repeal the foreign investment fund and deemed present entitlement rules. The schedule also makes consequential amendments to the Income Tax Assessment Act 1936, the Income Tax Assessment Act 1997 and the Superannuation Industry (Supervision) Act 1993 that are required as a result of the foreign investment fund and deemed present entitlement rules.
In the 2009-10 budget, the government announced significant reforms to Australia’s foreign source income attribution rules. In summary, the reforms mean that the controlled foreign companies rules and the transferor trust rules will be retained and modernised while the foreign investment fund rules and the deemed present entitlement rules will be repealed. The repeal of the foreign investment fund rules has been welcomed by the management fund sector as they contend that the foreign investment fund regime imposes significant costs and an uncompetitive tax burden on Australian fund managers. The reforms advance the government’s commitment to secure Australia’s place as a leading financial services centre in the region and more generally to improve the competitiveness of Australian businesses competing offshore—in fact, it is in respect of that matter that I address my comments on this bill.
The comparative stability of Australia’s financial institutions has become abundantly clear in the fallout from the global financial crisis, when we saw the domino effect of the collapse of one financial institution after another. Of course, that stability was very much increased by the Rudd government’s swift and decisive action to guarantee both bank deposits and bank wholesale lending. The performance of Australia’s financial institutions attracted the praise of international commentators and has been held up as a model at G20 meetings. Worldwide, there are fewer than 10 AA-rated banks and, of those, four are here in Australia. We now have the opportunity to build on that financial strength and stability. We know that in recent years the Asian and South-East Asian regions have emerged as regions of strong economic growth, and we saw that again in reports in the media only this morning. A well-regulated financial institution sector in Australia therefore provides Australia with a unique opportunity to build a leading financial services sector for the region.
The accumulation of superannuation funds over the last two decades has clearly contributed to the growth and strength of Australia’s financial sector. Compulsory superannuation was introduced in 1986, when an agreement between government, the ACTU and industry ensured that, under industrial awards, workers were required to have three per cent of their wages paid as superannuation contributions. In 1987 the assets of superannuation funds totalled $41 billion. By 2007 this amount had grown to $1.1 trillion, and it is expected that by the year 2035 this amount will grow to around $5.3 trillion.
The government’s commitment to increase superannuation contributions from nine per cent to 12 per cent over the next decade as part of the measures associated with the resource super profits tax will significantly add to the balance of superannuation funds available for investment. That in turn will lead to an even stronger financial sector, with more funds for reinvestment in Australia and further employment growth in the financial sector and in other sectors were those funds are invested. The Australian financial services sector has seen very strong employment growth in recent decades. The sector currently employs around 400,000 Australians, which is an increase of around 80,000 jobs in just 15 years.
I said earlier that Australian-based investment managers currently manage $1.1 trillion in assets on behalf of domestic Australian investors. As the Minister for Financial Services, Superannuation and Corporate Law has previously stated in this House, these same Australian-based fund managers only manage $53 billion worth of overseas investments. This means that in the global economy less than five per cent of funds managed by our domestic fund managers are sourced from overseas.
On 26 September 2008 the government announced the establishment of the Australian Financial Centre Forum, headed by Mark Johnson AO, to recommend ways that Australia could take advantage of its opportunity to become a leading financial services centre. The Australian Financial Centre Forum reported to the government, and on 11 May 2010 the government announced its response, which provided in-principle or direct support for nearly all of the 19 recommendations of the report. The Minister for Financial Services, Superannuation and Corporate Law made a statement in the House only some days ago that those recommendations include:
the introduction of an investment manager regime, providing greater certainty around the tax treatment of foreign funds managed by Australian investment managers;
the establishment of an online regulatory gateway, providing domestic and international investors with a one-stop shop for basic information about the Australian market; and
the development of an Asia region funds passport, which would involve a multilateral framework to enable a complying retail investment fund in a country that signs up to the passport framework to offer its products in each of the other signatory countries.
The announcement made by the minister two weeks ago will have been welcomed by the finance sector throughout this country. The announcement went to the heart of an opportunity that this country has ahead of it to establish a major industry—or at least an additional aspect to a major industry—in this country. It is not often that this country is in a position to compete with the rest of the world in a range of sectors. In most cases, we in fact find ourselves somewhat disadvantaged because of either our distance from the rest of the world or other competing pressures that seem to enable other countries to undercut our industries. I refer particularly to the manufacturing sector in this country. It may not be the case that we have seen a decline in that sector over the years, but it is certainly the case that we have seen many of our manufacturing industries relocate offshore.
With the finance sector, however, it is entirely different. It is different because the financial industry does not have to be specifically located in a particular country. It operates on the basis of technology that is available to the world today and from which you can establish a major industry wherever you want in the world. Australia has demonstrated that it has the capability, the stability and the security of our financial sector to become a financial services sector for the rest of the Asia and we should grasp that opportunity. We know from what we have seen in recent years that it will be the Asian area where we see growth occur most rapidly. We know that China has been a country of rapid growth, but we also know that several other Asian countries equally withstood the global economic downturn and withstood it well. We know that those same countries are in a prime position to continue to grow and, as they do, they will also look not only to increasing their relationship with Australia but also to working with countries that have stability within.
The financial services sector has certainly been rocked by the global financial crisis of the last couple of years. We saw that the financial hubs, whether in New York or in London, were very much rocked to the point where there would have to be without question a continuing degree of uncertainty as to whether they are the best places for governments and private enterprise to continue dealing with. I believe the global financial crisis presents Australia with a terrific opportunity to ensure that Australia builds on stability and security and does develop itself as a financial centre for the Asian region.
As part of its package of reforms for the financial services sector, the Rudd government is committing $25 million to establish a regional centre for financial system regulation and innovation. The sector in Australia has been stable and secure, but we can always do better. The establishment of a $25 million regional centre for financial system regulation and innovation is something we should all embrace. Our financial regulatory system in Australia was a key part of ensuring that our financial systems in this country remained stable and secure during the financial downturn across the world. The regulatory system can always be improved. It can always be made better, it can always be streamlined and made easier for the finance sector members to operate within.
We should also never lose sight of the fact that, no matter what industry we are in, we do compete with the rest of the world and, therefore, we need to constantly be innovative in what we do. The establishment of this centre is going to be critical in providing the innovation that is required by the sector as a whole to ensure that it does remain competitive and to ensure that it is able to provide the financial services that we are hoping will come to this country if it becomes a centre for financial services in the Asian region.
I understand that the centre will provide tertiary education and training for financial regulators from Australia and the Asia-Pacific region. I said a moment ago that it is the Asia-Pacific region that I believe will be at the heart of global economic growth in the years ahead. I was pleased to hear the Prime Minister announce only yesterday the new deals that have been signed between Australia and the Chinese government with a number of the mining companies in this country. I have to say that certainly flies in the face of those who are opposed to the resource super profits tax and those who have been suggesting that that tax will drive investment away from this country. Clearly that is not the case, and we saw that with the signing of those multibillion dollar agreements with the Chinese government only yesterday. It will be in respect of other trade matters as well that the establishment of a financial hub here in Australia will benefit the Australian economy and the Australian people.
One of the benefits of having a financial services centre in Australia and the increase of superannuation funds that will accumulate over the years is that this in turn provides the Australian people with a source of revenue that can be used to reinvest in this country. I expect that much of that reinvestment may well be back into the resources sector from which we have heard criticisms of the increase in superannuation from nine to 12 per cent. They will be one of the beneficiaries, because they cannot claim that the resource super profits tax is affecting the superannuation funds of millions of Australians without acknowledging that it is the superannuation funds of millions of Australians that are contributing to their very investments and to the very development of resources.
The Australian government recognises that regulation and innovation of financial markets cannot be separate issues; they must keep pace with one another. A moment ago I was speaking about the establishment of the Centre for International Finance and Regulation here in Australia. That in itself will create additional employment in this country, but it will also ensure that in the future we are not likely to see the kinds of crises and problems that were encountered by governments across the world as a result of the global financial crisis, where governments were consistently being asked to bail out the financial services sectors within their own countries. Better regulations, better training and innovation, which all go hand in hand, will ensure a much stronger sector.
We see announcements being made today by the new British government about how they are going to have to tighten expenditure across so many sectors in order to try and get their budget back in the black. You can contrast that with what happened here in Australia—stable banks, secure banks, a government that acted quickly and a debt and deficit regime that is much lower than most other countries, in fact, the lowest of all advanced economies. What we are seeing in this country right now is growth. With that growth come new investment funds. With that growth comes the need to borrow funds in order to pay for new developments, and that in turn means that we will have a financial services sector that will be more and more important to the future of this country.
The finance and tax laws of Australia are complex. It would be fair to say that most people would have little understanding of their complexities. Whether it is the taxation acts or the superannuation acts, they are very complex laws. Undoubtedly, because of their complexity these laws add to the cost of business in this country and will add to the cost of doing business into the future unless we begin a process of simplifying them. If we streamline and simplify the laws under which companies operate, we not only reduce their overheads—and that will be something that is welcomed by them—but also make them much more competitive.
This bill, with these amendments, does exactly that. It is a bill that will simplify tax laws in this country. It is a bill that will make Australian business more competitive and, in doing so, will put us on the right track to securing Australia as a leading financial centre for the Asia-Pacific region. It is something that this country has been pursuing for some time. The Rudd government has recognised this and is doing what it can to ensure that we do become a financial hub. Disappointingly, I heard the minister make it absolutely clear that the opposition does not support the intent of the Johnson report and does not support Australia becoming a future financial hub in years to come. That is disappointing because we have an opportunity that we should not let go. As I said a moment ago, this bill simplifies our tax laws and makes business more efficient. Those measures can only be welcomed by the business sector of Australia. I commend the bill to the House.
I would like to thank those members who took part in this debate. The Tax Laws Amendment (Foreign Source Income Deferral) Bill (No. 1) 2010 bill, which gives effect to the repeal of the foreign investment fund, or FIF, and deemed present entitlement rules, delivers the first tranche of reforms that were announced in the 2009-10 budget. As part of wider reforms to Australia’s foreign source income anti-tax-deferral attribution rules, this measure will assist Australian managed funds and other businesses to compete internationally by reducing complexity and compliance costs that are associated with the making of foreign investments. The repeal of the FIF and deemed present entitlement rules further contributes to the government’s objective of promoting Australia as a pre-eminent financial hub in our region. This will support Australian jobs. This measure, being part of wider reforms to better target Australia’s attribution rules, will also further simplify the taxation law and bring consolidation of the two-income tax acts a significant step closer. This bill deserves the support of the parliament. I commend the bill to the House.
Question agreed to.
Bill read a second time.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
For the information of honourable members, I present a replacement explanatory memorandum for the Food Standards Australia New Zealand Amendment Bill 2010.
Debate resumed from 26 May, on motion by Mr Burke:
That this bill be now read a second time.
Drought and all the issues surrounding it are supposedly the purpose of the Farm Household Support Amendment (Ancillary Benefits) Bill 2010. I have dealt with drought most of my life in agripolitics, politics and as a farmer—I am still a farmer. The bill inserts a new part 9D to the Farm Household Support Act 1992 to treat farmers receiving income support, under a pilot of drought policy reform measures in Western Australia, as if they were receiving exceptional circumstances relief payments for welfare related purposes. Talking to my Western Australian colleagues, it is becoming apparent that Western Australia is having a slow start to the winter cropping season and there is a need for more rain. However, being a farmer, I am an eternal optimist and hope that the season can only get better.
Right upfront of this debate I want to place on record my upset and my anger at the Minister for Agriculture, Fisheries and Forestry’s repeated comments that exceptional circumstances interest rate subsidies are causing mental health issues and should be scrapped because of it. This is a load of rubbish. If he had the practical experience of living in the areas and being affected by drought and the consequences of failing under it, he would see that the exact opposite of what he has suggested is, in fact, the truth—that interest rates subsidies have provided relief for agricultural families rather than the opposite. That is not a comment I want to hear ever again.
The government will provide $18 million over five years, from 2009-10, to pilot new drought reform measures in selected regions of Western Australia. The 12-month pilot will commence on 1 July 2010, in a few weeks time, and will be delivered and funded in partnership with the government of Western Australia, which has agreed to contribute $5 million. This brings the total cost of the pilot to $23 million over five years, with the state government contributing approximately 20 per cent.
The pilot includes $4.9 million for income support for eligible farmers experiencing hardship. Recipients will be eligible for the beneficiary tax offset and may be eligible for a healthcare concession card, youth allowance for their children and early release of superannuation benefits, as it does under exceptional circumstances wherever it is—in Tasmania, Western Australia or New South Wales. I am pleased that the income support component of this trial is not capped, unlike the vast majority of the funding for this trial drought program.
It should be pointed out that the Western Australian trial is not a drought program; it is an efficiency program, and I would be loath to support it as the new drought policy across Australia. I welcome the acknowledgement by the government that investment in on-farm efficiency is a wise and sensible investment. However, it will do nothing for farmers in future in exceptional drought situations, be that for two, three or whatever drought years in a row. Heaven forbid we ever have eight or nine years as in recent times. Les White from the Weekly Times in an article headed ‘Drought aid trial, farms to get $60,000’ states:
The trial is expected to cost $23 million—$18 million from the Federal Government and $5 million from the West Australian Government—however as there is no cap on the number of grants, the costs could potentially be higher. Grants will continue to be paid even if the $23 million figure is exceeded.
In a media release issued on 5 May 2010, Minister Tony Burke stated:
Almost 6,000 farmers in the trial region are expected to be eligible for assistance under the package … for grants of up to $170,000.
If it is uncapped, there is a potential liability of $405,000,000 from just two of the components of the trial. The government has allocated just $12 million when they know they have a potential liability of $405 million, or 40 per cent of their projected surplus, if each of the 6,000 eligible farmers took up only two of the components they were eligible for, namely, as the media release states:
Building Farm Businesses—grants of up to $60,000 to help farm businesses prepare for the impacts of drought, reduced water availability and a changing climate, and on-farm Landcare activities—
allocated up to $8.4 million, with a total liability of $360,000,000—and:
Farm Planning—support for farmers to undertake training to develop or update a strategic plan for their farm business with a focus on preparing for future challenges Farm Planning—
allocated up to $3.6 million, with a total liability of $45,000,000, if each of the 6,000 eligible farmers took up the grant offer. If it is capped, the program has been deliberately designed to fail and, as we found out at estimates, the Weekly Times had it wrong. These two components are to be capped, which, given there was no mention of the fact that the different programs within the drought trial would be capped—in fact, the minister for agriculture’s press release stated there were 6,000 eligible farmers—suggests the government is deliberately misleading farmers in Western Australia and around the country about the true nature of the government’s response to exceptional droughts. There is only enough money allocated in this year’s budget for one of the 6,000 eligible farmers to receive the full farm exit support grant of $170,000; eight per cent to receive the $7,500 farm planning grant and just enough money for 2.3 per cent to receive the full $60,000 Building Farm Businesses grant. Minister Burke’s media release stated:
… grants of up to $60,000 to help farm businesses prepare for the impacts of drought, reduced water availability and a changing climate, and on-farm Landcare activities—
and allocated up to $8.4 million, but only 140 out of 6,000 eligible farmers would receive the full grant if the program was capped, as we now know it is. Furthermore:
Farm Planning—support for farmers to undertake training to develop or update a strategic plan for their farm business with a focus on preparing for future challenges—
and allocated up to $3.8 million, but only 480, or eight per cent, of the 6,000 eligible farmers would receive the full grant if the program is capped, as we now know it is. The media release went on:
Farm Exit Support—grants of up to $170,000 to support farmers who make the difficult decision to sell the farm business—
And allocated up to $0.3 million, but only one of the 6,000 eligible farmers would receive the full grant if the program is capped, as we now know it is.
In his post-budget speech at the Rural Press Club, Brisbane, on 12 May 2010 the Minister for Agriculture, Fisheries and Forestry, Tony Burke, in relation to the drought policy reform pilot of new measures in WA stated:
So, under the pilot, lines on a map are gone and we have one test—a hardship test. If you’re in hardship you qualify and if you’re not in hardship then you don’t.
I would appreciate the minister clarifying a number of issues not just for me but for every farmer within the pilot program—that is, for the 6,000 farmers in WA—and for the whole sector generally. What is the definition of ‘a hardship test’ the minister referred to? What is the definition of ‘farmer’ used by the department in this trial? How many farmers located within the region of WA will be covered by the trial program? If during the 12-month trial period there were a hardship event—such as exceptional circumstances drought, locust plague, mice plague, bushfire, flood or dust storm—would the number of eligible farmers within the trial area increase? What is the name of the body that will decide whether a farmer qualifies for the help and is deemed to be in hardship, and how will this body be funded? Will the minister—and, if so, which minister, Western Australian or federal—has the final determination on whether an event qualifies as a hardship event to be eligible for the drought trial program? Will the minister—and, if so, which minister, Western Australian or federal—has the final determination? I am interested to know the answers to these questions as the definitions in the hardship test are extremely important.
The coalition do not oppose this bill and we will closely follow the so-called drought trial in Western Australia. We do not oppose the bill on these grounds. If there are farmers within this region of WA who are in strife and who can be helped, then far be it from us to deny them what the program is meant to do for them. But I have to say this: this is called a drought program, but drought as we know it is the kind of thing that would qualify as exceptional circumstances drought—and that is how we have dealt with it up until now—and it means pretty desperate times. It does not mean that you can spend $60,000 on a farm and drought proof it; you cannot.
I am not suggesting for one second that drought measures cannot be improved on, but I have a terrible suspicion following the Productivity Commission report. The minister called for it and got it; and the Productivity Commission does sit under Treasury, so it is not about handing out money. The report done by the Productivity Commission was scathing about drought, mainly because they are an arm of Treasury and they do not like money leaving. It was suggested that the interest rate subsidy had done harm rather than good; it has done good and it has held together areas within my electorate. There are areas that went into exceptional circumstances drought in June or July 2002—that is, eight years ago. There would be very few of them left, except for EC and except for the interest rate subsidy. That kept the banks on side, which kept farmers on the farms and gave them a chance when conditions improved to get some stock back and to do all those things. I take personal offence, as does the industry, to be told that the interest rate subsidy caused mental issues—and I would rather not go into those at this time. It saved them. It has done an awful lot for people. Whether or not you like the program, there is no getting around the fact that it has meant a lot to a lot of regional and rural Australians.
We support the bill because it will give a chance to those in the trial area of WA, who might be in particularly bad circumstances, to get the sort of relief that people get under exceptional circumstances.
I would like to deal with a couple of matters that the member for Calare dealt with. I would have liked to have seen a little more spirit of the future from him. I would have liked to have seen him looking to the future and looking for new ways. His point about exceptional circumstances not causing any problems I think lacked a little bit of political thinking and a little bit of political giving. There are people who sometimes cannot see their way through. There were people who were in debt before exceptional circumstances and before drought came to their properties and to their enterprises. One way of looking at new ways in this field is to try to find new direction. Exceptional circumstances payments actually pay people who are in debt and subsidise the debt on those enterprises. Those who may have worked hard to drought proof their property and to build risk management into their processes do not get any payment. They may be next door to somebody who does. This is a part of thinking that we have to move forward on. We have to be considerate of the nature of the human beings that are involved in the enterprise, but we have to have efficiency in the process.
The Productivity Commission’s main role is to make sure that the country is spending money wisely and is being productive. It is taxpayers’ money that is being spent. Therefore, the nation has to win from the programs. We have to make sure that that comes into play. It would be good if we could get some good modern thinking from the other side of the House. I am sure that not everybody would accept what was said by the last speaker.
The Farm Household Support Amendment (Ancillary Benefits) Bill 2010 inserts a new part 9D into the Farm Household Support Act 1992 to treat, for welfare related purposes, farmers receiving income support under a pilot of drought policy reform measures as if they were receiving exceptional circumstances relief payments. The pilot represents a dramatic shift in the way governments help farmers deal with the challenges of the future, from crisis management to risk management. The old system provides the most assistance to farmers who are in the most debt and fails to recognise those who have made the tough business decisions to stay out of debt. We need to reward those who are innovative and into using new ideas and moving forward, not those who may be into old thinking and who are unable to make decisions of a tough business nature.
This legislation very much takes heed of the findings of part of the Farming the future report, which was submitted to the parliament earlier this year. Drought relief as such has played its role and, although we need to phase out exceptional circumstances relief, we do not want to ‘chop them off at the socks’ as the president of the AIAST, Mr Geoff Thomas, said. He went on to say, however:
… there is no question that it has caused less adjustment than there would otherwise have been.
It would have been good if the National Party member for Calare had acknowledged that maybe that process had occurred. Mr Thomas also said:
Even some of the people who have received it—
exceptional circumstances payment—
would admit privately that it probably has not done them a favour … because it has reduced their capacity to adjust.
In the report, the pork industry, through Australian Pork Ltd, was quoted as saying:
… future drought policy should be aimed at assisting the agricultural sector to adjust to climate change and prepare for extreme climatic conditions.
This new approach to be trialled in Western Australia will help to make the farming sector more resilient and addresses mental health issues in farming communities. Importantly, the pilot will not affect farmers currently receiving income support payments and interest rate subsidies under the old exceptional circumstances scheme, but we must start talking about risk management instead of drought support. The National Rural Advisory Council will continue to consider proposals for exceptional circumstances declarations submitted by state governments and to reassess current declarations coming up for renewal.
The pilot will run from 1 July 2010 to 30 June 2011. It includes the farm family support measures which provide income support to assist eligible farmers facing hardship with basic household needs. Assistance is available regardless of the cause of hardship. The farm family support payment will be delivered through an executive scheme arrangement under the Financial Management and Accountability Act 1997, rather than being fully legislated, due to the complex nature of the income support legislation and the short-term nature of this program. Guidelines will be published which will provide details of the operation of the executive scheme.
The government wishes to ensure that the recipients of farm family support during the trial can access the full range of so-called ‘ancillary benefits’ which are already available for exceptional circumstances relief payment and to other welfare recipients under existing legislation. As it is not possible to use the executive scheme arrangement to provide the full range of ancillary benefits to recipients, legislation is required to ensure those will be available.
In order to meet the objective of making Commonwealth welfare assistance to this group consistent with exceptional circumstances relief payment, the bill will amend the Farm Household Support Act 1992 to effectively treat the farm family support as if it were exceptional circumstances relief payment for the purpose of providing access to a range of measures—the ancillary benefits referred to earlier—that are not available as part of executive scheme payments. These include an automatically issued healthcare card and some concessions relating to income and asset testing for student allowances paid to, or in respect of, the student children of recipients.
Ancillary benefits available to exceptional circumstances relief payment recipients will automatically become available to farm family support recipients. This will be achieved through the linkages in the Farm Household Support Act 1992 to other legislation—the Social Security Act 1991, the Social Security (Administration) Act 1999, the Income Tax Assessment Act 1936, the Income Tax Assessment Act 1997, the Small Superannuation Accounts Act 1995 and the Age Discrimination Act 2004. The bill does not make any amendment to any legislation other than the Farm Household Support Act 1992, but we must keep looking at the way government can drive change to help farmers help themselves in future. Although it is a gradual process, it is good to see the start put forward by this bill. Provisions of this bill can only be applied in respect of payments and services made under, and for the duration of, the Farm Family Support Scheme, an executive scheme created under the Financial Management and Accountability Act 1997.
The drought policy reform pilot will test a comprehensive package of drought reform measures. These are designed to: (a) support farmers in managing and preparing for future drought and a changing climate; (b) increase the resilience and capacity of rural communities to cope with adversity; (c) better coordinate social support services in rural areas; (d) help families meet immediate basic household expenses during financial hardship; and (e) connect farmers and former farmers to discuss opportunities outside of farming. As we know from many reports, farmers always underestimate their skill base and their ability to change direction especially, possibly, after generations on the one property.
Farm Family Support is a program under the drought pilot which provides other key elements of: (i) income support paid at a fortnightly rate based on the Newstart allowance base rate to help farmers and their families meet basic household needs; (ii) case management to assist farmers to develop a plan to identify action which will improve their financial position on-farm and off-farm; and (iii) support for the implementation of these plans with assistance of up to $2,500 to fund the cost of financial advice to assess farmers’ long-term financial positions and $5,000 to fund professional advice and/or training.
The Farming the future report concluded that drought policy should be about developing industries and enterprises that can cope with drought, and both sides of the House would support that approach. It emphasises capacity building and long-term resilience rather than short-term survival. Climate change is an issue we have to contend with, and farmers are on the pointy end of that change. We have to ask ourselves how long we can subsidise farms with old methods and old mechanisms. We must come up with ideas whereby we can move our rural producers into a phase where they are discussing risk management in their farming practices, new processes, sustainable methods and recycling so that nothing is wasted.
Our land is fragile, but it can be strengthened and the soil can be assisted and improved. But there is a limit to some of the farmlands and these limits have been pointed out before, even as far back as the early 1800s. Drought has always been a part of the picture and we need to understand it so we can live with it, survive it and work within it. We need to help to innovate and fund opportunities for farmers to do this. Funding interest rates on debt where, possibly, people do not make decisions that they need to is not moving us forward in this country.
In the Farming the future report of the House committee, the committee made the point that change is not easy and we need to fund bodies like Rural Alive and Well, which is a support and counselling service in my state of Tasmania and in my electorate. It is leading in new ways of delivering these processes of help and support for the farming communities. It deals with real people by going down the track, sitting at the kitchen table, having a cup of tea and offering support, which is usually done by a local person that knows the region and usually knows the family and their needs.
A key role of the service is to connect the support services of government with those people so that they get the services and the help that they need, and then also to keep an eye on the situation and make sure that things are happening and that there is change, help, direction and opportunity for those people. Exceptional circumstances are sometimes harming people and are not really giving them a way forward or helping them change and make the directions that, possibly, they should. Farms need to build a business plan. Farmers need to look into that sort of operation, work to achieve the plan goals and to accept the true risk of business and understand that risk is a part of enterprise. Government and, of course, the Australian people are better served by a robust farm sector using modern business practices than by paying to keep invalid or unviable enterprises going that are not re-adjusting as they need to.
There are many, many farmers who are looking for new directions and new ways, especially younger ones, and they might need a bit of help to do that. This is the way that government should be funding assistance to the rural sector to make it a robust sector and to bring people forward into new ways. We know the challenges of water into the future. We know the challenges of productivity and that the rural sector will have to use less water but increase productivity because the need is going to be there for us to meet those demands into the future. We have that opportunity and it will need government to be innovative and find new ways to achieve that.
This bill gives support to people in a trial that is endeavouring to do that. It is a very good intervention in an innovative way, and I congratulate the minister and the department for bringing it forward. I wish those involved with it the best of will. I certainly hope that we can get strong support for innovation and new ways of thinking in the rural sector in Australia so that we can go forward with this sector as they adjust, as do many other sectors of our economy.
The taxpayer pays for exceptional circumstances. We have to make sure that there is a public good at the end of the line. In that sense we have to show that we care about people and assist people in whatever way we can to go forward. We need to make sure that they are not staying where they probably need not stay and that they do readjust for the future. I think this bill does that very well and I commend it to the House.
The Farm Household Support Amendment (Additional Drought Assistance Measures) Bill 2008 is important legislation about which I will give credit where credit is due but take some part of my speech to identify a direction that I think would be more worthwhile. The Minister for Agriculture, Fisheries and Forestry, Mr Burke, is, nevertheless, to be congratulated. Through this pilot scheme, which I think is properly located in Western Australia, he has tried something different and something better, and recognised that the exceptional circumstances scheme has never been effective in giving appropriate support to the rural sector. One of its greatest failings, of course, is the fact that, if you are rather profligate and borrow a lot of money, you will get half your interest paid for you. If, on the other hand, you have been careful and even accumulated a few off-farm assets to protect yourself from seasonal and price cycles, you get nothing. The very nature of Western Australian farming is that today it generally covers very large farms and cropping programs of 10,000 or 15,000 hectares. The leading farmer puts in 100,000 hectares. Each of those people, I might add, are betting their farm virtually annually against the weather and against price movements, currency and everything else.
The fact of life was that we in government sent the ‘drought bus’ up to the northern sector of what was then my electorate. They had had three years of devastating drought when nothing grew. So in they went to the public servants to see what assistance they might give—and this program had been very successful in the dairying country—and one after another they were told, ‘You’re too rich.’ You had not grown a crop for three years but the asset valuation, which was often unsaleable, was such that you could get no money. The scheme failed through means-testing and it failed in other ways.
The minister, to his credit, has come up with an alternative. I am not going to criticise that alternative, because I am prepared, as I think most farmers in my electorate are, to give it a go. I recognise that NRAC as we know it, the National Rural Advisory Council, will be a participant. I have also got a note down here in speaking of the minister’s achievements that it was he with the cooperation of the Liberals—and it is interesting today when the Neanderthals were out there again complaining about the loss of the single desk—who had the courage, as did his predecessor John Kerin, to bite bullet on this. It is pretty handy if your opponents will take on the issues that are so hard for those with the constituency. But I wish the Labor Party took the same opportunity after we had fixed up the industrial relations sector for them. They should have just left it alone and said, ‘It seems to be working.’ Might I add that some credit there goes of course to Paul Keating and Bob Hawke. People forget that both Whitlam and Hawke attacked the industrial relations stupidity by lowering tariffs. Whitlam also revalued the dollar and both of these put pressure on people to stop doing silly deals and try and get more efficient.
Nevertheless, what has happened with the single desk deregulation is that farmers, particularly in my electorate, are now getting a separate account for their off-farm costs—their storage and the loading on ships and the freight. One of my constituents was horrified that that cost equalled his fertiliser account—and take it from me, that is a lot of money. The focus in my state now is not about crying tears of blood over the departure of the single desk, as it was known; in fact, 50 per cent of the crop is now handled in a single desk concept by the farmer cooperative CBH. That 50 per cent of farmers, as in other areas, has continued with the pooling system, but they have all got to understand that there is a huge cost burden being borne off the farm. It was all secret under the single desk—all bundled into the pooling. We knew that the corporate entity, AWB Ltd, was actually milking $40 million a year out of overseas freight contracts by contracting in their name for chartered shipping and then billing it at their chosen price per tonne to the pool. All those things are now exposed.
It is pretty interesting to note that, as farmers measured the cost of delivering their wheat to a storage, they started to buy silos and said, ‘I’ll pay for them in three years.’ Interestingly enough, the farmer co-op then lowered the price of storage. But they put a bit more on the price of loading a ship, where they have still got a monopoly at this stage. I have got farmers going out there now to protect their business, by their own right, by simply looking to alternative loading arrangements. They are talking to people with a woodchip belt and with an iron ore belt. They are looking to the development, which is being slowed down by the Barnett government—and I am after them about it—of the Buckeridge private port, where they will be able to get access to loading facilities sufficient to load a shipload of wheat. That is all great; that is getting on with it.
If you are growing 5,000 or 10,000 tonnes of wheat, which is typical, and you can save $5 a tonne, it is a lot of money and it is the difference between going broke and not. The other matter I want to talk about at length is to do with the farmers’ right to insure their return and to have a form of cash management, which is typical around the world. I would have preferred that to this legislation, but the minister has gone with a pilot scheme. But I will come back to that.
The reality is that the farming sector in my electorate now realises where its costs can be reduced. On-farm, they have gone from, in my living memory, 40 horsepower tractors and a three-pass approach to putting a crop in to 500 horsepower tractors and actually seeding dry on a certain date and waiting for the rain. That effectively adds about two inches of rainfall to their cropping period. They are doing all that. They have learned every form of no-till farming and all those things to make sure that they are as efficient on their property as they can be.
But now we have got to improve their local roads so they can use bigger trucks, if necessary, to go all the way to port. Again, I thank the minister because I convinced John Kerin to deregulate the transport of export wheat and Mr Burke, the now incumbent Minister for Agriculture, Fisheries and Forestry, reincluded that provision in the wheat marketing legislation, meaning that a farmer cannot be captured any more by a grossly inefficient rail system. When that came in under Mr Kerin, the then state government regulated rail authority of previous years thought it might be a good idea to put a loop down at Kwinana where the major exporter port is so they could actually bring a train back while a full one was going down. They did not care about that while there was a regulation.
CBH is a good organisation. Its executive know that they have got to get it cheaper. At the moment and at present rates, if they do not get eight million tonnes of wheat into their system each year, they cannot even break even. These are the issues that are being exposed by the government’s decision to deregulate the market and generate the transparency that is now allowing farmers to do it.
I was a most unpopular boy in my electorate at the last election. Funnily enough, the two parties that supported deregulation were the Labor Party and the Liberal Party, and we still got 66 per cent of the vote. Fortunately, I got nearly 50 per cent. But the fact of life is that, in these circumstances, people did not thank us. As I said, we still have the Neanderthals parading outside the parliament when farmers in my electorate are already making more money because it is deregulated, because they can negotiate a price or they can choose the old-fashioned pooling system. They are better represented now because their co-op owns shares in flour mills overseas, which will not guarantee the price but will certainly guarantee a sale, and in the present environment we have a very significant oversupply of wheat and grain around the world, driven I might add by one year’s spike in prices.
Farmers, who typically and in recent years would have looked at a tonne of wheat per hectare as the break-even point, last year had to harvest two tonnes per hectare because of price and other influences. For much of the so-called better part of the area, there was a very bad finish and they did not get it. In that region it is estimated by a constituent of mine, whose estimates I trust, that they lost $1 billion. Individual farms lost half a million dollars. If they do not get a good crop this year, then things could be very dangerous.
Consequently, the response of governments around the world is to give support to what is generally referred to as multiperil crop insurance. That can be delivered in many ways. Typically, around the world it is underwritten. In other words, if the losses of the private insurers exceed a certain point, then governments come in and pay. I will make further comment about that. Multiperil crop insurance is compulsory in South Africa. You cannot put a crop in without giving evidence that you have insured it. So you literally bet with the insurer against your crop being less than one tonne per hectare, two tonne per hectare or whatever.
I believe that, consistent with our policy on private health insurance, government funding would be best delivered upfront as a subsidy on that premium to make it attractive because, as we know with any form of insurance, the higher the rate of participation the lower the premium cost. Let us say the premium cost was—and this is purely a subjective figure—10 per cent. That would probably be beyond its worth. But at the moment farmers are deemed by the banking sector to be high-risk lending and they charge them accordingly—typically four or five per cent over what a home owner would pay for a home mortgage rate. Of course, if they have a bad crop, the friendly banker says, ‘You are an even worse risk now and you are struggling to pay me back, so I will charge you more.’ It is a policy I have never been able to understand, but the reality is that, if a farmer went into his lender and said, ‘Here is my insurance policy, backed in a fashion by the government, which says I will recover the full amount of your loan even if I get no crop at all,’ how can the bank then say, ‘You are a bad risk’? One might say in that example that five or six per cent of that 10 per cent would be offset by interest rates.
In my mind, this is a much better response. And, having congratulated the government on trying something new, might I say that there is a substantial accent in this pilot program relating to assisting people off their properties. Of course I do not think that should be the purpose of legislation, but I understand the reasoning. The words ‘to depart with dignity’ are used, and for some people the circumstances are beyond retrieval. But I am saying that if this House were to legislate a progressive and transitional arrangement, even in legislation of this nature, to give farmers the option of a subsidised or underwritten insurance scheme by which they could cover their input costs or such greater amount for which they were prepared to pay a premium, then in fact their security would be guaranteed. This occurs in Canada, it occurs in the United States, it occurs in many parts of the world. It is a common practice.
It is interesting. There have been numerous inquiries into this particular system, all designed to fail. In fact, one in Western Australia used as an excuse the fact that they sent out something like 1,300 or 1,500 survey forms to farmers to see if they would participate and they then said, ‘No, farmers aren’t interested; they only sent 230 forms back.’ I am surprised it was 230. You know what farmers do with survey forms; they chuck them in the bin. To use that as a judgment when they had figures in there that said that the premium rates could fall to two per cent if there were high levels of participation—now I am not recommending the South African system of compulsory participation but, if it happened, that would be extremely cheap. The thing has to be risk rated; you just cannot have a flat premium structure, because some properties represent a higher risk than others. Funnily enough, in the last couple of years in my electorate the so-called marginal country to the north has been doing pretty good after some very dry years, but the safe country has got another problem. It is called frost. One day they have a magnificent crop standing in their fields just maturing to head, and the frost comes along overnight and wipes it out.
Unfortunately, and I think unwisely, in better times for cropping and with all the efficiencies achieved, many farmers walked away from their livestock component, their mixed farming component. At the moment they are all rushing to get back into sheep—not to sell the wool, but to sell the meat, for which there is an ever-increasing international demand, particularly in the United States where the Latino population prefers mutton to beef. That is changing the buying habits of the United States, and of course they are such a huge consumer. We are talking now over $100 per lamb, and that in itself would make the difference.
All of this comes into the management process, but more particularly, considering the huge costs involved in putting a crop in and the past variations, farmers need a system that initially must be supported by government. My view is that all the EC outlays could be transferred to that, but there would be a double whammy period for government because you cannot say to those, particularly in the Eastern States, who are still on EC, ‘You get off it and go and insure yourself.’ No, you have to phase those sorts of people out. Maybe this is a step in that direction because it talks about self-reliance. I think we should be moving in that direction and, in the first instance, having a cost-neutral arrangement progressively so that the ongoing EC funding is committed to either a premium subsidy or an underwriting.
It is funny. When I talk about all of these concerns, the insurance industry in Australia have typically said, ‘It’s all too hard, we don’t want to be part of it.’ Yet I am pretty sure I read the other day that QBE have bought a company in the United States or Canada that specialises in crop insurance. I think they paid $700 million for it or something. So obviously they think those companies over there are profitable, but that is probably because of government underwriting.
I congratulate the government on trying to do it better because exceptional circumstances is a dog and it does not work and it was very unfair, but I would say to the government and I would say to my colleagues, as I do frequently, that we need to take another step and give people proper self-sufficiency through being able to insure, as everybody else does, and protect their actual asset through insuring their crop production. And if that requires some government assistance in the first instance, I think it would be worthwhile. (Time expired)
I thank the member for O’Connor for his comments. I would like to echo what he has had to say in relation to the exceptional circumstances regime, based on the experiences of my own region. I would also like to congratulate the minister, Minister Burke; he has been an outstanding Minister for Agriculture, Fisheries and Forestry. He has tremendous competence, and his straight talking and honesty have been well-received by all the men and women on the land who I talk to.
This Farm Household Support Amendment (Ancillary Benefits) Bill 2010 is very welcome, setting up this pilot project. It is a pilot of drought policy or risk policy, if you like, because we need to move away from an exceptional circumstances system that is based on consequence management to a risk management approach to better arm our farmers for the future. As has been mentioned, this trial will be operating in Western Australia from 1 July this year to 30 June 2011. They will have access to the same welfare related ancillary benefits as those receiving exceptional circumstances relief payments. All this includes the automatically issued healthcare card and concessional income and asset testing for youth allowance—so important, as you would know, Mr Deputy Speaker Scott, in relation to rural and regional areas in particular—and the farm family support scheme will be demand driven.
As part of the trial, we will continue to provide income support to help eligible farmers facing hardship to meet basic household expenses. That support is provided under the farm family support measure. The assistance is available regardless of the cause of hardship, which is another important point. Due to the complex nature of the income support legislation and the short-term nature of the program, farm family support payments will be delivered through an executive scheme arrangement under the Financial Management and Accountability Act 1997. This bill will amend the Farm Household Support Act 1992 to effectively treat—that is, deem—farm family support as if it were exceptional circumstances relief payments for the purpose of providing access to a range of measures.
The farm support scheme that we are introducing in this trial includes farm family support, which is income support for basic household expenses, and farm social support, which will be directed towards stronger social networks for mental health and other social needs—mental health being a huge issue in the rural and regional areas, especially during these stressful years of the drought that we have had. For farm planning, farmers will be able to access $7,500 to undertake training to develop or to produce a strategic plan for their farm business. Building on that we will have funding available for grants of up to $60,000 for on-farm investments identified as a consequence of the strategic planning that will help them apply that strategic plan. We also support stronger rural communities, so there will be grants to local councils for activities that make rural communities more resilient during the agricultural downturns that they may experience. If the worse comes to the worst, we will have the farm exit support grants of up to $170,000 for farmers who decide to sell their farms because they are no longer viable. Then we have a beyond farming component, which puts current and former farmers in touch to discuss opportunities outside of farming and help to make that transition much easier.
This is far superior to what we have had with exceptional circumstances. My region is a perfect illustration of the downfalls of that system. It is important to note, though, that that system will continue as this trial progresses, so all those receiving exceptional circumstances support now will continue to receive that support until we can determine how well this trial has gone and where we need to go from there. In my region, we suffered badly from the blunt instrument approach of exceptional circumstances. Partly this is because you tend to reinforce failure by not having an approach that looks at the real reasons for why particular farms might be in debt and whether or not they are in fact viable, but it is also because of the artificial lines on maps. In my region, which is now totally drought affected or marginally affected, you had boundaries that were drawn all the way up to the Sydney Basin, where the rainfall was much greater than was occurring in the Bega Valley or the Eurobodalla shire, for example. In fact, last year was the driest year on record in the Bega Valley. This has been compounded, of course, by the effects of climate change because the increasing temperatures have affected ground moisture quite severely. So whatever rain that was falling was rapidly evapotranspirating or not being soaked into the soil, which also gets back to another factor in the degradation of our soils through the loss of carbon in the soil. I will come back to that.
We also have the situation where, having tried to refine it a little more, we managed to get the Bega Valley under an exceptional circumstances declaration but the Eurobodalla farmers missed out. So you would have a qualifying farm that would effectively be right next door to a farm in the Bega Valley that would not qualify for exceptional circumstances relief because of the artificial lines on the maps. These are just a couple of illustrations of why the system was just dysfunctional and not worth continuing with. There must be a better way and this trial will help lead us there.
It is part of a raft of support measures this government has taken to support the men and women on the land. We truly have become the farmer’s friend through these many measures. Through Australia’s Farming Future, for example, we have a four-year initiative that features four programs delivering research and development, training, capacity building, adjustment advice and assistance. We have the Climate Change Research Program, which funds research development and demonstration projects to help primary producers to manage climate change, reduce emissions and improve productivity—and quite often these measures relating to climate change are associated with better productivity. We have the FarmReady program supporting training opportunities for primary producers, enabling industry to develop strategies to deal with the impacts of climate change. I will come back to that. We will have the community networks and capacity building aspect, which aims to build the leadership and representative capacity of target groups to strengthen community resilience and the productivity of primary industries. These groups include women, youth and Indigenous Australians. Under the Climate Change Adjustment Program, there is professional advice available and training delivered to individuals to help tailor individual farm businesses to adjust to climate change, set goals and develop action plans to improve their financial circumstances, either within or outside of agriculture.
There is also the Caring for our Country scheme, which carries over $2 billion of funding over its first five years and is particularly aimed at natural resource management. It seeks to achieve an environment that is healthy, better protected, well managed and resilient and provides essential ecosystem services in a changing climate. Caring for our Country is delivered in partnership with a wide range of stakeholders. The Australian government encourages information sharing and cooperation at individual, regional and national levels through this program. It focuses in particular on six national priority areas. These include national reserve systems; biodiversity and natural icons; coastal environments and critical aquatic habitats; sustainable farm practices, very importantly, including through the Landcare mechanisms; natural resource management in remote and Northern Australia; and community skills, knowledge and engagement. The Caring for our Country sustainable farm practices national priority area in particular seeks to assist farmers and fishers to increase their uptake of sustainable resource management practices that deliver improved ecosystem services; increase the number of farmers adopting stewardship and covenanting property management plans or other arrangements to improve the environment both on farm and off farm; and improve the knowledge, skills and engagement of Landcare managers, farmers and fishers in managing our natural resources and the environment.
The Landcare component covers off on many different areas, and these include Landcare projects—specifically, community based projects—also sustainable practice projects, the national network of Landcare facilitators, a $2.6 million program over four years to support the uptake of sustainable fisheries practices, and the community action grants. There was a bit of a scare campaign running at one point that the Landcare budget had been reduced in this year’s budget. This should be laid to rest very clearly. That is simply not the case. The Landcare budget increased from $35 million in last year’s budget to $36 million in 2010-11 and to $39 million in the further out-years. Caring for our Country funding also increased for next financial year by $15 million to $423 million for that year. So the Landcare funding situation is well and truly secure.
Our FarmReady training program—this is a particularly good program which many farmers in New South Wales are taking advantage of—provides $1,500 each year for farmers and their families, with extra funding for travel, accommodation and child care, and equips primary producers with tools to manage and adapt to the impacts of climate change. The sorts of courses that are available address particular key learning areas, and these include the implications of climate change, integrating new techniques, natural resource planning, farm business management, on-farm research and analysis, strategic planning, holistic whole-farm planning, financial management and human resource management. Under this scheme there are 500 courses now approved nationally; 225 are available on demand anywhere in Australia. More than 12,300 farmers had signed up as of 9 April this year. It is a very successful program. I know that in New South Wales alone 120 courses have been created targeting regional New South Wales. This includes face-to-face and online support by phone or email. It covers a vast range of areas which include dairy; risk management; compost tea—I have never tried any of that, but it sounds interesting; farm planning; computerised mapping; quality and food safety; grains; healthy soils; water management; weed control; permaculture; organic farming; irrigated lucerne; environmental performance; managing people and projects; transition to resilience; and profiting from soil carbon, among many others.
I am also very proud of what we have done in relation to the weeds threat. This is something that just simply is not well understood in metropolitan Australia—but I am sure you understand it very well, Mr Deputy Speaker Scott. It is a big challenge for my region. We face issues to do with the serrated tussock, African lovegrass, St John’s wort, Paterson’s curse and in particular the insidious threat of fireweed. Fireweed is a particular problem because it is a toxic plant that will kill not only animals but people as well. Originating from southern Africa, it has been given a leg-up by the drier conditions in recent years. If it were to spread more widely in Australia it could create a dire threat to our agricultural sector. I have seen estimates that range from $4 billion for the cost to our agricultural sector of weeds annually. So it was a big problem and I was distressed—and no doubt there were members on the other side who would have been distressed—that the weeds CRC was going to be canned under the Howard policy.
I am very proud that through heavy lobbying I have managed to save a scheme targeting weeds, which is the $15.3 million that we have allocated over four years to establish the new comprehensive National Weeds and Productivity Research program, which will reduce the impact of invasive plants on farm and forestry productivity and also, importantly, on biodiversity. The program focuses on improving the management of invasive plants in agriculture, forests, pastures and native vegetation by investigating the most serious invasive plant problems in Australia, uniting national experts, land managers and stakeholders to improve the understanding of how to manage the risks associated with invasive plants. It also ensures better coordination and information exchange between researchers, land managers and regulatory agencies for the management of invasive plants. Also, I am very proud that under this productivity research program we have already funded 39 weed research projects worth nearly $3.6 million. These projects build on existing work and also enhance the innovation of approaches to the management of weeds. I am particularly pleased that I was able to secure $300,000 specifically for the fireweed problem. Many of my own family are dairy farmers down in the Bega Valley, which seems to be the epicentre of the fireweed problem. So this $300,000 will help build on the research that had been previously undertaken into this insidious threat.
This brings us back to a focus on where this challenge is emanating from for our farmers. It certainly comes back to climate change but also to the isolation of the challenge farmers face in dealing with dry conditions from crises over the years. So what we need to get to—from my old military background—is a situation of planning for the worst-case scenario, enabling our farmers to survive and profit or to be able to take advantage of the good times and sustain their operations during the bad times. In the eastern half of Australia we experienced a long, dry situation from 1895 to 1948, and it got wetter from 1948 through to 1976. But now we have been on this downward cycle. It has been compounded by the higher temperatures of climate change which, as I mentioned, has affected this ground moisture situation.
There is a debate about whether rainfall is affected by climate change. This is an ongoing debate and an open question. I did note that the CSIRO recently did research which revealed that the subtropical ridge—which is affecting south-east Australia in particular and the Murray-Darling Basin and my region—had been intensifying and resulting in lower rainfall. The only way that they could replicate that effect in their modelling was by introducing human-induced or anthropogenic carbon emissions, climate change factors. So there seems to be some suggestion that that may well be the case. But, as I mention, whatever the case, the higher temperatures are having a dramatic impact on ground moisture.
I also mentioned previously that the situation has been exacerbated in that respect by the deterioration of the carbon content of our soil. Carbon in the soil helps to retain the moisture. It also, of course, is a nutrient for our crops. I know from my own family’s experience that they are having to lay on more phosphate than previously to get the same results from their pastures. This is a direct result of the deterioration of carbon in our soil. So we are having this combined effect of the higher temperatures, greater evapotranspiration and deterioration of carbon in the soil.
My farmers are not sitting still. On their own initiative they are doing some great work out there. There is a fantastic group called Monaro Farming Systems. This is a group of farmers who have gathered together to combine with the CSIRO to develop a modelling tool called Grassgro to help them manage their properties. This tool enables them to examine strategic decisions on their farming systems and to look at the effect of anticipated weather conditions over long cycles so that they can plan their herd sizes and their pasture management around that. It is proving to be a powerful facility for analysing risk. This has given my farmers great mental reassurance because one of their problems was not knowing what to do. Uncertainty was creating even more mental stress. So this tool is not only helping them plan better as a business but also helping them deal with the mental stress emerging from the challenge that they are facing. I salute the team—David Mitchell and the crew and the CSIRO—for their support for Monaro Farming Systems. I am looking forward to having the minister meet with the group soon. I would hope to network this initiative in order to get the information and the strategies that these farmers are engaged in more widely known in the broader farming community. It will show that there is something that we can do to plan for these circumstances and that there is information out there on how to manage the risk.
Another great initiative in my region is the Bega Cheese environmental management systems project.
The Bega factory.
Our Bega Cheese factory is a wonderful icon for the country and for our region.
The trade visitors centre.
There is a beautiful visitors centre, with wonderful pictures on the wall that include a photo of my great, great-grandfather who founded the Bega Cheese Co-op and who was its first chairman. It is a wonderful part of our community and history. The Bega Cheese environmental management systems project is doing wonderful stuff with all of the members of the former co-op and now publicly listed company. They have identified environmental risks on 22 dairy farms. They have invested $2 million of public money and leveraged $6 million of private money. They have delivered approximately 75 on-ground projects, including 83 kilometres of riparian wetland fencing to protect approximately 300 hectares of riparian land; 124 hectares of revegetation and remnant vegetation management; 197 off-stream watering points; remediation of 13 priority erosion sites; 23 dairy laneway upgrades; 17 stream-crossing upgrades; 37 effluent systems upgrades; soil testing and nutrient mapping across 90 farms; and a very exciting dung beetle assessment across 22 properties. That is a really interesting outcome from those projects.
I salute what Bega Cheese and the farmers who are participating in that program have done. I was lucky enough to be at the presentation ceremonies of certificates to the farmers for what they have done under that scheme. There are things that farmers can do and are doing for themselves—and we should not think that they are not and that they are not alert to the challenges of climate change.
Finally, I come back to the Carbon Pollution Reduction Scheme. We need to come back to this in the new parliament because it will help us to address this carbon in the soil issue. We need to unlock the investment that will flow from the CPRS and invest it programs that will help to get that carbon back into the soil. Various techniques and possibilities exist out there for helping us to achieve that. We need to get the CPRS in there to unleash all that potential investment, including in relation to reforestation. It will assist in this as well. It could also help with a range of other things like the wingless grasshopper problem that I had just recently, which gets a leg-up from the lack of vegetation in the area. We must take on board the Carbon Pollution Reduction Scheme.
Order! The time of the parliamentary secretary with the cheesy grin from Bega has expired. I had to put that one in for you!
I rise to speak on the Farm Household Support Amendment (Ancillary Benefits) Bill 2010. Just before the Parliamentary Secretary for Water leaves the chamber, I would like to say to him in the most helpful terms I possibly can what farmers would generally do—I was a farmer before I came into this House—about deficiencies in the soil. You should say to your family on these dairy farms that what we do when we have a phosphorous deficiency is put phosphorous on the soil. When we have a nitrogen deficiency, we put nitrogen on the soil. We would not address a nitrogen deficiency by putting phosphorous on the soil, because that would probably lead to acidification. When you talk with your family, get this matter straightened out and that will be a good starting point.
This bill has my support in so much as it is focuses on trying to improve farm business models. It is an attempt to improve on the exceptional circumstances scheme that we have been working with for some years to address drought in Australia. The trial in Western Australia is an opportunity to see whether or not it is a viable model. I must say that I am not a great fan of the exceptional circumstances scheme, which may come as a surprise to some people as I am someone who represents a large area of Australia that has been suffering from drought. But I am not a fan of this scheme largely because of the inconsistent way in which the assistance is provided, the distortions in the market caused by these inconsistencies and the ability of some and not others to access the exceptional circumstances package. For instance, boundaries are well defined but you may fall on the wrong side of a boundary. There are also different financial structures in any particular farm which may or may not give you access to the kind of help you might need to survive.
I have regular contact with a number of rural councillors and most of them are of the opinion that it is in fact far harder to get exceptional circumstances assistance in South Australia than it is in the other states—in particular, New South Wales. I think that is brought about by the primary industries in South Australia that tend to have a different view on some of these things. Access to EC actually causes a great number of conflicts in a district between those who receive the assistance and those who do not. However, having said all that—and I have raised this issue before—I am campaigning to restart the exceptional circumstances scheme for some areas in my electorate, largely because I feel that we have dragged these people halfway across the desert and now we have abandoned them, areas around Cleve, Cowell, Arno Bay, Ceduna and the upper north cropping district. As I have just said, there are some difficulties with EC in that it can be inconsistent. The EC was cancelled in these areas last year after a visit in November by NRAC, the National Rural Advisory Council. NRAC advised that the drought was over, but clearly for those districts, which I have raised with the Minister for Agriculture, Fisheries and Forestry, the drought was not over. In fact, for those confined areas the better year passed them by entirely. NRAC visited the upper north cropping district in November and within a week that district was faced with a heatwave.
Order! It being 2 pm, the debate is interrupted. The adjourned debate will be made an order of the day for a later hour this day, and the member will have leave to continue his contribution.
I move:
That the House record its deep regret at the deaths on 21 June 2010 of Private Timothy James Aplin, Private Benjamin Adam Chuck and Private Scott Travis Palmer while on combat operations in Afghanistan, and place on record its appreciation of their service to our country and tender its profound sympathy to their families in their bereavement.
I wish to express heartfelt condolences to Private Aplin’s wife, Natasha; his children, Ty, Shenae, Josie and Daniel; and his mother, Margaret. I also wish to express heartfelt condolences to Private Chuck’s parents, Gordon and Susan; his brother, Jason; his sister, Tiffany; and his partner, Tess. I wish to express heartfelt condolences as well to Private Palmer’s parents, Ray and Pam, and his brother, Adam. I wish to express my deepest sympathy to the extended families and friends of these three brave men.
I also express my sympathy and support to the members of the Special Operations Task Group, who continue to serve our country with distinction in Afghanistan; the men and women of the 2nd Commando Regiment; and the seven commandos who were wounded in the incident that took the lives of their fellow soldiers. Our thoughts are with them at this difficult time.
Private Aplin, Private Chuck and Private Palmer were experienced Special Forces soldiers who had faced the dangers of combat on multiple tours to Afghanistan. For Private Aplin, this was his second tour of Afghanistan; for Private Chuck and for Private Palmer, it was their third. They faced the dangers of combat in Afghanistan with courage, with professionalism and with honour. They were highly trained commandos and valued members of the Sydney based 2nd Commando Regiment.
Private Timothy Aplin was a loving husband and father. He was an outstanding and dedicated commando who was rightly respected and known to always put others first. Private Benjamin Chuck was a courageous and accomplished soldier. According to his mother, Susan, he was focused on what he was doing, even though he knew it was dangerous, and he did it with the utmost pride. Private Scott Palmer excelled at everything he did, and his professionalism was of the highest order. He loved his job and loved working alongside his mates. Australia is proud of these three outstanding commandos. The loss of Private Aplin, Private Chuck and Private Palmer will be felt by their nation, by the Australian Defence Force and, most deeply, by their families and their friends. These three men lost their lives in the service of their nation. The nation will honour their sacrifice and will honour their memory.
Our soldiers in Afghanistan are doing an outstanding job in very difficult circumstances, and they are doing a vital job. Our troops are playing an important role in coalition operations in Afghanistan. Those operations are aimed at providing greater security for the people of Afghanistan by tackling the insurgent threat. Our troops are also working to build the capacity of the Afghan security forces so that responsibility for the security of Oruzgan Province can be transferred to the Afghan authorities. It is in our national interest for this work to be done. It is in our national interest to help Afghanistan become more stable and secure so that it does not again fall into becoming a safe haven for international terrorism. Our troops in the field in Afghanistan are defending our national interest and our national security. Today we honour those who have lost their lives by again restating our commitment to the cause for which they were fighting. On behalf of the Australian government and all members of the House, we offer our prayers and our support for Private Aplin’s, Private Chuck’s and Private Palmer’s families, their friends and their fellow soldiers.
Honourable members—Hear, hear!
I support the statement of the Prime Minister. Privates Tim Aplin, Ben Chuck and Scott Palmer were all fine soldiers who had served with distinction on previous assignments in Afghanistan. We salute them. We send our prayers and best wishes also to their wounded comrades.
Knowing something of the spirit of the Australian Army, I suspect that these casualties would have only hardened the resolve of our soldiers to fight the good fight and to stay the course. They should not shake our commitment to achieving a more just society in Afghanistan and ensuring that it can never again be used as a base for terrorism. Privates Aplin, Chuck and Palmer died in the service of our country and in the service of a just cause, and that, I hope, will be of some consolation to their families and their loved ones in their time of grief.
Honourable members—Hear, hear!
Order! As a mark of respect, I invite honourable members to rise in their places.
Honourable members having stood in their places—
I thank the House.
Debate (on motion by Mr Albanese) adjourned.
by leave—I move:
That resumption of debate on the Prime Minister’s motion of condolence in connection with the deaths of Private Timothy Aplin, Private Benjamin Chuck and Private Scott Palmer be referred to the Main Committee.
After requests have been made, the government will ensure that this issue is listed for debate in the Main Committee tomorrow.
Question agreed to.
My question is to the Prime Minister. I refer the Prime Minister to his January 2007 statement that the mining boom had ‘piled in billions of dollars to this country’; to his March 2007 statement that the mining boom ‘is pumping up the national economy’; to his April 2007 statement that our current economic circumstances ‘are propped up by the mining boom’; and to his May 2008 statement to the Minerals Council that the boom ‘has contributed massively to national income and to the Australian economy at large’. Why then did the Treasurer say yesterday that the Australian people have actually been short-changed by the mining sector? And if the mining boom has been so good for the country, why is the Prime Minister now determined to kill it?
The Leader of the Opposition can never resist a triumph of rhetoric over logic.
Opposition members interjecting—
Order! The House will come to order!
When it comes to the contribution of the mining sector to the future of the Australian economy, one fact, and one fact alone, should confront the Leader of the Opposition if he is faintly interested in facts. That fact is as follows. Last year, on the question of jobs, the mining industry in fact cut employment by nearly 16 per cent. That is what happened as the rest of the economy sought to grow employment. That was no-one’s responsibility in particular. It is, however, a fact when it comes to jobs.
Secondly, what the Treasurer has also referred to is the fact that the profitability of some of our largest mining companies has increased exponentially across the decade on the back of rising commodity prices yet the return to tax through the form of royalties has not kept pace. That causes us to conclude that tax reform is necessary to make a difference. Thirdly, on the question of what that tax reform would therefore fund, support and invest in—providing better super to 7½ million Australians, providing tax breaks for 2.4 million Australian small businesses, a two percentage point cut in the corporate rate for Australian corporations—it would include, of course, other investments as well, not least of which would be in infrastructure, concerning the infrastructure needs of the resource states in particular.
Finally, can I say to the Leader of the Opposition, the challenge for this economy and the challenge for the future is to make sure that we have a globally competitive economy across the field. That means for every sector of the economy—our manufacturing industries, our service industries, all of whom have been doing it tough with a high Australian dollar, all of whom can benefit from a reduction in the company rate, all of whom can be benefited also by a range of other measures. But none of this happens for free. You have got to obtain the revenue source to fund it by other means. That is why we are proposing tax reform. That is why this government will get on with the business of tax reform.
My question is to the Prime Minister. Will the Prime Minister update the House on the government’s key reform of delivering a National Health and Hospital Network to Australian families?
I thank the honourable member for his question. Today the government released the 2010 edition of Australia’s health. This is a major report from the Australian Institute of Health and Welfare on the health of Australians. It bears some reading because it points to a critical factor, which is the impact of chronic diseases in our country. Diabetes is now three times as common as it was 20 years ago. Up to 32 per cent of all potentially avoidable hospital admissions are for people with diabetes. Secondly, the overall cancer rate has increased by four per cent in the decade to 2006 and it is projected that the number of new cases of cancer in 2010 will be around 115,000. That is a 10 per cent increase on 2006. Thirdly, 61 per cent of adults and 25 per cent of children were either overweight or obese in 2007-08 and the rate among children has been doubling and more than doubling over the last two decades.
The reason I emphasise these three conclusions of the health report by the AIHW is that, together with the ageing of the population, it underpins what we have now got to do with the reform of Australia’s health and hospital system. What we have had is the number of hospital admissions rising by 37 per cent in the decade to 2007-08. Health expenditure across our nation passed $100 billion for the first time in 2007-08, reaching $103.6 billion. Our hospitals cannot be expected to continue to shoulder the burden which arises from the increasing prevalence of chronic diseases together with the other admissions to our hospital system. That is why we need national health and hospitals reform. That is why the government today introduced landmark pieces of legislation to deal with this challenge, to help deliver the range of reforms that we have outlined through the National Health and Hospitals Network—a network which will be funded nationally and run locally.
The Federal Financial Relations Amendment (National Health and Hospitals Network) Bill 2010 will see the Commonwealth dedicate a third of GST revenue into the hospital system. It means that each time any Australian pays a dollar’s worth of GST at the shops, 33c of that will be dedicated to the health and hospitals system. That is an important reform because that funding helps deliver better outcomes for accident and emergency, better outcomes for elective surgery, better outcomes in terms of available hospital beds, better outcomes in terms of the availability of doctors and nurses in our system.
Under this reform the Australian government will take on 60 per cent of the efficient price for all public hospitals, 60 per cent of the buildings and equipment needs of our public hospitals and 60 per cent of the research and training undertaken in our public hospitals. And for the first time the Commonwealth will also become the sole funder of GP and primary health care and of aged-care services as well. The legislation today will remove the incentive to shunt patients from Commonwealth funded GP and primary-care services into the state funded hospital system. This is the blame game. It must be brought to a stop. The way in which you bring it to a stop is to resolve the fundamental funding arrangements which underpin the distribution of responsibilities between the Australian government and the states. The new funding arrangements will mean no more blame between governments about indexation rates and no more arbitrary cuts to indexation rates, as have happened in the past.
There was a further piece of health reform today. The government moved legislation to establish the Australian Commission on Safety and Quality in Healthcare. This will help reduce the harm caused by preventable errors, reduce healthcare costs resulting from unnecessary or ineffective treatments and formulate safety and quality standards with clinicians, professional bodies and consumers. Building on the foundation of this national system, the government is now investing $7.4 billion, starting on 1 July, to increase our capacity and to deliver more doctors, nurses and beds. This includes 1,300 new beds, 2,500 new aged-care beds or places, a four-hour target waiting time for treatment for accident and emergency and elective surgery being delivered on time for 95 per cent of patients. If you do not receive elective surgery within that clinically recommended time, you will receive free treatment at a public or private hospital. We are also funding 6,000 new doctors over the decade ahead, providing better financial support for 4,500 nurses and providing upgrades to around 425 GP and primary care clinics around the country.
These are fundamental reforms, fundamental reforms that cost money and that therefore require reform to Australian Commonwealth-state financial relations. The legislation introduced by the government will underpin the future investment in the health and hospital needs of Australia for the decade ahead. Had we not acted, our advisers concluded that there was a grave danger that our system would reach a tipping point.
That is the government’s plan. It is a clear-cut strategy. The alternative, as we know, is a Leader of the Opposition who as health minister ripped a billion dollars out of the system. We are growing the system by the investments that we have proposed to deliver better health and better hospitals to all Australians.
My question is to the Prime Minister. I refer the Prime Minister to Penrice Soda, which employs over 300 people at its Angaston mine and Osborne manufacturing plan in South Australia. In the last five years, this company has invested over $130 million in capital projects. I refer the Prime Minister to a letter from Penrice Soda that states:
… the new proposed tax would have a major and immediate impact on the competitiveness of our mining and chemical manufacturing operations … local communities will also be damaged.
Instead of the minor backflips and political fixes that the Prime Minister will announce in the coming days, when will the Prime Minister listen to real people in real businesses and provide real jobs and just dump this tax?
I thank the member for Mayo for his question. Part of his question dealt with the competitiveness of the Australian mining industry. I draw the member for Mayo’s attention again to what is happening around the world. Since 2 May, Australian resources have fallen by just under one per cent on the stock exchange here. Canadian resources are down two per cent, Brazilian resources are down 10 per cent and United States resources are down eight per cent. I therefore suggest to the member for Mayo that, when he suggests a particular connection between tax reform proposals here and the confidence of markets in the Australian resources sector, the facts stand in the way of the fear campaign which those opposite are seeking to perpetrate.
Furthermore, I say in response to the honourable member’s question that this government is committed to tax reform and to doing it through a process of consultation and negotiation with the industry. Since the announcement of the tax, the Treasury panel has engaged some 80 companies across the country. On top of that, ministers, including the resources minister, the Treasurer and I, have met representatives of the mining industry on numerous occasions for consultations and negotiations.
The government, as we have said repeatedly, is working to reach a balanced outcome with the industry. A balanced outcome necessarily involves a proper consideration of the national interest. The government is committed to the framework that it has put forward. The framework is a profits based tax, a 40 per cent tax, a tax that also applies to existing projects and a tax capable of delivering the revenue to meet the government’s policy priorities and to broaden the base of our economy.
I have no doubt that many of the big mining companies will not embrace any outcome that would see them paying more tax. No doubt they would be joined by those opposite, including the Leader of the Opposition, who thinks that these companies are paying too much tax already. At the end of the day, the government is interested in a sensible and balanced outcome that supports the future of the industry, that delivers tax reform and that—critically—improves the overall competitiveness of the Australian economy by improving the company rate and the small business rate and by boosting the superannuation earnings of 7½ million Australian workers.
I seek leave to table the letter from Penrice Soda.
Leave not granted.
My question is to the Treasurer. What developments in recent days have provided support for the case for a profit based tax? Why is the government determined to implement a profits based tax on resources despite opponents to reform?
A profits based tax is in our national interest. The future of the mining industry is bright. In recent days, we have seen the forecasts from ABARE in their quarterly outlook for commodity exports released yesterday. Minerals and energy export earnings are forecast to increase by 29 per cent, or almost $38 billion, in 2010-11 and hit $170 billion. You would not get a sense of that if you were listening to the scare campaign that is being waged by a few large mining companies. The fact is, there are very bright prospects for our mining industry. That is why we have put forward a very sensible proposition for a profits based tax.
In the last day, the Western Australian Premier has jacked up royalties substantially—to the tune of $300 million. Did we hear anything about that from those opposite? No, we did not. Did we hear anything about retrospectivity? No, we did not. Did we hear anything about it suppressing investment? No, we did not. And that is because our mining industry is very profitable. It is very profitable on an elevated terms of trade that is going to stay that way for some time to come. The Australian people are entitled to get a fair share of those elevated terms of trade. Those opposite just want the profit to walk out the door and to be lost to the Australian people forever. What we want to do with the proceeds of a profits based tax is to invest those in strengthening and broadening our economy, as the Prime Minister was saying before.
Nevertheless, we continue to get these scare campaigns. I see that the Queensland Resources Council is out today predicting doom and gloom. But at the same time the Queensland government is saying that there are strong mining exploration applications and that they have been unaffected by the RSPT. We saw the US coal group Peabody last week talk about a very substantial expansion in Australia. And of course we have seen the Association of Superannuation Trustees blow the whistle on this scare campaign, calling it scaremongering and irresponsible. And irresponsible it is. What gives the lie to that irresponsibility are these forecasts from ABARE. What they demonstrate is the absolute irresponsibility of those opposite, who say that the mining companies are paying too much tax. So we have this ridiculous position where those opposite are saying that the miners pay too much tax while some miners are saying that they could pay a bit more. But of course there are some companies that those opposite are in league with that will never agree to pay more because they are not interested in pursuing the national interest.
The Australian people are entitled to get a fair share of the boom in commodity prices that is going to last for some time. That does bring great opportunities to our country but it also brings challenges. So on our part we are having a sensible discussion and negotiation with the mining industry, because we are determined to get a balanced outcome for a 40 per cent profits based tax—a 40 per cent profits based tax that can deliver the revenue so we can give a business tax cut to all the companies in Australia, so we can do something about investing in infrastructure and so we can do something about boosting our national savings, which is very important for our long-term prosperity. The final word today about a profits based tax comes from the deputy head of the IMF, who said in Sydney today that he ‘supported it in principle’.
Do you?
Do you? Do you support it in principle? The mining industry supports it in principle.
Opposition members interjecting—
Order! Those on my left will cease interjecting. The Treasurer will ignore the interjections.
They do not have principles, and they are to the right of the mining industry—that is where they are. They are to the right of the mining industry—that is a pretty hard thing to do. But of course it does not surprise me, given the extremism that you have on the opposition frontbench—their desire to bring back Work Choices and their desire to watch this windfall profit walk right out of the door, of no benefit to the Australian people. We will stand up for the national interest in this debate. We will stand up for the long-term national interest of this country. This is what the IMF said. It will stand up for the workers. You on that side of the House have never stood up for the workers. When the workers of this country needed you in their hour of need, you went missing and voted down the stimulus. If you were in power—
Opposition members interjecting—
Order! The House will come to order.
there would be 200,000 more people unemployed in our country. So do not come in here and claim that you stand for employment. Do not come in here and claim that you stand for the workers. You slashed their wages and working conditions. You got right behind Work Choices and, when the workers and small businesses of Australia needed you, you would not support the stimulus. We on this side of the House stand for employment, we on this side of the House stand for jobs and we on this side of the House stand for small business.
Order! In reminding the Treasurer to address his remarks through the chair, can I suggest to some in the chamber that they not overly provoke the Treasurer or he will react as he did.
Opposition members interjecting—
Order! The House will come to order. The Deputy Leader of the Opposition is waiting patiently. I apologise to her because that was not very effective from the chair, but if the House could take things quietly we would be all much better.
My question is to the Prime Minister. I refer the Prime Minister to his previous answer on what is happening in the mining industry around the world. I refer to the comments of Gordon Peeling, Chief Executive of the Mining Association of Canada, who said this week in relation to the government’s great big new tax on mining:
… probably makes Kevin Rudd the mining man of the year in Canada, because he’ll bring a lot of investment our way.
Does the Prime Minister intend picking up his award when in Toronto next week for the G20 meeting?
Honourable members interjecting—
Order! The Minister for Trade and the member for Goldstein will be able to continue the discussion outside if they continue here.
I think the mining man of Australia award goes to the member for Dickson today, because the price that he bought at was $38.59 and today it is $39.12. Hear, hear, the member for Dickson! Here is a man who puts his confidence in the government’s policy—buys in and sees his share price go up. When we look at those opposite, actions always speak louder than words and, secondly, facts also triumph over fear. When it comes to facts and fear, let me draw this to your attention. On the question of Canadian mining stocks, Australian resources, since the 2 May introduction of the government’s tax proposal, have fallen one per cent; Canadian stocks have fallen two per cent.
So, can I say to the Leader of the Opposition, the Deputy Leader of the Opposition and the member for Dickson that we watch very carefully what those opposite do rather than what they say. We watched carefully what Clive Palmer did two days ago, when he initialled an agreement through his representative, in there with the Chinese—for a project of $5 billion to $6 billion, from memory. We also saw initialled, projects involving other Australian companies only two days ago.
Fact and fiction. Fact and fear. I just think we should always observe the behaviour of the member for Dickson. He is a bellwether in terms of what those opposite actually think is going on in the mining industry rather than what they say is going on in the mining industry.
My question is to the Minister for Resources and Energy and the Minister for Tourism. Can the minister update the House about consultations with industry on the resource super profits tax.
I thank the member for Oxley for his question. In doing so, I am pleased to advise the House that companies in both the petroleum and minerals sectors are seriously engaged in constructive discussions, not only with the Resource Tax Consultation Panel in Canberra this week, but also with the Prime Minister, the Treasurer and me. I say that because they appreciate that megaphone diplomacy is not going to assist in working out the generous transitional arrangements that are available for the purposes of bedding down this major change in taxation in Australia.
We all appreciate, as do many in the industry now, that there is going to be a resource super profits tax in Australia. It is also understood that is going to involve a headline rate of 40 per cent. The focus of these discussions is on delivering generous transitional arrangements that not only ensure that we have a capacity to gain for the broader Australian community a fairer share of the return on their natural resources, but also deliver measures that will broaden and strengthen the Australian economy.
This is a reform that, unfortunately, the member for O’Connor does not appreciate the significance of. I say that because we are talking not just about a change with respect to the taxation of minerals and petroleum resources in Australia but also about how we as a nation front up to the all-important issues of superannuation payments, how we take pressure off retirement income, and how we lower the burden for Australia’s 300,000 smaller businesses, many of whom are represented by the tourism sector, for which I also have responsibility. When it comes to broadening our economic base, it is also about taking pressure off our resource-rich regions and the difficulties they are now experiencing on the infrastructure front.
In that context, I say to those companies who are engaging in a very professional and constructive way with the government that we appreciate the way in which they are approaching those negotiations. They understand that this is an important reform and that the best way to inform the outcome is to engage in the process of consultation established by the government. They understand that, at the end of the day, there will be a transition, in association with the capacity to further attract ongoing investment with Australia, which will further enlarge the Australian economic cake.
In the context of the discussions I also draw the House’s attention to the huge price spikes that we have seen in recent years in such commodities as iron ore, where the price increases since 2004 have been over 500 per cent; and coal, where the price increases have ranged from 300 per cent to 400 per cent. Also, interestingly, there has been a growth in world demand for petroleum and LNG products.
These commodities will clearly deliver the vast bulk of the revenue under the RSPT and the PRRT. With respect to many other mineral resources, I simply remind the House, in a calm and measured way, they should appreciate that many of them will be better off under the proposed RSPT. Indeed, the RSPT actually involves a revenue loss for government and a tax cut for many companies that are mining less profitable commodities, because those companies will benefit from royalty refunds and the government’s contribution to unutilised losses.
Can I say in conclusion: the government is committed to this fundamental reform of Australia’s resources taxation system. This will deliver not only opportunities for the resources sector but also many significant opportunities through the broadening of the Australian economy, while also taking pressure off the Australian economy for the purpose of future retirement incomes.
My question is to the Prime Minister. I refer the Prime Minister to the statement of Reserve Bank board member Professor Warwick McKibbin that—
Government members interjecting—
That’s interesting!
The member for North Sydney has the call. He will ignore interjections and not be provoked.
They are passing a reflection on Professor McKibbin. Professor McKibben said:
The government rammed stimulus measures through the economy even though they were fraught with risk. It wasn’t evidence based policy. They panicked. They put the money into school buildings; they put it into insulation. They put it in stuff that they could never reverse. So they came up with a really badly designed resource tax to try and get the position to look good three years from now.
I ask the Prime Minister, is Professor McKibben, in the words of your own Treasurer, ‘a liar or just ignorant’?
Of course, the government welcomes continued debate about the actions the government has taken to keep Australia out of recession. That is why I so much welcome this particular question from the member for North Sydney. He should pose himself some pretty basic questions. Based on the Treasury’s analysis, had we not acted with stimulus, this economy would have gone into recession. Had we not acted with stimulus, 200,000-plus more Australians would be out of work. Had we not acted with stimulus, the impact on Australian small businesses would have been catastrophic, as it has been across the world.
Has the member for North Sydney asked himself this question: why is it that Australia now has the second lowest unemployment rate of all the major advanced economies, at 5.2 per cent? Why is it approximately half that of the United States, and approximately half that of the euro area? Had we generated the same unemployment rate—double-digit unemployment—that we have seen in those parts of the world, do you know how many more Australians would be out of work today? Half a million, Joe—half a million about whom you do not care.
The Prime Minister will refer to members by their parliamentary titles.
The member for North Sydney shakes his head. If you go from 5.2 per cent, Joe, to 10 per cent, let me tell you it adds up to about half a million more people out of work. Now, you might regard that as a mere piece of collateral damage; we on this side of the House do not. We are proud of the fact that we intervened in the economy. We protected this economy. We made sure it did not go into recession. We acted in a way to keep unemployment low. We have done so with the lowest debt and lowest deficit of the major advanced economies and, on top of that, we have emerged with the second-lowest unemployment level of the major advanced economies.
On the final part of the member for North Sydney’s question—which underlines fundamentally how he has failed to engage in the detail of the debate on tax reform, because we know the member for North Sydney is not big on detail—the tax reform proposal put forward by the government is entirely directed towards the reforms of the taxation system for company tax, small business and investment in infrastructure, and associated measures in superannuation. The member for North Sydney knows that to be true. If he bothered to read the budget papers, he would know it has nothing to do with the budget bottom line; it is to do with tax reform.
The government is proud of having intervened to assist the economy to remain out of recession. Many families out there in Australia are still doing it tough and many small businesses are doing it tough, but let me tell you: had those opposite prevailed, with their prescription for sitting on their hands and doing nothing, this country would be in the middle of mass unemployment.
My question is to the Minister for Finance and Deregulation. Why is the presentation of costed, detailed policies crucial for Australia’s future prosperity?
I thank the member for Blair for his question. The presentation of costed and detailed policies is crucial for Australia’s longer term prosperity. That is why the government has put out detailed policies—detailed, costed plans—for long-term sustainable growth for Australia’s future, including investment in infrastructure, skills, health reform, deregulation, regulatory reform, the National Broadband Network and of course tax reform. All of these are components of a wider, detailed plan to build long-term sustainable growth for the Australian economy.
Unfortunately, we have not heard a great deal from the opposition by way of detailed, costed policies. We have heard an awful lot from the Leader of the Opposition about what they would undo but very little about what they would do, were they to be elected. We have heard that they would cancel the computers in schools program, they would scrap the trades training centres. They would stop reforms to private health insurance, they would get rid of GP superclinics, they would abandon reforms to e-health that would make our health system more efficient. They would scrap the tax reforms that would deliver a lower company tax rate for Australian businesses, better superannuation, more infrastructure and better tax breaks for our small businesses. It is long overdue that we heard from the Leader of the Opposition what his economic strategy is, what his health reform strategy is, what his education reform strategy is, what his national security policy is. It is long overdue that we actually got some policy.
I do confess that this area is not a complete void; there have one or two things announced—for example, the opposition’s great big new tax to fund its Rolls Royce paid parental leave scheme for people on up to $150,000 a year. Interestingly enough, this tax means that company tax for larger businesses in Australia would go to almost 32 per cent, in contrast to the government’s proposal, which is that it would go to 28 per cent.
Mr Speaker, if you have been watching the media over the last 24 hours, you would have noted that the United Kingdom, under the new coalition government headed by the Conservatives, have just decided to drop their company tax rate from 28 per cent to 24 per cent. What that indicates is that we as a nation do not have the luxury of time in responding to the pressures—that have been there for some time and that were put on hold for a period because of the global financial crisis—about the headline rate of company tax. It is a very important reform to reduce the headline rate of company tax. This government is doing that. The opposition proposes to increase that rate. That is just one item.
The second item I noticed over the past 24 hours was the Leader of the Opposition announcing the creation of a parliamentary budget office. This triggered some vague memories in the back of my mind, and I discovered that it was remarkably reminiscent of some very interesting email exchanges that occurred last year between Godwin Grech and various Liberal luminaries. It would appear that Godwin’s ghost lives on! He is still drafting strategy for the opposition. Also, the Leader of the Opposition is out there making commitments for the period after the forward estimates end. Whether it is about road projects or pension indexation, he is out there saying to people, ‘Look, we’ll do something about that beyond the forward estimates.’ That is 2014. So what he is effectively saying is, ‘You’ve got to elect us twice before we deliver on our promises.’ These are policies on lay-by. You front up and commit initially and then you have to be voted in again before people actually get delivery! I am sorry, but this simply is not good enough. This is not good enough. We are within months of a national election. The Australian people are entitled to serious, detailed, costed positions from the opposition that they can form a view about and so they can make a decision about whether or not they want to take the risk of this erratic opposition leader running the Australian nation and our economy. That is a risk they cannot afford to take.
My question is to the Prime Minister. I refer the Prime Minister to the statement by the minister for small business this morning on Radio 2UE: ‘Governments can have a bit of an influence on restraining price rises.’ Given that in the last 12 months electricity has increased in price by 18 per cent, will the Prime Minister guarantee that the cost of electricity will not go up further as a result of his great big new tax on mining?
I endorse the remarks made by the minister for small business, and the reason I endorse them is that they go to the impact of competition policy—what can actually occur out there in the marketplace. I imagine, knowing the minister for small business very well, that he would have been talking about competition policy, because that is how you keep competitive pressures in the economy and keep prices low—and that is one of the principles for which we stand.
A second way in which you can actually contain price rises is through effective consumer protection laws. I note the efforts recently by the minister for financial services to make sure that we have got proper consumer credit protection laws, the first national consumer credit law in the country, which brings together the conflicting jurisdictions of the states into a single form, enabling consumers to have enhanced rights to deal with any exploitative behaviour towards them on the cost of credit and the conditions associated with credit. On the question of the impact on prices associated with the introduction of the government’s proposed tax reforms, once again I would refer the member to the detailed findings and conclusions of the Treasury modelling.
Are there no further questions? I call the member for Wakefield.
Oh! Oh!
Order! I may regret later on that I did not just present my audit report and then go to business. Nobody was too quick off their feet. I have given the call to the member for Wakefield because he sought it. I call the member for Wakefield.
What’s happening over there, Albo?
Order! The member for Sturt might find out what is happening by watching on television.
My question is to the Minister for Health and Ageing. Will the minister update the House on the latest statistics on the rate of cancer in Australia? What is the government doing to improve cancer treatment, and are there any challenges to this approach?
I thank the member for Wakefield for his question. I know he is particularly interested in the latest information about cancer statistics across the country. I was recently in his electorate to make an announcement about our regional cancer services that are providing chemotherapy in Clare and in Gawler, both in his electorate, and also about a new linear accelerator at the Lyell McEwin Hospital, so I know that he, along with many others in the House, would have been interested to see in the Australian Institute of Health and Welfare’s report today that unfortunately the rate of cancer, and the diagnosis of cancer, is growing in our country. Unfortunately it shows us that we can expect, this year, that 115,000 Australians will be diagnosed with cancer, a 10 per cent increase on the figures from 2006. The good news is that we are getting better at detecting and treating cancers, and survival rates are improving.
One of the reasons the government has invested so much in cancer services, particularly services in regional areas, is that the outcomes for those Australians who are diagnosed with cancer and live in rural and regional Australia are still significantly worse than the outcomes for Australians living in one of our capital cities if they are diagnosed with cancer. We were not prepared to let that difference continue. The government has also announced that it is taking very serious action when it comes to trying to reduce the rate of smoking tobacco. Tobacco is a killer product. Unfortunately we still have many Australians who use it, and our increasing the excise is aimed at trying to reduce the numbers of people that will take up smoking to start with. Of course the world-first introduction of plain packaging will help make it less attractive for young Australians into the future.
I am pleased to be able to tell the House that, although the Institute of Health and Welfare report shows the number of Australians who are diagnosed with cancer will increase, the 20 additional regional cancer centres across Australia will have an enormous impact on the treatment of cancer. The projects that we have announced to date represent 14 extra linear accelerators, 22 additional radiation oncology bunkers, over 250 chemotherapy beds or chairs, over 140 patient accommodation places and 10 scanners such as CTs, MRIs and PETs. Communities across Australia have been calling out for these investments, and unfortunately the previous government did not listen to many of those calls. So I was very interested to see in the Townsville Bulletin on 12 June this advertisement from the Liberal Party, with the Leader of the Opposition saying:
We will deliver a PET Scanner immediately.
Hold it up higher!
Unfortunately, during nearly 12 years in government, the Leader of the Opposition did not deliver a PET scanner to those people of Townsville. As the health minister, he did not deliver it. I think members opposite might be embarrassed to know that this advertisement that they are so gleefully calling out about is an absolute lie from the member opposite. This government has committed $70 million to deliver cancer services to Townsville—
Mr Speaker, on a point of order—
Order! The minister will resume her seat.
This includes a PET scanner—
The minister will resume her seat! I call the Manager of Opposition Business on a point of order.
Mr Speaker, I am assuming you are going to ask the minister to withdraw the word that she used to describe the promise of the coalition, as it is out of order.
I thank the Manager of Opposition Business, because the answer to the point of order is in his point of order. It was about a statement of policy.
Mr Pyne interjecting
You should know that you have only ever been pulled up when you have said that about a person.
Mr Speaker, on the point of order—
You’re on the way out!
Order! The member Banks, with that far from assisting comment, is lucky not to be on his way out. I call the member for Herbert on a point of order—on a point of order.
Mr Speaker, I request that word be withdrawn because I was responsible for that advertisement, they were my words and—
Order! The member for Herbert will resume his seat. I have ruled on the point of order made by the member for Sturt. The minister has the call.
Let us actually go through the facts. We have been in government for nearly three years. We have made a commitment to $70 million of cancer services in Townsville. That comes on top of a $250 million commitment in Townsville to expand the hospital. There is $70 million for regional cancer services in Townsville and Mount Isa, including a PET scanner due to be delivered in 2012. This will be the first time ever that north of Brisbane there is a PET scanner. There was not one when the Leader of the Opposition was the health minister. There was not even a promise when the Leader of the Opposition was the health minister. Now that we have provided the money and provided the timetable, we see an advertisement which includes the absolute lie that it should suddenly be believed that this man opposite, who did not provide a PET scanner when he was the health minister, is now going to deliver one without money, without funding, without the time and not at the public hospital. This advertisement is an absolute lie, and the Leader of the Opposition should be ashamed of himself.
Mr Speaker, I have a question, but first I would ask the minister to table the document from which she was quoting.
With pleasure.
My question is to the Minister for Education. I refer the minister to admissions from Mr Brad Orgill, head of her BER Implementation Taskforce, that he had not read the Auditor-General’s report into the school stimulus debacle in its entirety and was yet to ask the education department for any information about how they evaluate value for money. Given that Mr Orgill has entirely undermined the credibility of the task force’s work, will the minister now move to establish a judicial inquiry into the school halls debacle with powers to subpoena documents and summons witnesses to determine how much money has been wasted and who is responsible?
I thank the shadow minister for his question. Let us just remind the shadow minister about the audit report and about the appointment of Mr Orgill, because of course the shadow minister was out squealing for months that an Auditor-General inquiry into Building the Education Revolution was required. Indeed, he called for it. He was squealing for months about the need for an Auditor-General inquiry. Then, when the Auditor-General did report, what the shadow minister squealed about was that the Auditor-General had not found the kinds of things that the shadow minister wanted—squeal, squeal, squeal.
The independent watchdog has spoken. The independent watchdog in his report said that there were early positive signs that Building the Education Revolution was achieving the goals for which the program was established. He admits that the shadow minister’s squealing about the Auditor-General’s report was his squealing that this was not good enough because the Auditor-General had not looked at individual complaints and had not looked at individual projects. Whilst the shadow minister was out there squealing and yapping, as he does, and implementing education cutbacks in the coalition’s policies, we were getting on with the job of supporting jobs in Australian communities and modernising schools. To make sure that dollars spent on schools were value for money, we appointed Mr Orgill, a leading Australian businessman, to lead a task force inquiring into value for money. So Mr Orgill is on the job in schools, sleeves rolled up, inquiring into value for money.
What does the shadow minister come and squeal about now? Apparently, a leading Australian businessman is not good enough for him. Let me tell you and let me tell the House, Mr Speaker, that I suspect that any Australian of judgment called to choose between Brad Orgill and the member for Sturt would pick Brad Orgill any day of the week.
My question is to the Minister for Education, Minister for Employment and Workplace Relations, Minister for Social Inclusion and Deputy Prime Minister. Will the Deputy Prime Minister update the House on recent developments in policies to support regional education?
I thank the member for Bonner for her question. She is deeply interested in the quality of Australian education and in making sure that every child gets a fair chance for a great education—something that those members opposite have shown no regard for in government or in opposition.
Yesterday I asked the House to contemplate one simple proposition: when is $1 billion not $1 billion? Of course the answer to that riddle is: when it is promised by the National Party. Yesterday I revealed to the House that a so-called $1 billion education promise by the National Party was nowhere near a $1 billion education promise; it was apparently a promise to spend the interest on the so-called $1 billion policy.
But today I can reveal that in fact it is a little bit more interesting than that. So the member for Calare, when asked what the interest on the $1 billion, around $50 million, was going to be spent on, could not name specific programs that would receive funding. He went on to say, ‘It’s not meant to be a dot point policy.’ So apart from an illusion about the funding, it is an illusion about the outcomes. They have absolutely no idea what it is they should do to improve the life chances and life prospects of country kids—truly remarkable.
It goes on. The member for Parkes has assisted us even more than the member for Calare. The member for Parkes is recorded in his media as saying of this so-called $1 billion policy, which is really the interest on $1 billion that they have no idea how they would spend:
It’s an aspirational statement and not yet policy, but sent a positive message about education.
Quite remarkable.
Now if this were just a fight and confusion between members of the National Party, then of course everybody would say: ‘Business as usual. That’s what we expect from the National Party’. But, no, this policy has been sold, specifically sold by Senator Williams as a policy that has had the tick of the Leader of the Opposition and the shadow Treasurer. So let the record show, because I believe, Mr Speaker, it should, that what the Leader of the Opposition and the shadow Treasurer—the man who would be Deputy Prime Minister if the opposition were elected as government—stand for in education is this: they have promised $1 billion, but they really mean the interest on it, and they have no idea what it would be spent on and really, in the words of the member for Parkes, it is not a policy at all, it is just an ‘aspiration’.
I know what this really means, and let me make it very clear for the House: it is another phoney policy from an opposition that is erratic and irresponsible and on a mission to mislead Australian voters. The reality is when in government they watched the participation rate of regional kids in universities fall, and in opposition they are showing absolute contempt for these kids and their life chances.
My question is to the Minister for Veterans’ Affairs and Minister for Defence Personnel. Minister, does the Rudd Labor government believe it is a fair and equitable policy for men and women who have served courageously in our Defence Force, in harm’s way and on behalf of the people of Australia, to have their military pensions indexed at a significantly lower rate than our aged pensioners—and of course substantially lower than the pensions of members of the Australian parliament? If the minister does not believe this is fair, what exactly is the Rudd Labor government’s policy on this fundamentally important issue of military pensions indexation for the veterans of the Ryan electorate, and indeed veterans across the country?
I thank the member for his question. This is of course an issue of real concern to many military superannuants across the nation. Unfortunately it has been an issue of concern for many years now. The circumstance before the last election was the current government, the then opposition, came forward with two principal promises at the election with regard to this issue. One was to conduct an independent review to examine the indexation methodology and to see whether in fact it properly reflected how superannuation payments ought to be treated. The other was to release the report of what was commonly called the Podger review into military superannuation which had been conducted over a year and a half under the previous government. It had been in the possession of the then government for some months, but not released prior to the election.
The review in relation to indexation was conducted by Trevor Matthews, a distinguished actuary. That review came down with a set of recommendations, which I believe the member is familiar with. Those recommendations were that the system should not change currently; that the government should investigate if a potentially superior or more appropriate indexation method became available and to look at that, but otherwise not to change the system. Circumstances are that the government accepted those recommendations.
As for the situation that the member mentions, I will go to both issues. One is the position around superannuation for members of parliament. As he is aware, the system has changed in recent years and certainly with regard to new members of parliament—those who have been here over the last couple of terms—the circumstances are that they are not under that more beneficial scheme. I admit I certainly am, as are many here in the chamber still, but we are fading fast.
As for the question about the issue of age pensions, we have to be careful about the use of the word ‘pension’. It is a word that creates a lot of concern within the veterans community as to what in fact a pension is. The clearest point we can make there is that pensions are periodical payments, but there are in fact different types of what are commonly called pensions. The age pension is an income support payment that is part of the safety net provided to those who do not have access to other forms of income. If they receive it on a part basis then they receive it on a graduated basis according to other sources of income. It is designed to protect the poorest in society; it is designed to ensure that those who need it get it.
This government through the Harmer review made significant changes with respect to that and in fact with respect to those that I have responsibility for in the veterans affairs portfolio with some $1.1 billion worth of income support payments over the forward estimates. The circumstance with respect to a superannuation pension is that it is on top of that—it is an additional payment. Many of those military superannuants that the member is concerned about and that many of us are concerned about are in fact also part pensioners at the very least and receive income support payments to a degree according to their individual circumstances.
I know the member has been concerned about this issue for some time because I am aware that in fact earlier this year, I think, he endeavoured to move a motion during private members’ business with respect to this issue and was apparently not given permission by the opposition to move it. I understand that is something that has been a cause of some concern within the veterans community in recent times.
I would also make the point that this has been an issue for a long time. The circumstance with respect to that is that the situation of the opposition also needs to be focused on. My understanding is that the Leader of the Opposition has made a statement along the lines that, when back in government and when the budget is back in surplus, there will be a need to ‘tackle this issue’. My question to him is—
The question’s to you!
After more than a decade in government, almost entirely as a senior minister, in a situation where—
Honourable members interjecting—
Order! The Minister for Veterans’ Affairs will resume his seat! There are many in the chamber who seem to very much enjoy the sound of their own voices, but could they just sit there and listen. The minister has the call.
As a minister in a government that had surpluses for most of those 10 years, why was action not taken then? I think that is a question that also has to be asked out there within the community in terms of the bona fides of those present here today.
The situation with respect to the government’s position in response to the Podger review into military superannuation is that we agreed to consult with the ex-service community and the defence community post the last election, subsequent to the release of that report. We did and the response from those communities was, ‘We don’t like it; we don’t want it.’ That has produced a dilemma for the government—there is no question about that. My commitment, and I have made it quite public, has been that we will be releasing a position on military superannuation in the next few weeks. I will be ensuring that that is there for the ex-service community and the defence community to consider in the lead-up to the next election. I am committed to doing that and the government is committed to taking action.
My question is to the Treasurer. Treasurer, what income tax relief can Australian families expect from 1 July this year?
I thank the member for Page for her very important question, because I think the government absolutely understands what life is like for many families and many people on fixed incomes who are grappling with a very tight household budget. We understand that. As the Minister for Veterans’ Affairs was saying before, that was one of the reasons that we moved to put in place the historic increase in the age pension and disability support pension—something that had not been changed for a long, long time. This was a historic and very significant increase in the base rate of the age pension and disability support pension, because we recognised that many of those people were doing it tough. That is something that we did in very difficult budget circumstances last year but not something that those opposite could find the political will to do in almost 12 years. We moved to do that because we understand what life is like when people are on tight budgets.
We understand the importance of employment when people are trying to pay the bills. That is the fundamental reason why the government put in place the substantial, powerful and temporary stimulus into the system—to support employment, because if you do not have a job it is pretty hard to put food on the table and to meet the family costs. So we moved with the stimulus to protect households, to protect their employment and to keep the doors of small business open because we understand how difficult it can be for some people to make ends meet. That is why we are also delivering a third round of tax cuts, which will be coming through this Thursday.
They’re not yours!
They are ours. We have delivered two and this will be the third. We are proud that we are delivering these tax cuts because we do understand what life is like for people on low and middle incomes and for people on fixed incomes. We have been focused on that from day one. We have been focused on it in terms of child care with substantial increases there. We are focused on what life is like for people on low and modest and middle incomes when it comes to paid parental leave. Of course, that is why the third round of tax cuts, which are going to be delivered next Thursday, are so important and why the government is so committed.
For a worker earning $50,000 a year, the tax cut starting on 1 July this year is worth $450 a year. We understand that that is not a lot of money, but it will help make ends meet. It is very important to give this extra help that can make a difference in terms of tight family budgets. This means someone earning $50,000 a year is now paying $1,750 less in tax than they were when the government came to office. That has been a very substantial cut to their tax bill in the period that the Rudd government has been in power of almost 20 per cent.
What we are doing is putting more incentive into the system for the people who work hard, and that is important. It has also been accompanied by a range of other measures in terms of child care, the education tax rebate, paid parental leave and, of course, as I mentioned before, the very substantial measures that have been put in place to support employment and to keep people in jobs. We are proud of the support that we are providing to people on low and middle incomes, because it is support that they have earned, it is support that they deserve and it is support which will help them in the long run meet the costs of living, but, more importantly, it will strengthen our economy because it rewards Australians who work hard to make our country great.
My question is to the Prime Minister. I refer the Prime Minister to reports that the ship shown in this photograph, now known as the MV Sun Sea, is on its way to Australia. Given suspected links between this ship and an organised Tamil Tiger people-smuggling operation, will the Prime Minister assure the House that the MV Sun Sea will not be able to enter Australian waters, or is this the vessel that sailed undetected into Flying Fish Cove this morning?
I thank the member for his question. On the first point, as I said to the honourable member yesterday, the practice of this government—and, I believe, the practice of previous governments—is not to comment on ongoing security, operational and associated intelligence matters. That is the first point. That is the responsibility of any responsible government on questions of national security, something which the Leader of the Opposition obviously finds amusing. We on this side of the House do not. The second point I would make, in relation to the second part of his question, is that he refers to undetected arrivals. I would simply say that the detection rate under this government is considerably better than that under the last government. The interception rate under this government—wait for it—is 94 per cent. Under the previous government it was 87 per cent. Can I say to the member, therefore, that he might actually again put facts instead of fear. Could he also on this question possibly reflect on the responsibility of a responsible shadow minister, which is to engage his counterpart on questions of security and operational matters. There are protocols which govern these things. I would have thought that any responsible member, let alone a member of the shadow executive, would adhere to those protocols.
Mr Speaker, I raise a point of order. I have drawn your attention to the responsibilities of ministers on a couple of occasions. Is this parliament entitled to know whether a heavily loaded ship turned up in Flying Fish Cove this morning?
Opposition members interjecting—
I hear the murmurs of ‘serious matter’. It was not a serious matter when the Prime Minister was on his feet. The question was asked. Those on my left talked all the way through it. The member for O’Connor knows that the point he has raised is not something that I can deal with. It is something that I will not respond to. Many people—and the member for O’Connor is amongst those that have been here longest—would look through the way in which these matters have been handled by now successive governments.
My question is to the Minister for Competition Policy and Consumer Affairs and the Minister for Small Business, Independent Contractors and the Service Economy. What support is the government providing to 2.4 million small businesses across Australia? Are all small business owners, like other Australians, expected to comply with the rules of disclosure and accountability?
I thank the member for Corangamite for his question. The Rudd government have supported Australia’s small businesses through the global recession, and we continue to support small businesses during the economic recovery phase. They need our support because they are still struggling. We recognise that and we want to support them in a number of important ways. But at every turn the coalition in opposition have tried to undermine the support that this government has been providing for small business. The coalition voted against our stimulus package designed to help our tradies and the small businesses that supply them. The coalition have indicated that, if elected, they would scrap the small business tax breaks. Why would you do that? They say they are the party of small business, but they would scrap our small business tax breaks. The coalition have said that they would pull the plug on the National Broadband Network, which would be so important to our small business community.
Australia’s 2.4 million small businesses are required to follow the rules, and we are helping them to do that. We are helping them to follow the rules with Standard Business Reporting, which will start on 1 July, enabling small businesses to meet their compliance obligations with the Commonwealth through the Australian Securities and Investments Commission and to meet their tax obligations with a real reduction in red tape. We are helping small business comply with their superannuation obligations through the superannuation clearing house that will come into force on 1 July again, in just a couple of weeks time. The Rudd government is creating a national business names registration system so that those small businesses that operate across state boundaries do not have to register their business name in each and every state and territory and make those renewals every couple of years.
Small business owners, like all Australians, are expected to comply with these basic rules of disclosure and accountability, and parliamentarians are among those Australians who are expected to comply with their obligations of disclosure and accountability. Yet of course the Leader of the Opposition failed for two years to disclose a $700,000—
Mr Speaker, I raise a point of order. Under standing order 98(c):
The minister for small business has absolutely no responsibility for the pecuniary interests of the House, therefore his answer at the moment could not possibly be relevant to the question he was asked.
First of all, the Manager of Opposition Business has based his point of order on the standing orders relating to questions. I am just indicating that that is the case. Therefore, it relates to the question. The question was in order. He then makes a point that he would like that to then apply to the answer. He quite correctly has understood that he cannot directly use the matters that can or cannot be contained in a question to dictate that. The suggestion is that there is a thread between the intent of the standing orders on the questions and what should be contained in the answers. House of Representatives Practice actually has a good discussion about that but has indicated that—despite, from time to time, the Procedure Committee offering comments—there has been no attempt to address the standing orders. In this case, without ruling the minister out of order, I indicate to the member for Sturt that I will listen carefully to the way in which the minister relates the material that he is producing to the question that was in order.
Mr Speaker, on the point of order: there are some requirements placed on members as to the reporting of their financial affairs. My clear understanding is that the detail of those amounts is not public property, and nor should it be. Any attempt to disclose that is contempt of this parliament and its standing orders.
On the point of order—and not wishing to muddy the waters of where we are at at this stage—the member for O’Connor realises that the register is made available for public perusal.
But not the dollars.
This was the point. If the member for O’Connor could just sit there for a second and listen: the amount is not in the pecuniary interest.
Opposition members interjecting—
Order! I cannot go further into where amounts come from. The minister has the call. I have indicated to him that he must relate the material he is using to the question.
I was asked whether all Australians, not just small businesses, should meet their obligations of accountability and transparency. Of course, small businesses should meet their obligations of accountability and transparency, and that is what we are helping them to do. But there should be one rule for all Australians, whether they are small business owners, whether they are parliamentarians, whether they are working Australians or whether they are companies—and that is my point. I am not suggesting that this case was anything but an oversight.
Mr Tuckey interjecting
I really think from time to time that the member for O’Connor should think about the way in which he is not really assisting. One of the things that I have to say as the Speaker is that, when I am asked to make sure that a minister is actually answering a question in a certain way, I am supposed to possess a wealth of knowledge and to know all the answers. I only say that in the context of some comments which have been made by way of interjection in the last minute or two, which I do not know the background of and which are, therefore, a bit difficult for me to act upon. Certain people who are making those interjections should temper them. I am listening carefully to the matters that are now being raised by the minister. I would prefer some members to keep their comments to themselves.
Mrs Bronwyn Bishop interjecting
The member for Mackellar should know—she has been here long enough—that it is not helpful to carry on in the way that she is at the moment. The minister will relate his material to the question.
Thank you, Mr Speaker. I was asked: should there be a single standard of reporting and accountability for all Australians, whether they are small businesses or other Australians? And I am directly answering that question. The answer is that there is a double standard. There is a double standard going on in this parliament.
Mr Speaker, I rise on a point of view. I listened very carefully before to your quite correct and lengthy description of the standing orders in respect of this matter in relation to my last point of order. I think in addition to what I said before that there is a line of bad taste in this House, which obviously the Leader of the House and the Prime Minister think is reasonable to have crossed on this occasion, but the response from the opposition is, unfortunately, commensurate with the attack on the Leader of the Opposition. I would ask you to ask him to sit down for the benefit of the House.
The Manager of Opposition Business will resume his seat. I have listened for the 20 seconds that the minister was on his feet. There is nothing that he has transgressed in that 20 seconds. The minister has the call.
Mr Speaker, I will bring my answer to a close by observing that there is a double standard. There is a born-to-rule mentality on the other side of this parliament—the famous ‘victory is at hand’.
The member for Goldstein will resume his seat. The member for Goldstein has approached the dispatch box. I am indicating to him that he can approach the dispatch box but he must have a point of order.
Mr Speaker, surely a filthy smear campaign cannot be relevant.
You were so much better, Kevin.
Before I deal with the members for O’Connor and Goldstein, the member for Bowman will go for one hour under standing order 94(a), and I indicate to the House that this is an illustration of the failure of 94(a) because people now think that one hour is a reward. In dealing with the member for Goldstein, he will leave the chamber for one hour under 94(a), because exactly the same thing that he had one hour for he has repeated. The member for O’Connor, because he is displaying things, waving around and interrupting proceedings, will leave for one hour as well.
The members for Bowman, Goldstein and O’Connor then left the chamber.
The minister has the call. He will bring his answer to a conclusion.
All we are asking for is consistency in standard. This man is a risk to the Australian economy.
The minister will resume his place.
My question is addressed to the Prime Minister. I refer the Prime Minister to the fact that suicide is a leading cause of death for Australians under the age of 44 and to the fact that it is estimated that every year as many as 50 people, coming from all over Australia, take their own lives by leaping to their deaths from the cliffs at the Gap at Watsons Bay in my electorate. I also refer the Prime Minister to the application by Woollahra Council for $2 million of funding to enable it to complete the construction of fencing, railing, helplines, lighting and other suicide prevention infrastructure at the Gap. I ask the Prime Minister why his government has now on two occasions refused to give financial support for this lifesaving infrastructure or whether this is just another example of his government’s neglect of mental illness and its tragic consequences.
This, I understand, is an infrastructure matter, the details of which I do not have. For the convenience of the House, I will ask the Minister for Infrastructure, Transport, Regional Development and Local Government to respond to it. I will happily add to the answer at the end.
The government has introduced a Regional and Local Community Infrastructure Program, which has two parts. I thank the member for Wentworth for his question. The member for Wentworth might like to indicate or agree that I have discussed with him privately the circumstances of this program. I will go through the facts of this application. There is one section whereby every council receives an allocation of funding for local priorities. Woollahra has received $340,000 through this component. That funded $248,000 for the installation of a CCTV system, which was opened by Senator Michael Forshaw on 4 March 2010, and $91,000 for the construction of 85 metres of steel mesh fencing and safety handrails, which is underway.
The second component of this program is for larger competitive projects. The facts are these. We announced the funding for this second round on 25 June 2009. We released the guidelines for it on 9 October 2009 after consultation with the Australian Council of Local Government Steering Committee, made up of local government representatives. Indeed, we had another meeting with the ACLG Steering Committee just this morning for the third round of this program. We opened the application process on 2 November 2009 in accordance with the agreed guidelines and in consultation with local government. Applications closed on 15 January 2010. Councils had 14 weeks to formulate their applications to make sure that they fitted the guidelines and to get the details right.
Woollahra Council submitted an application of $2.2 million to the Department of Infrastructure, Transport, Regional Development and Local Government. I will go through, as I have privately with the member for Wentworth, what that was for. The majority of the funding they sought was for roadworks on Military Road in Watsons Bay that had specifically, as the member knows, been ruled out as being eligible for this program. We have the Roads to Recovery Program for local government for roads. The infrastructure program specifically ruled out roadworks, but the application included upgrades to the bus terminus on Military Road, a raised pedestrian crossing, a traffic island with water-saving devices underneath, underground cabling, five directional signs, six water-sensitive urban design plant beds, 10 tourist interpretation signs—
Opposition members interjecting—
That is the point, I say to the Leader of the Opposition. As the member knows, this did not get to my desk; this was not a political decision. The department ruled the application ineligible. Unlike the way that you operated in government, with the Regional Partnerships program, we followed the guidelines.
According to their own costings, only $20,000 was for two Black Dog Institute signs, $30,000 was for two emergency telephones and $15,000 was for additional fencing. I understand from the Minister for Health and Ageing that her department has been in contact with Lifeline about paying for it through the appropriate fund. As I indicated to the member for Wentworth when I spoke to him in private, I was quite sympathetic with action when it came to this, but we had to have a discussion between the council and me about the appropriate program. The fact is the government was not asked for funding for CCTV in this application. We have already funded it at Gap Park, and it has been opened. We have also provided funding for safety fencing. The majority of the funding was for roadworks. So the department had no choice but to determine their application to be ineligible. And I make this point: over the last two years the Rudd government has provided nearly $3.7 million in untied funding to the Woollahra Municipal Council—funding that they can put to whatever priorities they determine to be appropriate.
It has been suggested by the local mayor—who is also running for preselection for the Liberal Party for Vaucluse at the moment—that this program was not successful because it was an application in Wentworth. In the electorate of Wentworth we have provided $2 million for the Waverley Park Pavilion, as the member for Wentworth knows because he was there with me when we announced that funding. In other safe Liberal seats, I was in the electorate of North Sydney in this round to announce the Coal Loader parkland development in North Sydney, and there was $2 million for the Drill Hall in Mosman in the electorate of Warringah, $2.3 million for ocean beach promenade upgrade in Manly, also in Warringah, and $4 million for Narrabeen Lagoon in the electorate of Mackellar.
This is not a partisan program. Mental health is a serious issue, and people should not distort the facts of this matter. I continue to make the offer to the member for Wentworth that if the mayor wants to actually have a serious discussion about appropriate government programs then we are there to assist. But what does not assist is the sort of distortion, frankly, that we have seen in the member’s local papers over the last few days.
Mr Speaker, I ask that further questions be placed on the Notice Paper.
Mr Speaker, I seek the indulgence of the chair to add to an answer.
The Prime Minister may proceed.
I want to add one or two remarks on the general question of the government’s investment in suicide prevention as that formed part of the honourable member’s question. I inform me House that the government has invested some $127 million to reduce the incidence of suicide and suicidal behaviour. The government is also investing some $55 million to address perinatal depression. I can also inform the House that we have expanded our investments in the Men’s Sheds network right across Australia as well. These of course are important parts of local community infrastructure to support men in particular circumstances, including some men who suffer from various forms of mental illness. As I have said before in answers to questions in this area, much more remains to be done.
Mr Speaker, on indulgence, if I may suggest to the Prime Minister and to the Leader of the House, the member for Wentworth asked his question not in a partisan spirit but in a genuine attempt to try to ensure that something happens to reduce the incidence of suicide at The Gap. Could I suggest to both the minister and the Prime Minister that all members of this House would congratulate them and thank them if a phone call was to be made to Woollahra council this afternoon to fix this matter up. A hundred thousand dollars, or thereabouts, is a small price to pay to prevent suicides at The Gap.
Mr Speaker, on indulgence, I did have a conversation with the member for Wentworth. I reiterate my offer to him. I am prepared to have a discussion with the mayor of Woollahra about achieving an appropriate outcome here. It is not in anyone’s interests for this to be a partisan issue. I have made that offer before. I accept that the member for Wentworth is genuine about his position on this. But, if you look at the statements that have been made in the Wentworth Courier, they are not appropriate at all. I reiterate to the member for Wentworth—he has got my mobile—that we can have a discussion and achieve an outcome, as I have already offered.
Mr Speaker, on indulgence, the minister has invited me to confirm that we have had private conversations. It is true, we have. And he gave the same elaborate bureaucratic justification for not delivering any action in the private conversation. I should add that in a private conversation with a Woollahra councillor he said to that Woollahra councillor, ‘The reason the funding is not available is because it is in the electorate of Wentworth.’
Mr Albanese interjecting
That is what you said.
Opposition members interjecting—
Order! Before giving the call to the Leader of the House, regrettably I say to all that it will be the final call on this matter and I will dwell on what he said. Indulgence is given in good faith. The Leader of the Opposition I did not think stretched it too far to abuse that indulgence; I am disappointed that the member for Wentworth decided to. I know that that is a harsh observation from the chair—I am just talking about when indulgence is given—because I am trying to give the House a lesson about the importance of indulgence. The easiest thing for me would have been not to give indulgence and to leave it at the point it was. I call the Leader of the House.
Mr Speaker, I wish to make a personal explanation.
This is another process through which things of this sort can be much better resolved. Does the honourable member claim to have been misrepresented?
Yes.
Please proceed.
The member for Wentworth’s comments are simply lies. It is not the case—
Opposition members interjecting—
The minister will choose his words a bit better.
Opposition members interjecting—
I like it when people try to get on my good side after giving me a hard time for two hours. The minister will choose his words better.
The member for Wentworth’s comments are simply untrue. As the member for Wentworth knows, I rang him after he wrote an article about this issue and informed him that the department had ruled the application to be ineligible. I invited him to get the council to have a discussion with the government about ensuring that the funding for the mental health component could be delivered. That offer was made; that offer is still there.
Order! The Leader of the House has made his personal explanation.
On indulgence, I would like to update the House on efforts to recover the victims of the crash in the Republic of the Congo of a charter plane hired by Sundance Resources. A recovery team, including French military personnel, commenced a retrieval operation yesterday, 22 June West Africa time. The site remains very difficult to access and recovery personnel currently rappel in from helicopters. This is a very difficult process in a very difficult environment. It is not yet clear when all of the bodies will be recovered from the plane and the crash site and transferred to Brazzaville, the capital of the Congo.
Once in Brazzaville, the process of identification will commence. This is likely to be a complex, painstaking and time-consuming process. It may well be necessary for remains to be removed to a third country in order to complete the disaster victim identification process.
Australia’s High Commissioner to Nigeria and another DFAT officer are currently relocating to Brazzaville from Cameroon, where they will continue to provide support to officers from Sundance Resources and to work with the authorities of the Republic of the Congo on recovery and preparations for repatriation arrangements. Consulate officials continue to be in regular contact with Sundance Resources. Government agencies in Canberra are also examining what additional support may now need to be provided. Australian officials will continue to work closely with Sundance Resources and authorities from the Congo and Cameroon. They will continue to provide consular assistance to the families of the victims in the course of the recovery, identification and repatriation process.
As I indicated, we have to expect that this may well be a difficult, complex and painstaking process. We will keep the families informed and work closely with the company. Our thoughts are with the families and friends of the victims at this time.
I take this opportunity to compliment the officers of Sundance Resources for the way in which they have, in very difficult circumstances, worked very effectively in the interests of the families of the victims. In particularly, I compliment the chief financial officer, Peter Canterbury, with whom I have spoken on a number of occasions, and George Jones, who has been engaged as a senior adviser. He is a former chairman of the company. I compliment them for the effective and dignified way in which they have handled matters for the company in the most difficult of all circumstances.
On indulgence, we in the coalition support the government’s efforts in this very difficult and complex task of retrieving bodies from this tragic event that occurred in Africa last weekend. We commend the government and the consular services for the work that they are doing. Our thoughts and prayers are with the families, friends and staff of Sundance Resources. We appreciate the government continuing to keep us informed.
Mr Speaker, I wish to make a personal explanation.
Does the honourable member claim to have been misrepresented?
Yes.
Please proceed.
The member for Cowper said in tabling a petition in the House last week on the issue of bats at Maclean High School that bureaucratic inaction had been made worse by my refusal to support removal of the bats. The member for Cowper needs to tell the truth about this situation. I have been working closely with this school community since mid February to help new principal Mr Tony Carr, the parents and citizens association and the New South Wales Department of Education and Training lodge a fresh application for approval to disperse flying foxes. I had previously advised how to achieve this, as with the expiration of the licence there had been no action taken.
Opposition members interjecting—
It seems okay for other people to break the House rules.
Mr Speaker, I rise on a point of order. The member is entitled to show where she has been misrepresented, but she is debating the issue and that is outside the standing orders.
I will make the decision about when she gets into debating. The member for Page should be very careful. She will conclude her personal explanation.
I am showing where I was misrepresented.
The member for Page will just continue.
I also received this month a letter from the Maclean High School P&C, which said that members wished to express their gratitude for my comprehensive assistance in regard to moving this matter forward and hope that this support will continue in the future.
The member for Page will resume her seat.
Ms Saffin interjecting
The member for Page will resume her seat! I do not thank the member for continuing after she was asked and invited to resume her seat, especially when the microphones prevented her from adding argument to the explanation.
—I present the Auditor-General’s Audit reports Nos 47 and 48 of 2009-10 entitled No. 47, Performance audit: management of live animal imports, and No. 48, Performance audit: community intelligence—collecting and processing tip-offs.
Ordered that the reports be made parliamentary papers.
Documents are presented as listed in the schedule circulated to honourable members. Details of the documents will be recorded in the
That the House take note of the following documents:Australian Institute of Health and Welfare-Report-Australia’s health 2010.Australian Radiation Protection and Nuclear Safety Agency-Quarterly reports of the Chief Executive Officer for the period 1 January to 31 March 2010.Committee reports-Government responses to parliamentary committee reports-Response to the schedule tabled by the Speaker on 26 November 2010.Education Services for Overseas Students Assurance Fund-Reports on provider defaults-Aerospace Aviation Pty Ltd.Infrastructure, Transport, Regional Development and Local Government-House of Representatives Standing Committee-The global financial crisis and regional Australia-Government response.Productivity Commission-Report No. 50-Gambling-26 February 2010-Volume 1 and Volume 2.
Debate (on motion by Mr Hartsuyker) adjourned.
by leave—The government is committed to ensuring that the financial advice Australians receive is in their best interests. On 26 April this year, I announced the Rudd government’s Future of Financial Advice reform package, which contained significant policy measures that improve the quality of financial advice, enhance retail investor protection and improve trust and confidence in the financial planning industry.
These reforms represent a comprehensive government response to the Parliamentary Joint Committee on Corporations and Financial Services’ inquiry into financial products and services in Australia, which investigated issues associated with recent financial product and service provider collapses, such as Storm Financial and Opes Prime.
The need for quality advice
The government recognises the important role played by financial advisers in assisting Australians plan for their future. By 2050, one in four Australians will be over 65. Longer-term challenges such as the ageing of the population, as well as recent events such as the global financial crisis, underscore the need for quality advice.
At their core, the reforms will address the conflicts of interest that have coloured the perception—and sometimes the reality—of the quality of financial advice provided to Australian investors. If financial advice is to be an important part of investment decision-making in this country—and I believe it should—then it must abide by a fundamental ethical principle. That principle is that the financial advice given to Australian investors should be in their best interests.
This issue is also very much about the future professionalism of the industry. Good financial planners should not have their reputation affected by some in the industry who do the wrong thing. It has also been put to me that raising the professional standing of the industry will encourage more people to become advisers.
The Future of Financial Advice contains three key reforms, which will apply from 1 July 2012:
There are a number of other important measures contained in the package which will assist in facilitating simple and more affordable advice, provide enhanced investor protection and increase the professionalism of the financial advice industry in general.
There will be an expansion of the availability of low-cost simple advice to provide access to financial advice. The existing package which provides for simple advice within superannuation funds (known as intrafund advice) will be extended to new topics to facilitate simple, single issue, personal advice in a compliant matter. There will also be a review of whether simple advice can be provided in a compliant matter outside intrafund advice. The accountants’ licensing exemption will be removed, with consultation on an appropriate replacement.
ASIC’s powers to act against unscrupulous operators will be enhanced, professional standards for advisers will be reviewed by an expert advisory panel, the classification of sophisticated and unsophisticated investors will be reviewed and the option of introducing a statutory compensation scheme will be examined by an expert in the corporate law field.
In total the package represents a very significant reform for financial services and will greatly improve the quality and availability of financial advice in Australia. I would now like to briefly touch on some matters that have been raised in relation to these measures.
Commissions
One key issue surrounds how the reforms, particularly the ban on commissions, affects a consumer’s right to choose how they pay for advice. While I support the idea of consumers making their own informed decisions, the reality is that disclosure of commissions does not deal with the fundamental conflict of interest created by the commission.
Some say that a more simple disclosure regime is the answer to the current lack of consumer understanding in relation to fees and commissions. While simple disclosure is almost always better than complicated disclosure, it is not the answer here. I have looked at this question very carefully and I am convinced that, in this area, we cannot simply rely on disclosure alone. It is not good enough for an investor—who may have limited understanding of financial markets or may, for example, have English as a second language—to come to an adviser for advice, only to be handed pages of fine print and be expected to fend for themselves. Instead, the removal of conflicts of interest will lead to better quality of advice for investors, a conclusion supported by the considerable evidence given to the PJC inquiry.
Adviser Charging
While there will be a ban on conflicted payments, I am not interested in a government-prescribed one-size-fits-all approach to fees. There will still be flexibility in how advisers can charge clients, and how clients can pay for advice. It is open to advisers to devise a charging structure that suits them and their clients. That structure could include hourly fees and percentage fees—subject, of course, to the guiding principles of the reforms. I anticipate the changes will encourage innovation in adviser charging, for the benefit of both advisers and clients.
Through the annual renewal process (by requiring customers to opt-in), financial advisers will engage with their customers and assist them to see the value of the advice provided, with fees being directly related to the services provided.
The opt-in provision is an important measure. As I stated when the reforms were announced, the government will consult with industry about the form of the annual renewal notice and the period after which the initial advice is given that it will first apply. I was very clear about this when the reforms were announced, including explicitly outlining this in the information pack we released when we announced the reforms.
Simple advice
Most surveys show that about one in five Australians receives financial advice. While I agree that clients benefit from and may often need holistic advice, there are cases where clients have relatively simple financial questions they need answered, and where simple advice will be quite sufficient for that purpose. If we want more Australians to receive advice, I believe we need to try and find a way to deliver more affordable advice (including so called intrafund advice) and increase its use.
It is interesting to note that intrafund advice has already been very successful, with some funds reporting interest from their members well above their expectations. The introduction of intrafund advice has also enabled smaller financial planning firms to generate new business by providing intrafund advice services to super fund members.
Feedback on the reforms
Major reform is difficult and requires a mature and measured approach from industry. To respond to change in any other way diminishes an industry’s standing in the eyes of the community. I welcome the positive response from a range of stakeholders, including many in the industry, to the government’s financial advice reforms.
The Financial Planning Association and the Investment and Financial Services Association have agreed that the broad thrust of our reform package is sensible and much needed. I have been particularly pleased by the number of emails and letters of support I have received from individual planners and smaller planning practices who understand how beneficial these reforms are for their customers and, therefore, how beneficial they are for the industry.
The financial advice industry both large and small is working positively and effectively with the government on these reforms—reforms that do fundamentally change the way the industry will operate. There are times when we disagree, but the industry has shown it is willing to undertake difficult reform that is in the community’s interest and work constructively with government on its implementation.
Coalition position
Banning conflicted remuneration structures, such as commissions, will greatly reduce the incidence of investors being recommended financial products as a result of sales incentives offered to advisers. An ASIC shadow shopping survey found that unreasonable advice was about six times more common if the adviser had an actual conflict from remuneration.
The government was hoping for bipartisan support for these sensible but difficult reforms. Instead, the coalition has been critical of the government’s Future of Financial Advice reforms despite the overwhelming majority of industry and consumer stakeholder groups supporting it. The coalition’s position can be summarised very simply—they are the only ones still backing sales commissions.
The coalition’s position on sales commissions is code for supporting investors receiving financial advice that may not be in their best interests; the sort of advice that, as we have seen in recent corporate history, has led to investors losing their life savings. So inexplicable is the coalition’s position that JP Morgan described it in the following terms in a 15 June research note to clients:
They also appear rather perplexingly to be against the banning of commissions (conflicted remuneration structures) something the industry as a whole appears to have decided to move away from.
What we have here is a coalition so intent on opposing government policy that they are opposing important reform that industry is willing to undertake and consumer groups have welcomed.
Consultation process
I look forward to working with stakeholders across the industry and consumer groups, as we move to implement this important reform package. Although I have set out the broad policy direction, I expect that there will be a significant amount of consultation in relation to the finer implementation details of the package. There will also be a public exposure of draft legislation in due course.
I understand and appreciate that some stakeholders are keen to know further details about the reforms—such as the timing, consultation processes, and the detail of how certain policies will be determined. This is why, on 17 May, I announced the commencement of consultation including the establishment of a website—the Future of Financial Advice website—which communicates important information about the reforms, including a ‘Questions and Answers’ section, as well as providing ongoing updates about upcoming consultation with stakeholders.
Public information sessions will be held in Adelaide, Brisbane, Melbourne, Perth and Sydney in late June and early July of this year. The public information sessions are designed to provide an overview of the reforms and give stakeholders an opportunity to ask questions and raise issues. Details of the public consultations, including how to register, are now available on the Future of Financial Advice website.
Benefits of the reforms
While the reforms seek to improve the quality of advice, which is in the client’s best interests, they will also carry important benefits for the financial advice industry. I see the reforms to financial advice and our wide-ranging changes to superannuation as being inextricably linked. Put simply, we could not ask Australians to set aside 12 per cent of their income for superannuation, without ensuring that the system was being managed in their best interests.
The reforms will also support our ongoing work to position Australia as a financial services centre in the Asia-Pacific region. It would be impossible to ask professionals in other countries to place their trust and confidence in our financial planning industry if Australians do not. This point was emphasised by the Australian Financial Centre Forum, which we commissioned to recommend ways to position Australia as a regional financial services centre. The forum observed that realisation of opportunities to attract overseas capital to Australia depends on, ‘amongst other things, the reputation and integrity of Australia’s financial advisory sector being maintained and, where necessary, improved’. To this end, their report argued that resolving conflicts of interest in the financial planning industry was ‘a prerequisite for greater international engagement’.
I have a lot of confidence in the skills and expertise of Australia’s financial planners. I have confidence that our financial planners can not only provide high-quality advice to Australians but also develop as a significant potential export supplier. I want the financial advice industry in this country to grow and thrive. The reforms we announced last month, as well as those reforms we announced in April, are designed to ensure the industry is seen as honest, trustworthy and world’s best—with all the opportunities that that opens up. The government’s reforms will enhance the professional standing of the industry and ultimately encourage more investors to seek advice—something that is in all our best interests.
I ask leave of the House to move a motion to enable the member for Cowper to speak for 12 minutes.
Leave granted.
I move:
That so much of the standing orders be suspended as would prevent the member for Cowper speaking in reply to the ministerial statement for a period not exceeding 12 minutes.
Question agreed to.
I am pleased to respond to the Minister for Financial Services, Superannuation and Corporate Law’s statement today on the topic of financial advice and the government’s supposed intent to remove conflicts of interest in providing that advice. I am pleased to respond because it gives me the opportunity to correct the minister on many of the statements he has made today. As with everything this minister does, there is a massive gap between his rhetoric and the reality of policy outcomes.
The minister argues that the coalition support investors receiving financial advice that may not be in their best interests. This is a complete misrepresentation of the statements made by the coalition, and nothing could be further from the truth. The coalition support efforts to minimise the potential for conflicts of interest within the financial advisory industry. We have previously stated that trailing commissions which do not provide the investor with an opportunity to opt out should be removed from the industry, and payments made by product manufacturers to advisers must in fact be for the provision of advice and not merely an income stream for the adviser. However, the coalition have expressed concerns about how the Rudd Labor government’s intent with this legislation could hurt small business financial planners and could impact on the ability of low-income earners to receive financial advice.
As I said, we have expressed concerns about the massive gap between what the minister says and what the minister actually does. With much fanfare, Minister Bowen announced on 26 April on Sky News:
… the key change has been the banning of commissions and payments from financial providers to financial advisers.
That was shortly before some of the details were released by the minister, on the same day. Those details were under the heading ‘Overhaul of financial advice’ and clearly state:
It is important to note that the—
reform—
does not prevent client-agreed deductions being allowed from a client’s investment to pay for financial advice or flexibility in payment options.
The minister did not explain in his statement today how a payment can be made out of a client’s investment if it has not originated from a product provider.
The reforms will not completely meet the minister’s promise to Ross Greenwood on 26 April. He said of the reforms:
… they’ll stop people getting advice to invest in bad products which happen to be in the best interests of advisers but are clearly not in the best interests of ordinary mum and dad investors.
By suggesting that all commissions offer advice not in the interests of investors, the minister is making an attack on the financial planning industry, particularly small businesses involved in that industry. My office has been flooded with inquiries from small business financial planners who are concerned that they will not be able to offer services to mum and dad investors into the future and that these reforms have the potential to force a complete restructuring of their business or in fact force them out of business. But this minister is not concerned about the jobs that are going to be lost. In fact, he has admitted that the reforms will destroy jobs in financial planning. The minister said on 26 April, in a press conference:
I recognise that some people won’t be happy with these reforms. I accept that some people will leave the financial planning industry as a result …
A survey conducted by Radar Results, which is a consulting firm to financial planners, found that one in four financial planners are considering leaving the industry as a result of these reforms. So the minister is perfectly happy for, potentially, 25 per cent of the employees in the financial services industry to lose their jobs as a result of the reforms.
However, there is some hope because, despite threatening to take their jobs away, the minister for financial services is consulting with the industry! We have heard a bit about consultation lately. So the minister is telling us he is consulting with industry—just like they consulted with industry on the great big new tax on mining! But even the minister himself recognised that he did not have the details right. He told 2GB on 26 April that the reform proposals ‘will need a lot of work; we’ll need to consult’. It sounds very familiar, ‘a lot of work’. In order to consult, Labor are providing information sessions in capital cities from 25 June to 1 July. So we have a one-week intensive consultation session at the end of the financial year. Financial planners are pretty busy at the end of the financial year. How can the government be taking the views of small business financial planners seriously when they arrange a consultation period for the last week of the financial year?
This is a minister who dismissed details of consultations with the Association of Financial Planners in a press release on 4 June, saying they were ‘based on newspaper headlines rather than the facts’. This is a minister who promised in May 2008, in relation to another of his failed policies, Fuelwatch:
Fuelwatch brings down petrol prices, puts downward pressure on petrol prices …
There is a credibility problem with this minister. This is the man who introduced Fuelwatch, which was originally going to save us money on petrol but then became just a medium for more information on fuel. Then we had GROCERYchoice, which was going to provide us with cheaper groceries—but you might have to drive 2½ thousand kilometres to get a packet of Tim Tams in order to save money. So we have a minister who has a bit of a credibility problem. He has a problem because there is a massive gap between his rhetoric and his delivery.
The coalition will be watching very carefully the way these reforms are implemented, because this government has a track record of poor implementation. They could not build school halls cost-effectively, they could not give away pink batts and there are a lot of financial planners out there who are concerned that the government cannot reform this industry without causing massive damage to small business.
The Speaker has 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 failure of the Government to deliver on its 2007 election promises to Australian families.
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—
It is a very long time indeed since a new government has been such a disappointment. Not for a generation has a new government come to power and so quickly and so utterly disillusioned the people who supported it. We do not change the government lightly in this country; for the people’s mandate to be withdrawn from one party and handed to another is a big thing. But this government, in a remarkable way, has entirely squandered the trust that the people reposed in it almost three years ago. Where now the glorious February 2008! What happened to that great dawn when bliss it was to be alive and a Labor member of parliament!
We had the ratification of Kyoto, that great moment that signalled the dawn of a new era! Now we have the dumping of the emissions trading scheme and the abandonment of that which was supposed to solve not just the problem but the ‘greatest moral challenge of our time’. Then we had the apology, an overdue and noble gesture reaching out to the first Australians. Now we have a government which is conniving to rip away Indigenous land rights on Cape York, despite the passage last night in the Senate of the private member’s bill to override the wild rivers legislation of Queensland.
16:14:28 I accept that it is not easy for new governments. New governments have inexperienced ministers trying to meet impossible expectations. I accept that the Howard government struggled in its first term, and was only just returned. In 1984 Prime Minister Hawke had an approval rating of 70 per cent and yet his government came close to losing that year’s election, perhaps because of complacency. But both of those governments had solid records of achievement. Those governments were both in their own way historic. Neither government put the preservation of a superficial popularity ahead of substantial achievement for the Australian people. In its first term, the Hawke government achieved historic reforms. It deregulated the financial market. It floated the Australian dollar. The Howard government, in its first term, achieved historic gun law reform. It built on former Prime Minister Keating’s industrial legislation. It reformed the waterfront and, most importantly, it began the task of fiscal reform on which the current economic strength of this country is founded.
What has this government achieved? We all know that it was a very subdued and very unhappy caucus meeting yesterday. We all know that the Prime Minister attempted to rally his troops by telling them to go out and sell the government’s achievements. What are those government achievements? First, there is a paid parental leave scheme that is a small step in the right direction but which is basically a rebadged baby bonus, and we have a National Broadband Network, better described as a nationalised broadband network, which will hardly be noticed by the Australian people for many years and which will add billions and billions of dollars to Australia’s unsustainable debt. Oh, yes—the other achievement was avoiding a recession. The avoidance of the recession, let us make it absolutely crystal clear, owes far more to the reforms of the previous government than it does to the spending spree of the current one.
So that is it. After three years, this government has turned a $20 billion surplus into a $57 billion deficit, it has turned a $60 billion net asset position into a $100 billion net debt position, and all it has to show for it is a rebadged baby bonus, an economic slowdown, ameliorated by other people’s work, and a National Broadband Network that will not be delivered for decades. This is a government which has failed. This is a government which promised not to means test the baby bonus, but has. It promised not to means test the private health insurance rebate, but it has tried to do just that. It promised us GroceryWatch—undelivered. It promised us Fuelwatch—undelivered. Doesn’t the Minister for Financial Services, Superannuation and Corporate Law squirm at the table when he is reminded of his own personal failures? The government promised us 35 GP superclinics and has delivered three. It promised us 260 childcare centres and, having delivered some 20, has said 240 are no longer necessary. Of course with the greatest moral challenge of our time—not just any old problem but the greatest moral, economic, political and social challenge of our time, climate change—there is no policy. There is no policy whatsoever to deal with climate change.
Prior to the election the Prime Minister claimed he was the economic conservative, and he has become the greatest public wastrel in Australian political history. This is the economic conservative in opposition who has spent his time as Prime Minister attacking market fundamentalism, attacking 30 years of neoliberalism, and in fact rejecting the serious and beneficial reforms of more courageous and more substantial Labor predecessors. Broken promises are bad, but breaking promises is not all he has done. He has wasted taxpayers’ money in a way that is absolutely unforgivable. Now he wants to destroy our economic future with a great big new tax on mining, and that is tantamount to a political crime. A Prime Minister who has so misjudged a decision of this magnitude, a Prime Minister who has so mishandled due process in coming to a decision of this magnitude, is a Prime Minister who is no longer fit to govern this country.
Only a government with no shame would have kept its pink batts program going despite more than 20 official and formal warnings from government officials, from state governments and from professional bodies. The government went on, despite these warnings, to install 240,000 dodgy or dangerous insulations which, in their turn, caused more than 150 house fires, potentially electrified perhaps thousands of Australian roofs and, shame on shame, have been linked to four deaths. This is a Labor government—a Labor government indifferent to warnings that, had they been heeded, could have avoided the deaths of four workers.
Only a government with no sense of value for money would have wasted billions and billions on overpriced school halls. Anyone familiar with construction in this country could have gone to the Rawlinsons guide or the other standard industry guides and found out that the construction of a single-storey school building should have averaged $1,500 a square metre. But, no, that is not what this government has achieved. It gave money to independent schools, and of course independent schools managed to get the work done for $2,400 a square metre. But what did this government do with the vast bulk of the money? It gave it to the state education departments. In New South Wales, they have managed to achieve school hall construction at a price fully three times the industry average—$4,500 a square metre—but in some instances, particularly with the cubby-house size canteens in country schools, the cost has been $25,000 a square metre.
A government which cannot be trusted with public money is a government which cannot be trusted with re-election. Now, with $5.5 billion yet to spend, the government has appointed a value-for-money inquiry whose chairman has not even read the Auditor-General’s report and is proposing to spend the rest of the money before even getting that report, which will cost $14 million to produce. It is just not good enough, and now the government is targeting the most productive industry in our country with a penalty tax almost guaranteed to kill the mining boom stone dead.
Any government that thinks success should attract penalty rates of taxation and that regards a rate of return better than you can achieve by putting your money into the bank as being a super profit which should attract a super tax is a government which has no experience of how the real world works. But what should we expect from a Prime Minister who is a lifelong public sector employee, a Deputy Prime Minister who has rarely stepped outside the cabals of politics, except as a union lawyer, a Treasurer who is a lifelong party official and a finance minister who was a lifelong union official? I do not say that those are not worthy occupations in their own ways, but shouldn’t there be someone—just someone—in the decision-making counsels of this government who has some understanding of the economy on which every Australian’s prosperity depends?
Only a government with no understanding of how our economy works would think that the $53 billion of taxpayers’ money that we will be paying off for years should have been used to avoid two consecutive quarters of negative growth. Only a government with no understanding of how the real world works would think it makes sense to spend $43 billion recreating the Telecom of the 1960s without even a business plan. Only a government which is utterly bereft of any conception of due process would have told us that we were going to have root-and-branch tax reform and then not released the Henry review for months and then took just one of its 138 recommendations and distorted it, lied about it and told us that the government had achieved tax reform.
Let us be very clear about the great big new tax on mining. It is not what Ken Henry recommended. It is not going to pay for increases in superannuation. It is going to fund a lot more government spending as well as a hardly-to-be-noticed reduction in company tax. Nor is the great big new tax on mining going to build the infrastructure that Australia needs. All it is going to do is fund the continued spending spree of a government which is addicted to spending and, because it is addicted to spending, to taxation too. It is not good enough, and the Australian people deserve better.
The tragedy is that if this government is re-elected we will get more of the same, only worse. We will have a government which is all about politics and has no deep and abiding principles. We will have a government which puts its own political survival ahead of fundamental and necessary reform. We will have a government in the mood for vengeance on its critics. The Prime Minister said the other night to the mining industry, ‘We have a long memory.’ And that is exactly right. We know what the Prime Minister is threatening. We know the threats the Prime Minister is making behind closed doors to members of the mining industry, and that spirit of vengefulness seeped out last week in the Great Hall when he threatened people that he had a long memory.
We need to change the government because the alternative is different and better. I say to the Australian public: if you want to stop the boats, you have to change the government; if you want to stop the tax, you have to change the government; if you want to restore cabinet due process, you have to change the government. More and more people want to change the government because they do not want to see this government do any more damage. There is talk of risk from members opposite; the risk is that the Australian people might give this government the second chance that it certainly does not deserve.
What we have just heard comes from a Leader of the Opposition who says that economics is boring. The Leader of the Opposition used to work for Mr John Hewson, and Mr Hewson is well known for saying that this Leader of the Opposition is ‘essentially innumerate’—in other words, he cannot count. The previous Treasurer, Mr Costello, is well known for saying that you could not have Mr Abbott as the deputy leader because he does not understand economics. Yet this Leader of the Opposition has the audacity to come in here today and talk about risk.
This Leader of the Opposition presents enormous risk to the Australian people because he thinks that economics is boring, he cannot count and he has demonstrated today that he has not one policy that he is prepared to put up. He did not say one positive thing today in this matter of public importance debate, which is supposed to be about families. I do not think he even used the word ‘family’ in his whole 15-minute rave. It is extraordinary.
Mr Truss interjecting
I am so pleased that the Leader of the Nationals is at the table. It is extraordinary that, in this week when paid parental leave finally went through the parliament, we have no sharper or clearer example of the difference between the government and those opposite. We are the government who are delivering for families. For 12 years the Leader of the Opposition and the Leader of the Nationals had the chance to deliver a paid parental leave scheme. We know that the Leader of the Opposition spent the whole time campaigning against it. He said that paid parental leave would only ever happen over his dead body. Well, thanks to this government, that wait is over and it is going to be low-income women who are the big winners as a result of the government’s paid parental leave scheme. The Leader of the Nationals would be pleased to know that that is especially going to be low-income women in regional areas. Just walk down the street of any country town. Think of the hairdressing shop, the food store, all the places where women are working as cashiers, food attendants. These are the women who are, at the moment, least likely to have paid parental leave and many of them would be part-time or casual workers working in a local small business. They are now going to get paid parental leave for the first time.
We know that the Leader of the Opposition does have one policy on paid parental leave, but we also know that he did not talk to his Nationals colleagues, including the Leader of the Nationals, before he made this announcement. We remember in February this year the Leader of the Opposition went out and said that there would be no new taxes. That is what the Leader of the Opposition said in February. Then along he came in March and announced that there would be a new tax on business of 1.7 per cent that will apparently pay for what can only be described as a sham paid parental leave scheme from this Leader of the Opposition. This new tax on business from the Leader of the Opposition, who a month earlier said there would be no new taxes on business, will drive up grocery prices for families. The Leader of the Nationals knows it is an unfair scheme that the Leader of the Opposition has dreamt up because it is going to see high-income earners in the city getting as much as $75,000 when they have a baby and much, much less for those low-income women in regional towns who earn a lot less. The Leader of the Nationals made this very clear on the radio last week when he owned up to the fact that he has told the Leader of the Opposition that he has some concerns about the size of the paid parental leave scheme. Plainly the Leader of the Nationals is not happy about the Leader of the Opposition’s approach.
We have heard a bit from the Leader of the Opposition today, preaching to us about broken promises. I have to say, coming from this Leader of the Opposition, it really is beyond belief. It is extraordinary. We all know that he has form on this matter. He had form in government, and now he also has form in opposition. I have just outlined the one on no new taxes and now he is up there proposing a new tax. All of us remember that when he was in government he said that he had a rock solid, ironclad guarantee that had to do with the Medicare safety net. Immediately after the 2004 election he broke that commitment. You would have to say that this Leader of the Opposition’s commitments in government and in opposition really only have the substance of fairy dust.
It was summarised most accurately by the Leader of the Opposition himself on The 7.30 Report. I do not think any of us will ever forget the memorable interview with Kerry O’Brien when the Leader of the Opposition said:
I know politicians are gonna be judged on everything they say, but sometimes, in the heat of discussion, you go a little bit further than you would if it was an absolutely calm, considered, prepared, scripted remark, which is one of the reasons why the statements that need to be taken absolutely as gospel truth is those carefully prepared scripted remarks.
One thing that families know as a result of these comments from the Leader of the Opposition is they cannot trust anything that Mr Abbott says.
The Leader of the Opposition mentioned the baby bonus in his remarks. I want to draw families’ attention to the comments that he has made about the baby bonus, the commitments that the Leader of the Opposition has made in opposition about the baby bonus. This is a man who says one thing and then walks away and does another. If you look at the statements he has made, most recently the Leader of the Opposition has said on ABC Radio—this was in May, so not that long ago—that he would not be removing the baby bonus means test. He said:
Um, that’s not a commitment that I can make at this time.
Let us go back just a few months. This comment that he made in May follows repeated commitments that this Leader of the Opposition made to remove the means test on the baby bonus. This is him in the Sydney Morning Herald, quoted in December last year. He said:
Whacking the means test on was dead wrong. I’d like to see that means test come off.
He said it again in May this year, just before he went on the radio. He said this in response to a question from a journalist, who asked:
You believe the baby bonus should stay untouched?
Mr Abbott said:
I do, and it shouldn’t have been means tested the way the Government has.
It must have been one of those commitments he made in the heat of the moment; it must have been a heat-of-the-moment discussion because just a few weeks later we have had him ruling it out.
The shadow Treasurer, Joe Hockey, has ruled out another one of the commitments that Mr Abbott tried to make. He tried to double the baby bonus, and I gather the Leader of the National Party wants to do that as well. Mr Abbott apparently went into shadow cabinet trying to get an agreement to double the baby bonus. He could not quite say yes or no when he was on radio. He said he could not rule things out and could not rule things in, so the shadow Treasurer had to go on the television and make it plain. I make it clear to the Leader of the Nationals that this is the current position of the opposition. The shadow Treasurer said, ‘No, we can’t take that latest idea into this election.’ How would families ever be able to believe anything that this opposition says?
I want to run through the other major achievements that this government has delivered for families. We have delivered Australia’s first Paid Parental Leave scheme. One of the most important achievements of this government was keeping Australians in jobs, because nothing is more important to a family than knowing that mum or dad or both are in a job and that they can therefore put food on the table for their families. It was this government that got rid of Work Choices to make sure that families have decent working conditions, and all of this we did in the face of the global financial crisis. This government is delivering tax cuts to all taxpayers, so important to families. This will include a doubling of the low-income tax offset. In 2010-11, a person earning $50,000 will pay $1,750 less tax than they did in 2007-08. It is this government that has delivered an increase in the childcare rebate from 30 per cent to 50 per cent to make sure that child care is more affordable for parents. That is delivered—it is in the pockets of parents—and we made sure that we pay the childcare rebate more frequently. It is this government that has delivered the Medicare Teen Dental Plan so that eligible teenagers get annual preventive dental checks, and more than 80,000 dental checks have been undertaken so far, delivered by this government. In the face of the global financial crisis, we delivered economic stimulus payments to two million families to fend off the impact of the global financial crisis, to help those families and also to help the economy. It is this government that has also delivered an education tax refund—up to $750 for a primary school child and $1,500 per high school child—to help with the costs of education. These things did not exist under the previous government. There was not an education tax refund. There was no Medicare Teen Dental Plan.
Just this week, as well, we have delivered very, very significant welfare reforms to fight passive welfare and to do everything we can to make sure that welfare is spent in the interests of children so that the essentials of food and clothing are provided by families. It is this government that has also delivered Australia’s first National Framework for Protecting Australia’s Children. Never before has the Commonwealth provided the sort of leadership that is needed in the area of child protection. It is this government that has introduced learn or earn conditions for payment of family tax benefits for young people aged 16 and over.
I finish on the critical issue of housing. Those opposite, of course, did not even have a minister for housing. It is this government that has put in place the National Rental Affordability Scheme, to make sure that low- and middle-income renters have a better chance of affordable rental housing. It is this government that delivered during the global financial crisis the first home owner’s boost, helping over 250,000 Australians to buy their first home. It is this government that has put in place first home saver accounts to help people save for their first home. And, of course, there is the very, very significant increase in investment in social housing. We are also delivering the Housing Affordability Fund, to make sure that we are able to deliver savings to homebuyers through the improved planning and development reform. These are the extensive changes that we have put in place, all of it delivered by the government.
My final point has to be about what we did, which the previous government refused to do, for pensioners. Age pensioners, disability support pensioners and carers, who waited for 12 years, finally got an increase because of this government. (Time expired)
This is a very important matter of public importance—the government’s appalling record of broken promises—led by the Leader of the Opposition, a demonstration of its gravity. But where are those on the opposite side who made the decisions to respond to the charges of the Leader of the Opposition? Not one of the kitchen cabinet bothered to turn up to respond to the charges against them of having broken promise after promise of Labor’s election platform. All they could produce was a long forgotten former Deputy Leader of the Opposition, a person whose only capacity to contribute from a firsthand perspective to this debate is as one amongst the many who have broken election promises. She is amongst the many who have wasted taxpayers’ money. She is amongst the many who need to stand to account for their dismal performance and the failure of this government.
Let’s look at one of the government’s fundamental election promises. When in opposition the Labor Party promised to build 750 new houses for the Indigenous community, to refurbish 2½ thousand more and to rebuild 230 others by next year. Well, $180 million later, what have we got? Thirteen houses have been completed—$180 million gone and only 13 houses built. One hundred and fifty-five refurbishments have been undertaken, and none of them has met an acceptable standard. So this minister, the minister who was chosen to respond, is just as culpable as the others, but none of the senior ministers were prepared to even turn up to explain their appalling behaviour. If the Prime Minister and his chief of staff had spent as much time consulting with the mining industry and the community as they do in consulting with their Labor colleagues to save the Prime Minister’s own job, then this government might not be in the mess that it is. What an incredible mess it is.
This government came to power on the back of a campaign promising the Australian people everything from world peace to cheaper grocery prices. It promised trade training centres at every school, computers on every desk, fast broadband to the homes of 98 per cent of Australians—and all that simply has not been delivered. They are all broken promises. The government governs by decree rather than consultation and cooperation. It is a government that promises big, spends big and taxes big—but it is all talk and no action. There is no delivery. ‘Where has all this money gone?’ the people of Australia have every right to ask. For generations they will be paying it back, and what do they have to show for it? This is a scandal of international proportions. There is no government like this one for the way in which it has managed to destroy the birthright, to squander the birthright, and now leave to next generations substantial amounts of debt.
Last year the Prime Minister unveiled his $42 billion cash splash, and he was quite clear at that time that there would be no need for any new taxes to pay for it. He even also made it very clear that it was not a good idea to increase taxes. Let me quote the Prime Minister. He said:
We could try to keep the budget in surplus by raising taxes, but that would shift the burden of the global recession onto Australian businesses and taxpayers.
He was right then. Why isn’t he right now? Why isn’t he doing exactly the same thing now? He should have followed his own advice. Having designed his $13 billion a year Carbon Pollution Reduction Scheme tax—which is just asleep on the back counter—what he is waiting for now is another great big new tax, this one on the mining industry, the very industry that has helped Australia through these difficult times. What is the logic of this government in putting a big new tax on the productive sector? The Prime Minister said, when he introduced the Carbon Pollution Reduction Scheme, that that was a tax to encourage us to reduce our CO2 emissions. We had to have a new tax on cigarettes so we would smoke less. We had to have a new tax on alcopops so we would drink less. But, when it comes to a new tax on mining, that is supposed to make us mine more. What is the logic in this government’s explanation? It is simply beyond belief.
Let me convey to the Prime Minister a bit of advice from Sir Winston Churchill, who once said:
We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
Can you envisage the kitchen cabinet jumping in the bucket and trying to lift it up by the handle? That is about the logic of the tired and tortured government that we have, trying to extricate itself from problems of its own making. Professor Warwick McKibbin, Reserve Bank of Australia board member and ANU academic, described this tax yesterday as ‘a really badly designed resource tax’. It has been an example of a government out of its depth, completely unable to address the issues of this country. And of course it is another broken promise, because the government said it believed in balancing budgets and it believed in being conservative. He was a fiscal conservative, the Prime Minister told us—but he has not delivered.
Then Professor McKibbin went on to talk about some other things, like the $43 billion National Broadband Network. He said it was ‘a gigantic white elephant waiting to happen’. The government has been trying to criticise the Nationals in particular for being critical of this scheme, saying that we were denying the country people of Australia access to fast-speed broadband. However, the government’s promise excludes two million people from rural Australia. Everyone who lives in a town of under 1,000 people will not even get it. They are second-class citizens. Labor is proposing a scheme for which they have no business plan. They have no idea how it is going to be built, but it is only for those people who live in the densely populated areas. So this government has no right to be critical of those on the other side in relation to the provision of high-speed broadband. It is, sadly, another example of Labor’s spin, deception and broken promises.
When the Prime Minister said in 2007 that he would turn back the boats, did anyone really think that he meant turning back the bulk coal carriers or the LNG tankers? Did anyone think he was going to operate a water taxi service where the asylum seekers arrived close to Australia then rang 131008 and expected the taxi service to come and pick them up? This is the government’s policy. Canada’s mining man of the year is also the people smuggler’s man of the year because he has opened the floodgates and, sadly, people are coming in from all over the world. When Kevin Rudd said he would put a school computer on every desk, did we really think he meant only every third desk? When he said he was an economic conservative, did we think he would deliver the biggest budget deficits in our nation’s history and then spend a whole lot of money on cash splashes that left us with little more than some plasma screens and overpriced school halls? This is the record of this government: consistently broken promises.
Let’s remember a few more, like 2,650 trade training centres in Australian schools. After two years, there was just one completed. Remember GroceryWatch? Thirteen million dollars wasted. Fuelwatch? Twenty-one million dollars wasted, and it has not happened. Let’s never forget their promise to spend $100 million to re-engineer the Menindee Lakes to save 200 billion litres of water a year from the Murray-Darling. Nothing has happened. There were going to be 500 new Australian Federal Police officers. There are only 100. They have also wound back the air marshals program and cut the AFP budget. Two hundred and sixty childcare centres were to be built in schools and TAFE colleges. Only 38 will be built. What about the promise to provide rainwater tanks to all of Australia’s 305 surf lifesaving clubs? Forty-five have been provided, and the program has been axed. What about the promise to close the gap on Indigenous disadvantage? The secondary report to parliament showed there was little or no progress. What about the promise to increase X-raying and inspections of containers from overseas ports? They have cut the Customs and the quarantine budgets.
If you want the ultimate example of Labor’s deception and dishonesty when it comes to the Australian people, it is the Prime Minister saying on 17 March 2008: ‘We will honour every promise made to the Australian people.’ That is another promise broken. They made one more promise only a couple of months ago: there will be no cash splash before the next election. Watch this space. That will be another broken promise on top of a litany of broken promises, which will be the legacy of this government to the people of Australia.
For the purpose of those people who are in the gallery and those who might be listening to this debate being broadcast, I would like to draw their attention to the fact that the terms of the matter of public importance put by the Leader of the Opposition are about the government’s record on Australian families. Neither the Leader of the Opposition nor the Leader of the National Party could even bring themselves to utter the word ‘family’ throughout the entirety of their contributions. They could not even talk about Australian families. That is just how out of touch they are.
Only a few short years ago in this chamber, the then Prime Minister John Howard sought to berate Australian families concerned about cost-of-living pressures. He made the now infamous comment: ‘Australian families have never been better off.’ I was here in the chamber when he said that, and I remember it well. He said it in the context of having introduced the most antifamily industrial relations system we have every seen, where penalty rates, capacity to refuse changed working hours and basic rights to protection from unfair dismissal were stripped away. He said it in the context of Tony Abbott having stripped a billion dollars out of the health system, which saw access to general practitioners become even harder, hospital and dental waiting lists blow out and private health insurance, which everyone was encouraged to take out, become more expensive. He said it in the context of having done nothing to try and address the issue of housing affordability. He said it in the context of having done nothing to try and make child care more affordable. In fact, the then government’s policies exacerbated the problem by allowing the childcare market to be concentrated into the hands of on operator, the now failed ABC. He said it in the context of having denied families the opportunity of a paid parental leave scheme. The now Leader of the Opposition, who was one of the prime blockers in the 12 years the coalition were in government, said, ‘Paid parental leave over his dead body.’
Now we have the Leader of the Opposition—who has been part of a government that saw Australian families go backwards and that sought to lecture Australian families on how they should be truly grateful for all they received from the benevolent Howard government—claiming in this place that he is some sort of friend of Australian families. I am proud of this government’s record when it comes to families. During the 2007 election we made a commitment to Australian families to deliver a fairer workplace relations system and a paid parental leave scheme. We promised to increase the childcare rebate to 50 per cent and also to increase access to kindergartens for every four-year-old. We promised to deliver tax cuts to families and to introduce an education tax rebate. We promised to improve maternal and child health services and to provide opportunities for lower income and first home buyers to enter the housing market. Finally, throughout the term of this government and particularly in the context of the global financial crisis that we never anticipated when were in election mode in 2007, we have worked to protect the jobs of ordinary working families during the global financial crisis. We have delivered on every single one of these promises.
Just one year after the election of the Rudd government, we honoured our election commitment to get rid of Work Choices. During the 2004 election, members opposite failed to mention to Australian families that they were introducing extreme Work Choices laws. Australian families told us these laws were not fair. They did not support families in their employment. They were archaic and they were wrong. With the Fair Work Bill we delivered on our commitment to rectify the attack that those opposite made on the jobs of Australian families. We now of course know that, at the very first opportunity, Tony Abbott will reintroduce his antifamily Work Choices legislation.
In addition to the abolition of Work Choices, we committed to go even further in supporting families in the workplace and at home, with the implementation of a paid parental leave scheme. I spoke in this House last month about how delighted I was to be part of a government that was delivering on its commitment to implement this scheme. The Paid Parental Leave scheme provides families with real choices about how they balance their work and family responsibilities. It takes pressure off particularly women to return to work too early after the birth of their child. And while the former government had more than a decade to introduce such a scheme to support families, they decided to sit on their hands and do nothing. The Rudd government’s Paid Parental Leave scheme passed through the parliament last Thursday and represents a real win for families. I am not convinced that the Leader of the Opposition’s road to Damascus conversion on Paid Parental Leave is a real one. It is clear the scheme does not have the support of all members of the Liberal Party and nor does it have the support of the National Party. It has been roundly criticised by business. in my view, it is a policy on the never-never.
We have supported families by increasing the childcare rebate from 30 per cent to 50 per cent. Access to child care for children can be costly for parents and the government, through its measures, is trying to relieve these costs. We have recognised that parents want to provide the best possible start for their kids. That is why we have acted to provide 15 hours of early kindergarten education to all four-year-olds over the next five years.
In the budget we have implemented our promise of the third round of tax cuts for families. These tax cuts come into effect next Thursday and will be welcome news for many families around the country. This is the third round of tax cuts in the three years of this government. We have introduced the education tax rebate. Eligible families now have access to that refund, which provides up to $750 per primary school child and $1,500 per high school child to help with the costs of their education.
It was pleasing to hear yesterday Minister Roxon speak further on the government’s commitment to improve maternal and child health services. The government announced yesterday a new pregnancy, birth and baby helpline. The helpline will provide support to prospective parents, those who are pregnant and those who are new parents. There will be advice and support 24 hours a day, seven days a week, to support families through this important time in their lives. This measure will make a real difference to new families. On top of this, the government is providing 24-hour support for breastfeeding services—something that was forgotten under the former government. In addition, we have introduced a perinatal depression support service to assist women during their pregnancy and during a child’s early life. And of course our expansion of Medicare rebates to midwifery services is making a real difference to parents today.
Housing affordability is another significant achievement of the government and is a significant concern for Australian families. Measures like our Housing Affordability Fund and the National Rental Affordability Scheme are assisting real families today by providing opportunities for lower income earners and first home buyers to enter the housing market. This is on top of our $5.6 billion Social Housing Initiative as part of our nation-building plan that is assisting families who are homeless or at risk of becoming homeless.
The Rudd government has delivered a fair workplace relations system and the Paid Parental Leave scheme in the midst of the global financial crisis. We have worked hard to combat the impact of this financial crisis. The government has acted decisively to protect jobs through its economic stimulus plan. While other advanced economies have experienced a recession, massive job losses and long-term budget deficits, Australia has avoided a recession, has created 225,000 jobs and will return the budget to surplus early. The measures that we have put in place have kept Australia’s unemployment at around half the rate of the United States and of Europe, but if we had listened to those opposite we would have seen around a quarter of a million people out of work.
I hear the members opposite actually laughing at the comments I am making. I find it absolutely extraordinary that those members opposite think that having half the rate of unemployment of the US and of Europe is something to be laughed about. I find it extraordinary that they fail to recognise that Australia has managed to do better than almost every other developed country in the world. We have managed to do better not by accident, not by mistake. We have managed to protect the jobs of ordinary working families because we acted decisively to address the global financial crisis. I find it extraordinary that those members opposite somehow think that having a lower unemployment rate is something to be laughed about.
These have been real decisions that have a real consequence for working families. The Rudd government understands the challenges faced by Australian families. One of the things I am very proud about that this government acted to do was to increase the base rate of the pension. It was an appalling circumstance that every year at budget time pensioners and carers had to wait to see whether they were going to be subject to government largess. Now they do not have to wait for that. The base rate of the pension is there now, in perpetuity, in every single budget going forward. People do not have to wait to see whether a benevolent government will be able to help them each budget time.
The Rudd Labor government understands the challenges faced by Australian families. Unlike the former Prime Minister, John Howard, we will not be heard using such hubristic terms as ‘Australian families have never been better off’. We know that there is a long way to go in helping Australian families, but we are very proud of the record that we have to date. We have delivered on a fairer workplace relations system, we have delivered on a national paid parental leave scheme and we have worked to protect jobs during the global financial crisis. We have delivered tax cuts and also assistance with child care and with education. The government has a proud record when it comes to families. We do know that there is more to be done, but I will back our record any time. (Time expired)
Much has been published recently about the apparent psychoses that are lurking deep within the recesses of the Prime Minister’s mind. Indeed, it has become a national pastime to analyse the disturbingly complex and erratic behaviour of this Prime Minister: his temper tantrums over trivial inconveniences; his propensity to profanity in the most inappropriate circumstances, clearly designed to offend all in earshot; his deep-seated anger; and his thirst for revenge on those who might disagree with him. But it is his compulsion to make grandiose announcements that he has no intention of fulfilling that really hurts the Australian people. Sure, it hurts his credibility, but this Prime Minister is damaging our economy and hurting Australian families.
The celebrated psychoanalyst Carl Jung once said—and, indeed, he could have had this Prime Minister in mind—that ‘the man who promises everything is sure to fulfil nothing’. Rarely, if ever, has anyone assumed the high office of Prime Minister with the high expectations of this Prime Minister—expectations built on his flimsy platform of grand rhetoric. The Prime Minister was everywhere as Leader of the Opposition before the election, promising to intervene in every aspect of society. He was promising to fix every social ill. In every aspect of the lives of Australian families, the Prime Minister would be there intervening. There was nothing that the government could not fix, nothing that would not have the Prime Minister’s magic wand of intervention waved over it and be fixed. We would have an education revolution with laptops for all. He would fix the public hospitals. He would decrease the waiting lists. Labor hailed this new Messiah who was going to take us to the Promised Land of milk and honey, where there would be lower petrol prices and lower grocery prices and all the state premiers would sit around with the Prime Minister singing Kumbayain Mandarin.
This nirvana has not come to be, but the Prime Minister went on. Not content with promising the undeliverable, he declared war. He declared war on binge drinking, he declared war on poker machines, he declared war on unemployment, he declared war on drugs—on doping in sport—and he declared war on inflation and on executive salaries. This was a man out of control. But the ultimate would have to be his statement that climate change was the greatest moral challenge of our age. He asked, he begged, he pleaded the Australian people to believe him. He truly believed that climate change was the greatest moral challenge of our age.
The Australian people are reasonable. They give a new government a fair go. That is borne out by history—there has only been one government voted out after one term. The honeymoon given to the Rudd government has been exceedingly generous. The trust the voters had in the Prime Minister to fulfil the promises he made was evidenced by his rise in the polls. But it is now clear that an increasing number of Australian people have come to the realisation that they were duped in 2007 by slick Labor marketing machines, backed by union scare campaigns, and a politician who sought to seduce the Australian people with his shiny new promises. The seducer has now betrayed the Australian people. The grand promises, the towering rhetoric, have turned to dust. This Prime Minister has failed to deliver on his promises to date, and there is little hope that he will ever deliver on any of his promises.
It is worth remembering that this was a Prime Minister who promised to govern as an economic conservative. He inherited a $20 billion budget surplus and turned it into a $57 billion deficit, one of the highest deficits on record—this from a Prime Minister who said he would keep a rein on spending. He promised to commit to evidence based policy making—and what a cruel hoax that has turned out to be. The hallmarks of the waste and reckless mismanagement would be the home insulation scheme, the school halls program, the rorts, rip-offs and reckless spending. That program now has the ignominy of being the most reckless spending program in Australian political history. What of his promise to turn aside the asylum-seeker boats? People smugglers now have our Navy on speed dial. We have a record number of boats coming to our shores—and the Prime Minister promised to turn the boats back. (Time expired)
I am very pleased to be speaking on this matter of public importance because no government has delivered better for families than this Rudd Labor government. We have seen, very interestingly, that this MPI today is about the failure of the government to deliver on its election promises for Australian families but the opposition has not mentioned families once. In fact, in his contribution the Leader of the Opposition was reminiscing about the early Howard years and talking about the great achievements of those years being gun control, industrial relations and economic reform. There was nothing about families, and that is because the Howard government achieved nothing for families. We have achieved more in three years for families than the previous government did in 12 years. What I took away from the Leader of the Opposition’s contribution was that he not only finds economics boring but he also finds families boring.
A lot of this debate has been about broken promises. I certainly remember a promise by the previous government that they would keep interest rates at record lows. Instead, what we saw were 10 interest rate rises in a row putting a huge strain on families at the same time that the previous Prime Minister was telling families they had never been better off. That was a significant broken promise by the previous government. But the broken promises did not stop at the broken promises for families by the previous government; they also begin with this Leader of the Opposition. As we famously know, it depends on whether something has been written down as to whether or not it is a promise or a broken promise or the gospel truth—it is hard to know with this Leader of the Opposition. We have seen a huge backflip from him: he said he would not introduce any new taxes and then, quite soon after, we saw the Tony Abbott big new tax on everything. If he were to be elected, bread would cost more, milk would cost more, and this would have a very big impact on Australian families.
We did not hear anything about families either from the Leader of the National Party or from the Deputy Leader of the Opposition. That is because they have no coherent plan for families. They are erratic and cannot be trusted to deliver for Australian families. Instead, it is the Rudd Labor government that is getting on with delivering on its election promises and making sure that it is easing the cost of living for families.
I will point first of all to the tax cuts. There have been three sets of tax cuts over three years which have had a huge impact on many families. Our education tax refund has had a big impact on reducing the cost of education. We have heard a lot about school buildings, computers and trades training centres. In my electorate of Kingston, trades training centres are being delivered on the ground. Computers are being delivered into schools. What we do know is that if the Leader of the Opposition became Prime Minister, these important programs that help families and help kids get a good education would get an asterisk: ‘discontinue’. This would have a significant impact for many families who want to give their children the best start to life. Many families in my electorate cannot necessarily afford a laptop or high-tech technology, so their children need access to that at school.
Not only have we been delivering on the education tax refund; we have also invested in the area of health. We have seen GP superclinics right around the country. I was very pleased to be with the Parliamentary Secretary for Health in my electorate turning the first sod of the $25 million GP superclinic that will provide essential health care to families living in my electorate. Again, we know that the Leader of the Opposition is not interested in health and just wants to cut this very important program, along with many other health programs that we have heard health ministers talk about.
Most importantly, we know that the opposition opposed our intervention when there was a global financial crisis. They opposed our intervention to make sure that people had jobs in our community. They would have preferred the unemployment queues to get longer and longer, with families suffering without paid employment. It was this government that was decisive in acting and making sure that families had jobs—
Order! The time for the discussion has concluded.
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 presented.
Ordered that this bill be considered immediately.
Main Committee’s amendments—
(1) Schedule 1, page 3 (after line 10), after item 2, insert:
2A Section 3 of the Schedule (subparagraph (a)(ii) of the definition of approved person)
Omit “notified the APVMA in writing is”.
2B Section 3 of the Schedule (paragraph (b) of the definition of approved person)
Omit “has notified the APVMA in writing is authorised by that person”, substitute “has authorised”.
(2) Schedule 1, page 3 (after line 25), after item 4, insert:
4A Section 3 of the Schedule
Insert:
file includes a file of information stored or recorded by means of a computer.
(3) Schedule 1, page 3 (after line 28), after item 5, insert:
5A Section 3 of the Schedule (paragraph (d) of the definition of relevant particulars)
Repeal the paragraph, substitute:
(d) in relation to the approval of a label for containers for a chemical product—the information required to be recorded in the relevant APVMA file by paragraph 21(2)(c);
(4) Schedule 1, page 3, after proposed item 5A, insert:
5B Section 3 of the Schedule (definition of relevant particulars)
Before “29(1)(h)”, insert “26A(4)(a) or”.
(5) Schedule 1, page 4 (after line 3), after item 6, insert:
6A After subsection 9(2) of the Schedule
Insert:
(2A) Division 2A deals with applications to vary a relevant particular if the relevant particular is of a kind set out in a legislative instrument made by the APVMA for the purposes of section 26A.
(6) Schedule 1, page 4, after proposed item 6A, insert:
6B Subsection 21(1) of the Schedule
Omit “section 23”, substitute “section 23A”.
6C Subsection 21(2) of the Schedule
Repeal the subsection, substitute:
(2) Approval of a label takes place by:
(a) determining the particulars, prescribed by the regulations, that are appropriate to be contained on the label; and
(b) giving a distinguishing number to the label; and
(c) recording the following information in the relevant APVMA file:
(i) the distinguishing number;
(ii) the adequate instructions and any particulars that are to be contained on the label; and
(d) recording any conditions imposed on the approval by the APVMA under subsection 23A(2) in the relevant APVMA file.
(7) Schedule 1, page 4, after proposed item 6C, insert:
6D Subsection 23(1) of the Schedule
Omit “, the registration of a chemical product or the approval of a label for containers for a chemical product”, substitute “or the registration of a chemical product”.
Note: The heading to section 23 is amended by adding “active constituents and chemical products”.
6E Subsection 23(3) of the Schedule
Omit “, registration of a chemical product or approval of a label for containers for a chemical product”, substitute “or the registration of a chemical product”.
(8) Schedule 1, page 4, after proposed item 6E, insert:
6F After section 23 of the Schedule
Insert:
23A Conditions of approval—labels
(1) The approval of a label for containers for a chemical product is subject to:
(a) the conditions prescribed by the regulations (whether or not the conditions are prescribed at the time the label is approved); and
(b) any conditions imposed on the approval by the APVMA under subsection (2).
(2) At the time of approving a label for containers for a chemical product, the APVMA may impose conditions, as the APVMA considers appropriate, on the approval.
(3) The conditions prescribed by the regulations may be expressed to apply in relation to:
(a) a label for containers for a particular chemical product; or
(b) a label for containers for a class of chemical products; or
(c) a label for containers for all chemical products.
(4) Approval of a label for containers for a chemical product may be granted on the condition that the approval remains in force for a particular period. The period may not be more than one year.
(5) If:
(a) the approval is subject to a condition referred to in subsection (4); and
(b) the conditions of approval have not been varied before the end of the period referred to in the condition, or the end of that period as previously extended under this subsection, so as to remove the condition;
the APVMA may vary the condition so as to extend the period for a further period of not more than one year or for further periods each of which is not more than one year.
(9) Schedule 1, page 4, after proposed item 6F, insert:
6G After Division 2 of Part 2 of the Schedule
Insert:
Division 2A—Changes in certain relevant particulars
26A Applying for a change in certain relevant particulars
(1) An interested person in relation to:
(a) an approved active constituent for a proposed or existing chemical product; or
(b) a registered chemical product; or
(c) an approved label for containers;
may apply to the APVMA for variation of a relevant particular of the approval or registration if the relevant particular is of a kind set out in a legislative instrument made by the APVMA for the purposes of this section.
(2) An application must:
(a) be signed by an approved person; and
(b) be accompanied by the prescribed fee (if any); and
(c) be lodged with the APVMA.
(3) Subsection (4) applies if:
(a) in the case of an application that relates to an active constituent or registration of a chemical product—the APVMA is satisfied that, if those particulars were varied in accordance with the application, the continued use of, or any other dealing with, the constituent or product in accordance with the instructions for its use or for such a dealing:
(i) would not be an undue hazard to the safety of people exposed to it during its handling or people using anything containing its residues; and
(ii) would not be likely to have an effect that is harmful to human beings; and
(iii) would not be likely to have an unintended effect that is harmful to animals, plants or things or to the environment; and
(iv) would not unduly prejudice trade or commerce between Australia and places outside Australia; or
(b) in the case of an application that relates to a label for containers for a chemical product—the APVMA is satisfied that, if those particulars were varied in accordance with the application, the use of the product in accordance with the instructions for its use would be effective according to criteria determined by the APVMA for the product.
(4) If the APVMA is satisfied, as mentioned in subsection (3), the APVMA must:
(a) both:
(i) vary the relevant particulars; and
(ii) record in the relevant APVMA file the relevant particulars as varied and the date on which the record is made; and
(b) give the interested person a written notice that states that the relevant particulars have been varied.
(5) If the APVMA is not satisfied, as mentioned in subsection (3), the APVMA must give the interested person a written notice that:
(a) states that the relevant particulars have not been varied; and
(b) sets out the reasons why the relevant particulars have not been varied; and
(c) states that the interested person may apply to have the relevant particulars varied under Division 3 of this Part.
(10) Schedule 1, page 4, after proposed item 6G, insert:
6H Paragraph 28(1)(ba) of the Schedule
Repeal the paragraph.
(11) Schedule 1, page 4, after proposed item 6H, insert:
6J After subsection 28(1) of the Schedule
Insert:
(1A) If an application is made under this Division and an application has previously been made for the same variation under Division 2A, the APVMA must set off the fee paid for the previous application against the fee payable (if any) under paragraph (1)(d).
(12) Schedule 1, page 4, after proposed item 6J, insert:
6K Subparagraph 29(1)(h)(ii) of the Schedule
Repeal the subparagraph, substitute:
(ii) if the application was for a variation of the relevant particulars of the approval of a label—by recording in the relevant APVMA file the relevant particulars as varied and the date on which the record is made; or
(13) Schedule 1, page 4, after proposed item 6K, insert:
6L Subparagraph 34(5)(a)(ii) of the Schedule
Repeal the subparagraph, substitute:
(ii) if the variation relates to the relevant particulars of the approval of a label—by recording in the relevant APVMA file the relevant particulars as varied and the date on which the record is made; or
6M Subsection 34(5A) of the Schedule
Repeal the subsection, substitute:
(5A) The APVMA may only vary a condition of the approval of a label that was imposed under subsection 23A(2).
(14) Schedule 1, page 4, after proposed item 6M, insert:
6N Paragraph 34A(3)(a) of the Schedule
Repeal the paragraph, substitute:
(a) both:
(i) vary the relevant particulars; and
(ii) record in the relevant APVMA file the relevant particulars as varied and the date on which the record is made; and
6P Subsection 34A(4) of the Schedule
Repeal the subsection.
(15) Schedule 1, page 4, after proposed item 6P, insert:
6Q Paragraph 40(2)(b) of the Schedule
Repeal the paragraph, substitute:
(b) the interested person does not satisfy the APVMA that a label, including the particulars as proposed to be varied by the APVMA, will be attached to the containers for the chemical product;
(16) Schedule 1, page 4, after proposed item 6Q, insert:
6R Paragraph 41(4)(b) of the Schedule
Repeal the paragraph, substitute:
(b) the interested person does not satisfy the APVMA that a label, including the particulars as proposed to be varied by the APVMA, will be attached to the containers for the chemical product;
(17) Schedule 1, page 4, after proposed item 6R, insert:
6S Paragraph 47(5)(a) of the Schedule
Repeal the paragraph, substitute:
(a) any condition of a kind referred to in:
(i) subsection 23(3) to which an approval or registration is subject; or
(ii) subsection 23A(4) to which an approval of a label for containers for a chemical product is subject; and
(18) Schedule 1, page 4, after proposed item 6S, insert:
6T Paragraph 81(1)(a) of the Schedule
Repeal the paragraph, substitute:
(a) the label attached to the container:
(i) states the relevant particulars; and
(ii) does not contain information that is contrary to the relevant particulars; or
6U Subsection 81(2) of the Schedule
Omit “that the label attached to the container was not identical to an approved label for the container for the product”, substitute “that the label attached to the container:
(a) did not state the relevant particulars; or
(b) contained information contrary to the relevant particulars”.
6V Paragraph 81(3)(a) of the Schedule
Repeal the paragraph, substitute:
(a) the label attached to the container states the relevant particulars that were required to be stated on a label (the earlier approved label) that was an approved label for containers for the product at a time before the supply takes place; and
(19) Schedule 1, page 4, after proposed item 6V, insert:
6W Section 86 of the Schedule
Repeal the section, substitute:
86 Labels not to be detached etc.
(1) A person commits an offence if:
(a) either:
(i) a label attached to a container of a chemical product contains any relevant particular identical to any relevant particular contained on an approved label for containers for the product; or
(ii) a label attached to a container of a chemical product contains any relevant particular identical to any matter required by an established standard for the product to be included on a label for containers for the product; and
(b) the person:
(i) detaches or otherwise removes the label; or
(ii) alters, defaces, obliterates or destroys the relevant particular; or
(iii) attaches another label to, or endorses anything upon, the container that in either case has the effect of expressly or impliedly negating, varying, or in any way detracting from, qualifying or minimising the purport or effect of, the relevant particular.
Penalty: 300 penalty units.
(2) A person commits an offence if:
(a) either:
(i) a label attached to a container of a chemical product contains any relevant particular identical to any relevant particular contained on an approved label for containers for the product; or
(ii) a label attached to a container of a chemical product contains any relevant particular identical to any matter required by an established standard for the product to be included on a label for containers for the product; and
(b) the person causes or permits:
(i) the label to be detached or otherwise removed; or
(ii) the relevant particular contained on the label to be altered, defaced, obliterated or destroyed; or
(iii) another label to be attached to the container that has the effect of expressly or impliedly negating, varying, or in any way detracting from, qualifying or minimising the purport or effect of, the relevant particular; or
(iv) anything to be endorsed upon the container that has the effect of expressly or impliedly negating, varying, or in any way detracting from, qualifying or minimising the purport or effect of, the relevant particular.
Penalty: 300 penalty units.
(3) Subparagraphs (1)(b)(ii) and (2)(b)(ii) do not apply to an alteration, defacing, obliteration or destruction of a relevant particular that is done by the destruction or disposal of the chemical product without otherwise contravening this Code.
(4) Subsections (1) and (2) do not apply if the person has a reasonable excuse.
Note: The defendant bears an evidential burden in relation to the matter in subsection (4). See subsection 13.3(3) of the Criminal Code.
(20) Schedule 1, page 4, after proposed item 6W, insert:
6X Paragraph 103(1)(a) of the Schedule
Omit “kept in, or in conjunction with, the relevant APVMA file in relation to the product”, substitute “for the product”.
6Y Paragraph 103(2)(c) of the Schedule
Omit “kept in, or in conjunction with, the relevant APVMA file”, substitute “for the product”.
(21) Schedule 1, page 4, after proposed item 6Y, insert:
6Z Section 158 of the Schedule
Repeal the section.
(22) Schedule 1, page 4 (after line 13), after item 7, insert:
7A After paragraph 167(1)(b) of the Schedule
Insert:
(baa) a decision under section 26A to refuse to vary:
(i) relevant particulars of the approval of an active constituent for a proposed or existing chemical product; or
(ii) relevant particulars of the registration of a chemical product; or
(iii) relevant particulars of the approval of a label for containers for a chemical product;
(23) Schedule 1, page 4 (after line 13), after proposed item 7A, insert:
7B Labels approved under existing law
(1) If a label was, immediately before commencement, an approved label within the meaning of the old law, then:
(a) the label is taken, from commencement, to be an approved label within the meaning of the new law; and
(b) any particulars determined under paragraph 21(2)(c) of the old law are taken, from commencement, to be recorded on the relevant APVMA file; and
(c) any condition on the approval of the label imposed under section 23 of the old law is taken, from commencement, to be a condition imposed on the approval of the label under subsection 23A(2) of the new law; and
(d) any condition prescribed by regulations made under paragraph 23A(1)(a) of the new law is taken to be a condition imposed on the approval of the label.
(2) In this item:
commencement means the day this item commences.
new law means the Agricultural and Veterinary Chemicals Code Act 1994, as in force immediately after commencement.
old law means the Agricultural and Veterinary Chemicals Code Act 1994, as in force immediately before commencement.
(24) Schedule 1, item 8, page 4 (after line 19), after paragraph (1)(a), insert:
(aa) an application for variation of the relevant particulars of the approval for a label for containers for a chemical product under section 26A of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994, as inserted by this Schedule, that is made on or after the day this item commences; and
(25) Schedule 1, item 8, page 4 (line 27), after “the Agricultural and Veterinary Chemicals Code Act 1994”, insert “, as amended by this Schedule,”.
(26) Schedule 1, item 8, page 5 (line 10), after “the Agricultural and Veterinary Chemicals Code Act 1994”, insert “, as amended by this Schedule,”.
(27) Schedule 1, item 8, page 5 (line 17), omit “3 to 7”, substitute “3, 4, 5, 6 and 7”.
(28) Schedule 1, item 8, page 5 (after line 19), after subitem (2), insert:
(2A) The amendments made by items 4A, 5A, 6B, 6C, 6D, 6E, 6F, 6H, 6K, 6L, 6M, 6N, 6P, 6Q, 6R, 6S, 6T, 6U, 6V, 6W, 6X, 6Y, 6Z and 7B of this Schedule apply in relation to:
(a) an application for approval of a label for containers for a chemical product under section 10 of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994 that is made on or after the day this item commences; and
(b) an application for variation of the relevant particulars of the approval for a label for containers for a chemical product under section 26A of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994, as inserted by this Schedule, that is made on or after the day this item commences; and
(c) an application for variation of the relevant particulars or conditions of the approval for a label for containers for a chemical product under section 27 of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994 that is made on or after the day this item commences; and
(d) a reconsideration of the approval of a label for containers for a chemical product under section 34 of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994, as amended by this Schedule, if:
(i) the APVMA has published a notice in respect of the label for containers for the chemical product under subsection 32(1) of the Schedule to that Act before, on or after the day this item commences; or
(ii) the APVMA had given written notice in respect of the label for containers for the chemical product under subsection 32(2) of the Schedule to that Act to an interested person or an approved person before the day this item commences and, on the day this item commences, the period stated in the notice has not expired; or
(iii) the APVMA gives written notice in respect of the label for containers for the chemical product under subsection 32(2) of the Schedule to that Act to an interested person or an approved person on or after the day this item commences; and
(e) a reconsideration of the approval of a label for containers for a chemical product under section 34A of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994, as amended by this Schedule, that begins on or after the day this item commences; and
(f) a standard for a chemical product that is submitted to the Minister for approval under section 56D of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994 on or after the day this item commences.
(2B) The amendments made by items 5B, 6A, 6G, 6J and 7A of this Schedule apply in respect of an application for a variation that is made on or after the day this item commences.
(29) Schedule 1, item 8, page 5 (line 24), at the end of the definition of approved person in subitem (3), add “, as amended by this Schedule”.
(30) Schedule 1, page 8, page 5 (line 36), at the end of the definition of relevant particulars in subitem (3), add “, as amended by this Schedule”.
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.
Debate resumed from 26 May, on motion by Mr Burke:
That this bill be now read a second time.
Before I was interrupted I was focusing on the areas in my electorate that had missed out on a good season and who, unfortunately, had their EC cancelled in March following a visit from the National Rural Advisory Council during November. I pointed out that NRAC visited the upper north cropping district in the first week in November and in the second week of November we were hit with a record heatwave. The crops that looked so good had many of their yields halved. There was a late change to the season after the assessment had been made.
On Eyre Peninsula around the Cowell, Cleve, Arno Bay and Ceduna areas, they simply missed out on a good season. The EC declaration was cancelled on the strength that the greater area—in the case of Cowell, Cleve and Arno Bay; that is the central Eyre region—had a good season. The centres of Kimba, Wudinna and Elliston had excellent seasons. It was taken on the balance. About one-quarter of the farmers missed out in those areas that I have already pointed out.
For the western region, it was pretty much the same. It was a great season, except if you happened to live just to the north of Ceduna. Indeed, about 20 farmers there, or a few more, experienced a very poor season. Once again, the area was judged on the balance. Those farmers have not exited the drought. They are still well and truly dealing with the effect of it.
With that in mind, I met with the relevant task force. We decided to approach Minister Burke. They came to Canberra and I accompanied them. Minister Burke encouraged the regions to reapply for EC support and to go back through the state minister. So we went back to South Australia and with the support of PIRSA a new application was lodged. I must congratulate the new minister for agriculture in South Australia, Michael O’Brien. He approved the application and it was sent to Minister Burke’s office. Following his commitment to make this process as speedy as possible, it was forwarded to NRAC.
I must say that NRAC have now had that submission for almost two months. I am continually contacted by people under stress within my region wondering how the process is going. I urge them to put their foot on the pedal and make a decision. The stress of the people contacting my office is quite concerning. I have visited a number of the people involved. To watch people lose this lifelong investment and see the pressures that their families are being put under is quite disturbing.
Exceptional circumstances has two components. Those two components are the interest rate subsidy and household support. Almost surprisingly, the household support seems to be the one that is most keenly missed. That is the one that puts food on the table. That is an indication of how difficult the circumstances are for some of these people. In many cases, farmers are just trying to hang on long enough to sell their farms to qualify for exit grants. The exit grants are another difficulty with the current EC package, in that if a mortgage is foreclosed on it is too late to apply for an exit grant. You must have made the decision to leave of your own free will before that day. What happens is that, once people reach this unfortunate position, they put their properties or portions of their properties on the market. But that does not mean to say that they will sell. For the time they are not selling, the debts just keep accumulating. Eventually, if they do not sell quickly enough, the debts reach that trigger point when the banks will move in on them and issue a foreclosure. Then they have no chance to qualify for the exit grant.
As I said, some people are under terrible stress, watching their lifetime’s work and the future of their children go down the drain. As I have said previously, the process of winding down EC across Australia can be supported if other appropriate arrangements are in place. That is what this bill is leading to. I believe that at the moment it as if these people have been taken three-quarters of the way across the desert and left without a horse or a waterbag and expected to make the rest of the distance. The drought has not ended. They are still clearly in the same drought that they were in last year, the year before and the year before that.
To return to the legislation and the trial in Western Australia, it will include farm family support, farm social support, grants of up to $60,000 for building farm businesses, farm planning support, support for stronger rural communities, a farm exit package up to $170,000 and a new measure to put current farmers in touch with former farmers to work through some of the opportunities outside farming.
In an overall sense, this is an admirable range of options—it is just a case of whether or not it will actually make the difference it needs to. I support it in so much as it focuses on trying to build better businesses and better business models and I think that is a good move. Will it meet the demands of the next exceptional drought? I would have to say probably not because, once again, when governments are faced—as almost inevitably they will be, in these kinds of circumstances—with large-scale business failure there will be calls for them to intervene. I am not sure this is going to foot the bill, but it is certainly worth a try. Hopefully, it will promote better and stronger businesses, more aware of their financial position and able to manage the increasingly complex business of farming. Farming involves a good knowledge of electronics, soil analysis, marketing, finance and staff management—just to name a few.
I must say as an ex-farmer it is a fantastic job. It has the wide responsibilities and challenges of a large corporation but is still, largely, a hands-on occupation. And you are rewarded—the smarter you work, the more you are likely to earn. I have enjoyed the challenge of farming. It is a fantastic job. But we farmers can be our worst enemies, in fact—from time to time talking down the industry and discouraging those that may join it. Family members are sometimes actively discouraged from farming. Our agricultural training courses are well undersubscribed, and we struggle to attract the top students. Farmers should be proud of what they do and they should be, in an overall sense, optimistic about their future, because we know that there is going to be not only a continuing demand for agricultural products but also an escalating demand. That is why I support anything that supports farmers to become better at the job. The future of farming in Australia hinges around profitability, adaptability and innovation.
I have raised before, in this place, the continual decline of government support for agricultural research. We expect to have eight to nine billion people in the world by 2050 and 11 billion by 2060. Surely, the greatest moral issue of the generation will be how the world will feed this number. Widespread famine is more than just personal tragedy—and it certainly is a terrible personal tragedy—it is a world security issue. The planet will need to double food production. At the same time, we expect to lose 30 per cent of our arable lands. Those who believe agriculture is a sunset industry are wrong. They have to be wrong, because if agriculture is not a new horizon then all else will fail.
Five million dollars of research funding was cut from the Department of Agriculture, Fisheries and Forestry’s budget last year and, in my state of South Australia, the South Australian Research and Development Institute can expect no more than standstill budgets in the foreseeable future. Investment in research and development is the backbone of the agricultural industry but has been diminishing in real terms for the past 25 years. Climate change, the pressures of international trade, the rising cost of doing business in the Australian economy, the likely rises in inputs and the weakness of the American dollar—which will continue to reduce our competitiveness—all present real challenges for the industry. Periodic drought, pestilence and market collapse inevitably will occur. A profitable agriculture sector is the best chance we have of avoiding periodic requests for assistance. Australia must have a commitment to the world and our own nation to ensure that industries are equipped to meet those challenges, and the best way of doing this is to provide the scientific horsepower to drive adaption and adoption of new technologies.
In some areas we are restricted by cheap politics. In South Australia we are held hostage to the green left, who have opposed any advances in technological agriculture as being somehow bad for the general public. Any new technology promoted by a multinational automatically becomes bad. Where else are we going to find money to develop new technology that costs millions of dollars per product except from major multinationals? Some of these people who feel they have the environment in their best interests are driven by this idyllic view of agriculture a hundred years ago—that, somehow, it was better for the environment than today’s agriculture. That is an unfortunate consequence of the urbanisation of the nation, as city dwellers disconnect from rural activities. There was a time in Australian cities when virtually everybody’s father, uncles or cousins resided on farms and people would travel out from the cities for their summer holidays and have some contact with and some understanding of how food is produced. That is becoming increasingly rare, and children tend to think that milk comes from packets and meat comes from the supermarket. That disconnect is a real threat to agriculture in so much as people do not understand what farmers do, how they do it and how it needs to be done. Those who would inhibit the use of new technologies have a charming view of agriculture and farming—but, if we were to adopt their views, millions of people around the world would starve. One hundred years ago, for instance, our topsoil was washing away and blowing away. Modern farming has made farming in Australia environmentally sustainable—and the technology has made it so.
The influence of the Greens scare campaigns means there are still bans in South Australia on growing GM product, when the rest of the nation has moved on. Indeed, the rest of the world is moving on. We will soon see widespread adoption of these technologies in China and other parts of Asia and we all well know that increasingly—and sometimes disturbingly—an increasing part of our food profile is actually coming from these nations. Genetic modification offers lower chemical use, varieties which will grow on and rehabilitate degraded lands and drought tolerance, and certainly in the future there will be health benefits. Blanket bans are nonsensical. Every product should be assessed product by product, just like any other new product in any market. If there is a new chemical on the market we assess the new chemical—we do not just say all chemicals are good or all chemicals are bad. I urge those that have control over the licensing of GM product in South Australia to get on with the job.
To return to the legislation and this limited trial in Western Australia, I think it is well worth a go. I am not fully convinced it will meet the challenges of the next extended drought in Australia, but there is nothing in this package which is harmful and it may well help—it should help—build better sustainable businesses and farming businesses.
Before I begin I would like to acknowledge the traditional owners of the land upon which we meet. I also wish to acknowledge the traditional owners of the land that we call northern Tasmania. I respect elders both past and present, together with their continuing culture and traditions. On 20 February 2008 when I gave my inaugural speech I advised the House that it was indeed both an honour and a privilege for me to wear traditional shell necklaces hand made by Dulcie and Lola Greeno. I am extremely proud to again wear a traditional shell necklace hand made by Dulcie Greeno and to bring Tasmanian Aboriginal culture into this chamber. I am inspired by women like Dulcie Greeno, who continue to be a fountain of virtue and optimism for our society. Dulcie is a woman who understands that a nation that is fully reconciled to its past is one that can go forward with confidence to embrace its future.
The Australian parliament under Prime Minister Rudd’s leadership, together with Minister Macklin, made the formal apology in parliament on 13 February 2008, which will be remembered as a proud day in this nation’s history when, as a nation, we declared that we are ‘sorry’. The word ‘sorry’ holds special meaning in Aboriginal and Torres Strait Islander culture. In many Aboriginal communities, sorry is an adapted English word used to describe the rituals surrounding death. Sorry in these contexts is also often used to express empathy or sympathy rather than responsibility. Simply saying that you are sorry is a powerful symbol. It is powerful not because it represents some expiation of guilt or any form of legal requirement but simply because it restores respect.
On 24 November 2007 it became evident that the people of Bass were indeed an excellent barometer for the mood of the country. On that day the people of Bass, like the people of the nation, determined to forge a new future for our country and our local communities. In doing so, the people of Bass demonstrated their decency, their belief in the ‘fair go’ not just for themselves but for all Australians. I was elected to this place at a monumental time within Australian politics. The ‘Your Rights at Work’ campaign was the most successful union and community campaign in Australian election history. It began when the former Howard government announced sweeping changes to workplace laws that would strip away basic rights at work, including penalty rates, overtime and unfair dismissal protection. As thousands of Australians, including many young workers, began feeling the impact of Work Choices, the campaign grew rapidly into a broad based movement for a fair go. Australians were adamant that they wanted to uphold the Australian way of life and its values that working people hold so dear—a fair day’s work for a fair day’s pay. ‘Your Rights at Work’ was instrumental in the downfall of the Liberal and National Howard government. ‘Your Rights at Work’ was instrumental in getting me elected to this place. I have no doubt that in decades to come, and when my children’s children look back at Australian political history, historians will refer to the 2007 election as the ‘Rights at Work’ election, an election and a platform that I am so honoured and proud to have been a part of.
I acknowledge the brilliant work of the Deputy Prime Minister, Julia Gillard. I put on the record my sincere thanks and gratitude to all the union members, to all the working families and to all the workers within my electorate that I had the privilege of meeting and who stood up for the rights of future generations on that November day in 2007. You have a place in my heart forever and you have again instilled in me the principles to fight for what you believe and to never, ever give up.
Those principles are what gave me the determination to fight for the entitlements of the employees in Launceston who were made redundant when Ansett Australia collapsed back in 2001. Let us not forget 400 employees in Launceston, let alone the 16,000 employees across the country. I was part of a collective team who worked solidly for many, many months with the hope of securing what was rightfully due and owing to those employees. On 14 September 2001, the day of the Ansett collapse, employees were entitled to all wages, accrued annual leave, long service leave and redundancy entitlements that had not been paid under the Special Employee Entitlements Scheme for Ansett employees, otherwise known as SEESA. As of 31 March 2010, the scheme has made payments totalling $383.7 million to all of the 13,072 eligible former Ansett employees. This really is fantastic news, as it means that former Ansett employees have now received 100 per cent of the SEESA payments that they were entitled to. Those principles have been with me in this role as the federal member for Bass. Being the 13th member to hold this seat, I feel extremely privileged and incredibly humbled to have been given this opportunity to serve the people of Bass and to represent them and participate in decision making at the highest level of democracy within our country.
When I was elected to this role I wanted to achieve real outcomes for people in areas that mattered. Two of those outcomes hold special significance. The first one involved a local woman, Jo Ryan, and concerned her son, Ben, who has a condition known as fragile X syndrome. Jo came to me as one determined mum, asking for help for funding a weekend respite program so that she could get some much-needed rest and, equally importantly, Ben could attend the weekend program, have a certain degree of independence and socialise with his peers. I will always remember Jo’s words to me that she had worked so hard and put so much time in with Ben that she was not about to let it go to waste. I could see the look of sheer desperation, but I could also see the look of anger in her eyes. For a long while Jo had really been beating her head up against a brick wall without any success at all. After discussions with the Parliamentary Secretary for Disabilities and Children’s Services, Bill Shorten, funding was received for a weekend respite program, which has made such a positive difference not only to the lives of Jo and Ben but to the lives of many other carers and clients who use the service. Funding for the Youth Break program is due to finish in mid-2011 and I would encourage whoever forms the next government to commit to extending the funding for this vital and necessary program.
I am extremely proud of the work that was completed by the Standing Committee on Family, Community, Housing and Youth, in particular the inquiry Who cares … ?: Report on the inquiry into better support for carers. I would like to acknowledge the leadership of my colleague and chair of the committee, Annette Ellis, together with the deputy chair, Judi Moylan. During this inquiry it was incredibly important to hear from the various organisations about their views and strategies in which government could play a role, but it was the evidence from the carers themselves that was just so heartfelt. The committee heard evidence from 1,300 carers across the country, who shared their personal and often distressing experiences with the committee. Often committee members were reduced to tears, having heard about and been faced with the reality of what life for a carer in our society actually means—their real life stories of becoming socially isolated from their peers, disconnected from mainstream employment and themselves suffering greater adverse health outcomes than the general population. Becoming a carer is not a choice. Some people feel that they are thrust into the role without warning. For others, becoming a carer is a more gradual process, though ultimately, equally devastating.
The committee heard loud and clear from carers that they wanted choices—choices for themselves, choices for the people they care for and choices for their families. That is why the announcement made on 23 November last year by Prime Minister Rudd at the National Disability Awards was just so important. The Productivity Commission inquiry into the national disability care and support scheme will seek to clarify what support carers and people with disabilities are entitled to receive. I am proud to be part of a government that takes the role of carers and also people living with a disability seriously. To that end, I would like to acknowledge the work of Minister Macklin, together with the incredible work that the Parliamentary Secretary for Disabilities and Children’s Services, Bill Shorten, has done by highlighting the dilemma of people with disabilities and their carers.
The other story began with a telephone call that I received from Angela Sheehan, Ward Clerk at the renal unit of the Launceston General Hospital. I could feel the desperation in Angela’s voice as she explained to me that the renal unit, in its then current form, was at full capacity. They needed some assistance and they needed it now. I met with Rose Mace, the Nursing Unit Manager at the LGH, who for many years had been fighting for a new renal satellite unit. Space was so rare at the renal unit that nurses would see patients in Rose’s office, and chronic and well patients were dialysing side by side in an environment that was just totally unsuitable. At times, patients had to cut back on one of their treatments because space was so limited. I worked with Rose and her dedicated team and also with the most amazing people, the patients at the renal unit. Jill Dewis, Robert Wilkinson and Wilma George whom I have the utmost respect for, taught me a great deal when it comes to life on dialysis.
This process took time and I would like to thank the minister for health, Nicola Roxon, together with the Prime Minister, not only for the $15 million but for their genuine interest when it comes to the patients who rely on that technology. I am pleased to say that on 28 January this year I jointly opened stage 1 of the integrated care centre, which is the renal satellite unit. For people like Jill Dewis, Robert Wilkinson and Wilma George who, as I have already said, taught me so much, this renal unit gives them the dignity to access what is a routine procedure in their life outside the hospital environment. As I said earlier, these are two stories that I share with you today; however, there have certainly been many, many more.
I believe the Rudd Labor government has a proud record when it comes to delivering real outcomes for the people of Bass. In health—where in the first instance it was the Whitlam-Barnard Labor government who initially invested in our local hospital, the Launceston General—we see yet again a Labor government investing to the tune of $40 million to create an acute medical and surgical services unit. Again I thank Minister Roxon for her patience—no pun intended of course—for always taking my calls and for seeing me on those early Thursday mornings in her office where we had many constructive conversations.
In education, as I have experienced while attending the opening of the Launceston Church Grammar School junior school library and resource centre and inspecting the construction of the Ravenswood Primary School community hall, the school communities in the Bass electorate have been overwhelmed and so appreciative of the funding that they have received under Building the Education Revolution, which has enabled them to begin their capital works program much earlier than they would ever have expected. The government is connecting the people of Bass to the rest of the world by investing in a National Broadband Network. We will see the community of Scottsdale become one of the first three towns in the country to be connected as early as next month under the Rudd Labor government’s National Broadband Network initiative.
I am proud that, for the first time in Australian history, women on low incomes will have access to paid parental leave, giving them greater financial security when planning to begin a family. I would like to acknowledge the commitment and hard work of Sharan Burrow, President of the ACTU, together with Jennie George who have worked with many others to achieve this incredible result.
I am also proud to be part of a government that has delivered the most significant reforms in the 100-year history of the pension system. Because of this government, these historic reforms delivered for more than 17,000 pensioners in Bass increases of up to $100 per fortnight for singles and up to $74 per fortnight for couples combined.
As I reflect on my time here I am further convinced of the importance of the work that is done in this place. It is important because the people of Bass are important, the people in Tasmania, Australia and indeed our global village are important. International trade, global financial markets and high-speed technologies have connected individuals and communities beyond the borders of their countries. There is a growing awareness with the realisation that individuals, communities, corporations and countries have obligations to one another that are global in reach. In a world with much, it must continuously shock and disturb us that so many have so little. The fact is that we need to engineer opportunities for those who are economically underprivileged.
The Millennium Development Goals paint a vision of a better world—a world where poverty is halved by the year 2015. I am proud to be part of a government that prioritises the poor and the Millennium Development Goals. This year’s federal budget saw an increase of $530 million in overseas aid and I look forward with anticipation to when our aid budget reaches 0.7 per cent, which will effectively result in 220,000 lives being saved every year.
The young people of Bass have been particularly inspiring concerning the MDGs. A young student from Launceston College, Laura Sykes, has recently lobbied the Launceston City Council to become a fair-trade-certified council and succeeded. Young people understand the global injustices, question our belief in equality and justice and are active in raising a voice for those that have no voice. In doing so, the people of Bass demonstrate their decency and their belief in the fair go, not just for themselves as Australians but indeed for themselves as global citizens.
Together with my colleagues it has always been my intention to make a difference. I chose the Labor movement because of what it represents—a movement that has always sought to act with a moral seriousness, a commitment to social justice and an ideology that is on par with my principles and beliefs. It has been my intention from day one to bring to the team all my energy, patience, skill and compassion, and I believe I have done this. I am extremely pleased that the Labor Party in Bass has a strong and dedicated candidate in Geoff Lyons. Geoff brings to this role a commitment to his community that is second to none, holding 34 voluntary positions on committees. Geoff has my total support and will be an effective and dedicated federal member for Bass who represents the interests of his constituents.
Of course, there are people I dearly wish to thank. To the people of Bass, a hard-working and resilient community, I thank you again for allowing me the opportunity to represent you in federal parliament. To my parliamentary colleagues who have given me much support and encouragement, I say thank you. I have forged some great friendships and value them greatly. I also value the great working relationships I have had with political staffers. Thank you to my ALP colleagues in my home state of Tasmania, together with party members who work so incredibly hard from election to election. With Senator Helen Polley, duty Senator for Bass, and with her staff, my office has enjoyed a great working relationship. To Karl Bitar I want to put on the record my sincere thanks for his advice and support. To those on the opposite side of the chamber, clearly our political views differ. However, I believe we have the same determination, which is to make a difference to the lives of others.
To the most wonderful staff here at Parliament House—the attendants, security and, may I say, the Comcar drivers who keep us all incredibly sane and safe, and to my dear friend Patti Wilkins for giving me a truly wonderful home to return to after a busy day here in parliament—just amazing—I say thank you. To Anne Marie Wilcock, thank you for your friendship and allowing me, at times, to vent my frustrations and feelings. To my staff—and some are here this afternoon—to Gemma, Ben, Lauren, Gordon, Steph, Michelle and Terri, an amazing team for whom I have a tremendous amount of respect, a group of people who have shown me such loyalty and trust, I thank you all for always working so incredibly hard in helping the constituents who walked through our door. In particular, I would like to thank you, Gemma, as you have been with me right from the beginning of this journey.
To the most gorgeous Emma Brindley, who is also here today—who would have thought when I gave my inaugural speech in this House that you would be sitting in the chamber listening. We were indeed strangers at that point. However, as events unfolded, you moved from Sydney to Launceston to lead the team in the Bass office. You became someone in whom I could confide and whom I could trust and whose loyalty I so appreciate. You were able to make people see things a whole lot clearer than I ever could, and that certainly was not from a lack of trying on my part. For that, Emma, I thank you. You are now back in Sydney with your fiance, Tim, and whilst you are clearly now not working for me, what I do have is a lifelong friend in you.
To my offshore advisers, Margaret and Terry Brindley, and of course the lovely Nanny Flo, thank you for your kindness, friendship, wise counsel and, may I say, humour. To my dear friends Sophie, Matt and Ava, Steph, Ben, Oliver, Xavier and Indigo, Genevieve, Steve and Felix, Maxine, George, Pippa and Hugh, Fiona, Peter, Shanelle and Samara, Jake, Michael, Joy, Darlene, Graham, Alyssa, Holly and Sophie, thank you all for your friendship and for always being there for the girls and for me.
This position has made me realise the importance of family. To my sisters: at times you yourselves were, I am sure, under scrutiny because of my position. I thank you for your patience.
My mother passed away only recently. I have learnt in recent times that I certainly have my mother’s passion for music together with, at times, her feistiness and resilience. As my sister said at her funeral, she was most proud of a photo that had pride of place in her home—a picture of her, me and the Prime Minister. She was a nan whom both of my girls adored.
To my dearest Alex: you have always had this amazing ability to put light and colour into my life. We have always been able to make one another smile; however, it took us a little while to realise this. I have the utmost respect for the work that you choose, which is to improve the lives of people living with a disability. You most certainly make an incredible difference. I thank you for all of your support, for being there and for showing me an incredible part of our island, Arthur River.
Of course then there are my two beautiful and clever daughters: Sommer and Izabella. You have both travelled this political journey with me—from the campaign trail wearing orange T-shirts and handing out balloons to sitting through your first question time, when you were both very disappointed that you were not able to wear your Kevin 07 T-shirts. It was to my amusement when Sommer told me after question time that she thought everyone was acting like monkeys. Well, I could hardly argue with that. I am looking forward to spending more time with you both and enjoying the simple things in life that we enjoy together.
I would like to take this opportunity also to thank the many people across this country, together with my parliamentary colleagues, for the support I received last year. It was absolutely overwhelming. I must say a special thank you to Roger Price, who not only gave me a great deal of support but gave support to my staff. I would like to thank and acknowledge Corri McKenzie and Fiona Sugden from the Prime Minister’s office, together with Andrew Harris.
The most difficult thing that I have gone through being a member of parliament is having my private life become a public affair. I certainly understand that there is a need to look at court processes; however, I do believe that there needs to be a reporting environment that draws the balance between reporting information that is relevant and having the journalistic integrity so as not to add to the burden.
I have always been a person who has been able to advocate for myself. Now, after going through that period of time in my life, I most certainly understand and relate to women who have been on a similar journey. It is so incredibly important that women are able to access legal services and to have the support they need and that processes are explained to them clearly and precisely.
I am pleased that, in the 2010-11 budget, $154 million has been allocated over four years to enhance access to justice to legal aid commissions, community legal centres and Indigenous legal services. This will provide support for women who require legal assistance to deal with domestic violence. I am also aware that the government is in the final stages of the development of a national plan to reduce violence against women, and I await that report with anticipation. To that end, I would like to acknowledge the work of Minister Plibersek in her role as the Minister for the Status of Women. I would like to personally thank her for her support.
Again I say that I have been extremely humbled to represent the Bass community. I have learnt much from my time here in this House, knowledge that I will take away with me on my next journey. I leave this role knowing that I have achieved a great deal for my community in a short period of time and of that I am extremely proud. I have no doubt in my mind that Bass will always be best served under a Labor government. I will continue to advocate for the party and its principles that brought me to this place.
As the attendant of this monkey cage, I wish the member for Bass every happiness in her future endeavours. May she enjoy her time with her delightful daughters and, well into the future—without wanting to age her too quickly—her children’s children, whose hopes and aspirations she spoke of today.
Before I call the member for Throsby, I understand it is the wish of the House that there be no points of order taken during her speech.
A few weeks ago I sat on the stage at Sydney Town Hall with other stalwarts of the union and women’s movement lending our support to the ASU test case for pay equity. It was an inspiring event. Just last week we all celebrated the introduction of Australia’s first paid parental leave scheme. Historic breakthroughs such as these occur when both parts of the labour movement work together on agreed outcomes. Labor in government has the capacity to deliver legislative changes unencumbered by the limitations of industrial campaigning. Providing access to superannuation for all was a grand Labor achievement. It began with the creation of industrial funds and then flowed through to all working people by the legislative reforms of the Hawke-Keating government.
In making this last speech in parliament I realise how fortunate I have been over the last four decades of public life to have had the opportunities both in the union movement and, since 2001, in parliament as the member for Throsby. All who have served in the federal parliament are indeed privileged to have earned the public trust of their constituents. In early 2002, I took my place in this House as the 981st elected member of the House of Representatives. But only 56 female MPs were elected before me, the majority of them from the eighties onwards, and what a difference they have made to this House.
But who could have imagined that the daughter of parents who came to Australia as refugees under the UNHCR program would one day be making a farewell speech in this chamber. But my story is not atypical. Our national identity today has been shaped by people who have come to Australia from many lands and in many circumstances. They have helped build our economic fortunes and our cultural diversity and made a great contribution, as we know, in so many walks of life. The politics of fear and prejudice undermine the very best of the values that we take pride in: our belief in a fair go and the generosity and compassion that Australians display in so many ways every day.
Australia has a reputation as a land of opportunity. The industrial and welfare safety nets are an important part of our postwar development. I would like to think that in hard times we continue to extend a hand to those in need and that we will continue to redress the multiple disadvantages of Indigenous Australians. We say as Australians we believe in the principle of equality of opportunity, but translating that into practice needs recognition that material circumstances and family background are important determinants in the outcomes that are achieved. A good education is a key factor in breaking down the barriers that limit an individual’s aspirations and achievements. It certainly was for me.
Demography should not define destiny—a strongly held view that I share with our Minister for Education. The public education system gave me the solid foundations for later achievements. That is why I remain a strong supporter and advocate for public education. It is in that system that the life chances of almost 70 per cent of our students will be defined. That is why I will continue to argue that the primary obligation of governments, at all levels, is to ensure a quality public education system. The effects of disadvantage on student achievement can and are constantly overcome. The inspiration of individual teachers that we all remember cannot be underestimated. But funding levels, resourcing, staffing and facilities do matter and our government has already made a substantial investment in the educational reform agenda with lots more to come.
The school funding review recently announced by the minister gives us all the opportunity to replace the flawed SES system with one that is based on genuine need. I am also very heartened by the goal we have set of 20 per cent of all university enrolments to be filled by low-SES students by 2020. I have spoken about this issue on several occasions in the House, concerned that the Throsby electorate is ranked at a low 133 out of the 150 electorates on the measure of participation rates in higher education. The Bradley review confirmed that we do not still today provide equal access to all. A student from a high socioeconomic background is still three times more likely to attend a university than one from a low-SES background. I will be watching with great anticipation and with great interest the outcomes of these reforms.
My time as the member for Throsby has been challenging and rewarding. It is a great community to represent in the parliament. Working with people on the ground, listening and dealing with their concerns, being their advocate in this place, helping to find local solutions and defining the policy and resource responses required from government is a challenging job that confronts us all. I have enjoyed campaigning locally around issues like doctor shortages, dental health needs, unemployment, job creation, apprenticeships and skills training.
Youth unemployment in our region has been unacceptably high and in some suburbs intergenerational. Like all of you, we do want to make a difference and I focused particularly on that issue. In the Illawarra area our low school retention rate meant that lots of young kids from disadvantaged backgrounds and Indigenous children were falling through the cracks with bleak future prospects. With a grant from the former government for an apprenticeship coordinator and an expansion in pre-apprenticeship courses, our local apprenticeship committee, which I chaired, assisted over 400 young people in gaining an apprenticeship.
Our local solution to a local problem has now been mainstreamed by the government’s Apprentice Kickstart program. Raising incentives for businesses to take on young people has resulted in great outcomes locally and nationally. In the first three months of this year around 550 local young people were taken on and given a great start in their working life. Our local campaign was co-sponsored by the local paper, the Illawarra Mercury, and I thank them and Ian Nichols, working from the Illawarra Business Chamber, for their endeavours.
As a member of parliament I believe one of my key responsibilities is to convey the views of the electorate both in our caucus and in debate on legislation. Often I am representing the views and voice of people who have no clout at all in the political process. At other times I am representing the interests of major companies like BlueScope Steel, understanding their importance for our regional economy and the employment prospects for our young people and local families.
As well as being their voice in parliament I really welcome the opportunities to contribute to public policy work through the work of parliamentary committees. I have been a member of several committees whose reports have made a difference. The report Every picture tells a story led to a shake-up of the child support system and a revamp of family law. I enjoyed working on that committee, chaired by the indefatigable member for Riverina, and for several years serving as deputy chair on the environment committee to my friend, the member for Moore, Dr Mal Washer.
Our roles are now reversed but we continue a tradition on that committee, providing bipartisan reports which are substantial in scope and in content. Our recent report on the impact of climate change on the coastal zone followed on from the Sustainable cities report and the one on a sustainability charter. It is through opportunities like this that a lot of good work is done with people on the opposition benches and unlikely friendships can develop across the political divide.
I would like to place on record my thanks to all the staff who work in this building and to the secretariat staff who service the work of our committees. We need to recognise and strengthen the work of parliamentary committees and to that end I trust that our recent report from the Procedure Committee, tabled by the chair this week, and its recommendations will generate interest for future reform.
In this last term I have served as part of the federal Labor team in government. It certainly makes a difference to being in opposition, particularly so if you are representing as I do, a relatively safe Labor seat. The people that I represent understand the difference. By our actions we have shown that a federal Labor cares about the local community regardless of where it sits on the political pendulum. They see every day the benefits of over $400 million of investment in our community with the upgrading of school infrastructure and important community projects throughout all the suburbs of Throsby: the upgrade of local roads, the new GP superclinic, investing in cancer care, elective surgery and new beds, the re-opening of the Medicare office at Warrawong, and the list goes on. I never fail to promote these positive achievements locally to remind people what has been achieved in our first term of office at a time of great economic and financial challenge.
It is more than the bricks and the mortar; it is the local jobs that were sustained and new employment opportunities created. You can see the multiplier effect in operation on every building site that you visit throughout my electorate. Instead of unemployment rates almost double the national average in the Howard era, we are now closing the gap in the Illawarra and laying solid foundations for future prosperity.
Investment in social capital, which is not so visible, has been equally important. Early intervention programs like the HIPPY program, Indigenous disadvantage, homelessness, disability and respite care, and social housing, have all benefited from government investments. It has been humbling to see the work of our church and welfare agencies, community groups and organisations like Barnardos, Southern Youth and Family Services, the Aboriginal Corporation and Warrigal Employment. If anyone is deserving to have their work properly recompensed it is the workers, predominantly women, in the community sector.
The Illawarra has a proud working class history built on the traditions of coal mining and steel making. In looking to the future one of our major challenges is to ensure a more diversified economic base. In that regard our region is indebted to the key role played by the University of Wollongong under the guidance of Vice-Chancellor Gerard Sutton. The member for Cunningham and I have had a solid and productive relationship with both our university and the TAFE institute so ably led by Di Murray. Recent government investments, secured in competitive funding rounds, at our university will have profound, long-term benefits for the Illawarra.
The new SMART infrastructure facility that we have funded will have value way beyond Wollongong, so too the new processing and devices facility at the Institute for Innovative Materials, where our scientists will be able to manufacture their inventions in fields like medical bionics, solar cells and superconductors. And just in the last few weeks a $25 million investment in an exciting new project, Retrofitting for Resilient and Sustainable Buildings, will provide for a new six-star Green Star facility with research and teaching laboratories at the university and, very importantly, testing laboratories at the local Yallah TAFE. BlueScope Steel will provide the materials and the technical expertise. Indeed, a great collaborative venture.
We hope that the whole nation will benefit as we in the Illawarra develop new technologies to make buildings more energy efficient, helping in our transition to a more carbon constrained future. But to complete our vision there is a missing link—and I am glad the minister for infrastructure is with us this afternoon—the Maldon-Dombarton freight rail link. The local campaign to have this major piece of infrastructure completed has been ably led by my colleague the member for Cunningham, Sharon Bird. It will complement the state government investment in the port at Port Kembla. If the economics stack up at the end of the feasibility study, it will be a bonanza for the Illawarra and a great reward for Sharon’s persistence and vision.
On top of this the southern end of my electorate of Throsby is one of the first test sites for the rollout of broadband. This will position our region well to capitalise on the innovation and opportunities that will come with our national broadband project.
In concluding I want to acknowledge the many people who shared my journey over the past 40 years. So, to you all, a big collective thank you. Whatever I have achieved and done has always been with collective support and encouragement. To the union movement, and Bill Kelty in particular: thanks for the opportunities and the memories—who could ever forget the maritime dispute! And thanks to all of you who helped pave the way for my transition to this parliament.
I have always been, and will continue to be, a strong believer in the importance and benefits of a constructive engagement between the industrial and political wings of the labour movement. We saw the mutual benefits of the Your Rights at Work campaign—a brilliant campaign—and, of course, one of our proudest achievements, the dismantling of Work Choices. Communities across the nation will never forget the much despised Work Choices regime, which stripped away conditions like overtime and penalty rates and forced individuals onto insidious individual contracts of employment. Women will be the major beneficiaries of our new Fair Work system. That system has enshrined for them an annual minimum wage review; the right to request flexible working arrangements; a new, comparable wage fixing principle; new protections on the grounds of pregnancy and caring responsibilities; an effective award safety net; and a bargaining stream for the low paid—truly historic achievements. Just last week we had Australia’s first national paid parental leave scheme—an historical achievement, which only Labor in government could deliver.
I have had great support from the local unions affiliated to the South Coast Labour Council. Special thanks to Arthur Rorris, Andy Gillespie and Garry Keane, for their wise counsel and friendship over the years—and so, too, to Colin and Melissa Markham. Thanks to the community groups, local organisations and council representatives with whom I have worked and alongside whom I have campaigned for the benefit of our community, and to the local media on whom we rely to communicate the Labor message. Without loyal branch members and supporters and my campaign director Vicki King, no election campaign could have been successfully prosecuted.
And without our staff no MPs can do effective jobs for their communities; we all rely on them so much. Thank you, Idalina, Sarah, Michel and Danielle and current relief staff Annie, Wendy and Brian, for all your efforts over all these years.
To my colleague Sharon Bird, the member for Cunningham: it has been great working with you and sharing the highs, and the occasional lows, of political life. I know, in moving on, that the needs and aspirations of the Illawarra will be in safe and capable Labor hands.
I wish Stephen Jones, my successor as the Labor candidate for Throsby, all the best in the election.
He won’t fill your boots.
I am confident he will take his seat in this chamber alongside my colleagues, on the re-election of our government. Stephen will be in the fortunate position of building on the foundations of our first term in government—seeing those investments come to fruition and meeting future challenges, working together with the member or Cunningham. Last, but not least, to the residents of Throsby, who have made all this possible: thank you for your continuing support. It has indeed been a great privilege to represent a wonderful community.
I am looking forward to moving on. I think we all know when the time is right. I am not quite sure what retirement actually means in practice—other than knowing I will have lots more time for friendships, both new and longstanding, and time with Denis and mum. I remain forever grateful for the opportunities, experiences and memories in almost 40 years of public life, and the many fine people with whom I have shared that journey.
Hear, hear!
Order! I thank the member for Throsby for her friendship, her comradeship—especially as a colleague on the House environment committee in years past. Congratulations on your contribution to public life, both within this place and outside.
Before calling the member for Hume, I indicate to him that I am not sure it is the wish of the House that he is protected from points of order!
Mr Speaker, I had to take the opportunity to say hello and congratulate a fine individual and a good local member.
I rise to talk on the Farm Household Support Amendment (Ancillary Benefits) Bill 2010. I take this opportunity to compliment the minister for the decision he made on 5 May 2010 to carry out a trial of drought reform measures across 65 local government areas in rural Western Australia. The pilot will run from 1 July this year to 30 June of next year. The trial will not affect farmers currently receiving income support payments and interest rates subsidies under the old exceptional circumstances system. The National Rural Advisory Council, which I have often spoken to the minister about—pointing out some weaknesses in that system—will continue to consider proposals for exceptional circumstance declarations submitted by state governments and to reassess current declarations coming up for renewal.
This trial is a very significant contribution to the history of drought relief in this country, and I praise the minister because he had the initiative to look at this in a very visionary way. There have been criticisms about the current system for some time now, about it not meeting the expectations of people affected by drought, specifically in terms of the arbitrary declaration of borders. The property of one farmer can be declared eligible for EC assistance, but his neighbour a fence away might be told that his property does not meet the criteria. I just find that reprehensible. There is only one aspect of the trial that requires specific legislative changes, and that is the Farm Family Support program. A similar measure is already in place, the exceptional circumstances relief payment program, for those areas subject to an EC declaration.
The issue around this particular legislation is that farm businesses outside of the trial area suffering from dry conditions and not in an EC declared area may raise concerns that farmers not necessarily suffering from drought conditions in Western Australia are able to receive funds, but they cannot. The government has not yet made public the guidelines for the Farm Family Support scheme which will include precise definitions of which farm businesses will be eligible and which will not. The government has previously indicated that farmers who are in hardship will be able to access support through this program but has not defined ‘hardship’. That is a very important part of this lesson—the definition of ‘hardship’. I believe the government needs to take that part of the thrust of this legislation into serious consideration.
Those of us who spend time in our rural electorates have watched droughts come and go, watched fires come and go, and watched floods come and go, so we appreciate the very significant impact that they have on individuals and farming families. The impact of drought is around a couple of things: the financial pressures and the stress that comes from those pressures, and the pride of farm families who are in many instances placed in destitute situations but because of that pride will not put their names forward for some sort of social security assistance. That is what the farming community and people on the land have been born with and what they have practised all of their lives. They do not seek help from people. They want to try and get themselves out of the mire that natural events like drought create for them. They see the futility of borrowing money from the bank and putting in a crop in the hope that the weather patterns that people say are going to come their way to break the drought will occur, only to see their wheat in the ground die because the follow-up rains did not come. We have seen that in this latest drought, one of the worst droughts in the history of this country, which has gone on for about eight years.
I want to illustrate just how hard it is for people in drought conditions and why this legislation is very important. About eight years ago, my wife was asked by some women in Sydney to bring some country women to Sydney to talk about drought and how it affected them as women on the land. There was a function at the New South Wales state parliament, and my wife took with her two women and the 27-year-old daughter of one. They addressed those city women, some 200-plus in number, about drought and how it affected them. One of the things that usually happen during a drought or at other times when things are tough is that women give up what they call non-essential items. They gave up things like perfume; they could not afford to buy perfume. They could not afford to buy hand cream, facial cream, shampoo—all the non-essential items that you and I and other people in the nation take for granted. The young lass, the 27-year-old, after she finished reading a poem that she had written about drought and how it affects farming families, was asked by one of these elderly matrons who came from the North Shore of Sydney why her hands were in such a mess. She told them that her hands were a mess because they had been damaged by barbed wire because she was helping her dad put some fencing up because he could not afford to employ any labour—and we talk about poverty in this place. They made such an impact on those women at the luncheon that there was not a dry eye in the house, my wife told me. Offers of assistance by way of holiday home accommodation and things like that came forward out of that.
About a fortnight after they came back to the electorate, I got a phone call from one of those women and she said, ‘Alby, we’re sending down two station wagon loads of items that some of the women affected by drought might be able to use.’ We waited for the station wagons to arrive. They arrived at my office, I think, at around 20 past five in the afternoon. My staff stayed back and we unloaded them. We went into the store next door and bought 200 of those fancy little bags with handles on them—I am not quite sure what you call them; I am a mere male. My wife called them pamper packs, and we distributed all the items that came in those station wagons among the packs. I estimated that each one of them, because of the cost of the items, was worth between $250 and $400, so it was a very significant contribution by urban based women.
That process continues today with some members of the Trefoil Guild here in Canberra—women who were Girl Guides in their younger days and then joined the Trefoil Guild, which works for charities. When these ladies buy their groceries, they spend an extra $50 to $100, in some cases $200, on non-perishable food items. They stockpile them in a double garage and then 10 of them come down every now and then and pack them all up into bags and then they give us a phone call. If there is too much for us we arrange for volunteers to go and pick them up and deliver them to families in need. Only last Friday I went to the little village of Wee Jasper, a beautiful little place down in the valley of the Goobragandra and Murrumbidgee rivers, where we delivered 20 parcels to five families in need.
The point I am making here is that these are the things that flow on from drought conditions which people do not know about. We drop these goods at schools because people are proud and do not want to be seen to be picking up assistance from other people. I am so grateful that a minister of the Crown, in this case the Hon. Tony Burke, has had the vision to look at exceptional circumstances relief to find how we can better assist farmers to handle drought and to get out of drought. I know that, no matter what a government of the day does, there will be people out there who will be critical because they have a personal view on what should or should not occur with changes to legislation which might assist where drought is making life difficult for people.
It is important that people understand just what is involved in this process. The trial in Western Australia is going to cover several issues. There will be farm family support, with income support to help farmers meet basic household expenses; and farm social support, with stronger social support networks to meet the mental health, counselling and other social needs of farming families and communities. In the last five years I personally, as a result of a plea from women, have talked seven farmers out of committing suicide. That is where beyondblue and all of those organisations come into it. But these men would not talk to anybody else; they wanted to talk to me for some unknown reason. There are a lot of people around this place who do not want to talk to me on a regular basis! Somehow I had made an impression on these people. It is very important that we understand the pressures on farmers in drought.
Another aspect of the trial is building farm businesses, with grants of up to $60,000 to help farm businesses prepare for the impacts of drought, reduced water availability and a changing climate, and on-farm land care activities. The previous government assisted small businesses who rely on the off-farm income that comes into their business and their communities and also those businesses that assist farmers by supplying them with the equipment and goods that help keep them going. When the farmers are going bad these businesses are going bad and go out of business. It impacts on the economy of the small rural towns in particular, and you see the unemployment rate go up. So once again there is recognition by a government of this great country, regardless of its political persuasion, of the need to support businesses that work with farmers.
Then there is farm planning, with support for farmers to undertake training to develop or update a strategic plan for their farm business with a focus on preparing for future challenges. We did a report centred on the skills that are lacking in rural and regional Australia. There are multiskilled people out there in the isolated areas, and they need assistance. There are the wives who keep the businesses going and they need computer training and those sorts of things. Once again, that support is a very good initiative.
Under the heading of stronger rural communities, there will be grants to local government for activities that make rural communities more resilient during agricultural downturns. The only point I make there is that, if we put government assistance into those areas, we must make sure that we have the i’s dotted and the t’s crossed so there is no waste and that valuable resource is used constructively and has positive outcomes for people affected by drought. There will also be farm exit support. That commenced under the previous government, and there will be grants of up to $170,000 to support farmers who make the difficult decision to sell their farm businesses. That is wonderful stuff, because it does help them. It helps them particularly when, because of drought and the drop in value of their properties, they live on the fringe of absolute destitution. This sort of package is the difference between them going off their properties broke and going off their properties with at least enough money to start a new life. I compliment the minister for recognising that and keeping the momentum going in that area.
The beyond farming proposal is a new measure that puts current farmers in touch with former farmers to work through the opportunities outside of farming. Again, this is wonderful stuff. You have to have that peer group understanding; you have to have people who know what farming is physically all about and how drought affects people working with them. Ex-farmers and retired farmers are terrific people who go back to the land to help. Some of them go back to the land because they just love it so much, and in some instances their children have taken up the farm for a living and need some assistance. It is interesting to note that not too many young people are taking up farm occupations, and they are not taking them up in part because of the stigma placed on farming by some sections of the educational world. More importantly, they are not taking them up because they cannot see the sense in this day and age of working from dawn till dusk for $20,000 or $30,000 a year when they can go as young people out into the IT sector or into major urban businesses and make four, five or six times that amount.
The farmers are in a situation where they work the land they love and do not in many instances get any credit for the significant contribution they make to the environment. The environment is their living—the land they toil on has to be there on a day-to-day, year-to-year basis for them to have any hope of making a living out of it. They love their land, and it is very, very difficult for them to walk away from it.
I cannot express to you, Mr Deputy Speaker, how pleased I am that a bill of this sort is going through. As I said at the outset, it is wonderful that we have a minister of the Crown in the agricultural field who does not have an agricultural background and does not come from the country but who, to his credit, is going out there and talking to people and introducing legislation which in my view is going to produce some very positive outcomes for farmers.
I close by saying that, whilst some might accuse me of being overgenerous to a minister for agriculture who is on the other side of politics, I do not resile from what I have said. I think he is doing a wonderful job. He is a very caring minister, and I often talk to him about problems associated with farmers in my electorate and elsewhere. I must be doing something right, because I note that the National Farmers Federation, the Western Australian government, the Western Australian Farmers Federation, the Pastoralists and Graziers Association of Western Australia and other organisations are in favour of the direction the minister is taking on this. I complement him on it, and I am pleased to have been given the opportunity to speak on this bill here tonight.
I take the opportunity, following the comments of the member for Hume, to also add my support for the work of the Minister for Agriculture, Fisheries and Forestry. It might not be looked on very favourably if I did not do that, so I am with the member for Hume in his praise for the work of the minister for agriculture. I also join with the member for Hume and my other rural and regional colleagues to support the Farm Household Support Amendment (Ancillary Benefits) Bill 2010. I think that all speakers in the debate have acknowledged that we are on the threshold of a new era in drought support. It is a change that reflects the reality that Australian farmers face: a hotter and drier future, which means that the existing concept of exceptional circumstances as a measure of support for farmers will increasingly lose its relevance.
Our new system is built on the projections from our scientific organisations, such as the CSIRO and the Bureau of Meteorology, which tell us that droughts are likely to happen more often and be more severe. It is also built on the renowned resilience and adaptability of our farmers. We want funding and support to be there to help farmers use that resilience and adaptability to prepare their farm businesses for droughts and other climate based risks. Our new approach to drought policy strengthens the support system and moves it from crisis management to risk management.
This bill ensures that farmers who are participating in the current pilot of the government’s drought scheme in Western Australia receive all the benefits for which they are eligible. It does that by amending the Farm Household Support Act 1992. As I said, the bill relates to the pilot project program that will run in Western Australia for the next 12 months. In a partnership between the Commonwealth and Western Australian governments announced by the minister for agriculture in May this year, a number of support programs will be trialled and evaluated in a region of Western Australia between Karratha and Esperance. About 6,000 farmers who are involved in these trials are expected to be eligible for assistance under the package. The aim of the pilot, which was announced in May this year, is to trial drought reform measures that will better support farmers, their families and rural communities in preparing for future challenges rather than waiting until they are in crisis to offer assistance. This is about preparing for drought as much as it is about responding to drought when it occurs.
There are seven measures in the new package to be trialled in Western Australia. The first measure, farm family support, provides income support to help farmers meet basic household expenses. The second measure, farm social support, provides stronger social support networks to meet the mental health, counselling and other social needs of farming families and communities. The third measure, building farm businesses, provides grants of up to $60,000 to farmers in two components: $40,000 to help fund businesses prepare for the impacts of drought, reduced water availability and the changing climate and a further $20,000 which can be accessed for on-farm natural resource management measures and landcare activities. The fourth measure, farm planning, provides up to $7,500 for farmers to undertake training to develop or update a strategic plan for their farm business, with a focus on preparing for future challenges.
The fifth measure, stronger rural communities, provides grants to local governments for activities that make rural communities more resilient during agricultural downturns. The sixth measure, farm exit support, provides grants of up to $170,000 to support farmers who make the difficult decision to sell their farm business. The money can be used for things such as retraining and relocation expenses. The final measure, beyond farming, was referred to specifically by the member for Hume. This is the new measure that puts current farmers in touch with former farmers to work through the opportunities outside of farming. It will allow farmers to talk to someone who has been in the same position as them about the options for themselves and their families if they are selling the farm business or retiring.
Farming groups across the country have welcomed this much-needed reform. As the list of seven measures indicates, this reform includes financial grants for farmers experiencing hardship or trying to exit the industry. Along with the financial measures, this new drought policy has a much stronger focus on the mental health issues that can arise from the challenges of drought. The farm family support payment is part of the pilot being conducted in Western Australia. It provides eligible farming families who are facing hardship with income support based on Newstart rates to help them meet basic household needs. It also provides case management support to assist farmers to assess their financial situation and identify those on-farm or off-farm activities which may improve their financial position.
The Farm Household Support Amendment (Ancillary Benefits) Bill 2010 will ensure that farmers who receive the farm family support payment will be eligible for the same access to ancillary benefits as those farmers who receive exceptional circumstances relief payments. After so many years of drought gripping large areas of our country, most people would be familiar with exceptional circumstances relief payments. Those payments help farming families living in areas affected by exceptional circumstances to meet everyday living expenses. Of course we on this side are all very proud that that program was originally introduced by the Labor government in 1992 under the then minister for agriculture, Simon Crean.
With these new changes to drought relief, the government believes it is important that recipients of farm family support payments participating in the current Western Australia trial can access the full range of ancillary benefits in the same way that exceptional circumstances relief payment recipients can. The ancillary benefits include an automatically issued healthcare card. The trial also allows for concessions relaxing the income, assets and family actual means testing of student allowances paid to, or in respect of, the student children of recipients. Importantly this trial will support farmers to develop or update a strategic plan for their farm business. We want to support Western Australian farmers and their families through this pilot period and this bill ensures that they will be spared financial hardship while they consider the future of their farming business.
My electorate of Capricornia covers a large section of Central Queensland and it is home to beef, horticulture, grain and sugar industries. Central Queensland experienced significant rainfall at the start of the year—it was almost back to a traditional wet season—but it has had little to no rain in more recent months. So while many areas of Central Queensland have experienced pasture growth as a result of the rainfall, there has not been enough rain to replenish water supplies to the extent that farmers can be confident of seeing livestock through to the next summer storm season.
The large rainfall at the start of the year, however, did see drought declarations lifted from 15 shires in Queensland in April. Rockhampton, in my electorate, was amongst those on this list. Banana, which is just south of my electorate, is one in our region that does remain partly drought declared. Of course before an area’s drought status was removed in this way, the local drought committees carefully considered whether an area had received enough rain for sufficient pasture growth and water for maintaining stocking. Revocation of drought status provides producers with access to restocking and freight subsidies for returning stock from agistment. I am pleased to say that currently only 1.4 per cent of Queensland is currently drought declared. This is a 35 per cent drop from 2009, and this is great news for Queensland and an ideal time for the government to be trialling its new approach to drought relief.
Of course the government has always made it clear that, whatever reforms to drought policy were proposed, those farmers who are currently receiving exceptional circumstances assistance would not be affected. Our drought reforms are about setting a path for the future, not inflicting any hardship or anxiety on those currently recognised as being drought affected.
Rockhampton has struggled with the negative effects of drought in the past. Although none of us can pretend to know the full devastation of drought unless we have lived through it as members of a farming family or rural community, in a city like Rockhampton and a region like Central Queensland, we all feel its effects—especially through our local abattoirs in Rockhampton. The Lakes Creek and Swift meatworks in Rockhampton have experienced shortages of cattle, and the management and staff know that the tough times of 2009 will continue this year as graziers recover from a very dry period last year, combined with the effects of flooding in parts of Queensland. However, as I was saying, currently pasture production across the region is generally good, but it is lower than what normally occurs in a longer growing season as a result of the late summer rain and pasture not beginning to grow in some areas until January. Pasture quantity is good to very good, but the quality is deteriorating with the onset of cool weather, some frosting and no useful rainfall in these past few months.
Cattle condition has held well during the autumn period, with breeders in good condition generally and fat dry stock being turned off, particularly earlier this month. Pastures in the Mackay district in the north of my electorate are now at their peak after the long and very wet summer up there. The Central Queensland sorghum harvest is about to start and to date reports indicate much of it is likely to produce above-average yields. The cotton crop west of Rockhampton and around Emerald has generally suffered from poor weather conditions with much of January and February being cloudy and then significant rainfall happening as the cotton balls opened and picking started.
I list that snapshot of some of the industries in my electorate to demonstrate the unpredictable ups and downs that drought and general climatic conditions can bring across areas in Australia. It is no doubt the reason that the Productivity Commission, in its review of drought policy, found that most farmers are sufficiently self-reliant to manage climate variability; climate variability has long been a fact of life for farmers in Australia. That is why the emphasis has to be on preparing for the very real risk of drought and helping farmers with that preparation rather than waiting until the situation reaches crisis point.
As members know, and the member for Hume told us some examples from his experience, there is always a positive story to come out of these hard times that rural Australians often face. In my electorate, as well as all over Australia, farmers are able to contact an organisation known as Aussie Helpers. For those who do not know, Aussie Helpers was started in 2002 to help families who are living with the hardship and poverty that farming can bring. John and Rhonda, for example, are volunteers based outside Rockhampton and cover all of Central Queensland west to the border. They are part of a network of around 40 helpers nationwide who freely give their time and expertise to enable Aussie Helpers to achieve its goal of tackling poverty in the bush. This program originated in Charleville, which is south-west of my electorate in Queensland, and many Queenslanders have benefited from their advice and support. The long years of drought in so much of our country have brought much devastation to farming businesses. National Farmers Federation figures show that rural debt has increased by 85 per cent since 2002-03 and the debt servicing ratio has followed a similar upward trend in that time. It will take many years for farmers to recover.
In the meantime, we are confident that these measures that are being trialled in Western Australia are the right way to go for drought policy in this country. It represents the shift from drought relief to drought management and preparedness, as the National Farmers Federation described it at the time of the announcement of the WA pilot. We will no longer have the situation, as before, when in the good times government retreated and assistance for farmers dried up. The seasons would change and when things became dire for farmers the government would step back in and provide just enough support to keep people struggling on in their farming business during devastating drought, only to disappear again when the rains came and exceptional circumstances status was lifted.
Now that we know that longer and more severe droughts will be part of the business of farming into the future, we want to work with farmers in a proactive and strategic way to support them as they work through all of the challenges and opportunities their farms face. We want them to do that thinking and planning and deciding and preparing before any drought takes hold, and when it does we want to support them financially and also emotionally through community networks and counselling where necessary.
We will all be watching the Western Australian trial very carefully and we look forward to working with farmers and their organisations on incorporating any lessons that come out of the next 12 months. In the meantime I join with my rural and regional colleagues here in the House to support this bill, which extends important benefits to farmers receiving income support payments as part of this very significant trial of these new drought support measures.
Tonight I rise to speak on the Farm Household Support Amendment (Ancillary Benefits) Bill 2010. Mr Deputy Speaker Adams, there is no doubt that over many years our farmers have gone through trials, tribulations and undue hardship—you would know that from your own electorate down in Tasmania. It is important that governments of any persuasion provide benefit to those who work the land. Without people who are working the land and providing the food basket for this nation, our nation suffers dearly. We must also remember that the large bulk of agricultural product produced in Australia is exported, so it helps our bottom line. It is important, though, that as we go through periods of drought—and we must remember that Australia is by and large a dry nation which we attempt to farm as a wet nation—we come to a realistic understanding that, indeed, we must start to adopt dry-farming principles broadly and largely across Australia.
That being said, it is critically important that the government provide supports in those times of undue hardship, and it is important that that support is bipartisan. The coalition holds the majority of rural seats throughout Australia. My own electorate is a rural and regional electorate. I have farmlands from the floodplains through the Port Stephens, Raymond Terrace and Maitland areas, the home of the famous 1955 flood. I have seen that region under water, on the long weekend in June 2007, when the Pasha Bulker was grounded, but I have also seen that region tinder dry, when there has been no water and they have had to pump water out of the rivers just to keep the feedstock up where they could. There are areas through the electorate of Paterson where, indeed, it is impossible to bring water to the farms; then people have to rely on the importation of feed. Most of the time, farming is very marginal in areas like that, but, when you have the added cost of pumping water or bringing feed to keep your cattle sustainable, it is critically important that the government in those financially difficult times provides that support.
One of the key aspects of farming, in particular when times are tight—when they are dry—is the increase in the number of mental health problems throughout our rural farming communities and, sadly, the increase in the number of suicides because of the difficult financial pressures that are placed upon our farmers. Quite often these suicides are not recorded as such; they tend to be motor vehicle accidents or farming accidents; but nonetheless it is something where we as members of parliament and governments of either persuasion need to ensure we put into effect systems that provide support.
Exceptional circumstances relief is critical. I know from my own area that one of the difficult things is the fact that the locations of the gauges measuring the amount of rainfall do not necessarily reflect the amount of rain that is coming across an area. I will give the classic example of that. A catchment area that covers a large part of the Gloucester-Stroud area also includes some of the more coastal fringes down through towards the Great Lakes region. Whilst we might get coastal rain, some of those areas that are a little higher up, through Gloucester, Stroud, Allworth and Booral, quite often suffer because they are excluded from exceptional circumstances but do not have the rain. They do not have access to water, so their only recourse is expensive stockfeed to keep their cattle alive. As you would know in your own area, Mr Deputy Speaker Adams, some would say it would be simpler just to remove the stock from the land and not incur that cost, but in particular in areas like mine, where you have a large number of breeders, it is very hard to replenish that stock either at an affordable price or at a rapid rate.
The issue with that is that it has a downstream effect on local employment and local investment. The money does not flow through our communities and, therefore, it starts a vicious cycle downwards. I know that this bill does not particularly relate directly to the zonings of exceptional circumstances, but time and time again members of parliament of all political persuasions put the arguments to the bureaucracy to redefine the areas within which rainfall is measured to determine whether an area is in long-term drought and what level of exceptional circumstances relief should be provided to those farmers.
It can be said that there is nothing better than to grow up in a regional and rural area. I was one of those young people who grew up in the city of Sydney but took the first opportunity to move into a regional and rural area. That is something I have been very thankful for. I have learned a lot from our farming communities. I have learned one end of a cow from the other and I have learned so much about the lifestyle and the environment, but after around 28 years in and around regional and rural Australia I am not quite a local yet. I still suffer from hay fever from grass seeds, so I tolerate it.
Mr Deputy Speaker, I am aware the hour is now coming to seven o’clock and it is time for the valedictory speech of my good friend Pat Farmer. With that I will hope to continue my remarks at a later hour. I wish Pat Farmer well in his future endeavours.
In the year 2000, not long after I finished my run around Australia for the Centenary of Federation, a run that took me 191 days, 14,964 kilometres, I received a phone call from John Howard, the then Prime Minister of Australia. Mr Howard asked me whether I would consider a political career. He said, ‘Pat, if you would be prepared to run for the Liberal Party at the next federal election, I will give you my support and the support of cabinet ministers to get great things done for your electorate.’ One thing about Mr Howard was that he knew how to press all the right buttons. He knew how I felt about the people in my electorate and he knew how I felt about actually getting things done. You see, I have this simple philosophy in my life. This philosophy is that opportunities come along—you either take those opportunities or you live on regrets. I have to say that I have absolutely no regrets about anything I have ever done with my life.
That was in 2001, and I have since been here doing just that: serving the people of Macarthur. During my first campaign I remember one journalist saying to me: ‘Pat, you’re an Irish Catholic. You grew up in the western suburbs of Sydney. You’re a motor mechanic by trade, not a lawyer.’ Sorry about that, John. ‘You seem like a typical Labor voter.’ I said, ‘Yeah, I am. But, you know what, I am also an athlete, and as an athlete I believe that if I train harder than anybody else I deserve to win.’ And, do you know what, the rewards of hard work are what the Liberal Party stand for. That is what we are all about. It is about reward for effort. Just as Menzies said, we are lifters, not leaders. We support people who are prepared to get off their backsides and make a difference with their lives. It is important to note that hard work and reward for effort can make a real difference to the economic position of this country. It is not just those people who get off their backsides and do something with their lives, but it is most important that we do that when we can so that we can help those people who are less fortunate than ourselves who simply do not have the means or the ability to be able to do that.
This is why we need a good economic management policy, so that we can have money and prosperity to help those Australians that cannot help themselves. We need prosperity to be able to help Australia meet its millennium goal of 0.07 per cent of gross national income so that we can support the poverty stricken people of this world. I believe that Australians are hard workers and what they need more than anything from government is for government to get out of the way—for them to get out of the way and for them to allow businesses to get on with the job of what they do best, without burdening them with bureaucratic bundles of forms and documents. What people need most is government support, not red tape.
I wish to thank all the people that work in this building in all areas that have supported me. I would like to thank the landscapers, the florists, the gym staff, the Comcar drivers, the security staff and everybody else in between. I would especially like to thank my electoral staff, who have worked tirelessly supporting me to help the people of Macarthur. I would like to thank my colleagues on both sides of this House. I want each and everyone of you to know that I admire you and I feel privileged to have had the opportunity to work side by side with you. At this stage I would like to thank the Prime Minister and the ministers for making the time available on the occasions when I needed to speak with them about issues in my electorate.
I will dearly miss two of my running partners in this place. Of course I will miss everybody but especially my friend Greg Hunt and of course my favourite running partner Tony Abbott. He is the only one who came close to me running up and down Red Hill.
Oh, outrage!
Sorry, Greg. I acknowledge the negative publicity that I received moving house from Campbelltown to Mosman. This occurred in January, and it was obviously a slow month for the media. The media believed that in order to represent an area you must sleep in that area. Well, they may well be right. This may seem a little strange to everybody here in this House, but I would like to thank the local preselection panel. I would like to thank them for putting the people of Macarthur’s needs first and for making sure that the preselected candidate for the next election lived in the area that they represented. I also believe that this is very important, but from time to time there are moments in my life when I have to represent my family first and foremost, and I make no excuses for putting my family first. I want to make it known to everybody in Macarthur that I wholeheartedly support and acknowledge Russell Matheson, the past Mayor of Campbelltown and Campbelltown councillor, as the best person to represent the people of Macarthur at this point in time. I want it known that they should feel very lucky to have somebody who is prepared to put up their hand and work tirelessly for that community, just as I have done.
Many years ago, when Brooke and Dillon were just little babies, the people of Macarthur banded together to support me through one of the toughest crises in my life, the loss of my wife, Lisa. For this reason, their lives a bond between myself and the people of Macarthur that I cannot expect anybody else to understand. That is why, no matter where I travel on this planet or no matter what I do with my life, I will never forget those people that were there for me when I needed them most. I am the sum of all of you and the influences that you have had on my life.
I made a simple promise to the people of Macarthur that I would bring Canberra to Macarthur and Macarthur to Canberra. The people of Camden, Picton and Campbelltown have had full access to all the ministers and the departmental staff through me, and there have never been so many visits by ministers and prime ministers to Macarthur prior to my election. I have delivered on that promise. I have also delivered close to half a billion dollars worth of infrastructure and services to the people of Macarthur and the surrounding regions.
During my political career, I particularly enjoyed my role as Parliamentary Secretary to the Minister for Education, Science and Training, with special responsibilities for high schools, primary schools and transition-to-work programs. I loved working with the teachers and the kids and getting into the schools to motivate the kids. I love this job very, very much and I will never forget this part of my life. Also, I loved delivering the $1.2 billion Investing in Our Schools Program. This program worked directly with schools to deliver what they needed most. Whether it was outdoor learning centres, computers, libraries or classrooms, the program delivered what the schools needed and wanted from the government.
I have spoken on this subject many times in the past but I once again want to draw to the attention of this House, in this my valedictory speech, the need to dispose of Badgerys Creek as an airport site and instead create a business park. My vision for Western Sydney is for the 1,700 hectares of land to become an economic centre, which would allow the peak-hour flow of traffic to be reversed. I believe that 1,000 hectares should be used for job creation and for commercial and industrial land. Further, 350 hectares should be used for quality housing to alleviate the housing crisis in Sydney and another 350 hectares could be used to create the lungs and recreational areas for Penrith, Campbelltown and the whole of south-west Sydney—similar to what Central Park is to New York. The advantage of this vision is that it would finally put an end to the 30-year controversy that has embroiled Badgerys Creek. It will not cost money. In fact, if it were sold with a covenant for job creation, it would fetch around $500 million. This would improve the government’s bottom line and help to pay off the massive debt that it has accumulated.
The people of Western Sydney are spending four hours of their lives each and every single day just travelling to and from work. This is causing many problems with the family unit, including the need for extended childcare times and a reduction in the quality of family life. This can be fixed without any expense to the government. Badgerys Creek is an asset that, at the moment, only feeds and breeds rabbits. This asset has sat there for nearly 30 years and has prevented people in the surrounding areas from doing anything with their homes. It is bureaucracy at its worst. The federal government has said for years, after numerous inquiries, that it is not building a second airport at the Badgerys Creek site, yet the New South Wales state government has not rezoned the surrounding area. The only way to fix the massive congestion in our cities is to create jobs and recreational facilities for people where they live.
It is not just the big issues in Macarthur that are important to me; it is also the individuals who count. There are many people in the area who from time to time have needed my help in assisting them with immigration matters or getting their children into schools in the local area. There was one case in particular of a lady who came to my office. She had just two teeth in her mouth. She had missed a dental appointment earlier that year and consequently was put to the back of the queue. She had waited two years and still had another 12 months to go before she could get something done about her dental situation. She told me that she had not eaten anything solid for over two years. That afternoon I spoke to Sydney South West Area Health Service and arranged for this lady to be fitted with a set of dentures. One month later, this lady came into my office. She had a smile that started at one ear and finished at the other ear. She had tears rolling out of her eyes as she thanked me. I will never, ever forget the look on that lovely old lady’s face. That is what this job is all about.
I found housing for a lady who was living in a car in bushland in Kentlyn, in Campbelltown. She had been attacked several times. As well as her housing dilemma, she suffered from schizophrenia. After several phone calls, we managed to get her medical help and some accommodation. People who are suffering from mental illness need to be supported by the federal government. This is part of our everyday work, and because we want to make a difference to these people’s lives, we get frustrated from time to time because we cannot help. That is when I am reminded of the words of my mother. My mother said to me—I should say, ‘My mom always said to me’ in my best Forrest Gump accent—‘Rome was not built in a day but it was certainly started in one.’ I think it is important that, when we feel disillusioned with this place, we remember those words and get started. We have to take the initial step needed to make a difference to people’s lives.
I want to acknowledge my family and the sacrifices that they have made to support me in this career—in particular, my daughter, Brooke, and my son, Dillon, who are sitting here in the chamber. I want it to be known to everybody that I am incredibly proud of you two. Last year, we spent our holidays in an orphanage in Chang Mai, in Thailand, helping children suffering from AIDS. My daughter, Brooke, read books to the children and helped to feed and clothe the babies, while my son, Dillon, and I repaired playground equipment, worked on buildings and built bikes. The love that they showed these beautiful little children and the absolute desperation they felt about the situation they were in was something that any parent would be proud of.
The year before, I travelled to India, Nepal, Egypt and Peru. I saw firsthand the work that the International Federation of Red Cross and Red Crescent societies does. As I stood in the office of the Red Cross in Cairo with the Secretary-General, Professor Mamdouh Gabr, he took an urgent call. In that instance I saw his jaw drop and his eyes fill with anger as he was told that a school had been bombed in the Gaza Strip. It was a school that was being used by the Red Cross to provide aid to both sides of the front line. He recomposed himself and went about coming up with alternatives to get aid to those areas in the Gaza conflict. Later that night I asked him: ‘How can you possibly help these people who cause so much pain and destruction to others? In some cases, they cause this pain and destruction to people who are close to you.’ He told me: ‘We are the Red Cross-Red Crescent. We cannot do our job any other way.’ The people of the Red Cross go into war zones to brief soldiers on the Geneva convention. They provide a safe haven for people who are destitute. They provide food and shelter in times of cyclones, bushfires, floods, mudslides and tsunamis.
Two-thirds of the world’s population do not have clean, sanitary conditions or fresh drinking water. I have seen firsthand the different levels of poverty in this world. I have visited communities in Cairo where people live in rubbish tips and have to scavenge beside the rats to find something they can sell in order to buy water just to survive. In these same communities I have seen young children take needles from medical syringes. When they have accumulated two kilograms worth of these needles they are paid one Egyptian pound. I met with a lady whose job was to collect plastic. She burnt this plastic waste and used a stick to lift up the molten plastic and put it into a metal tub. When 10 kilograms of solidified plastic had been accumulated she would earn the equivalent of two Egyptian pounds. Her face was covered in soot and her nostrils and ears oozed black ash. One man told me that he can earn two Egyptian pounds for collecting rubbish from the city. If he earns less than that, he has to choose between feeding his donkey and feeding his children. Unfortunately, he is forced to choose the donkey, because it can earn him money the following day, and he and his children go without food that night. I have seen communities in the mountains of Nepal and Peru that are desperately poor, but they have water, and with water they can grow a little grain, feed chickens, boil up food and wash. They can stave off disease. They are poor, but they can survive because they have water.
I have been influenced by these things and so much more in my life. That is why I feel an absolute need to build wells and to raise the money needed to provide clean, sanitary conditions for the women and children of these communities. I encourage all Australians and world citizens to do the same and support me in my next endeavour. On 27 November I will embark on the greatest journey that I could ever possibly imagine. I have set a goal to raise $100 million for this worthwhile endeavour. I will run from the South Pole to the edge of the ice in Argentina, then through South America, the United States of America and Canada, and then on to the North Pole before flying to the United Nations to present my findings—the places I have been, the people I have met and the things I have done along the way. I will run more than 21,000 kilometres through the extremes of every weather condition on this earth.
I have met with every high commissioner and ambassador of the countries I will be running through, and I am proud to say that I have their support and that they strongly support work to improve the lives of the severely poor of this world. I will present to the United Nations at the end of my journey all that I have seen and all that I have done. I will be asking the politicians to take a good, long look at themselves and to ask the question: if one man can do this, what can we all do if we work together as a nation? What can we do to help each and every nation meet the Millennium Development Goals to alleviate the poverty crisis in our own backyards as well as around the world? I ask each and every one of you here in this House: why is it that we can put a man on the moon and yet still two-thirds of the world’s population do not have clean drinking water or clean, sanitary conditions? Throughout my run, using the latest communications technology, I will beam into the boardrooms, the classrooms and the living rooms of people worldwide everything that I see and everything that I do. Hopefully, that will encourage people to follow my journey and to support me.
In finishing, if the people of this House remember nothing of the words that I have ever uttered in this place but they remember this last phrase, then my time here will have been worth while. So I say to each and every one of you that locked within each of us is the ability to achieve great things. I believe that the greatest force on this earth is our will. If we want to do something and we want to do it with all our heart, we can and we will find a way, but if we do not truly want to do it we will simply find an excuse. To all of you here in this House: please find a way to help all of humanity, and please, please, please, no excuses.
I rise this evening to speak in support of the Farm Household Support Amendment (Ancillary Benefits) Bill 2010. The Minister for Agriculture, Fisheries and Forestry announced a trial of drought policy reform measures in Perth on 5 May with the Western Australian Minister for Agriculture and Food, Terry Redman MLA. The trial represents a new chapter in a long history of Australian governments grappling with the challenge to farming by a harsh climate. On 6 May in an Australian Financial Review article, National Farmers Federation President David Crombie is quoted as saying that the pilot is a ‘sensible, practical and forward-looking approach that takes account of climate risks and proactively manages them’.
In Western Australia this bill has widespread support. The Western Australian Farmers Federation President, Mike Norton, in a press release on the same day, welcomed the trial and noted, ‘It represents a good opportunity for WA’s farmers.’ WA’s Liberal Mental Health Minister, Dr Graham Jacobs, stated: ‘Difficult times on the farm can be very traumatic, even soul destroying. This bill offers more support to meet the mental health social needs of the farming community.’ Tony Crook, the Nationals’ candidate for O’Connor, stated, ‘I am very proud that Western Australia is at the forefront of a program that could revolutionise the way Australia tackles drought in the future.’ And the WA minister for agriculture, Terry Redman, stated, ‘We need to move to a mindset of being proactive rather than reactive when it comes to tough times in agriculture.’
Western Australia will remain the world leader in agricultural production and continue to grow productive farming industries despite the challenges of climate. As a Western Australian. I am aware of the significance of this bill to the farmers who take the risk to put a crop in. It is a bill that will support farming communities and farming families. In this place we hear a lot about working families. This bill is about farming families.
WA has a strong history of agricultural achievement in challenging conditions. Colonists arrived in WA in 1829 and planted wheat they had brought from England. European farmers recorded their first wheat harvests in WA in 1831. Of course, the wheat had been developed in English conditions and frequently failed to provide reliable and substantial crops. The failure of these first crops was inevitable. In isolated areas such as the Victoria District, at Champion Bay near Geraldton, it was even known that ‘starvation deaths’ followed crop failure—I quote from Sister Mary Albertus Bain. By the end of 1873 it could correctly be claimed that there had been only one good season since 1867. The most promising harvest since that date had that year been attacked again by red dust and almost the entire crop in the district was a failure. Malnutrition, worry and heat gradually took its toll on the district. The greatest number of deaths from 1870 to 1894 was amongst the children, and the most common cause was marasmus—inability to thrive due to a protein deficiency.
Such was the skill of successive generations of farmers in the WA grain belt that from failed crops and starvation has grown a sophisticated, science based, machine driven, satellite guided export industry. The first mechanical harvesting was done with a reaper. Heaps were forked into a thresher and then bagged by hand and shovel. But from the 1920s to the 1960s there was significant improvement in Western Australian grain yields through the use of superphosphate fertiliser and identification and amelioration of deficiencies of trace elements such as zinc, copper and manganese. The benefits were dramatic on the sandy soils that dominate the WA grain belt. The WA grain belt contains some of the driest consistently farmed land in the world. Soils are generally ancient, shallow and naturally infertile. Taken together, these factors create a challenging farming environment, amongst the most difficult in the world.
WA agriculture prides itself on being science based. There can be no better example of science based agriculture anywhere else in the world. Combined with improved farm practices and the advent of wheat varieties better adapted to the Western Australia environment, yields have trended upwards. The 1970s saw the beginning of minimum tillage—that is, seeding into uncultivated land, especially when it had carried a crop in the previous year. From the year 2000, WA has had a run of erratic seasons, with widespread drought and some severe localised frosts in spring downgrading grain quality. The 2003-04 grain harvest, however, heralded a record-breaking 14.7 million tonnes of grain.
WA is Australia’s export state. We export minerals, ore, hydrocarbons—and grain. The WA wheat belt not only supports WA’s food needs but also creates an exportable surplus representing 90 per cent of our total grain production. WA produces the bulk of Australia’s export grain, and an annual crop of 10 million tonnes is usual. Today, Western Australia’s grain is exported to over 20 countries, with major shipments to Japan, South Korea, Indonesia, Iran, Pakistan, Vietnam and China.
In Western Australia as we speak, many farmers have completed seeding in often very dry conditions. Growing season rainfall is commonly less than 200 millimetres per annum—eight inches in the old scale—in the important period of May to September. So far the 2010 season has had a slow start. Rain has been patchy; however, a good 15 millimetres last week has provided some relief.
In years of severe drought farmers turn to the Commonwealth and state governments for support. Commonwealth assistance evolved in a haphazard way, with states taking the lead on drought policy. In the early 1970s drought was recognised under a joint Commonwealth-state natural disaster relief arrangement. Within two decades that approach was abandoned in favour of stand-alone drought policy separate to natural disaster relief. In 1992 a formal national drought policy to encourage self-reliance for primary producers and protect the nation’s farming sector from an unprecedented climate impact was determined. In 1984 the then agriculture minister, Simon Crean, introduced drought income support payments and interest rate subsidies for farmers within areas defined as facing exceptional circumstances or EC. Exceptional circumstances relief has evolved significantly as successive governments have tried to find the best way to help build more resilient farming communities. Exceptional circumstances support is available for farmers affected by drought events that must not have occurred more than once, on average, every 20 to 25 years. But, with current rainfall uncertainty, few believe the next drought will be a one in 20- to 25-year event. Some farmers have reached the interest rate subsidy limit of $500,000.
Farmers in the most debt receive the most assistance and we fail to recognise good farmers who have made tough business decisions to stay out of debt. Assistance is based on arbitrary lines on a map, meaning that one farmer may be eligible while their neighbour is not. We are getting it wrong. We get it wrong in agriculture when we fail to take hard, pro-business decisions. So I would like to take this opportunity to acknowledge the contribution that Dr Henry Schapper made to the great agriculture industry of Western Australia through agricultural economics, public policy, farm management and strong business practices in farming. Dr Schapper was an articulate and determined man who recently lost his battle with illness, on 27 April this year. He fought his battle in the same way that he lived.
Debate interrupted.
Order! It being 7.30 pm, I propose the question:
That the House do now adjourn.
Denzel Washington earned an Oscar for his portrayal of corrupt LAPD Detective Alonzo Harris in the film Training Day. For those unfamiliar with the plot, it centres on his attempts to trap rookie detective Jake Hoyt, played by Ethan Hawke, into joining his team of corrupt cops—for whom murder and drug trafficking are day-to-day business. One of the film’s most compelling scenes is Jake’s introduction to Palmwood Drive in Los Angeles, known to police affectionately as ‘The Jungle’. Once regarded as America’s most dangerous street, it is home to the notorious gang the Black P Stones.
Palmwood Drive is no longer regarded as America’s most dangerous street. The fight to win back control of The Jungle was not won by chance but was achieved through the leadership of Sheriff Lee Baca of the Los Angeles County Police Department, who established the CalGang database, which has proven so effective that it is now used by all law enforcement authorities across America. CalGang, short for ‘California Gangs’, connects vital information for law enforcement authorities, such as gang membership and identification details, and also alerts police when people have been issued with anti-association orders. These orders give police the authority to ban people from associating with gang member, something that the Victorian state Labor government will not introduce. Instead, they instruct the Victorian Police to welcome outlaw motorcycle gangs into Victoria by stopping traffic for their bikie runs. What a disgrace.
Using information from the CalGang database, the FBI teamed up with the LAPD Gang Enforcement Detail to undertake Operation Cold Stone. The team conducted a 14-month investigation resulting in 30 Black P Stone gang members being jailed. The success of the operation was due to the cooperation between the FBI and the LAPD. It was a fantastic operation. The combination of legislative powers, resources and shared experience enabled them to win back the streets.
At a federal level, the Howard government established the Australian Crime Commission, the ACC, in 2002. Through the ACC, state and federal police work together to investigate serious and organised crime, similar to the model which has worked so effectively in the United States. However, since coming to power, Labor has cut the funding to the ACC, reducing staff by 22 per cent. The Prime Minister has also stopped paying the bills for the majority of seconded investigators from the states, territories and AFP. Working together, they would have been the weapon of choice against violent gangs in Australia. This is a disgrace and slap in the face for law enforcement and the public they protect.
The Howard government also established the national law enforcement database, CrimTrac, in 2002, which is used to share information amongst all the state and territory police forces. CrimTrac is the ideal database to store information on any violent gangs, including OMCGs, racially motivated gangs targeting international students and prison gangs, to name a few. The murder of underworld figure Carl Williams gives us some insight into the violent nature of prison gangs. Prisons are the breeding ground for gang activity. In the hostile prison environment many inmates join gangs for protection. Prison gangs are the major recruiters for extremists, such as the terrorist shoe bomber Richard Reid, who converted to Islamic extremism during his incarceration at Blundeston Prison in 1996.
If we hope to win back our streets it is time to get tough on gangs. It is time for the Prime Minister to take up the challenge. He was all talk after the fatal attack at Sydney airport in which two outlaw motorcycle gangs fought each other and one OMCG member was killed. When in Washington, Mr Rudd said that he would take firm action. He has not taken action at all. Mr Rudd has let down the people of Australia. He will not take the violent gangs on. He would rather have the violent gangs cause fear and intimidate the public.
During this term of government, we have seen the worst economic crisis in 75 years. We saw financial systems, banks and the world economic system at risk of epic failure. That had terrible consequences for jobs in places like the United Kingdom and the United States of America. We saw terrible pain among the working-class and middle-class communities in those countries. And we see ongoing pain today in the British budget brought down by the new Conservative government. It lifts consumption taxes to 20 per cent. We can see some indication of how conservatives handle both recessions and recoveries from recessions: they tax the poor to give company tax cuts to corporate citizens.
Our government is different. Our government believes in restoring the budget to surplus three years early. We are going to halve peak debt. We are going to restore the public finances in a responsible way after avoiding recession and saving 200,000 Australian jobs. Most importantly, we have a plan to add to national private savings. The resources super profits tax builds infrastructure in mining communities and mining states like Western Australia, Queensland and my own state of South Australia. It lowers company taxes for small business and for businesses overall. Most importantly, it lifts national savings through lifting superannuation.
Increased superannuation for individual workers can have a very big effect. It is projected that a 30-year-old full-time worker will have around $108,000 extra in their superannuation under these changes. That makes a very big difference to those working Australians who so desperately want a dignified retirement. Most importantly, in aggregate this will add around $500 billion to the existing pool of superannuation savings, increasing our national savings by 0.4 per cent of GDP by 2035. That is an incredibly important thing to do. Over the long term, our great weakness has been a lack of national savings; our great weakness has been the current account deficit. By increasing superannuation and increasing the savings pool in this country, we will lower our reliance on overseas savings and put Australia on a path of economic independence. That is part of the great economic reform undertaken by this government: a responsible restoration of the public finances after a period of international recession and a responsible increase in the private savings of individuals to help national savings.
We have to contrast this with what the opposition would give us—what the Leader of the Opposition would have delivered had he been in government. What he would have delivered is recession, New Zealand style: five quarters of negative economic growth, with all consequences for working families that go along with it—hundreds of thousands of people out of work, in working-class communities like Elizabeth, which I represent, and in growing regional towns like Gawler. We would have seen misery and dole queues—that is what we would have seen. Instead, we have seen the government’s responsible economic management avoid the terrible price that is currently being paid by so many other countries.
Look what the opposition have delivered most recently through their control of the Senate. We see them in an unholy alliance with the Greens, in the other place. They have prevented action on climate change and they seek to prevent action in so many other areas. They have killed progress dead. They have frustrated and rejected the mandate of the Australian people in the 2007 election. They are the party of just saying no, of just not doing it. They are against progress in all its forms. We know that they are against the broadband network. I was out doorknocking in Craigmore and Hillbank over the weekend. These are people who are stuck on dial-up after a decade of policy failure by the Howard government—people who want broadband. Just this week, Senator Alan Ferguson put out a Tony Abbott pamphlet in my electorate which claimed that they would stop the broadband network. I do not think that is going to win any votes in Craigmore and I do not think that is going to win any votes nationally. That is the motto of the opposition: ‘Just don’t do it.’ A vote for the Leader of the Opposition would equal recession, would equal another decade of delay on climate change—because he thinks it is not real—and would equal another decade of delay on broadband. People in Craigmore and Hillbank would be left on dial-up under an Abbott government.
It is with a heavy heart that I rise this evening to inform the House that this Friday is the fourth anniversary of the capture of Israeli soldier Staff Sergeant Gilad Shalit by Palestinian militants. On 25 June 2006, Gilad was captured in a cross-border raid in the Kerem Shalom crossing—ironically translated as the vineyard of peace—between Israel and the Gaza Strip and has since been in the captivity of Hamas, the party that took control of the Palestinian National Authority.
Repeated requests from the international community for his release have, unfortunately, fallen on deaf ears. Hamas has repeatedly refused requests from the International Committee of the Red Cross and Red Crescent to allow the ICRC to visit Shalit. The situation has, unfortunately, turned Gilad into a bargaining tool for Hamas. The day after his capture, Hamas requested the Israeli government release all female Palestinian prisoners and all Palestinian prisoners under the age of 18, in exchange for information about Gilad Shalit—just information. Hamas further requested an additional 1,000 Palestinian prisoners within a 24-hour ultimatum, but Israel refused on the basis that ‘there will be no negotiations to release prisoners’.
Since then, there has been a large number of diplomatic efforts pursued in order to secure Gilad Shalit’s release, but these have all resulted in the negative. Gilad Shalit’s parents constantly live without knowledge about whether their son is alive or dead and they are taunted by Hamas with videos and handwritten memos, which are received in exchange for prisoners. This fear is encompassed by nearly every Israeli citizen, as they realise that it could be their son—compulsorily conscripted into the army—in Gaza. Israelis struggle to conceptualise how they would react in these circumstances and are placed with a dilemma, because when you give in to your captor’s demands, and you have Gilad Shalit returned at any price, you are giving in to people who might have killed other members of your family.
What is remarkable about this situation is the empathy shown by Israelis in their determination to receive one captured soldier—to relieve a parent’s nightmare—for what we have seen to be an exchange for thousands of lives. However, may I query the House as to how many terrorists, militants, must be exchanged for one soldier—why thousands of prisoners for one? Prime Minister Benjamin Netanyahu remains in contact with Gilad Shalit’s parents and last week claimed that no efforts were being spared to bring him home. But Gilad Shalit’s parents, Noam and Aviva, claim that not enough is being done and will not be giving up any time soon. They are planning to march through Israel and not to return without their son.
I am drawn to this distinctiveness of determination that the Israeli people constantly show. I call on Hamas to immediately release Gilad Shalit. This has been an obstacle to peace for long enough. I do not need to remind the House of my strong commitment over 17 years to a two-state solution, and I have been a supporter of the ongoing peace negotiations between the Israelis and the Palestinians. I know that almost every member of this House would share that view—both Labor and Liberal, National and even Independent—and some members on both the Labor side and Liberal side feel these issues in a very passionate and bipartisan way.
The coalition maintains its position and is committed to a just and peaceful solution to the Israeli-Palestinian conflict. I am sure I speak for all honourable members today in hoping that a peaceful solution is acquired in the foreseeable future, because every life that is lost is deplorable. I am sure all members of the House would join with me in calling for the release of Gilad Shalit.
Tonight, I want to talk about the government’s GP superclinic program, and my desire to see one of these established at Caboolture in my electorate of Longman. Firstly, I want to express my disappointment at comments made in one of the local newspapers by my Liberal-National Party opponent for the next election. I had high hopes that the LNP choice of candidate would be a person who would not simply recite party lines parrot fashion, but unfortunately that has not been the case. In particular, he has trotted out the tired old lines being used by the Abbott led coalition to misrepresent the facts about the government’s GP superclinic program.
I will give some basic facts for the benefit of coalition members and candidates, wherever they may be. The 2007 election commitment for GP superclinics was followed through, with funding for the first 31 GP superclinics, later increased to 36—a $223.2 million program over five years from the 2007-08 financial year through to the 2011-12 financial year. Two years into that program three GP superclinics are fully operational and open, and another eight are providing early services. Four more GP superclinics will open shortly, with construction actually underway at 18 new sites. That is 21 GP superclinics that can be expected to be fully operational by the end of this financial year—21 out of the 36 being funded in this five-year commitment. Contracts have been signed for the remaining 15 GP superclinics.
All 36 GP superclinics involve general practices, with general practice networks or divisions being active partners in 13 of them. All 36 GP superclinics will play an active part in teaching the next generation of health professionals, and 33 of them already have university involvement. There is no doubt that all 36 pioneer GP superclinics will be delivered well within the timeframe of the program. It is a nonsense to say that this model has been ‘fundamentally rejected by local practitioners’—a suggestion that I reject out of hand.
During the 2007 election campaign there was no commitment for a GP superclinic in Longman. The government’s health commitment to Longman was for $7 million for a 12-chair dialysis unit at North Lakes. That has been operational for about six months, providing an excellent service to northside renal patients. We did commit to building two GP superclinics in our region: in Strathpine in the electorate of Dickson and Redcliffe in the electorate of Petrie. The Strathpine GP superclinic is fully operational and provides a wide range of services beyond those available at traditional doctors’ surgeries. The GP superclinic at Redcliffe, to be located at the hospital, is one of those currently under construction.
In the 2010 budget the government committed a further $355 million to this program. This money is to be used to enhance the existing program in three ways. First, it will provide for around 23 new GP superclinics. Second, nine of those 23 will be enhanced and able to provide day-surgery procedures. Third, around 425 existing GP practices will be able to access funding to upgrade those practices to provide additional services to their communities.
This additional funding provides an opportunity for us to improve primary healthcare services in our area. I have already spoken to health minister Roxon regarding the siting of one of those nine enhanced GP superclinics at Caboolture to ease pressure on the Caboolture Hospital. I have also spoken to a number of potential partners to gauge their interest in being involved in such a project, and I am delighted to say that I have been greeted with unbridled enthusiasm.
Obviously, there is some way to go before a bid can be submitted to the government but I am confident that we will have the right partners and that they will deliver a competitive tender document when the time arrives. This will be important because, while the minister is well aware of the case for additional health services in Longman and the fast-growing areas of the Moreton Bay region and has always been sympathetic when I have approached her regarding our needs, these are competitive quotes.
I am keen to encourage existing doctors’ surgeries to consider applying for the funding being made available under this program—up to half a million dollars—to enable them to upgrade those practices to provide additional services or to provide improvements to their current services. During the parliament’s winter recess I plan to speak to as many GPs as possible on this opportunity. I am also keen to encourage them to apply for funding from the General Practice After Hours Program—a $76.3 million four-year program established in the 2008 budget. This program targets areas of community need for after-hours GP services and assists with the establishment of new after-hours services or the maintenance or extension of existing after-hours services. Successful applicants in this program can receive up to $100,000 exclusive of GST over at two-year period, and the funding can be used to assist with the operating costs or recurrent expenses of after-hours services.
Much has been made of the need for after-hours GP services on Bribie Island and Caboolture in the northern parts of Longman. Through these two programs the opportunities do exist for existing GP practices to expand into those after-hours services. This is not something that needs to be developed as a stand-alone facility. Indeed, nearly one in every five GP superclinic services provided to date has been an after-hours service.
An election looms, and the people of Longman need to be wary—wary that the Abbott-led coalition has announced that it will cut this GP superclinic funding, denying us the opportunity to enhance local medical services; wary, too, of promises made by the local coalition candidate that— (Time expired)
I rise to speak on behalf of residents living around Williamtown RAAF Base and Salt Ash Air Weapons Range. Under the new Australian Noise Exposure Forecast Maps 2025, many people who have never experienced noise issues from our RAAF base are now being classified as highly noise affected. This is a result of the introduction of the Joint Strike Fighter.
As shadow minister for defence science and personnel, I have a passion for our Defence Force and the role its members play in protecting our country. I believe it is extremely important that they are provided with the best possible resources. However, I want to make it abundantly clear that I understand the situation many of those in the Paterson electorate now face, and it is unfair. Defence has changed the goal posts and inexact modelling contained within the noise maps means the goal posts could change yet again.
Residents are justified in speaking about the possible impacts of these maps on their homes. Impacts include the cost of noise attenuation if their house were to be damaged, inability to rebuild if their house were destroyed, possible property value loss and changes to quality of life, through no fault of their own. That is why I welcome any chance to represent those who are concerned about this problem and would say to anyone affected, ‘I am here; I am listening. Your concerns are important.’
I am thrilled that Oyster Cove has now been excluded from the 2025 forecast. The people at Oyster Cove could have faced huge decreases in property values and quality of life and an inability to construct their dwellings. I met with these residents the first time they came together as a collective and I spoke on their behalf at the Williamtown Consultative Forum. I also represented each and every person who approached me on this matter. I am pleased that they now have some security in the future of their properties. This is what all residents in the Paterson electorate deserve.
Unfortunately, those in areas such as Medowie, Raymond Terrace, Nelsons Plains, Brandy Hill, Riverview Ridge and Lakeside do not have such security. That is why Port Stephens Council, the state government and Defence need to work together closely on a long-term plan for our area. I believe Defence has a responsibility to give local people security as soon as possible—security in knowing that their homes are going to be safe, comfortable and able to be lived in. I see this as an opportunity for the defence minister to improve his relationship with the local community. He has a real chance to get out and talk to people, to find a fair compromise. Through consultation, Defence can negotiate a solid agreement for the long term.
There are a number of long-term planning options which should be discussed and explored, and I would happily work with the defence minister on viable options. I would also urge the minister to consider the purchase of rural and severely noise affected properties. If you want to travel along a highway, first you need to acquire the land. That is what our coalition government did in Slades Road, Moxey Close and Steel Street at Williamtown airport.
Port Stephens Council also has a role to play in mitigating noise impacts. Unfortunately, some councillors have been extremely irresponsible, and I urge them to look towards the long term, not the short term. In particular, I would like to mention the Kings Hill development. I have raised concerns about this development with the council, the state government and Defence for some time now. While I am mindful of the need for affordable housing in the Paterson electorate, this must occur sensibly. Large parts of the proposed Kings Hill development, north of Raymond Terrace, are directly under the flight path. My fear is that in 10 years from now, if all of this development goes ahead, the owners of those residential blocks will be faced with the same problem some Port Stephens residents are facing now.
I find it very difficult to believe the two-faced actions of some Port Stephens councillors who are currently campaigning for compensation from the federal government for noise-affected residents. They are the same councillors who have voted to push ahead with the development of Kings Hill. They have voted to put more homes and more families under the flight path. No doubt in the future they would also want the federal government to pay compensation for these affected residents, even though the federal government had no control whatsoever over the approval of Kings Hill.
I should point out that the Parliamentary Secretary for Defence Support, Dr Mike Kelly, met with Port Stephens councillors earlier this month and ruled out any form of compensation or acquisition. I certainly hope councillors take these noise impacts on board when making rezoning approval decisions and do not cast their votes to score political points.
The Williamtown RAAF base is important for our local community, the Defence Force and our country. It will be here for a long time and councils need to be proactive in preparing for it. I have said it many times but I will say it again: I would like to work with the council, Defence and the state government to find a commonsense, win-win solution that my constituents are happy with. This issue should be fought not along party lines but for the good of everyone involved. I will continue to fight hard on this matter for the people I am elected to represent to ensure a mutually beneficial outcome for all people. It is not those in RAAF uniforms at Williamtown and Raymond Terrace but those bureaucrats in Defence who need to realign their attitudes. (Time expired)
I rise tonight to speak about free-to-air television. We have seen, at long last, the deployment of multichannelling and an increase in free-to-air content. The ABC Kids channel is an example of the increase in choice available to Australian viewers. This is a very good thing, as we always knew it would be. The rise of multichannelling prompted dreams in some of us that free-to-air television networks would be able to schedule broadcasts that are a little more specialised, a little more observant of both niche and very large markets for programming.
I have spoken previously about the increased potential for free-to-air networks to broadcast a greater volume of the content of a particular sporting event. I have also spoken of the potential for a network to broadcast more Wimbledon, for instance, or games in the lead-up to the World Cup, as many of us would wish. But it seems we are in the same situation we have always been. Even with multichannelling, it appears that networks continue to have very popular events, sporting events, dictated to and compromised for viewers as if the network had no choice.
A topical case in point: the Adelaide Advertiser’s AdelaideNow website is running a story on how Channel 7 in Adelaide has refused to air this Friday night’s AFL grand final rematch between Geelong and State Kilda live, preferring to delay the broadcast by an hour and a half. Irrespective of how important one thinks this particular game is—and I am not a Geelong or St Kilda supporter but I do love AFL and I love watching it live, as many thousands of people do in both my electorate and South Australia generally—I found it encouraging that a fair number of the comments posted on AdelaideNow regarding the story referred to multichannelling and the antisiphoning rules. I will read some of the posts. StevieB of Bomberland wrote:
Not just this game, every game!! Wasn’t this exactly why you brought on a new third channel?
David posted today:
Put Better Homes and Gardens on Channell 72.
And Aaron of Adelaide made a good contribution:
The anti-siphoning list prevents the AFL from being shown on the secondary channel (I.e. 7TWO, OneHD) before it is shown on the main channels (I.e. 7, 10). In the case of last night, both Wimbledon and cricket (all matches in Oz or the UK) have to be shown on the main channel first, hence neither could be bumped to the secondary channel. Hopefully when the review of the list comes out later this year, the secondary channels can show first run sports on them.
It is a real pity that Channel 7 in Adelaide is not running the St Kilda-Geelong game live and I plead with them to reconsider and show it live for the sake of the sports fans in Adelaide. Whether we end up allowing a program to be aired live on a second or third channel before it is broadcast on the primary channel, I cannot say. I expect there will be less and less justification for the maintenance of such a rule over time. If live broadcasts were permitted on secondary channels now, with the existing practice of playing the delayed on the primary channel, would it be such a bad thing? Would anyone be disadvantaged?
When it comes to these issues, I have a compulsion to revert to commenting on SBS. I had the pleasure of meeting with Joseph Skrzynski and Shaun Brown of SBS the other night—a pleasure for the insight they gave me into their current thinking and the development of their services to the Australian public. The SBS is a great success story, and again I go back to sport: SBS was the primary vehicle, I would suggest, for the development and increase in the popularity of football, which some call soccer, in Australia. People like the late Johnny Warren, people like Les Murray, having been given the possibility of promoting football through SBS, have assisted substantially in it becoming absolutely commonplace around Australia.
Many years ago, soccer or football was an oddity, with its round ball, and the people who played it were, as Johnny Warren titled his book, Sheilas, Wogs and Poofters. We have come a long way from that title. The nation as a whole is captivated by ‘the beautiful game’ and SBS should be recognised for the central role it has played in this coming about. As we are currently in the World Cup finals, we are blessed with wonderful coverage of every single game—every game. If it was another channel, we might get highlights of a few, I suspect. But SBS can again hold its head high and be congratulated for the terrific coverage of the World Cup that it is providing.
SBS is an amazing institution and, as I have said, a terrific success story, but its future is still in the making. With the American free trade agreement and questions on the cost-competitiveness and viability of Australian content, with the availability of international channels that have been streaming directly into people’s homes from all over the world—Italy, India, Greece—the very viability of free-to-air television is more questionable than it ever has been. And the viability of a public broadcaster, a network that still is to a large extent a public service for the benefit of our population, with decisions weighed by not just the prospect of profits but social utility, is increasingly under threat. We want good things of our free-to-air television. We want the great achievements of SBS to continue.
Order! It being 8 pm, the debate is interrupted.
The following notices were given:
to move:
That standing order 31 (Automatic adjournment of the House) and standing order 33 (Limit on business after 9.30pm) be suspended for the sitting on Thursday 24 June 2010.
to present a Bill for an Act to amend the law relating to corporations, and for related purposes.
to present a Bill for an Act to amend the law relating to airports, and for related purposes.
to present a Bill for an Act to amend the law relating to telecommunications interception and access, and intelligence services, and for related purposes.
to present a Bill for an Act to amend the law relating to courts and tribunals, and for related purposes.
to present a Bill for an Act to establish the Military Court of Australia, and for related purposes.
to present a Bill for an Act to amend the Sex Discrimination Act 1984, and for related purposes.
to move:
That, in accordance with the provisions of the Public Works Committee Act 1969, and by reason of the urgent nature of the works, it is expedient that the following work be carried out without having been referred to the Parliamentary Standing Committee on Public Works: Infrastructure and upgrade works on identified immigration detention facilities.
to move:
That, in accordance with the provisions of the Public Works Committee Act 1969, and by reason of the urgent nature of the works, it is expedient that the following work be carried out without having been referred to the Parliamentary Standing Committee on Public Works: Construction of housing for the Department of Defence at Muirhead, Darwin, Northern Territory.
to move:
That, in accordance with the provisions of the Public Works Committee Act 1969, and by reason of the urgent nature of the works, it is expedient that the following work be carried out without having been referred to the Parliamentary Standing Committee on Public Works: Proposed construction of housing for the Department of Defence at Voyager Point, Liverpool, New South Wales.
to move:
That, in accordance with the provisions of the Public Works Committee Act 1969, and by reason of the urgent nature of the works, it is expedient that the following work be carried out without having been referred to the Parliamentary Standing Committee on Public Works: Pawsey High Performance Computing Centre for SKA Science at Kensington, Western Australia.
to move:
That, in accordance with the provisions of the Public Works Committee Act 1969, and by reason of the urgent nature of the works, it is expedient that the following work be carried out without having been referred to the Parliamentary Standing Committee on Public Works: Construction of a Centre for Accelerator Science and extensions to other facilities for the Australian Nuclear Science and Technology Organisation at Lucas Heights, NSW.
to move:
That, in accordance with the provisions of the Public Works Committee Act 1969, and by reason of the urgent nature of the works, it is expedient that the following work be carried out without having been referred to the Parliamentary Standing Committee on Public Works: Proposed fit-out of new leased premises for the Department of Climate Change and Energy Efficiency at the New Acton Nishi building, Edinburgh Avenue, Canberra City, ACT.
I rise this morning to pay tribute to two local community leaders and local community groups. I will speak first about a local Montrose resident from the electorate of Casey, Mr David Ferres, who owns a newsagent in Croydon, also in the electorate, who is making a wonderful contribution to East Timor. A bike tour of East Timor prompted him to start raising money for that impoverished nation. He has been selling raffle tickets at his newsagency and raising money as best he can with other local residents, like Lois Scullion, whom I know well, with the aim of building a new school for almost 700 students in the community of Groto. As I said, he was inspired to help after visiting the country recently. As he said in the local paper:
I was in East Timor supporting my son, who was competing in an international bike race called the Tour de Timor. On the plane back, I was seated next to a doctor who was working with the people there. He inspired me to think about what I could do in my backyard in Melbourne.
He has raised $6,000 already, with the aim of raising $10,000. He is building great community spirit and getting a lot of support for this important initiative. It is a reminder of the important role that individuals and local communities, as well as government, play. I pay tribute to him for the work that he is doing.
This morning I also would like to pay tribute to the Montrose community, in particular the Montrose Township Group. Its coordinator, Julie McDonald, and the team at Montrose have done so much work to transform an alleyway once covered in graffiti to an alleyway now covered in local artwork. There are 12 panels depicting the history of Montrose. This has been a real community effort, as it is always in Montrose. Volunteer artists and students from Billanook Primary School and Montrose Primary School have produced the 12 panels. I would like to mention some of the artists in the brief time available: Janice Anne, Jeanette Dodson, Justine Indigo-Rose and Janet Wilson. They are some of the artists who put in a lot of time. I want to pay tribute to the Shire of Yarra Ranges and Julie McDonald and her team in the Montrose community. (Time expired)
The provision of health services has been a key issue for the electorate of Throsby. In opposition, together with community groups, we campaigned on the issue of GP shortages, the need for greater investment in dental health, the closure of the Medicare office that operated in Warrawong and improvements for our local hospitals. All our pleas fell on deaf ears until the election of a federal Labor government. In our first term we have seen some truly remarkable changes and substantial investment in health provision.
The Medicare office closed by the Howard government has now reopened in Warrawong, in an expanded Centrelink office. Our local hospitals have received additional funds to help reduce elective surgery waiting lists. The Prime Minister visited Wollongong Hospital, announcing an extra $12 million for expanded cancer services. Just last week the Minister for Health and Ageing announced funding for an extra 21 beds at the hospital and a $5 million new training and accommodation facility for medical and nursing students.
Last week, I, along with the health minister, turned the sod at the site of our GP superclinic. It will be called Shell Cove Family Health. It will be the hub of preventative and chronic health services and attention. The facility will provide training opportunities for our medical students at the university, as well as for graduates.
Federal Labor has indeed a huge health and hospitals reform agenda. However, I am disappointed that the agenda has not yet acted on the recommendations of the reform commission with regard to dental health. We know that over half a million Australians are still languishing on public dental health waiting lists. Regrettably, 133,000 of them are in my state of New South Wales and 7,000-plus are in the Illawarra region alone. Oral health is one of the greatest inequities in our health system and it can only be redressed in the long term by moving to a universal dental insurance scheme. I am hopeful that, in the lead-up to the election, the government will revisit this critical issue. I believe that people not covered by private insurance would be supportive of a modest increase in the Medicare levy to cover basic dental health provision.
Congratulations to all the members of the Illawarra Dental Health Action Group with whom I have worked over the years and, in particular, its chair, Alice Scott. Keep up your campaigning; there is still some way to go to ensure that, ultimately, all Australians will have access to a quality health system with teeth!
Today I wish to raise two matters with the House. The first is in relation to the issue of literacy, in particular, early childhood literacy within the Hastings region of my electorate of Flinders. Last year the problem was diagnosed by the 2009 Australian Early Development Index. Very simply, the index found that young children beginning school in Hastings at primary level had one of the highest proportions in the state of poor language development. What this means in real terms is that teachers found that many prep children—beautiful young children—were not able to properly articulate, to ask a question or, in some cases, to indicate curiosity or wonderment about the world. These things have a real impact on their ability to learn, to thrive, to prosper, to develop and to grow.
The solution is very clear. It is not the solution to everything, but there is a clear, local solution. Firstly, the Linking Schools and Early Years program is a program which I will support and push, in conjunction with the Hastings Rotary Club. The Hastings Rotary Club has translated that at a local level to a Reading for Life program in all Hastings primary schools. In practice, that means that one-on-one volunteers, mostly elderly—people who have been professionals—will work for 45 minutes for between 10 and 15 weeks. Secondly, we have managed to secure some funding, of $3,000, through the Myer foundation and through BlueScope, of almost $3,000. Thirdly, I now call on volunteers from within the electorate of Flinders—from within the Hastings, Somerville, Balnarring, Crib Point, Bittern and Somers area—to be part of this tremendous program for kids. In short, the Reading for Life program, sponsored by people in the Hastings Rotary club such as Jeff Harvey, is a wonderful program.
The second thing I want to mention briefly is the valedictory speech tonight by my friend and colleague Pat Farmer. Pat is one of my closest friends not just in the parliament but in life. I am tremendously sad that he is leaving the parliament. I am disappointed that he lost his preselection, but he is very philosophical. Tonight he will announce a great step forward in his own life. I want to acknowledge that he is one of the most noble, decent, honest and honourable people I have ever had the fortune to meet. I wish him luck. I will miss his companionship on our running adventures. He has slightly bigger projects, but he is a great man with a mighty heart and an honest character. It has been a pleasure to be a close friend of his. (Time expired)
The development of Israeli settlements in the West Bank continues unabated. With the world occupied in getting the parties to the negotiating table, the reality on the ground is changing to the point that a real and meaningful settlement based on a two-state solution may soon become practically unachievable. Palestinian President Mahmoud Abbas is being painted into such a corner as will prevent him from agreeing to any peace plan that does not provide the Palestinian people with a meaningful unified state and not a series of fractured Palestinian cities and towns.
The building of the so-called separation wall has only increased the likelihood of this occurring. The wall goes beyond the internationally recognised West Bank border with Israel. Clearly it is designed not to keep out the terrorists but, rather, to seize additional territory to be claimed in any settlement by Israel under the pretext of security. It divides Palestinian farms, divides Palestinian families and even denies access to Arab universities. Further, it is designed to inconvenience the Palestinian people by surrounding towns, denying access and rendering the ability to lead a normal life impossible. Encouraging Palestinians to leave the territories and the building of Israeli-only roads leads one to think that Israeli governments intend this as their permanent solution.
As the Israeli government drive this settlement bus at breakneck speeds they are driving the state of Israel to the edge of an abyss that endangers its existence as a Jewish state. It is very simple. More settlement construction means that a viable Palestinian state is unachievable. More settlement construction will make it impossible to resettle Israelis from the occupied territories. More settlement construction means the Israeli army will be unable or even unwilling to remove settlers by force to facilitate any peace agreement. Many settlers are on the public record as saying they will not leave and will violently resist any attempt to remove them from the biblical lands of Judea and Samaria. This claim is no more valid than the Italian Prime Minister whipping out maps of the former Roman Empire and laying claim to larger tracts of Europe, the eastern Mediterranean and North Africa. The argument is nonsensical. But the Jewish people will be left in charge of an apartheid state, ruling second-class citizens with limited rights. This is no more acceptable to the rest of the world than the former apartheid regime in South Africa.
I rise with seven days to go to the switch-off of analog television out of Mildura at the transmitter at Yatpool. This time next Wednesday the analog signal out of Yatpool will be no more. It has been a fairly tumultuous journey getting to where we are today, but I am pleased to say that tonight a repeater transmitter will be transmitting out of Robinvale, which is an issue that I drew to the minister’s attention before Christmas. Last week we had repeater transmitters installed at Walpeup, which gets to the Mallee Highway, and there is now a third repeater at Ouyen. We are getting satisfactory outcomes out of them. I was advised this morning that the rollout of satellite to the more isolated sites is continuing, to the satisfaction of the retailers.
I intend to be present with the minister, the Hon. Stephen Conroy, on Wednesday, when there is going to be a symbolic flicking of the switch. I want to take this opportunity, as the last opportunity in this place, to make a plea to my constituents: if you have put it off, the minister is serious. Even though I have been asking him to consider perhaps a couple of weeks delay, he has decided he does not want to do that. If you have not converted to digital by now, on nine o’clock next Wednesday morning your analog signal will be no more.
My constituents are fascinating. I have checked the Australian Football League’s draw for the weekend of 2 July. Port Adelaide are playing Collingwood. I know the minister is an avid Collingwood supporter. On 3 July my team, Geelong, and Hawthorn will be beating it out, as well as West Coast Eagles and Adelaide, Brisbane Lions and St Kilda, and Richmond and Fremantle. On 4 July it will be Melbourne and Essendon, and Carlton and the Western Bulldogs. The one thing I have learnt is that this is the signal that my constituents want to see the most. It has been a fascinating journey for me over the last 16 years to get AFL football broadcast out of Mildura. The high concentration of desktop boxes is one of the reasons that Mildura has been chosen as the site for the first conversion. It was already 75 per cent before the program towards switch-off started. The reason for that is that the only way Mildura residents have been able to get their football broadcast has been through a combined signal with WIN Television and Prime Television, jointly owned.
One last reminder, constituents: if you have not gone to see a technician or a retailer for your set-top box or your new digital television, you have only got seven more days to do it. Otherwise, you will not be able to watch your football over the weekend of 2 July. (Time expired)
On the weekend I had the privilege to attend the launch of a project with the Parliamentary Secretary for Multicultural Affairs and Settlement Services, the Hon. Laurie Ferguson, in my electorate at the South Australian Amateur Soccer League Association headquarters, which is based on the corner of Trimmer Parade and Military Road in Grange. The magnificent project that was launched on the weekend was an Australian government initiative to provide $135,000 of funding to a program called Soccer Unites. This program is about assisting young refugees in the western suburbs of Adelaide who are new arrivals or new settlers.
As I go around the electorate and visit amateur soccer clubs—I have got many of them in the western suburbs—I see refugees who are playing soccer with these clubs. Every team has five or six Africans or people from the Middle East and Afghanistan. They seem to gravitate to these clubs. They become part of the community and enjoy being part of a team. I suppose they are drawn to soccer or to sporting clubs because when you are playing football or soccer it does not matter what colour you are, what your religion is or what your race is; all that matters is that you can kick a ball. You become part of that team and you also become part of that community. It is very important to support these clubs because they do some great work. Apart from providing the sporting facilities, they also assist many of these new arrivals with their everyday needs, like housing et cetera. I get calls constantly from committee members of amateur soccer clubs in my electorate who are seeking assistance and services for some of their players who are new arrivals.
They do some great work and the federal government has recognised this by providing $135,000 to the Soccer Unites program. It was great that it was announced and launched on the eve of Refugee Week and at the same time the world is embracing soccer fever, with the World Cup in progress. The Soccer Unites South Australia project will engage over 10,000 participants and 110 clubs, giving those involved a chance to inspire their fellow Australians. The project will also allow a sharing of experiences and cultures and will help create common ground among people of different backgrounds. On Saturday morning there were people there from Burundi, Somalia, Eritrea, Ethiopia, the Middle East, Iran, Iraq and Afghanistan. It was great to see these young people, who have gone through horrendous situations, playing soccer.
Yesterday I met with representatives of Micah Challenge here at Parliament House. I met with six of their representatives and I thank my constituent Joanna Elliot and also fellow Western Australians Jen Noonan, Matthew Bond and the State Director of Youth for World Vision, Ashleigh Williams. They were joined by Michelle Dobbs and Jenni Downes, who are from Sydney. I commend these Micah Challenge representatives for their forthright advocacy for the Millennium Development Goals. The Millennium Development Goals focus on the reduction of poverty with regard to the percentage of the population living on less than a US$1.25 per day, the reduction of hunger in the world and the reduction of the proportion of those who are undernourished. There are goals relating to the net enrolment ratio in primary schools, the increase of female political representation and the reduction of child mortality and maternal mortality rates, as well as the reduction of the incidences of infectious diseases such AIDS, tuberculosis and malaria, which go hand-in-hand with the goal related to the need for safe water and improved sanitation.
As representatives of the parliament of an advanced nation, these are goals that we all seek to meet. We acknowledge our responsibilities and we know that through our commitment we can achieve advances for those in the developing world. It is important therefore that we seek to maximise the value for money to be achieved. Every possible dollar must be targeted to real action on the ground and not towards the middlemen or to projects that really have no part to play in the pursuit of the Millennium Development Goals. It is therefore disappointing when we hear of megasalaries and private contracts detracting from our aid programs. It is also amazing when we hear of even the AFL being given $307,843 for the promotion of football in Africa. I wonder what Millennium Development Goal that is targeting?
Contrast that to the great work being undertaken by the Mwika Hope Foundation in Tanzania, which is supported by local people in the electorate of Cowan. At the Mwika school in recent years they have built two classrooms for $25,000 each. They also built a six-by-eight-metre dining room for AIDS orphans That cost just $6,400, using local building stone and local labour. In this case, so much value has been achieved in one place. I therefore had no hesitation when I wrote to the government to highlight the work of the foundation and how they are certainly the sort of organisation that can achieve real gains for the Millennium Development Goals. The work of the Mwika Hope Foundation, particularly through their school project and their HIV programs supporting sufferers, advances many of the Millennium Development Goals.
The point is that progress towards the goals is best achieved through such high-quality organisations as the Mwika Hope Foundation. I applaud their efforts and I will advocate for them in the future. But, clearly, once you have super-NGOs, superbureaucracies and supercontracts you have superprices and supercosts. The one thing you do not have is super value for money. I wonder how much more could be achieved in the future with more money being sent to the right places, and that is what we should aim for.
I want to talk today about two girls in my electorate who I find inspiring as I reflect on the different lives that are given to us, some harder and some easier, and on the important role that government has in assisting those kids and their families who are affected by chronic health conditions and disability.
In March earlier this year, many members and senators would have taken the opportunity to meet with a youth ambassador representing the Juvenile Diabetes Research Foundation as part of the annual Kids in the House event. Amy Fitzgerald was the youth ambassador that I met, and she lives in my electorate of Fremantle. Amy was four years old when she was diagnosed with type 1 diabetes. She is now an active 12-year-old who participates in national surf-lifesaving and swimming competitions. When we met, she told me about the ways she has learned to manage diabetes in order to lead an active normal life. She said, ‘I control diabetes; diabetes doesn’t control me.’ Amy’s mother, Melissa, also lives with type 1 diabetes.
Many people would be aware that living with diabetes involves multiple blood tests each day to monitor and manage insulin levels. However, it is perhaps not commonly recognised that living with diabetes carries a serious risk of early-onset blindness, kidney disease and heart disease. Young people with type 1 diabetes are some of our most influential advocates. They are outstanding at raising awareness of the urgent need for investment in Australia’s best and most promising diabetes research in pursuit of a cure for this disease.
An equally worthy effort is made by those involved in the Politician Adoption Scheme, run by Jan Hansen, from the Developmental Disability Council of Western Australia, to ensure that political representatives understand the challenges that children with a serious disability or medical condition face on a daily basis. It was my privilege to be adopted by Chloe Corfield, who has atypical Rett syndrome and epilepsy. I am grateful to Chloe and her family for letting me into their lives and for showing me what it requires to live with a disability in a direct and practical way. Rett syndrome is a rare and acute neurodevelopmental disorder with severe physical and gastrointestinal consequences which develops when a child is around 18 months old.
Chloe’s atypical version of this disorder is less severe than typical forms, but she also suffers epilepsy and requires round-the-clock attention. She attends Castlereagh School in Willetton four days a week and also enjoys horse riding, riding on a specially designed trike, swimming, listening to music—ABBA was her favourite when last we met—going for rides in the pram, playing with her siblings and having spas at her grandparents’ house. Chloe’s parents, Tracy and Byron, do a fantastic job in providing a loving and vibrant family life for all their kids, and they run a business from home to better allow them to provide for Chloe’s needs. I know the joy they experience with their kids, but I also know they worry about the future, particularly in terms of the financial and other support that Chloe will need.
I take great heart from Chloe, Amy and their families and I applaud their fortitude and spirit. I am resolved to keep their example in my mind, especially when it comes to necessary reforms in the area of disability policy.
This morning I rise to talk about a very important issue to a small local school in my electorate, which is the Norton Summit Primary School. It is having extreme difficulties with getting the federal government to understand the need for some reconsideration of the out-of-school-hours care program which was defunded some time ago because of an appalling bureaucratic classification decision. The bureaucrats have decided from lines on maps to put Norton Summit in with the Adelaide metropolitan zone for the purpose of considering funding for the out-of-school-hours care program. What they failed to recognise on their maps is that there is a cliff between Norton Summit and the city. It is not part of the city; it is quite clearly a part of the Adelaide Hills community and has been unfairly treated in that respect.
Today I will be tabling a petition before the Petitions Committee from concerned parents and residents of Norton Summit about this issue. For a school where there are fewer than 100 kids attending we have a petition with over 500 signatures from the local community. I think that indicates the level of unhappiness and anger that is in the local community about this very important issue. I have written to Minister Ellis, the Minister for Early Childhood Education, Childcare and Youth about this issue, as she is the responsible minister. I have had some conversations with her in relation to it. She wrote back last week, responding to a letter sent in March on this issue, saying she has now contacted the Assistant Treasurer to ask him to get the ABS to reconsider the classification of this school so that they can again potentially have the out-of-hours school care program. I have also written to the Assistant Treasurer asking he give consideration as well. A bureaucratic decision has been made simply based on lines on maps. It has failed to take into consideration the genuine needs of a small school community.
I have many very small schools in the Adelaide Hills. Unfortunately, it is the desire of the Rann state Labor government to get rid of these schools and to make so-called megaschools which do not suit the community. They are small schools and schools of choice for people in these communities. This is another decision along the way to make it more difficult for these small popular local schools—whether it be Norton Summit or Basket Range or Eastern Fleurieu—that the state Rann Labor government is so desperately trying to get rid of by stealth and, unfortunately, this decision by federal bureaucrats is making it harder as well. I urge the Rudd Labor government to reconsider this decision and give Norton Summit School the out-of-hours care it so deserves.
Over the last two days I was very pleased to have with me in my office Kira Kelly, who is part of the Learn Earn Legend Program, an internship for young Indigenous students to come and see the goings on of departments and also parliament. Kira asked me to read something on her behalf about her local area, because I really wanted her to think of herself as a representative for her suburb. This is what Kira had to say about her local area:
I’m pleased to write this speech about my local community and how it could be improved. I live in a suburb called Alexander Heights. In this area the people are friendly and approachable. Alexander Heights has lots of parks and ovals for sporting activities. I love to play sport and guitar and when ever I have free time I usually spend it outside playing netball or singing and playing guitar for my sisters. I moved to Perth two years ago from the small town of Port Headland in Western Australia. When I first moved to Perth I was excited but sad to leave home. Since then I have had to learn to catch public transport everywhere and when you come from a small town it can get confusing. But since then I have learned to catch buses and trains everyday. I am very happy to live in this area but I believe it still can be improved.
I go to school at Aranmore Catholic College in Leederville in Perth. It is a very small private school with many students who are willing to learn. Because the school is in Leederville I have to catch the bus every morning and afternoon. But when I walk to my bus stop everyday I see bus stops and walls that have been vandalised. As I get on to the bus I notice that the vandalism only gets worse. Every bus I get on has names of people and gangs that are scratched into the windows. Sometimes the graffiti is so bad that makes it hard to see through the window. Vandalism is not just found in my area, but it is found all across Perth.
I think that the kids that get caught vandalising should be punished but also educated about the cost of cleaning and fixing the vandalised property. Kids who have been caught vandalising should also be put in a program that helps them work on art to get on the right track in life and maybe even paint murals for the city walls.
That is what Kira Kelly had to say about her local area. It was a pleasure to have her accompany me and to reflect on things in her local area. She said that being here was a great initiative, she had a great experience and it has actually opened up ideas for her. She did say to me that she will now consider perhaps working in Parliament House. I commend the Minister for Early Childhood Education, Childcare and Youth on the Learn.Earn.Legend! program and also say that perhaps in Kira Kelly we may have a future member of cabinet.
Order! In accordance with standing order 193, the time for members’ constituency statements has concluded.
Debate resumed from 17 March, on motion by Mr Laurie Ferguson:
That this bill be now read a second time.
The coalition supports the Immigration (Education) Amendment Bill 2010. It introduces amendments which will encourage more vulnerable migrants to undertake their most important and urgent settlement task, and that is learning English. This bill implements minor changes to the delivery and eligibility requirements of the Adult Migrant English Program. In particular, the proposed act will remove administration fees, at a cost to the budget of approximately $10,000. It will make New Zealand citizens ineligible for taxpayer funded classes and will allow new arrivals up to six months to register for classes but require them to commence classes within 12 months, which is an existing requirement. It will allow migrants five years to complete these courses under the program. It will also give the Secretary of the Department of Immigration and Citizenship discretion to adjust time limits on registration, commencement and completion of the program when required, which recognises one of the most important aspects of settlement policy, and that is that everyone’s case is different, particularly when we are dealing with those who have come from quite extreme circumstances under our refugee and humanitarian program. It is important that we recognise the individual circumstances of those individuals and that, wherever possible, we tailor our programs to suit their individual circumstances to assist their integration and assimilation into the Australian community.
The legislation also provides access to the program for 15- to 17-year olds who are not participating in school within the first year of arrival in Australia. The proposed amendments will ensure that clients under 18 years of age will not be subject to the six-month registration time frame but rather will be required to register and commence the program within 12 months. The five-year completion time frame will also apply to them.
As I move around the country and talk to those involved in the settlement services funded by the government—and I think there is a genuine level of bipartisanship on this aspect of the policy—it is always incredibly encouraging to hear stories of young children who have been settled in this country, particularly those coming through that refugee humanitarian program, who have gone to school and done extremely well. They have learnt English and they have gone on to higher education. Recently in Townsville I was talking to those who provide the settlement services there, and I learnt the wonderful story of a young woman who had gone through this exact process, having had very little English when she arrived. She went through this program of going to school, and she has now gone through university. She has achieved extraordinary things, and now her younger siblings are doing exactly the same thing. That is what happens to those who go through school. But there is the opportunity also for those who are not at school, for whatever reason, if they are under the age of 18, to participate in the English language program, which gives them the most necessary skills to make their contribution and to realise their own goals and objectives. That is a very positive thing.
This bill will also allow the program to deliver a citizenship course for vulnerable refugee migrants who are unable to sit the computer based test. This course does not form part of the Adult Migrant English Program curriculum but is in addition to it. It is another worthy initiative in this bill. The AMEP was established in 1950. It is a national settlement program that provides up to 510 hours of free English language tuition for eligible adult migrants and humanitarian entrants who do not have functional English.
Some migrants with provisional visas may be eligible to join the program. The AMEP is delivered nationally by 13 service providers with learning centres in more than 250 locations. Additional tuition is available through the special preparatory program to humanitarian entrants with low levels of schooling or who have had difficult pre-migration experiences, such as torture and trauma.
In 2008-09 the AMEP provided English-language tuition to 52,720 clients and expenditure was $174.5 million. That was money very well spent. Some 56.6 per cent of all AMEP clients were family stream entrants, 26.4 per cent were humanitarian stream entrants, and 17 per cent were dependents of skilled entrants. AMEP clients represent 193 countries of birth. Some 19 per cent of all clients indicated they had seven years or less of formal education, 68 per cent of all clients were female, 77.4 per cent of all clients were aged from 16 to 44, and 22.6 per cent were aged above the age of 44. The most common spoken languages were Mandarin, Arabic and Vietnamese.
Australia is almost unique in the world in the free provision of language tuition to residents. Both sides of politics have a pretty much bipartisan approach to settlement services. We both acknowledge the critical importance of English language acquisition, although we may disagree from time to time about the detail of how that is provided. The provision of settlement services in general is an uncontested area of policy. Again, both sides acknowledge the critical importance of providing services that ensure the successful and quick settlement and integration of new migrants into our community.
I was recently, as I referred to before, in Queensland, but on this occasion I was in Brisbane and I had the opportunity to visit with a group called ACCES, which is a non-profit group that delivers a range of services to newly arrived migrants and refugees in Logan City. It is run by their CEO, Gail Ker, and her team. ACCES Services is a community based non-profit organisation which was established some 25 years ago. They are a committed to fostering community development, settlement and employment initiatives and to providing personal support programs to address the needs of disadvantaged community groups, including migrants, refugees, humanitarian entrants and temporary protection visa holders. Under a social justice framework they are also committed to creating coherence through the development of needs based services and the establishment of collaborative service delivery with relevant service providers.
I was particularly impressed with their commitment to putting migrants into work as quickly as possible, and their hands-on, practical approach to ensuring that people can stand on their own two feet as quickly as possible. They have developed a number of very innovative ways for doing that—for example, outreach to a wide variety of potential employers to discuss employment opportunities and tell the good stories of employment success, particularly for those who have come through the humanitarian program. This includes discussions about cultural differences and practices and the importance of mentoring. Word of mouth is the most important PR tool newly arrived migrants have, once employers know how eager these people are to work and how committed and loyal they are to the companies that have put faith in them. They have found a number of willing employers and newly arrived migrants on their way to self-sufficiency.
Gail told me the story of one individual who was walking two hours to and from work every day. If only that level of enthusiasm was repeated more around the country it would be a great thing. I think it highlights the gratitude and the real sense of value that is placed by those who come to Australia on the opportunity that they have been given—and that they have been generously given by a generous nation. I noted also that ACCES had created and developed small business opportunities which employ migrants and refugees. For example, they have established a furniture removal business and even an asset maintenance business, with lawn mowing and things of that nature. They established a hub for migrant services, which is truly innovative, bringing together a range of government departments and service providers to help newly arrived migrants find their way. They have also obtained funding from a range of sources in order to provide more tailored services to the almost 500 clients they take care of each year. It is one of the most innovative and successful service delivery models I have encountered in the time I have been in this portfolio, and if this bill were consolidating these initiatives into the AMEP business model then it would be sure to be a great success.
When I was in Brisbane I met Mohammed Olad Salad, who was teaching English to some primary kids. They were Abdiaziz from Iraq, Umucaltum, Abdiwadud and Hamdi, a family from Somalia, and Maung Lwin, Tha Ku and Mumu from Burma. It was marvellous to witness the enthusiasm and commitment of these young kids of such diverse backgrounds and circumstances engaging with the programs and settlement opportunities that were being provided to them. It is a hope for all of us that these children not only learn English in the supportive environment provided by places like ACCES but learn the lessons about each other and the values of the broader Australian community, which I know they do.
There are a range of programs offered under our settlement strategy and policy. I think it is a great credit to this parliament that these settlement programs are supported by both sides of politics regardless of who is in government. I am aware that recently the parliamentary secretary, Mr Ferguson, has engaged in wide-ranging consultation with service provider groups all around the country. There has been feedback from those groups. The parliamentary secretary said to me, when we were both at a function, that he was a bit surprised that the feedback was so good and asked for it to be checked. I think it is great that he had that level of appreciation of the need to ensure that the feedback was right. But the feedback was, indeed, right and the policy parameters that have been put into these programs over a long period of time by our government, when we were there, and by this government have received a very good reception. There are always things that can be improved; they are being improved and there is always good advice.
The one thing I take away when I visit places like ACCES is that the key to the success of this model has been in engaging community based organisations in the delivery of these services. Gail, who was recently awarded an Australian honour—deservedly so—has created an integrated hub of service delivery that seeks to link people to services and to link people to each other. The more that we can empower Gail Ker and her colleagues all around the country who are engaged in this business the better. The more we can get out of the way and give them the tools they need to do the job they are so passionate about doing I am very optimistic about.
I am very optimistic about the success of our settlement programs. There is no doubt that around the world our settlement programs in Australia are perceived as the best in the world—long may that continue. People and governments come from around the globe to see how we do it. We do it well. We need to continue to do it well so, on behalf of the opposition, I am pleased to continue to give our support to working on the success of these settlement policies, to continue to engage with the sector and to listen to them about where the improvements can be made. We must continue to give them the assurance that this parliament stands behind the Gail Kers and all of Gail’s ilk all around the country as they stand in the breach and deliver these services, not just as a job, but out of a real sense of passion, service and commitment, which I know is represented by many, not only in that area but all throughout out community. It is an excellent model.
This bill, which seeks to make some minor amendments to the way that the English language program is delivered, takes another albeit small but good step forward. There will be more small steps and there will, hopefully, be some large steps as well. There is nothing more important than giving someone who comes to this country the language skills they need to be functional and to make a contribution. Without the language it is harder to get a job. Without the language you do not know how to get on a bus or you do not know how to access services. We all know of people in our own electorates and through our experiences who may not have had access to these services 30, 40 or 50 years ago and to this day are hamstrung by their ability to read the most simplest of things such as letters from government departments or agencies informing them of various things.
The fact that we are now ensuring that a much higher proportion of migrants who come to this country have those language skills, I think, is a very positive thing. It builds social harmony. It moves away from the situation where people tend to stay clustered in enclaves and that more have an open outlook to the Australian community and are invited to engage. These are the tools that we want people to have. These are the tools that should be funded to be provided to those who are delivering services on the ground.
I commend the government on this bill. The coalition is very happy to support it and to continue to work with the government and, more importantly, Gail Ker and all the Gail Kers to ensure that we deliver these programs effectively in the future and maintain our reputation as being the best in the world in this area.
Like the member for Cook, I too am very pleased to have this opportunity to speak on the Immigration (Education) Amendment Bill 2010. I listened very carefully to the contribution by the member for Cook and I know Laurie Ferguson would be very pleased with his valuable contribution and his gracious comments in respect of Laurie and the work he has done in this area. As someone who has worked closely with the member for Reid I certainly know he really has his heart in this, not least because of his responsibilities as parliamentary secretary but because his electorate certainly is one of the most culturally diverse communities in Australia and his electorate is home to very many newly arrived migrants and refugees. Many of these refugees, including very young children, have been subject to horrors beyond our comprehension.
This bill today is an example of the government introducing measures that will provide longer term sustainable programs for newly arrived migrants. Further, it is another example of our government recognising the needs of the most vulnerable and disadvantaged in our society by implementing ways to ensure that they are given appropriate assistance to fully participate in our very fortunate country: Australia, the lucky country.
Specifically, the bill amends the Immigration (Education) Act 1971 to implement the new Adult Migration English Program, AMEP. That is the business model. Essentially, the AMEP is a federal settlement program that provides English language tuition for eligible migrants and humanitarian entrants who do not have functional English. Currently the AMEP offers up to 510 hours of free English language tuition to eligible adult permanent migrants and humanitarian migrants. Humanitarian entrants can also access further tuition if they have low levels of schooling or have experienced some form of premigration trauma or torture. Some 13 service providers deliver AMEP in more than 250 locations around our great country. Through the new AMEP business model a greater number of regions will deliver the AMEP and improve client outcomes.
The amendments will also improve the design, the delivery and the administration of the program and provide greater transparency and flexibility. The provisions in this bill today ensure that well-designed and targeted programs will deliver the assistance needed for newly arrived migrants to make an easier transition to Australian life. AMEP is a very important part of the government’s social inclusion agenda, highlighting the importance of language skills as a key to improved participation in everyday life as well as a gateway to further education, training, jobs and building friendships. That is why the government will extend the period for registering in an English course from three to six months from the date of the person’s arrival. I believe this amendment to extend the registration timeframe from three to six months from the date of arrival better reflects the many obstacles and difficulties newly arrived migrants face when settling into their new home.
Most of us understand the chaos that moving home brings, but few of us truly appreciate the enormous challenges that come along with moving country. Some of these are finding new schools for children; obtaining all the necessary household furniture and items; looking for long-term accommodation; attending many appointments, such as medical, Centrelink or social services appointments; and, not least of all, dealing with the emotional strains of leaving one’s homeland. It would be extremely difficult for those coming from other countries with very different environments, especially for those making the transition to our urban lifestyles. More importantly, the extended time frame recognises that others are dealing with post-traumatic symptoms which can be exacerbated by the sudden and significant pressures they experience with so much change, moving to a new country and a new way of life.
On this point, I would like to speak for just a few moments about a very important organisation that operates in my local area. It is called STARTTS, and is certainly well known to the Hon. Laurie Ferguson. STARTTS is an acronym for Service for the Treatment and Rehabilitation of Torture and Trauma Survivors. It was established in 1988. STARTTS is jointly funded by the state and federal governments and is one of Australia’s leading organisations for the treatment of torture and trauma survivors. Recently, I had the pleasure of meeting with the chief executive officer, Dr Jorge Aroche, and the Community Services Coordinator, Jasmina Bajraktarevic Hayward. Jorge and Jasmina work with and assist refugees who need help to recover from their traumatic experiences and build a new life in Australia, and they are doing an excellent job to help these people.
Torture, as defined by the United Nations declaration against torture, is the deliberate use of physical or psychological methods that cause a person severe pain and suffering with the intention of punishing, intimidating or extracting information from him or her. The torture must be perpetrated by a public official or at his or her direction. Trauma or traumatic experiences cause great stress or pain and/or fear for a person. Traumatic events can disrupt or disturb a person’s health and everyday living.
STARTTS is particularly concerned with trauma that happens in situations of organised violence such as war or violence inflicted by government or paramilitary forces. Examples include rape; death or disappearance of family, friends or colleagues; harassment by authority figures; and burning or looting of a home or workplace. STARTTS notes that more than 60 per cent of refugees in Australia have survived torture and trauma. STARTTS has seen many refugees live with physical reminders of broken bones and injuries to all parts of the body from torture and incarceration, resulting in chronic pain, diseases and cardiopulmonary disorders—to name but a few. However, STARTTS knows that it is often the psychological effects that are the most debilitating. The problems can range from depression, severe anxiety and sleep disorders to memory and concentration problems and intrusive thoughts. This is compounded by the changes they face in relocating to a new country that has a foreign language and different culture, social norms and sociopolitical systems.
STARTTS has a long history of providing refugee services to help them regain their ability to live full lives and to contribute to our country. They provide refugees with a broad range of services, including individual family counselling; youth services; group therapy; activity groups such as English, craft and exercise classes; physiotherapy; pain management groups; early intervention programs; psychiatric services; and neurofeedback, to help retrain the brain to overcome the effects of torture and trauma. Torture and trauma survivor clients need more time to recover from such experiences with the assistance of outstanding organisations such as STARTTS. I again commend the work of STARTTS. I commend them for their efforts to help some of the most vulnerable people in our society, and I look forward to working further with them in the future.
It is evident, in the light of the challenges facing and services offered to new migrants, particularly refugees, that the amendments in this bill today better reflect the challenges many new migrants face by providing the appropriate flexibility to the AMEP. It is important for newly arrived migrants to have enough time to adapt to their new homes before they can focus on learning English. However, the bill will also introduce a time frame to complete an English course. The five-year time frame will provide the incentive for clients to make good use of the program early in their settlement period. It will also ensure that the services are used to optimum effect, as support for services is needed most in the initial years of settlement and will lead to more independent and valued members of society equipped with the necessary language skills. If, however, a client does not complete the AMEP within the five years and is not eligible under compassionate and compelling circumstances, they will have the opportunity to improve their English through other English language programs including those provided by the Department of Education, Employment and Workplace Relations. The amendments will also allow the extension of registration, commencement and completion time frames for English courses to be prescribed by regulation, recognising that circumstantial issues may require individual review.
I am pleased to note that the amendments will also provide support for youth under 18 years of age by extending the registration and commencement period from six months to 12 months from arrival. Access to AMEP for 15- to 17-year-olds who do not remain at school within the first year of arrival in Australia was announced in the 2009-10 budget. This measure aims to keep young people engaged in education and provide them with the skills to secure work and improve their social participation. We know that, even for English-speaking youths who do not remain at school or in some form of training, they are at risk of long-term unemployment and of becoming disaffected members of our society. It is very pleasing that the amendments do not overlook this very important group of new migrants.
The bill will also remove the annual administration fee for English courses, removing any financial disincentive to registration. I understand that the revenue collected through the fee was small and only charged to roughly one per cent of AMEP clients. To assist AMEP providers in their assessment of clients and their English proficiency, the term ‘functional English’ will be updated through the amendment bill to ensure it is consistent with the current definition in the Migration Act 1958. The bill will clarify, through a legislative instrument, the standards to be used by providers to determine ‘functional English’. Not only will this amendment provide greater clarity for providers; it will offer greater transparency and clarity in the assessment of a client’s English proficiency.
The 2006 census data indicates that almost 50 per cent of residents in my local area were born in a country other than Australia and that 40 per cent of my constituents speak a language other than English at home. These are significant figures, and a number of younger people in my electorate will benefit from a bilingual upbringing. However, it is also important for English courses to be provided to ensure non-English-speaking adults are given the opportunity to learn English so that they may participate fully in Australian life. That will also enhance opportunities for migrants to contribute meaningfully in our society and add to the richness of the community. While children are offered English as a second language at school, the AMEP is a wonderful opportunity for eligible adult migrants to learn English, free of charge.
I know that many other countries around the world provide language proficiency programs for the benefit of new migrants. Understanding and being able to communicate in the language of the country in which you reside is extremely important for social inclusion and a smooth settlement into a new way of life. As the member for Reid, Laurie Ferguson, has previously mentioned, it is a well-established fact that the ability to communicate effectively in English is a key factor in participating in Australian society.
The new program model aims to provide improved support for participants, encourage participant retention and improve the English language proficiency of clients. Further, the amendments proposed in this bill aim to provide greater settlement support, flexibility and clarity for the clients and providers of the AMEP. I am very, very proud of the contribution that education has made for the new migrants in the area that I represent and the concomitant contribution that those migrants have made not only to our local community but to our great country, Australia. I commend them for the contribution that they make and the rich cultural heritage that they bring to our country. They make it a bigger, stronger and better Australia. I commend the bill to the House.
I also join in this debate to offer my full support for the Immigration (Education) Amendment Bill 2010. In doing so, I would also like to join with the member for Cook in acknowledging the contribution that the member for Lowe has played in relation to the migrant community and refugees in this country. On many occasions I have had the opportunity—and possibly to the embarrassment of the member for Lowe—to indicate that he is probably one of the best versed people in this place on this issue. He fully understands the issues facing new immigrants in this country. He has a very personal commitment in that respect. It certainly shows through in the work that I see him doing in our local community in the south-west of Sydney. As I said, I join with the member for Cook in making that observation.
This is an important bill, particularly when implementing the new Adult Migrant English Program business model, which is intended to improve the settlement programs, in line with government’s broader settlement framework. It is with some pride that I make my contribution to the bill as a member of this House. In the area that I come from, the south-west of Sydney, the new arrivals to our country play such a significant part in my local community. It is my view that there can be nothing more important, when advocating for migrants and refugees, than ensuring that our most recent arrivals achieve a sense of belonging in this country and quickly develop a capacity to participate in their newly adopted homeland.
Many here would know that Sydney attracts a significant proportion of immigrants to this country. There are 40,000 new arrivals to Sydney each year. Four in 10 of Sydney’s residents are immigrants. Further, we know that the south-west of Sydney has a disproportionately large contingent of new arrivals, which places demands on the various service organisations out there which are looking after their needs. I am therefore very grateful to the many local groups, such as the Liverpool Migrant Resource Centre, the Cabramatta Community Centre and the Vietnamese Community in Australia for the valuable work that they do, not just in welcoming people from other countries to our great nation but in making sure that these people acquire the skills, the knowledge and the know-how to fully participate. I think that is pretty important.
I would like to put on record my gratitude to people such as Ahmed Muktasha, President of the Liverpool Migrant Resource Centre, and Kamalle Daboussy, its CEO. It is a reflection not only of what they do for new arrivals in the migrant community but of what they do for our community generally. I think they make an extraordinary contribution. Most of it is unsung. I think we should take opportunities in this place to acknowledge the good work that they do and the positive outcomes they bring in building a very wholesome community, particularly where we come from, in the south-west of Sydney.
These organisations, as part of 10 organisations across the south-west of Sydney, were only recently granted $2.8 million from the government’s Settlement Grants Program, and I know that money will go to very good use. I have already met with each of those organisations and have seen the programs they are developing. What is more important is that I know this is not just another grant going to another organisation. The checks and balances applied are very good. I personally know each of those organisations and have seen the outcomes they have delivered in past activities, and they are extraordinary. This money is well invested by the Commonwealth in those programs, which will be administered at a local level. This funding will make a difference in the lives of many, and I know for a fact that it is welcomed and will go a long way to assist these organisations to meet the demands on their valuable services.
I would be remiss if I did not in this debate recognise the many cultural benefits that have flowed to this country, particularly throughout my electorate, and the achievements by the migrant community. I am very honoured to live in and represent an area which has an abundance of strong ethnic groups which include Vietnamese, Chinese, Indian, Lebanese, Fijian, Bangladeshi, Filipino and New Zealander people, to name just a few. Their culture really does enrich our region in many ways. Their colour, vibrancy and diversity have combined to produce an overall richness of spirit in this country which we, particularly in the south-west of Sydney, are particularly proud of.
I recognise that there are many challenges for these ethnic communities to overcome, and that is where it falls to the various groups that operate so diligently to assist that integration into the wholesome nature of our region. I emphasise that I am confident that, through the diligent work of those community organisations and their focus on assimilation and inclusion, this is very much in good hands. Again, I pay tribute to Laurie Ferguson for what he has achieved in that regard. I do know that he is a household name throughout the south-west of Sydney. That is not just because Laurie is a good mate or anything like that; it is a fact that he does tireless and very good and meaningful work for people who need that assistance.
The bill introduces measures to help newly arrived migrants in relation to English courses. As the member for Lowe said, it will remove the administration fee for these courses. Funnily enough, only about one per cent of people are actually charged for their course. The department would know this better than most, but I think it probably works out that the administration charge for collecting that fee is far outweighed by the one per cent that is collected. So withdrawing that fee is a very good thing, and it also sends the very good message that we in this country put a premium on inclusion.
The bill will also amend the language definitions used to refer to ‘functional English’. The purpose is to provide clarity and to ensure that it is relevant within the act. It will also remove the eligibility for New Zealand citizens, who hold a special category of visa. Importantly, this will not breach our commitments. It does not mean that people who do not have functional language skills will miss out. There are other programs through which they can be assessed, but this amendment will ensure that there is some practical application when we are referring to ‘functional English’.
We know that after migrants arrive in this country they undertake a range of activities. The ones I get to meet spend a lot of time familiarising themselves. The migrant resource centres spend a lot of time with them. Their kids get into schools and they try to find employment. All those things are happening. It is difficult, in terms of the time frames, for them to get out within three months to undertake a language course. I know after speaking to these people that coming to a new country is full on, particularly if they are trying to find a place to live and do all these other things. Their mindset is not: ‘I must now enrol in and turn up at this English course.’
The bill will address this difficulty by extending the registration period from three months to six months for newly arrived persons. That way, it can allow them to get their lives in order, concentrate and prioritise what they are going to be doing. Their biggest priority, I have to say, is family. I know from the Liverpool Migrant Resource Centre that one of the biggest tasks they have with newly arrived people is getting their kids to schools and getting them access to transport and all that sort of thing. For any mums and dads, newly arrived or not, that is the key thing that needs to be addressed.
Following on from this bill we will introduce a five-year time frame to complete the course, with an extension on compassionate grounds or if there are compelling circumstances. As I understand, in 2007 we removed the three-year time frame for completing the course, possibly on the basis that there will be changes and people will do part of the course and then come back and complete it further down the track. It is a little bit like our kids removing themselves from a university course thinking that they are going to go back in a couple of years time. The reality is that they probably do not go back. While this provision was designed to give some flexibility, the practical result was that people did not return.
Apart from not achieving the outcomes, the provision also leaves us with the contingent liability, because a number of things flow from the Commonwealth providing these courses to so many clients. As I understand it, there is a contingent liability of almost $300 million. We have a responsibility to get them to have functional English. If people adjourn their participation in a course and fail to come back, it creates all sorts of problems. I think bringing time frames back into it is a very good thing. It allows people to function and to arrange their lives, but it also ensures that they know there is a responsibility to participate. There is flexibility in completing within five years; you can certainly complete it in a far shorter period. Your life can be worked around the completion of this course.
The other thing is that this has to drill down to the fact that completion is not simply getting a certificate. This is all designed to provide, through this qualification, functional English and literacy to people in such a way that they can fully participate in life in this country.
Once again, I would like to praise the efforts of the department. I see what they do firsthand in my local community. I would also reiterate my support for the respective migrant resource centres and the good work that they do. We are indeed a very lucky community. In the south-west of Sydney, we regard ourselves as particularly blessed because we are multicultural and we have a very strong sense of inclusion. Our kids grow up thinking that it does not matter whether their kids are playing football with kids from Chinese, Japanese or Filipino backgrounds. This is our modern Australia. We are seeing the next generation of that now developing in such a way that you could not be anything other than proud of our population mix and the way that we bring a new vibrancy and dynamism, particularly in the south-west of Sydney. I commend the bill to the House.
in reply—I thank members for their contribution to the debate on the Immigration (Education) Amendment Bill 2010, and I will turn to those individually at a later stage. The provisions in the bill reflect the government’s commitment to delivering long-term sustainable settlement outcomes for newly arrived migrants through the integrated, targeted and well-designed programs that support clients in their transition to life in Australia. The Adult Migrant English Program is Australia’s largest and longest running program, having been in place for over 60 years. It is delivered at more than 250 locations around Australia to more than 50,000 clients from 193 countries each year.
Since roughly 20 years ago when I went out to the Villawood migrant centre, which has become a detention centre in more recent times, and met Peter McBorney, George Campbell and other staff—and equally through my sister-in-law Patti Waller—I have appreciated that there is a particular commitment by migrant English teachers in this country. They are like us. We might be interested in overnight allowances, our superannuation et cetera. There is a degree of self-interest with everyone. In some of the struggles around the allocation of hours for teaching et cetera, they are like everyone else and have a degree of their own industrial interest. But I have run across so few groups of people as committed to the clients they work with as these migrant English teachers. They give their time on weekends. They know these people personally. They enrich their lives and are involved with these families. It is worth remembering when we talk about the 60-year anniversary—an anniversary that was saluted by the department of immigration last year—that the people who established the migrant English service in Australia went there on their holidays as volunteers. It is internationally renowned and, as I said, it is full of very committed people.
The Adult Migrant English Program plays a significant role in the government’s social inclusion agenda by providing clients with settlement focused English language tuition and settlement support soon after their arrival in Australia. Participation in the Adult Migrant English Program is the beginning of the path to further education, employment and participation in Australian society. It is a well-established fact that the ability to communicate effectively in English is a key factor in participating in Australian society.
The initial results from the Employment Pathways and Traineeship in English and Work Readiness initiatives announced in the 2008-09 budget demonstrate the effectiveness of the Adult Migrant English Program. Over half of the 1,047 pilot program participants progressed to further education and training and approximately one-third gained employment. For people who are separate from the realities, who are not involved and who are unaware of what really goes on, half might not sound impressive, but I think it is an extremely successful outcome.
We have to understand the kinds of people we are dealing with. I often get, quite correctly, particularly African communities saying to me: ‘Australian politicians and Australian government employees often talk about the fact that we have problems. In actual fact many of us come here through the skilled intake.’ That is very true, and I appreciate that. However, when we talk about the success rate for this program being half of the over 1,000 participants we have to understand that we are talking about a cohort in the refugee intake who have in many cases lived in refugee camps for decades. We are talking about people who have had very limited educational options in life. We are talking about people who come from families that have been destroyed. We are talking about family formations that have had to be recreated when parents were killed—nieces taken over by their aunts et cetera. We are talking about in many cases people who come to this society without any formal education whatsoever and are from families where the parents are illiterate in their own language, let alone English. That is a tremendous outcome for that pilot program, and it has certainly informed the government direction in this field.
The new Adult Migrant English Program business model, which is an amendment in this bill, will provide greater settlement support, flexibility and clarity for clients. Clients will now be able to register for the program within six months of arrival rather than within three months, enabling them to concentrate on establishing themselves and their families when they first arrive in Australia.
That reality very much informed our consultation process last year on the broader issue of our settlement process in this country. It is renowned internationally as the best in the world and has been created by Labor and Liberal governments. But that informs very much our directions on a number of fronts. People are under so much pressure in those first three months: re-establishing in our society, getting to know the education system, getting connected with Medicare, meeting people in their community and being concerned with family who have been left behind and are still in traumatic circumstances. Extending that to six months I think is a very intelligent move.
The introduction of a five-year time frame for completion of the English language tuition will provide clients with an incentive to fully participate in the program soon after their arrival. Clients can move on more rapidly to further education and employment, enabling them to more fully participate and contribute to Australian society. The flexibility established by the bill allows clients to apply for extensions of the program registration, commencement and completion time frames both before and after these time frames have expired. The five-year time frame for program completion may only be extended where—and I stress this—compassionate and compelling reasons exist. This approach ensures that most clients participate in the Adult English Migrant Program early in their settlement period, whilst providing flexibility for a few vulnerable clients in difficult circumstances. As the member for Werriwa indicated, the reality even amongst Australian students is that if people get put off things and drift away from the system for a while the chances of reconnecting are diminished. Quite frankly, this is an overdue change to our requirements.
Amendments to program eligibility will provide clarity and equality in program participation. By providing for a registration time frame of 12 months for clients under 18 years of age rather than the six-month registration time frame that other clients must meet, the amendments will ensure that clients who are not participating in the school system in the year after their arrival in Australia are able to access the Adult Migrant English Program, as announced in the 2009-10 budget. This measure enables these youth to begin building a positive life for themselves in Australia. Once again, it is indisputable that we do not want these people dropping out of society and becoming marginalised, outside of education, disconnected and ready recruits for antisocial activity. I think this will be universally welcomed as a progressive change.
Additionally, the amendments will ensure continued access to the citizenship course for eligible clients. Only applicants for citizenship who face significant difficulty preparing for and sitting the computer based test will have access to the alternative citizenship course based test. I am pleased to say that, when I was in Adelaide last Saturday, as well as meeting the general African community I had separate meetings with representatives of the Burundian, Liberian and Sudanese communities. The continuation of these courses was stressed to me as a very necessary requirement in their communities. I was pleased to say that the government was continuing these courses through the Adult Migrant English Program. The government firmly believes that the AMEP plays a vital role in the government’s social inclusion agenda by helping newly arrived migrants transition to life in Australia and start on the path to further education and employment. The bill ensures that the Adult Migrant English Program continues to play this role whilst providing greater support and certainty for clients, enabling them to be more fully participative in Australian society at an early stage of their settlement.
I now turn to the contributions of previous speakers. I am pleased to join with the member for Cook, the opposition spokesman in the area of migration and settlement, in saluting the efforts of Gail Ker in gaining the Order of Australia. That is why we appointed her to this nation’s multicultural advisory committee. We recognised the vital work she was doing in Logan City and broader Brisbane. Last Friday I was pleased to be in Brisbane at a very successful refugee art launch in West End. Quite frankly, I think everyone present was absolutely surprised by the quality of material there. I agree with the member for Cook that Gail has been at the forefront of settlement of this country. It is also worth acknowledging that Brisbane has two of the lead agencies in this country—MDA, which is run by Kerrin Benson, and ACCESS, which is run by Gail. To my mind, if we went through the migrant resource centres around the country, these two Brisbane based organisations would be in the top half a dozen. It certainly is indicative of a very professional approach in Brisbane with regard to settlement of people. Both people are acknowledged in this nation as amongst the leaders of thought and action on this front.
I am pleased of course in the broader sense. The opposition spokesman has given bipartisan support for this bill. We have been extremely successful in settling seven million people over the postwar period, including 700,000 refugees, and this scheme—I have said it before and I will say it again—which was recognised by the UNHCR on the visit of their international director as being the best in the world, has been created on an essentially bipartisan agreement over many decades. Whether it is connecting people with society, getting people connected with education or health or putting people through torture and trauma counselling, we are in the forefront internationally. I acknowledge Mr Morrison’s interest in the sector and I am pleased to say that he has played a role in being very positive about the settlement programs in this country. Whilst we might disagree about the refugee policies on detention, temporary protection visas, the rules and working rights, on this matter we do have a commonality of purpose and position.
I also want to refer to the member for Werriwa, who plays a very active role in this policy area. I note he made a speech earlier this week about demands by the Syrian government with regard to Australian migration officials and the question of claims that the Syrian government requires certain information about refugee claimants. Last night the member for Mallee and I had the opportunity to attend a very interesting talk by Diana Buttu on the question of Palestine. I took this issue up with the Ambassador of Syria and I will certainly be pursuing the matter in the future. We certainly do not want to have to give information about claimants’ details to another country. The ambassador put a different point to me. He gave a different reason for that and said that it had largely been sorted out. But it certainly is typical of the member for Werriwa’s interest in this field, most particularly centred around the significant number of Middle Eastern Christians in the Liverpool-Fairfield region. As he notes, his region is one in which there is a high prevalence of, particularly, Bangladeshis and Pacific Islanders, and it is typical of the region and his own personal involvement that the Casula Powerhouse in the next month will be running a nationally recognised, nationally renowned cultural two-day event with regard to Pacific Islander communities. The member for Lowe also made a contribution. Of course he is very clearly associated with hyperactivity in the Italian, Tamil and South American communities! Both of them are people with a deep interest in the realities of multicultural Australia.
I want to end by saying that I have come here this morning from an interview with Korean television about multiculturalism. What we are doing in this country, despite 2GB and a few other people, is really world renowned. It is typical that Korea is now looking at having to go down our road of multicultural policy because they can no longer survive as a monolithic, one-culture society. They need significant people in the workforce. They have a significant number of intercultural marriages. They are here in Australia to see what this country is doing, what they can learn from us and how can they build their structures.
Thank you to all those who have contributed in the debate.
Question agreed to.
Bill read a second time.
Ordered that this bill be reported to the House without amendment.
Debate resumed from 17 March, on motion by Mr Burke:
That this bill be now read a second time.
I speak today in support of the Agricultural and Veterinary Chemicals Code Amendment Bill 2010. This bill aims to vastly improve the efficiency of the registration process of the Australian Pesticides and Veterinary Medicines Authority without jeopardising human health or the environment. The APVMA was introduced in 1993 to replace the smaller state based authorities and provide a national approach to agricultural and veterinary chemicals. These chemicals range from personal insect sprays through to the chemicals used during crop dusting and the huge variety of animal medication, drenches and dips that enable Australian producers to continue to deliver a high-quality product to Australian consumers and to the rest of the world without harming the environment or the producers themselves. The authority regulates one of the agricultural community’s few lines of defence against disease and insects that have the capacity to bring our crops, produce and exports to their knees, and deserves more time and attention than it is currently afforded by the government. The authority currently regulates some 8,000 chemicals and operates under a series of legislation enacted over the last 20 years to maintain higher standards of quality control.
Many companies and producers are currently forced to wait too long for products to be registered and deregistered. This bill aims to simplify and streamline that process, meaning an easier, quicker and better system for those involved. This will be done by allowing the authority to liaise with all applicants who are attempting to gain a permit to use the same product. Under the current system each application would be looked at on an individual basis despite being in some cases identical to another application. By combining several similar applications into one, the authority would be able to more efficiently deal with the applications themselves. Under the current legislation, it is very difficult for the authority to disclose that it has received multiple applications.
Streamlining these applications has a number of impacts on the efficiency of the authority. A streamlined process obviously reduces the number of hours required to approve or deny applications. Streamlining also provides greater consistency across the decision-making process. Identical cases should always produce identical results. The streamlining provides a stronger assurance that this will happen. Four separate producers in the same area currently have to lodge four separate applications to extend their use of exactly the same product. These applications, all of which are almost identical, have to go through the same evaluation process four separate times. The go-ahead is then given to the four separate producers as each of their applications is approved. The process is unnecessarily long and is disadvantaging the producers individually and collectively as time is wasted. The science behind all four applications will be the same and the impact on the environment, the livestock and the crops is almost identical. The authority needs the power to efficiently and effectively liaise with the four producers, verify the similarities and process the application as one joint evaluation.
This bill represents real action by the coalition on attempting to improve how efficiently the authority can act on these claims. Currently, according to the authority themselves, it takes anywhere from three to 15 months to register. However, there are reported cases well over this figure and this large backlog of claims and registration applications is hurting the agricultural community at large. The process can be improved by changing legislation and investing more money into the authority. The Labor government seems uninterested in either option.
Currently a product designed and developed primarily in Australia has been used by producers right around the world, but Australian producers have been missing out on its benefits. Zolvix, an active drench aimed at internal parasites and intestinal worms, was largely developed by Australian science for the Australian market at Kemps Creek in Western Sydney. It was approved in New Zealand 14 months ago, some 12 months after it was submitted to the APVMA. At the beginning of this month, Australian producers were still unable to access the product because it had not been approved. The product was launched in the UK and Europe in April this year and it has been approved. It is also being used in South America. These countries and the producers taking full advantage of this product are in direct competition with producers in the seat of Dawson, in the west in electorates like O’Connor and Forrest, in my electorate of Calare and in almost every livestock-producing electorate in this country.
The drench has been billed as a 25-year breakthrough, with New Zealand based Professor Bill Pomroy quoted as saying ‘The product is a relief for farmers everywhere’ after the product was approved across the Tasman. Yet our producers were forced to wait and wait and wait for the product to work its way through the current waiting list that exists and prevents Australian producers from being at the front of the pack when fighting disease and maximising output.
You will find no-one on our side of the House who denies that the process of verification and regulation needs to happen. Proper scientific evaluation for all new products is crucial to the longevity of our producers and of their product. Verification regulation also helps guarantee the longevity of the environment and the land that is farmed, harvested and grazed on by our agricultural sector. But the process currently takes too long and is coming at too big a cost for our producers, who are forced to play catch-up to the rest of our world. We do need clean and safe chemicals but we need them sooner to guarantee the longevity of Australian food production. We need to be able to make the cake before we can eat it too and that is why we support this bill.
The government have announced that they are embarking on a reform partnership for the authority. However, like so many of their promises, we are yet to see any substantial improvements in the current situation. The government are yet to enlighten us on what exactly the reform partnership for the APVMA is, what form it will take or what role it will play. The lack of action thus far on the government’s behalf is putting Australian producers behind the eight ball both domestically and in the increasingly competitive international market.
The time must be shortened with respect to the backlog of chemicals waiting to be registered. If these chemicals will improve our yield without harming the environment or individuals then they should be on our crops and on or in our livestock, not waiting in line for approval. Any time that these chemicals spend in a line represents opportunities missed by Australian producers to harvest a bigger crop, to raise better livestock and contribute more to the Australian economy.
It is an issue of agriculture and an issue of food security; the two fields do go hand in hand. The coalition knows this and it also knows the importance of a country being able to feed itself. I am very fortunate to be the shadow minister for food security. I see it as an important responsibility and believe the portfolio complements the Agriculture, Fisheries and Forestry portfolios. The Labor Party does not share our priority. Food security is nowhere to be seen. Mind you, it is not alone. The Treasurer did not even mention the word ‘agriculture’ throughout his entire budget speech.
Those opposite simply do not care about regional Australia and their lack of serious action so far confirms this. At the 2007 election the coalition promised $6 million to address the minor use issue. This issue has seen legitimate access to appropriate crop protectants and animal health treatments for many smaller industries reduced by regulatory reviews of older chemistries. The government has done little to rectify the situation and has simply ignored the growing need for action. All this seems typical of a government that places food security at the low end of its priority scale, whether it be on the South Coast or in the Murray-Darling Basin.
When it comes to the importance of food security, I have said it several times here in committee and several more in the House of Representatives that the ability of a nation to feed itself is the cornerstone of any modern society. This amending bill will help our nation to improve that.
The second aspect of this bill will focus on ensuring trade issues are considered when addressing the adequacy of product labels and the definition of ‘adequate’. Instructions currently ensure that proper use of a product will not adversely affect Australia’s exports. However, from time to time an issue may arise that requires changes to be made to labels to update their instructions. If a country is to change their standards or what they consider acceptable, the Australian product labels will not always match these changes and will therefore be registered as a violation of the importing nation’s policy. Currently the authority must take regulatory action against the product registration. Once this is done it can then—and only then—take action to update the label. This takes time and money. The APVMA lacks the authority to move directly to the product label.
The bill would enable action to be taken by the authority that addresses any concerns as to the labelling of the product without unnecessarily affecting the actual registration of the product. This would enable our producers to continue to meet export demands without the flurry of paperwork and backlogs that currently exists. Our reputation—Australia’s agricultural reputation for clean, green and safe exports—must not be jeopardised. However, this reform and this alteration will enable our producers’ products to stay on foreign shelves and foreign dollars to stay in Australia.
The Australian export market is too big and too important to our economy and to the economy of regional centres and rural towns to be held back by inefficient paperwork. Our agricultural sector has spent the better part of the last decade fighting tooth and nail through the worst drought on record. Our farmers have done it tough. Our producers have done it tough. We, as a parliament, must give these producers the best possible chance of bouncing back. There has been rain but by no means are we or they out of the woods yet. Crop failures, crop losses and a higher Australian dollar have combined to create a situation where producers now need a series of successful years to get back into the black and to get back to being fully operational.
The bill makes that transition a little easier. It should be accompanied by more announcements and more action by the Minister for Agriculture, Fisheries and Forestry and more funding towards our agricultural agencies, particularly our quarantine and R&D agencies. Now is the time to reward those producers who have helped keep our economy out of recession. Now is the time to reward those producers who have battled through one of the most difficult decades for producers that this country has ever faced. This bill helps those producers and it helps regional Australia. I commend it to the parliament.
The Agricultural and Veterinary Chemicals Code Amendment Bill 2010 consists of two measures that seek to improve efficiencies in the way that chemicals are registered with the Australian Pesticides and Veterinary Medicines Authority, the APVMA , without jeopardising human health or the environment. The government is working with state and territory governments to develop a single national regulatory framework for agricultural and veterinary chemicals. This forms part of COAG’s seamless national economy initiative. Going to one of the areas in which it seeks to cut red tape, it clarifies what constitutes confidential commercial information when applying for certain types of permits for chemical use. It allows the Australian Pesticides and Veterinary Medicines Authority to use information in a permit application that is not commercially sensitive when assessing an application. Currently, all matters about a permit application are deemed confidential commercial information, including the very fact that an application has been made. It is true that some permit applications to use agricultural and veterinary chemicals include some commercially valuable information. However, clearly not all information needs to be protected in the same inflexible way.
The current legislation forces the APVMA and industry to enter a complex and inefficient process. The APVMA first seeks the applicant’s approval before seeking information from the product registrant, or others, to inform its expert assessment of minor use or emergency use permit applications. This places a substantial burden on industry and it limits the authority’s ability to engage openly with others who may be seeking similar permits at the same time. The paperwork, consultation and other aspects of these similar permits could be streamlined under these changes.
I think that the bill’s theme of protecting human health and the environment is important. I say this because we need to address shortcomings in the current system that have resulted in the risk of pesticide pollution particularly, in my view, in relation to the Great Barrier Reef. I point out to the House that the Great Barrier Reef Marine Park Authority, in its Great Barrier Reef outlook report 2009, indicated that nearly one-third of the Great Barrier Reef, especially inshore, is now exposed to herbicides. Seven main herbicides are in widespread use throughout the Great Barrier Reef catchment and are being widely detected in fresh and marine waters of the Great Barrier Reef region. The herbicides are diuron, atrazine, ametryn, simazine, hexazinone, 2,4-D and tebuthiuron.
The Queensland government and Premier Anna Bligh have made the following important observations:
Land derived contaminants, including suspended sediments, nutrients and pesticides are present in the Great Barrier Reef—
the Great Barrier Reef—
at concentrations likely to cause environmental harm.
Also:
Chemical residues at biologically harmful concentrations have been found in the marine waters of the Reef up to 60km offshore.
Further:
The science is clear. The Reef’s health is suffering long-term decline from soil, fertilisers and pesticides washing from the mainland.
According to a report by CropLife Australia in June 2009, Great Barrier Reef: the impact of pesticides:
Sometimes pesticides do find their way into rivers and streams. Pesticide concentrations in some rivers draining into the Great Barrier Reef do also periodically exceed the draft guidelines levels.
Pesticides that are inappropriately applied, as well as pesticides that are properly applied may - in some circumstances - find their way into streams and rivers and ultimately end up in the GBR where they may present a risk to the health of the reef.
Recent studies have investigated the load of pesticides that are entering the GBR lagoon from river systems draining GBR catchments. These studies have highlighted that large and potentially damaging volumes of pesticides are transported to the reef lagoon during heavy rainfall events.
After river floods, elevated concentrations of herbicide residues persist in the Great Barrier Reef lagoon for several weeks. These residues have the capacity to produce cumulative chronic effects on sensitive species of marine plants and corals and may cause a change in the community structure of mangroves, seagrass and coral reef ecosystems.
It is appropriate, I think, and timely that Australia’s pesticide regulatory arrangements are currently being reviewed for COAG. WWF, in a submission to the review of the APVMA, say that they believe that Australia’s farm chemical regulator has not been responsive enough to health and environmental risks and should not be given extended powers without far greater safeguards and budgets. They have been concerned about this question of addressing chemical pollution of the Great Barrier Reef. One of the WWF spokespersons in Australia, Juliette King, says, ‘At least eight chemicals have been under review for more than 13 years.’ That is, of course, an extremely long time.
One of the chemicals they are concerned about, endosulfan, has been banned in over 60 countries but remains approved for use in Australia. On 10 June, just recently, the United States banned this toxic insecticide, concluding that endosulfan can cause nerve damage and reproductive complications in farm workers and is also a hazard to wildlife. Endosulfan is widely used in some Australian crops such as cotton, macadamia and horticultural crops. It has recently been implicated in fish deformities in a Noosa River fish hatchery, and it is being considered for a global ban under the Stockholm convention. I think that as a matter of priority Australia needs to be looking at this highly toxic chemical and making sure that we are keeping in step with developments in the rest of the world.
The toxic pesticide diuron has been under review since 2002. There have been interim findings of unacceptable risks to seagrass and dugongs in the Great Barrier Reef Marine Park, but it remains available for sale. Another toxic pesticide, atrazine, has been banned in Europe since 2007, but it is still widely available in Australia. It is one of the chemicals which has been detected up to 60 kilometres into the Great Barrier Reef World Heritage area. WWF has said:
The lack of action to deregister these dangerous chemicals suggests the APVMA—
the authority—
gives the benefit of any doubt to the pesticide industry rather than to Australians and their environment …
… Currently only about one per cent of pesticide revenues is spent ensuring they are safe.
That is something that the WWF are concerned about. They say that this ‘is not the fault of farming communities’, but we need to ‘catch up with the rest of the world’. They say:
Many farmers want to do the right thing but they need better choices.
They also suggest:
We need a cost recovery system that is commensurate with risk - where the registration, assessment, monitoring, evaluation of chemicals, and their cost recovery, encourages innovative lower risk products and deters the continued sale of dangerous chemicals.
The WWF are supportive of the precautionary approach, which gives the benefit of the doubt to human health and to the environment rather than to the pesticide industry. They say:
We need a system that is more transparent, more independent and one that encourages agricultural innovation and the development of low risk chemical products.
The WWF submission includes a number of recommendations which it believes would improve the regulatory framework. First, the WWF recommends that Australia adopt a re-registration system for chemicals as is currently the case in the European Union, with the re-registration time frame dependent on a chemicals risk rating—for example, five years if it is high risk, 10 years if it is medium risk and 15 years if it is low risk. Risk rating should be conducted by an independent science panel using factors such as quantity sold, regulatory action taken internationally, peer reviewed research and incidents demonstrating risks, such as fish kills.
Second, the WWF recommends that the chemical review program be retained and used either to review chemicals in between re-registration time frames, where necessary—that is, for emergencies—or for reviewing classes of chemicals collectively or the cumulative impacts of likely chemical combinations. Third, it recommends that there be introduced statutory time frames for the completion of chemical reviews—for example, two years—that may only be extended in certain circumstances. Fourth, the WWF recommends that the obligation on the authority to find a risk mitigation solution before it can deregister a chemical be removed.
Fifth, the WWF recommends that a requirement for the authority to apply the established precautionary principle when making decisions about the likely harmful impacts to human beings or the environment be introduced. Sixth, it recommends that third-party appeal rights be included in the Agricultural and Veterinary Chemicals Code, with extended standing for environmental and human health advocates. Seventh, it recommends that the information relating to the human health and environmental impacts of a chemical be exempt from the commercial secrecy provisions of the code.
Eighth, the WWF recommends that the direct link between chemicals sold and the authority’s revenue be severed—for example, by removing the funding collection role and having its budget administered by a separate body such as the Department of Agriculture, Fisheries and Forestry—and that the authority’s income be significantly increased over the next five to 10 years through increased fees and levies for pesticide registrants. The WWF believes that the new revenue arrangements should be introduced to encourage the innovation of low-risk chemicals—for example, higher fees and shorter registration tenures for high-risk chemicals and low fees and longer tenures for low-risk chemicals. Finally, the WWF proposes that a proportion of the authority’s income be invested into a blind trust for public interest research into the human health and environmental impacts of chemicals.
The Australian people would expect our pesticide regulator to have robust powers to take action where a chemical is likely to have a harmful effect on human beings or on the environment. The authority has the power to suspend or deregister a chemical directly, but it appears that this regulatory tool has rarely been used. The authority is funded almost entirely by the pesticide industry, with its funding directly linked to the number and commercial success of chemicals registered in Australia. It would be a matter of concern if this was creating a perverse disincentive for the authority to deregister chemicals. The recommendations that are suggested and proposed by the WWF are designed to enhance the regulatory framework which is required.
As I indicated at the outset, this bill represents some significant steps forward. The measures which are part of the bill which amend the schedule should have the impact of improving the efficiency of the registration processes and should have positive impacts in relation to the way in which the industry functions and also in relation to human health and the environment. I am pleased that a review is being undertaken of these matters and I look forward to the government’s response to that review in due course. I commend the bill to the House.
I rise to speak on the Agricultural and Veterinary Chemicals Code Amendment Bill 2010. I probably will not speak for long, as I am awaiting the arrival of my colleagues the members for Moreton and Makin, who have significant things to say on this bill. This is an interesting bill because it effectively is about reducing unnecessary regulation in two particular areas relating to the code. There are two measures which seek to improve efficiencies in the way chemicals are registered with the Australian Pesticides and Veterinary Medicines Authority without jeopardising human health or the environment.
There are very good reasons, as the member for Wills has outlined, for reviewing regulation and even increasing regulation where it relates to environmental and health outcomes. But there are some aspects of the current regulation which make things difficult for the Australian Pesticides and Veterinary Medicines Authority to operate that do not actually contribute any positive benefits; they are in fact regulation that slows down what should be quite a simple process. As I said, there are two particular areas. The first one concerns the general prohibition on using confidential information. At the moment, when an application for registering a product is made, everything concerning that application is considered to be confidential commercial information, including the fact that there was an application at all. That means that the Australian Pesticides and Veterinary Medicines Authority has to ask the applicant’s permission even to seek information from the product manufacturer. What this amendment does is simplify that process considerably. It allows the APVMA to determine which aspects of the application are commercial information and to use the other information to engage in the process of reviewing the application.
The second aspect involves trade issues and the adequacy of product labels. Currently, the APVMA are required to consider trade as a decision criterion when they determine whether or not to grant or refuse an application but not when approving a label. The instructions specified on the product label ensure that proper use of the product will not adversely affect Australia’s exports. However, over time issues may arise that require changes to a label. Such issues may, for example, arise where an importing country reduces its maximum residue limit or establishes a zero tolerance. Again, this does not affect the nature of the product itself, but simply the information contained on the label. This sort of trade concern can be addressed by an instruction on the label but, currently, in order to update the label instructions to address what is only a trade issue, the APVMA must take regulatory action against the product registration. Only then can it update the label as a related action. It actually lacks the power at the moment to take direct action against the source of the concern, which in many cases is simply the product label. This bill addresses this problem by enabling the APVMA to focus the regulatory action upon the label approval when concerns about trade issues arise, without affecting the registration of the product.
They are both very sensible amendments which simplify an important process. They are a good example of reducing regulatory burden where regulation exists without providing any real gain, and I commend the bill to the House.
I rise to speak in support of the Agricultural and Veterinary Chemicals Code Amendment Bill 2010 and the related amendments before the House. The Australian Pesticides and Veterinary Medicines Authority was set up in 1993 as the central body to register agricultural and veterinary chemicals. It replaced separate state and territory based registration systems. There are more than 8,000 chemicals and pesticides on the register which primary producers rely on to protect their crops and animals from diseases and pests. The APVMA ensures the chemical products are effective and safe for people, animals and the environment before accepting them onto the register. The APVMA also reviews chemicals that have been registered a long time or when safety or quality concerns about a particular chemical are raised by the community. This is an important safeguard and checking point.
The APVMA’s role is to look at these chemicals and how they are being used because a dangerous chemical can be used safely and a not-so-dangerous chemical can be used unsafely, so it is all about how they are being used. I would suggest the APVMA needs to take a closer look at some of the world’s best practice and make sure that Australia is complying with world’s best practice, it needs to look at some of the research taking place around the world, especially if it is peer reviewed and with good safeguards so that we can make sure that any chemical used is brought to the market as quickly as possible, obviously with the APVMA still having the fundamental role of making sure that the Australian public will not be harmed by the misuse of any chemicals.
As part of the Standing Committee on Primary Industries and Resources I recently talked to some parliamentarians from the European Union, some of them are farmers as well as parliamentarians. I talked to them about some of their chemicals because I noted that the European Union had recently overhauled their registration system, banning about 100 of the most dangerous and toxic chemicals. The European Union also placed heavy restrictions on aerial pesticides, particularly around drinking water supplies. Perhaps restricting all of those chemicals was a bit of an overreaction and that was what the European Union parliamentarians said. The APVMA takes a slightly different approach. We have seen with chemicals that were once considered safe, like arsenic and asbestos, just how dangerous these chemicals can be if not treated properly and respected. The consequences of not using them properly—not looking after them and disposing of them properly—can be fatal. We do not want that to happen.
With 8,000 chemicals registered in Australia, it is easy to see why we need a robust and efficient system in place to ensure human health and protect the environment. Seeing the young faces of Macgregor State High School students from my electorate, it is obvious why we need to look after the health of the future generations when we look after these chemicals. The bill before us will improve the way chemicals are registered with the APVMA and maintain the high standards for health and environmental safety. The bill will simplify the application process for a limited range of chemicals for defined low-risk minor variations. Instead of going through the full technical assessment process, applicants will simply notify APVMA of any change. The kinds of minor variations will include those where there is no material change to the product’s chemistry, no risk to quality, stability or safety and no risk to the environment or trade. It will include things like the site of manufacture, the pack size or the substitution of certain non-active ingredients such as dyes.
By streamlining the variation approval process, APVMA will be able to direct more resources to expert scientific assessment of new chemicals. We need this to happen as much as possible. The APVMA needs to be focusing its attention where the rubber meets the road, where the more dangerous possibilities are, rather than going through some processes that any reasonable person would consider to be almost administrative. This bill also removes the requirement to notify the authorisation of an approved person. Under the code, registration or approval applications are required to be signed by an approved person who must be an Australian resident. Therefore overseas applicants must authorise an Australian approved person to be liable for their products. The APVMA also requires chemical producers to authorise a person to receive notices concerning their products. This ensures that any administrative dealings can be done locally. However, the requirement for a registrant to notify the APVMA in writing of who has been authorised to act for the applicant is unnecessary red tape and will be removed.
The amendments also make some changes to chemical labelling. APVMA will be required to oversee adequate instructions for the safe handling and effective use of a product. I think this is where we differentiate ourselves from the European Union. In Australia we respect the capabilities of our farmers and people that use the chemicals that APVMA regulates, whereas in the European Union the approach seems to be to look at the lowest common denominator which led to the banning of the 100 chemicals that are often still being used in Australia. We use a much more risk based analysis rather than focusing on prevention that removes the opportunities for beneficial chemicals to be used in our agricultural systems.
Once again these changes are about ensuring that the APVMA can focus its resources on the key issues of safety and quality. Under the current law they are required to assess and approve all aspects of labelling. Obviously, product labels include all kinds of information and it is totally unnecessary for the APVMA to review it all. Their main concerns, as is appropriate, are the safe and effective use of the chemicals.
This bill and related amendments will slash red tape, which is obviously a good thing, and will streamline the regulation of agricultural and veterinary chemicals registration. As I said, I will still put that call out there for us to perhaps make better use of the American and European approved scientific processes rather than the APVMA having to reinvent the wheel every single time. That is a process that might take a little bit longer, but it would certainly be to the benefit of Australian farmers.
The bill implements a COAG agreement and Productivity Commission recommendation of 2008 and it will lead to immediate benefits for industry and the community. As I mentioned earlier it is important that we get the balance right so that students such as Yulia Batsman, Rhianna Neilsen, Riley Kernaghan, Rebecca Lay, Casey Huang from MacGregor State High School and their teachers Gail Bligh and David Burgess—the people that look after the future generations—are eating foodstuffs brought from Brisbane markets or the like that are not unduly affected by chemicals and so that we have a Barrier Reef that is protected and not unnecessarily impacted on by run-off from sugarcane farms and the like.
It is important that we get the balance right for our future generations, and the measures before the chamber strike the right balance. They ensure that protecting health and safety remains the priority while removing unnecessary steps in the process which will then free up the APVMA to focus its attention on the danger zones. I commend the bill to the House.
I too rise to support the Agricultural and Veterinary Chemicals Code Amendment Bill 2010. This bill makes commonsense amendments to the labelling laws relating to labels on agricultural chemicals which have already been approved for use. In summary, if there are to be minor changes made to labels which do not affect the principal composition of the chemicals and which are essentially superficial changes to the product or the packaging and labelling itself, then the process will be streamlined. The changes are also made in conjunction with changes relating to the labelling laws administered by Food Standards Australia New Zealand and for which complementary legislation is necessary. These are the subject of a separate bill in this House which I will be speaking on later.
What I will focus my remarks on, however, is the use of chemicals in food production because that is what I believe the real debate should be about. Over time we have seen the increased use of chemicals in food production in order to eliminate pests and to increase production. As with the use of all chemicals, there are always unintended consequences, in particular health consequences, for both the farmers using the chemicals and the consumers using the end product, as well as contamination of the environment, as these chemicals are inevitably washed into the soil, into waterways and into the ocean.
The consequences of course are minimised by the research and approval processes in place, but the long-term effects are never fully known until many years later, and the safety is never 100 per cent guaranteed. Often it is only years after the product has been in use that the effects are clear and the chemicals used are then banned. In the interim the negative health effects are significant.
Just as concerning is the fact that food is increasingly being imported from countries overseas where there is little or no guarantee that those same chemicals are not still being used in food production. If they have been banned, one can never be sure that in countries which do not have effective compliance regimes the bans are being enforced. In fact, I am not absolutely certain that we have the systems in place in Australia to ensure that bans on products are enforced in this country as well.
I know this is a matter which greatly concerns many of the people I speak with. Food health risks and the consequences of the increased use of chemicals in the production of food are unquantifiable but nevertheless very real. The nature of medical conditions that have become commonplace throughout society but which were previously rare has changed markedly in recent years. Only this morning it was interesting to read in one of our daily newspapers about the rising level of cancer throughout the community. Again, I do not know what to attribute the rising level of cancer to, but I suspect that our food could be one of the sources.
The cause of these changes is difficult to establish. However, I have little doubt that our food sources are contributing to the health conditions of the nation and, in turn, the cost to the nation in responding to those health conditions. Not surprisingly, the provision of information on specific ingredients in foods is now a critical consideration of our food labelling laws. I note that our food labelling laws are themselves the subject of an extensive national review, with Dr Neal Blewett, a former member of this place and a former health minister of this country, heading the review panel. I can assure the House that in my own electorate the review of the food labelling laws with respect to not only the composition of the food in terms of its natural ingredients but also the chemicals that are being used in those foods and used to produce the food sources that goes into those foods is something that is frequently raised with me.
The use of chemicals in food production is likely to escalate into the future. In Australia most of our fertile agricultural land along Australia’s coastline is being used up for housing, pushing food production to less fertile areas. I have certainly seen that in my own home city of Adelaide. It was not that long ago that most of the fruit and vegetables were grown in and around the Adelaide CBD area, because that is where the most fertile land was. That land has now been almost entirely consumed by housing development. Not surprisingly, food production is slowly being pushed further out to country and regional areas, where it does of course provide an industry sector for those country and regional communities. Nevertheless, what it has done is push the production of fruit and vegetables out to areas where the soil is nowhere near as fertile as it was in the Adelaide Plains. Growing food on less fertile land requires increased use of chemicals. It is as simple as that. As more chemicals are used, they not only get into our foods but are washed into the land, into the waterways and into our coastal waters, causing very serious consequences.
A key goal of the development of extensive wetlands in northern Adelaide was in fact to prevent contaminated water from entering the adjacent coastal waters which were the home to Adelaide’s major fish-breeding grounds. I am also aware that this has been of real concern with respect to management of the Great Barrier Reef in Queensland, and I will talk about that in just a moment. But with respect to the fish breeding grounds off Adelaide in the Gulf of St Vincent, as a result of contamination of those waters we were seeing a reduction in the level of fish that were breeding. The development of the wetlands by the northern councils in Adelaide was done for a number of reasons, but one of the key reasons was to ensure that those contaminated waters were not entering into the Gulf of St Vincent, destroying the fish-breeding grounds, the sea grasses and the mangroves along the coast. As a result of the action taken, what we have seen in recent years is a reversal of those trends. The sea grasses are now regenerating, the mangroves have regenerating and so are the fish stocks. The fishing industry to South Australia is very, very important, and I can very well recall being lobbied by the fishing industry in South Australia to ensure that we tried to do whatever we could to preserve the fish-breeding grounds in the Gulf of St Vincent. I am pleased to be able to say that we are in fact doing just that.
to 60 kilometres inside the World Heritage area. As a member of the House Standing Committee on Climate Change, Water, Environment and the Arts I also recall visiting the Great Barrier Reef and being briefed about the use of chemicals in that region, and being advised of the concerns being expressed about the washing of chemicals out into the coastline adjacent to the reef. Having said that, I have to say that we were also briefed about some of the terrific work that is being done by local communities there to ensure that that does not continue to happen, and I have to compliment many of the local communities for what they are doing.
And farmers.
And farmers, certainly. I appreciate the interjection, because it was in fact a local farmer who took us through his farm and gave us a firsthand demonstration of what he was doing with respect to trying to minimise the effects of chemicals being washed out into the waterways and into the coastline.
I said just a moment ago that only a week or so ago some members of this House were briefed by the World Wide Fund for Nature. The effect of that briefing was to highlight the concern that they had about the use of chemicals in the growing of fruits, vegetables and other crops in this country. One of the things that concerns me as a result of their presentation—and I assume that their presentation was factual—is that it quite often takes many years for a chemical about which concern has been expressed to be reviewed, sometimes between five and 10 years, and I understand that there are some cases where reviews have been underway for something like 13 years or more. That seems to be an extraordinarily long period of time.
We were also advised that there are chemicals which have been banned by the European Union but which we continue to use in Australia. Again, those kinds of statements are of concern, and I am pleased to see that Minister Tony Burke is in the chamber because I am sure that he will take them on board. Those kinds of concerns are being put to me by the very people I represent, and it would be reassuring to know that we have the systems and review processes in place to provide some level of comfort to the people of Australia that chemicals being used are in fact not a risk to their health.
In closing, I want to also point to some very good and responsible examples of gardening and agricultural practices in Australia. The example I will use is an example of something that I know is occurring right around Australia in many local communities. On 5 June, I visited the Wynn Vale Community Garden in the electorate of Makin. The concept of community gardens is not new to me, and I know that many communities around Australia have similar gardens in place. What most impressed me about the Wynn Vale Community Garden was just how well-organised it was and the diversity of fruit, vegetable and flower plantings that the 25 or so members had grown, and how well each of the garden beds was being cared for. Half of the garden is devoted to individual plots, and the other half to communal plots of herbs, ornamental vegetables and native varieties.
There is a strong emphasis throughout the garden on saving water and, in that respect, there was a water harvesting wetlands area located adjacent to the garden where the water is collected, and there are discussions underway between the community garden and the local council to pipe water directly from those wetlands and then use it on the garden. Produce from the garden is shared or donated to charity, so a great deal of the members’ work benefits others. For children who visit the garden, it becomes a fascinating educational experience about how food is grown.
Planning for the Wynn Vale Community Garden commenced in 1994, with land donated by the city of Tea Tree Gully. Since then, it has received grants from the federal government and local government and has been recognised for its work, with awards from the Heart Foundation and KESAB. In 2004, the garden was featured in a segment on the popular ABC television show Gardening Australia. In fact, the group has had to limit membership numbers, and I understand that there is a waiting list. The group regularly invites in gardening experts to speak about gardening to members, and on the day that I visited there was one such expert doing exactly that—teaching people how to grow flowers, fruit or vegetables with minimal use of any chemicals whatsoever.
Perhaps what impressed me the most was that the membership appeared to be fairly evenly split between men and women, and they all equally contributed to the gardening activities. It was terrific to see that it was evenly split between men and women, and it reminded me very much, I suppose, of what I would refer to as a men’s shed, a place where men could go out and do what they wanted to do. But in this case it was a men’s and women’s shed, and they did have a shed on the property—in fact they had several sheds, which they obviously used to assist them with their activities.
I say to the Wynn Vale Community Garden members: I congratulate you on what you have achieved. I thank them all for their welcome to me on the day and their hospitality, and I particularly thank Graham Douglass, whom I have known for several years, for providing me with a guided tour of the garden. As I have said from the outset, I think this bill makes common sense in respect of the administration of the labelling laws relating to the chemicals used in the production of agricultural products in this country, and I commend the bill to the House.
in reply—I thank all members who have contributed to the debate on the Agricultural and Veterinary Chemicals Code Amendment Bill 2010, including you, Mr Deputy Speaker Kelvin Thomson, at an earlier moment. I was pleased to be here to listen to the comments made by the member for Makin. I know of his strong commitment and family involvement. I have visited one of the properties run by members of his family, and I understand his commitment to making sure that these issues are regulated well and also to getting the balance right and understanding that extra red tape serves the interests of neither farmers nor the environment. Where we can eliminate red tape and free up systems to make them work more effectively, we should.
The bill before us amends the Agvet Code in two areas: first, it allows the authority to disclose certain information where a minor use or emergency use permit is being sought; and, secondly, it will allow trade concerns to trigger a review of a product label. These reforms aim to improve effectiveness and efficiency as well as strengthening the protections around the registration of Agvet chemicals for the community. The amendment will not compromise the overarching importance the government attaches to the protection of human health or the importance of protecting the environment.
Following the second reading—assuming we are lucky enough to have it carried—there will be some government amendments. I want to thank the opposition for their bipartisan support on this issue. I understand that the shadow minister—although I was not able to be here for his comments—referred to the fact that we have promised reforms through the better regulation partnership but have not seen any action yet. I suspect we will be able to see the first down payment on that action in about a minute and a half.
Question agreed to.
Bill read a second time.
Bill—by leave—taken as a whole.
I present a supplementary explanatory memorandum to the bill and ask leave of the Main Committee to move government amendments (1) to (30), as circulated, together.
Leave granted.
I move government amendments (1) to (30):
(1) Schedule 1, page 3 (after line 10), after item 2, insert:
2A Section 3 of the Schedule (subparagraph (a)(ii) of the definition of approved person)
Omit “notified the APVMA in writing is”.
2B Section 3 of the Schedule (paragraph (b) of the definition of approved person)
Omit “has notified the APVMA in writing is authorised by that person”, substitute “has authorised”.
(2) Schedule 1, page 3 (after line 25), after item 4, insert:
4A Section 3 of the Schedule
Insert:
file includes a file of information stored or recorded by means of a computer.
(3) Schedule 1, page 3 (after line 28), after item 5, insert:
5A Section 3 of the Schedule (paragraph (d) of the definition of relevant particulars)
Repeal the paragraph, substitute:
(d) in relation to the approval of a label for containers for a chemical product—the information required to be recorded in the relevant APVMA file by paragraph 21(2)(c);
(4) Schedule 1, page 3, after proposed item 5A, insert:
5B Section 3 of the Schedule (definition of relevant particulars)
Before “29(1)(h)”, insert “26A(4)(a) or”.
(5) Schedule 1, page 4 (after line 3), after item 6, insert:
6A After subsection 9(2) of the Schedule
Insert:
(2A) Division 2A deals with applications to vary a relevant particular if the relevant particular is of a kind set out in a legislative instrument made by the APVMA for the purposes of section 26A.
(6) Schedule 1, page 4, after proposed item 6A, insert:
6B Subsection 21(1) of the Schedule
Omit “section 23”, substitute “section 23A”.
6C Subsection 21(2) of the Schedule
Repeal the subsection, substitute:
(2) Approval of a label takes place by:
(a) determining the particulars, prescribed by the regulations, that are appropriate to be contained on the label; and
(b) giving a distinguishing number to the label; and
(c) recording the following information in the relevant APVMA file:
(i) the distinguishing number;
(ii) the adequate instructions and any particulars that are to be contained on the label; and
(d) recording any conditions imposed on the approval by the APVMA under subsection 23A(2) in the relevant APVMA file.
(7) Schedule 1, page 4, after proposed item 6C, insert:
6D Subsection 23(1) of the Schedule
Omit “, the registration of a chemical product or the approval of a label for containers for a chemical product”, substitute “or the registration of a chemical product”.
Note: The heading to section 23 is amended by adding “active constituents and chemical products”.
6E Subsection 23(3) of the Schedule
Omit “, registration of a chemical product or approval of a label for containers for a chemical product”, substitute “or the registration of a chemical product”.
(8) Schedule 1, page 4, after proposed item 6E, insert:
6F After section 23 of the Schedule
Insert:
23A Conditions of approval—labels
(1) The approval of a label for containers for a chemical product is subject to:
(a) the conditions prescribed by the regulations (whether or not the conditions are prescribed at the time the label is approved); and
(b) any conditions imposed on the approval by the APVMA under subsection (2).
(2) At the time of approving a label for containers for a chemical product, the APVMA may impose conditions, as the APVMA considers appropriate, on the approval.
(3) The conditions prescribed by the regulations may be expressed to apply in relation to:
(a) a label for containers for a particular chemical product; or
(b) a label for containers for a class of chemical products; or
(c) a label for containers for all chemical products.
(4) Approval of a label for containers for a chemical product may be granted on the condition that the approval remains in force for a particular period. The period may not be more than one year.
(5) If:
(a) the approval is subject to a condition referred to in subsection (4); and
(b) the conditions of approval have not been varied before the end of the period referred to in the condition, or the end of that period as previously extended under this subsection, so as to remove the condition;
the APVMA may vary the condition so as to extend the period for a further period of not more than one year or for further periods each of which is not more than one year.
(9) Schedule 1, page 4, after proposed item 6F, insert:
6G After Division 2 of Part 2 of the Schedule
Insert:
Division 2A—Changes in certain relevant particulars
26A Applying for a change in certain relevant particulars
(1) An interested person in relation to:
(a) an approved active constituent for a proposed or existing chemical product; or
(b) a registered chemical product; or
(c) an approved label for containers;
may apply to the APVMA for variation of a relevant particular of the approval or registration if the relevant particular is of a kind set out in a legislative instrument made by the APVMA for the purposes of this section.
(2) An application must:
(a) be signed by an approved person; and
(b) be accompanied by the prescribed fee (if any); and
(c) be lodged with the APVMA.
(3) Subsection (4) applies if:
(a) in the case of an application that relates to an active constituent or registration of a chemical product—the APVMA is satisfied that, if those particulars were varied in accordance with the application, the continued use of, or any other dealing with, the constituent or product in accordance with the instructions for its use or for such a dealing:
(i) would not be an undue hazard to the safety of people exposed to it during its handling or people using anything containing its residues; and
(ii) would not be likely to have an effect that is harmful to human beings; and
(iii) would not be likely to have an unintended effect that is harmful to animals, plants or things or to the environment; and
(iv) would not unduly prejudice trade or commerce between Australia and places outside Australia; or
(b) in the case of an application that relates to a label for containers for a chemical product—the APVMA is satisfied that, if those particulars were varied in accordance with the application, the use of the product in accordance with the instructions for its use would be effective according to criteria determined by the APVMA for the product.
(4) If the APVMA is satisfied, as mentioned in subsection (3), the APVMA must:
(a) both:
(i) vary the relevant particulars; and
(ii) record in the relevant APVMA file the relevant particulars as varied and the date on which the record is made; and
(b) give the interested person a written notice that states that the relevant particulars have been varied.
(5) If the APVMA is not satisfied, as mentioned in subsection (3), the APVMA must give the interested person a written notice that:
(a) states that the relevant particulars have not been varied; and
(b) sets out the reasons why the relevant particulars have not been varied; and
(c) states that the interested person may apply to have the relevant particulars varied under Division 3 of this Part.
(10) Schedule 1, page 4, after proposed item 6G, insert:
6H Paragraph 28(1)(ba) of the Schedule
Repeal the paragraph.
(11) Schedule 1, page 4, after proposed item 6H, insert:
6J After subsection 28(1) of the Schedule
Insert:
(1A) If an application is made under this Division and an application has previously been made for the same variation under Division 2A, the APVMA must set off the fee paid for the previous application against the fee payable (if any) under paragraph (1)(d).
(12) Schedule 1, page 4, after proposed item 6J, insert:
6K Subparagraph 29(1)(h)(ii) of the Schedule
Repeal the subparagraph, substitute:
(ii) if the application was for a variation of the relevant particulars of the approval of a label—by recording in the relevant APVMA file the relevant particulars as varied and the date on which the record is made; or
(13) Schedule 1, page 4, after proposed item 6K, insert:
6L Subparagraph 34(5)(a)(ii) of the Schedule
Repeal the subparagraph, substitute:
(ii) if the variation relates to the relevant particulars of the approval of a label—by recording in the relevant APVMA file the relevant particulars as varied and the date on which the record is made; or
6M Subsection 34(5A) of the Schedule
Repeal the subsection, substitute:
(5A) The APVMA may only vary a condition of the approval of a label that was imposed under subsection 23A(2).
(14) Schedule 1, page 4, after proposed item 6M, insert:
6N Paragraph 34A(3)(a) of the Schedule
Repeal the paragraph, substitute:
(a) both:
(i) vary the relevant particulars; and
(ii) record in the relevant APVMA file the relevant particulars as varied and the date on which the record is made; and
6P Subsection 34A(4) of the Schedule
Repeal the subsection.
(15) Schedule 1, page 4, after proposed item 6P, insert:
6Q Paragraph 40(2)(b) of the Schedule
Repeal the paragraph, substitute:
(b) the interested person does not satisfy the APVMA that a label, including the particulars as proposed to be varied by the APVMA, will be attached to the containers for the chemical product;
(16) Schedule 1, page 4, after proposed item 6Q, insert:
6R Paragraph 41(4)(b) of the Schedule
Repeal the paragraph, substitute:
(b) the interested person does not satisfy the APVMA that a label, including the particulars as proposed to be varied by the APVMA, will be attached to the containers for the chemical product;
(17) Schedule 1, page 4, after proposed item 6R, insert:
6S Paragraph 47(5)(a) of the Schedule
Repeal the paragraph, substitute:
(a) any condition of a kind referred to in:
(i) subsection 23(3) to which an approval or registration is subject; or
(ii) subsection 23A(4) to which an approval of a label for containers for a chemical product is subject; and
(18) Schedule 1, page 4, after proposed item 6S, insert:
6T Paragraph 81(1)(a) of the Schedule
Repeal the paragraph, substitute:
(a) the label attached to the container:
(i) states the relevant particulars; and
(ii) does not contain information that is contrary to the relevant particulars; or
6U Subsection 81(2) of the Schedule
Omit “that the label attached to the container was not identical to an approved label for the container for the product”, substitute “that the label attached to the container:
(a) did not state the relevant particulars; or
(b) contained information contrary to the relevant particulars”.
6V Paragraph 81(3)(a) of the Schedule
Repeal the paragraph, substitute:
(a) the label attached to the container states the relevant particulars that were required to be stated on a label (the earlier approved label) that was an approved label for containers for the product at a time before the supply takes place; and
(19) Schedule 1, page 4, after proposed item 6V, insert:
6W Section 86 of the Schedule
Repeal the section, substitute:
86 Labels not to be detached etc.
(1) A person commits an offence if:
(a) either:
(i) a label attached to a container of a chemical product contains any relevant particular identical to any relevant particular contained on an approved label for containers for the product; or
(ii) a label attached to a container of a chemical product contains any relevant particular identical to any matter required by an established standard for the product to be included on a label for containers for the product; and
(b) the person:
(i) detaches or otherwise removes the label; or
(ii) alters, defaces, obliterates or destroys the relevant particular; or
(iii) attaches another label to, or endorses anything upon, the container that in either case has the effect of expressly or impliedly negating, varying, or in any way detracting from, qualifying or minimising the purport or effect of, the relevant particular.
Penalty: 300 penalty units.
(2) A person commits an offence if:
(a) either:
(i) a label attached to a container of a chemical product contains any relevant particular identical to any relevant particular contained on an approved label for containers for the product; or
(ii) a label attached to a container of a chemical product contains any relevant particular identical to any matter required by an established standard for the product to be included on a label for containers for the product; and
(b) the person causes or permits:
(i) the label to be detached or otherwise removed; or
(ii) the relevant particular contained on the label to be altered, defaced, obliterated or destroyed; or
(iii) another label to be attached to the container that has the effect of expressly or impliedly negating, varying, or in any way detracting from, qualifying or minimising the purport or effect of, the relevant particular; or
(iv) anything to be endorsed upon the container that has the effect of expressly or impliedly negating, varying, or in any way detracting from, qualifying or minimising the purport or effect of, the relevant particular.
Penalty: 300 penalty units.
(3) Subparagraphs (1)(b)(ii) and (2)(b)(ii) do not apply to an alteration, defacing, obliteration or destruction of a relevant particular that is done by the destruction or disposal of the chemical product without otherwise contravening this Code.
(4) Subsections (1) and (2) do not apply if the person has a reasonable excuse.
Note: The defendant bears an evidential burden in relation to the matter in subsection (4). See subsection 13.3(3) of the Criminal Code.
(20) Schedule 1, page 4, after proposed item 6W, insert:
6X Paragraph 103(1)(a) of the Schedule
Omit “kept in, or in conjunction with, the relevant APVMA file in relation to the product”, substitute “for the product”.
6Y Paragraph 103(2)(c) of the Schedule
Omit “kept in, or in conjunction with, the relevant APVMA file”, substitute “for the product”.
(21) Schedule 1, page 4, after proposed item 6Y, insert:
6Z Section 158 of the Schedule
Repeal the section.
(22) Schedule 1, page 4 (after line 13), after item 7, insert:
7A After paragraph 167(1)(b) of the Schedule
Insert:
(baa) a decision under section 26A to refuse to vary:
(i) relevant particulars of the approval of an active constituent for a proposed or existing chemical product; or
(ii) relevant particulars of the registration of a chemical product; or
(iii) relevant particulars of the approval of a label for containers for a chemical product;
(23) Schedule 1, page 4 (after line 13), after proposed item 7A, insert:
7B Labels approved under existing law
(1) If a label was, immediately before commencement, an approved label within the meaning of the old law, then:
(a) the label is taken, from commencement, to be an approved label within the meaning of the new law; and
(b) any particulars determined under paragraph 21(2)(c) of the old law are taken, from commencement, to be recorded on the relevant APVMA file; and
(c) any condition on the approval of the label imposed under section 23 of the old law is taken, from commencement, to be a condition imposed on the approval of the label under subsection 23A(2) of the new law; and
(d) any condition prescribed by regulations made under paragraph 23A(1)(a) of the new law is taken to be a condition imposed on the approval of the label.
(2) In this item:
commencement means the day this item commences.
new law means the Agricultural and Veterinary Chemicals Code Act 1994, as in force immediately after commencement.
old law means the Agricultural and Veterinary Chemicals Code Act 1994, as in force immediately before commencement.
(24) Schedule 1, item 8, page 4 (after line 19), after paragraph (1)(a), insert:
(aa) an application for variation of the relevant particulars of the approval for a label for containers for a chemical product under section 26A of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994, as inserted by this Schedule, that is made on or after the day this item commences; and
(25) Schedule 1, item 8, page 4 (line 27), after “the Agricultural and Veterinary Chemicals Code Act 1994”, insert “, as amended by this Schedule,”.
(26) Schedule 1, item 8, page 5 (line 10), after “the Agricultural and Veterinary Chemicals Code Act 1994”, insert “, as amended by this Schedule,”.
(27) Schedule 1, item 8, page 5 (line 17), omit “3 to 7”, substitute “3, 4, 5, 6 and 7”.
(28) Schedule 1, item 8, page 5 (after line 19), after subitem (2), insert:
(2A) The amendments made by items 4A, 5A, 6B, 6C, 6D, 6E, 6F, 6H, 6K, 6L, 6M, 6N, 6P, 6Q, 6R, 6S, 6T, 6U, 6V, 6W, 6X, 6Y, 6Z and 7B of this Schedule apply in relation to:
(a) an application for approval of a label for containers for a chemical product under section 10 of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994 that is made on or after the day this item commences; and
(b) an application for variation of the relevant particulars of the approval for a label for containers for a chemical product under section 26A of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994, as inserted by this Schedule, that is made on or after the day this item commences; and
(c) an application for variation of the relevant particulars or conditions of the approval for a label for containers for a chemical product under section 27 of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994 that is made on or after the day this item commences; and
(d) a reconsideration of the approval of a label for containers for a chemical product under section 34 of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994, as amended by this Schedule, if:
(i) the APVMA has published a notice in respect of the label for containers for the chemical product under subsection 32(1) of the Schedule to that Act before, on or after the day this item commences; or
(ii) the APVMA had given written notice in respect of the label for containers for the chemical product under subsection 32(2) of the Schedule to that Act to an interested person or an approved person before the day this item commences and, on the day this item commences, the period stated in the notice has not expired; or
(iii) the APVMA gives written notice in respect of the label for containers for the chemical product under subsection 32(2) of the Schedule to that Act to an interested person or an approved person on or after the day this item commences; and
(e) a reconsideration of the approval of a label for containers for a chemical product under section 34A of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994, as amended by this Schedule, that begins on or after the day this item commences; and
(f) a standard for a chemical product that is submitted to the Minister for approval under section 56D of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994 on or after the day this item commences.
(2B) The amendments made by items 5B, 6A, 6G, 6J and 7A of this Schedule apply in respect of an application for a variation that is made on or after the day this item commences.
(29) Schedule 1, item 8, page 5 (line 24), at the end of the definition of approved person in subitem (3), add “, as amended by this Schedule”.
(30) Schedule 1, page 8, page 5 (line 36), at the end of the definition of relevant particulars in subitem (3), add “, as amended by this Schedule”.
As I referred to a moment ago, there has been a request from the opposition that we begin action on the better regulation partnership. These amendments are the first stage of that action. The government amendments to the Agricultural and Veterinary Chemicals Code Amendment Bill 2010 support further reforms to cut red tape and increase efficiency in the regulation of agricultural and veterinary chemicals. As I have consistently emphasised, our overriding priorities are the protection of human health and the environment, but we can make the system work more efficiently without jeopardising these priorities.
Following the introduction of this bill, work continued on the better regulation ministerial partnership between me and the Minister for Finance and Deregulation. Some early reforms were identified during that process which would further cut red tape in the regulation of agricultural and veterinary chemicals. The government is seeking to incorporate those reforms into this legislation. I understand that the opposition have been briefed and that there is bipartisan support on these further amendments.
The amendments implementing these measures will help to ensure that the APVMA can remain focused on safety risks and will assist new and improved products to make it to market sooner. Firstly, the amendments will modify the schedule to the Agricultural and Veterinary Chemicals Code Act 1994 to effectively allow applicants to notify the APVMA of a limited range of defined, low-risk, minor changes to their products. Under current legislation the APVMA must undertake a comprehensive assessment of all technical changes to chemical product approvals and registrations, no matter how minor. This creates unnecessary delays for industry when making changes that can be inconsequential, such as to the colour of a product or to the size of a container. It also distracts the APVMA from the important task of assessing higher risk changes.
Under the amendments, the APVMA can prepare a legislative instrument listing the particulars of a registration or approval that can be changed without unnecessary regulatory burden. This will only apply to changes which are low risk and where no technical assessment is required. The changes must not have significant implications for the risk assessment undertaken in relation to the efficacy or safety of the chemical product. Applicants will be permitted to make changes to listed particulars through a simplified application process, effectively allowing them to notify the APVMA of the change. The simplified process could see new high-quality products available to market sooner. Importantly, we will maintain full assessment for all other changes.
Secondly, the amendments will cut red tape relating to industry having to nominate an approved person. Under the current system industry has to notify the APVMA in writing every time an approved person is authorised and the APVMA has to verify that each person it corresponds with is an approved person. This is an unnecessary administrative burden both to registrants and to the APVMA, particularly given general legal protections against fraud. The amendments would remove the requirement for industry to advise the APVMA in writing of an approved person. The amendments will not affect the requirement to authorise an Australian approved person who is liable for the products of overseas applicants. We will maintain those safeguards provided by an approved person.
Finally, the amendments seek to limit the APVMA’s regulation of labels to matters related to adequate instructions for the safe and effective use of the chemical. The APVMA is currently responsible for assessing all aspects of labels, even details of colour and presentation. This is unnecessary. It delays product registration and discourages label improvements. Of course, instructions on labels are very important in ensuring safe and effective use, but the APVMA will no longer expect registrants to apply for approval to change a label if those changes do not detract from the particulars required to be displayed on the label. For example, registrants will be able to change their logo, add marketing information or change other details on the label not relevant to the safe and most effective use of those chemicals. The registrant will retain responsibility for all other label aspects, such as warranty and contact information.
Making these government amendments to the bill is a further down payment on future reform. We will continue to work through the better regulation ministerial partnership and the COAG agenda to introduce a single national framework for agricultural and veterinary chemicals regulation. I commend these amendments to the House.
Question agreed to.
Bill, as amended, agreed to.
Ordered that this bill be reported to the House with amendments.
Debate resumed from 26 May, on motion by Mr Bowen:
That this bill be now read a second time.
I welcome the opportunity to speak on the Superannuation Industry (Supervision) Amendment Bill 2010, which makes some minor changes to the ability of superannuation fund trustees to purchase assets through limited recourse loans. The purpose of this bill is to resolve the uncertainty with the application of the borrowing exemption allowing for limited recourse loans, which reduces the risk to superannuation funds investing through this type of borrowing. Section 67 of the Superannuation Industry (Supervision) Act generally prevents a trustee of a regulated superannuation fund from borrowing money. There are exceptions in the act, such as if there is a temporary need for liquid funds to settle outstanding securities transactions.
In 2007, another exemption was added. The coalition responded to sentiment in the industry to allow an exemption to borrowing requirements of superannuation trustees in terms of limited recourse loans purchased through instalment warrants. These types of loans have become popular with the self-managed superannuation fund sector. The flexibility allowed by SMSFs, including high levels of engagement in choice, are all principles that the coalition has tried to follow in superannuation, and they have informed our amendments to the Superannuation Industry (Supervision) Act. The amendments made to the act in September 2007 allowed superannuation fund trustees to borrow money on a limited recourse basis to acquire any asset that a fund is not prohibited from acquiring directly.
Under these rules, superannuation trustees are able to use instalment loans to fund the purchase of any number of assets. However, the loans made to trustees typically have guarantees placed on them, allowing recovery outside of the assets that the loan was originally intended for. This practice of offering personal guarantees on assets held on collateral outside the specific assets covered by the loan allows lenders to access an individual’s superannuation balance to cover any defaults on a loan. The bill introduced by the coalition in September 2007 was not intended to allow superannuation balances to be used as collateral against a loan. The amendments made by this proposed legislation address this issue and also make a number of other changes to protect the integrity of recourse lending available to superannuation fund trustees.
There are two main amendments to the system of recourse borrowing made by this legislation. Firstly, under the current law, it is possible to interpret ‘asset’ in the plural for the purpose of using recourse borrowing as funding. Again, this was not the intention of the legislation and this bill explicitly defines the interpretation of an ‘acquirable asset’ in the singular. This amendment ensures that the recourse of the lender or any other person against the superannuation fund trustee for default on the borrowing is limited to the rights relating to the acquirable asset. Guarantees on loans beyond the value of the underlying asset will effectively be prevented. Importantly, the amendments are drafted to allow for investments in a particular kind of asset class, and it is their intent that superannuation funds will still be able to borrow on a limited recourse basis to fund an investment in a managed share portfolio. This amendment addresses the situation where a superannuation trustee is able to choose which asset is to be used in order to settle defaults on a debt.
The amendments will allow lenders certainty when judging the risk inherent in lending to a particular type of asset. They will also protect the integrity of an investor’s superannuation balance by limiting the risk to a particular asset and minimising the exposure of the fund to claims made by creditors. The bill clearly defines which assets can replace the assets purchased under a recourse loan for the purpose of designing a dynamic investment strategy. For instance, money is not eligible as a replacement asset under any circumstances. The replacement cannot be improvements of real property and an asset cannot be replaced by an asset arising from an insurance claim covering the loss of the original asset.
The second set of measures contained in this bill makes amendments to the measures allowing personal guarantees as collateral against recourse loans. The situation has arisen from the 2007 amendments where several providers of limited recourse borrowing are requiring trustees or fund members to provide guarantees of the borrowing to underwrite the provider’s risk for the limited recourse nature of an instalment warrant. The amendments will prevent a trustee from using superannuation balances as a guarantee against a default on a limited recourse loan. Again, this protects the balances of superannuants whilst limiting the risk to the asset under which the loan falls. These arrangements are sensible reforms to the legislation. The Treasury held a consultation process in March 2010 where stakeholders were broadly supportive of the changes.
I would like to reflect the view of the SMSF Professionals Association of Australia, or SPAA. I have mentioned before that the coalition is a strong supporter of the self-managed superannuation fund sector. There are approximately 800,000 trustees and members in the sector, but the investments made by SMSFs account for 31.8 per cent of total superannuation assets, or around $400 billion. This is a significant proportion of Australia’s total superannuation asset pool, which currently stands at $1.23 trillion. SPAA have raised two issues with this legislation which will impact on the SMSF sector. It will be the responsibility of the government to monitor the impact of the legislation to ensure that the provisions are working as intended. Firstly, SPAA see no policy justification for banning superannuation loan structures which hold only liquid assets such as a diversified portfolio of listed securities. I have already mentioned that the legislation will enable investments in managed funds from loans to be made on a limited recourse basis, but the SMSF sector believes that this should be more flexible. SPAA admit that section 67A of the act as implemented by the amendments to place a general ban on the use of multiple assets within complying loan structures should contain an exemption for securities listed on the Australian Securities Exchange. The coalition asks that the government and the Treasury continue to monitor the impact of this policy on a number of SMSFs which are able to invest in ASX listed shares and whether the policy has had any detrimental effects.
The second issue with regard to self-managed superannuation funds is relating to personal guarantees. Under the proposals, personal guarantees will not be held over the superannuation balances under the trustee but third-party guarantees will continue being permitted. This means that an individual member of a super fund will be able to make a personal guarantee relating to personal property in order to cover a potential default on a limited recourse loan. This creates the situation where members of small superannuation funds may become personally exposed as a result of a personal guarantee without any recourse to fund assets. SPAA submit that the ban on personal guarantee be extended to all guarantees linked to a superannuation fund complying loan structure. The impacts of these measures need to be monitored. However, without access to any guarantee the lender may be less likely to provide credit for the purposes of purchasing assets in a superannuation fund. In this case the risk of lending might be too high and the creditor will be less likely to lend to superannuation trustees for purchases of assets.
Whilst the government must monitor the implication of the two issues raised by the SMSF sector, the intent of the legislation is to reduce the risk of limited recourse loans to superannuation trustees. The premise of the legislation is that personal guarantees on a limited recourse loan are a risk to superannuation balances. The coalition support the legislation because we support measures that protect superannuation balances from risk that is not connected directly to that superannuation balance, like a separate asset in fact. This is why we do not support measures from the government that intervene in the market and increase the risk to superannuation balances today.
Since the government’s great big new tax on mining was revealed in the press in April, superannuation investments in the resource sector have reduced significantly. The peak of this plunge occurred on 21 May, with a total of $23 billion wiped off superannuation fund investments in resource stocks. The impact of the resources tax, particularly on smaller Australian miners, has been disastrous. This is why the Rudd Labor government is now being labelled ‘a sovereign risk to Australia’ by international investment professionals. The manager of the government’s own Future Fund, Mr David Murray, said:
… if we can’t achieve a design that does not penalise the existing projects—that’s a sovereign risk issue and a design that does not discriminate between recurrent spending and long-term intergenerational wealth creation; if those things can’t be done, the tax should be abandoned.
The chairman of the Australian company Wesfarmers, Mr Bob Every, said:
To change the rules for investors after decisions have been made and costs incurred risks undermining Australia’s position in the international investment community.
So, although the government is looking to minimise risks to superannuation balances by virtue of this legislation, its actions and its broad agenda are a great risk to those very same balances. The ANZ Bank suggested that an international lender in credit markets should compensate for perceived sovereign risk by adjusting the interest rate charged. By lowering the interest rate charged in areas of high sovereign risk, the lender can expand the demand between potential borrowers. The fall in the Australian dollar since April demonstrates the extent to which the exchange rates have moved. A proportion of this fall can be attributed to the increased risk in investing in Australia. The Australian dollar has fallen by eight per cent against the US dollar since April. This is a sovereign risk and a risk to superannuation balances.
The coalition does not support risks to superannuation balances unless the investor has assumed that risk with due diligence. Superannuation investors should not have to worry about risk that is beyond their control. This is one of the reasons the coalition opposes Labor’s great big tax on mining and this is the main reason the coalition supports the amendments to the Superannuation Industry (Supervision) Act. As I have outlined, the bill makes some important amendments and clarification to the exemption in the act allowing superannuation trustees to access limited recourse loans for the purpose of producing or purchasing investment assets. The amendments will limit loans to a single asset or asset class. This will limit the risk to one asset and prevent a member’s superannuation balance from being accessed in the event of a default on the loan. The amendments will also prevent personal guarantees relating to superannuation assets from being used as security against the recourse loan. This protects the balance of an investor’s superannuation account and provides that investor and the lender with certainty as to which asset is attached to the risk involved. The coalition support these principles and we support the legislation. I commend the bill to the House.
I rise to speak on the Superannuation Industry (Supervision) Amendment Bill 2010. At a moment like this it is important that we examine the bill and ensure it is compliant with the grand policy position that the Labor Party has always pursued, which is to guarantee the retirement incomes of working-class people. This bill amends section 67 of the Superannuation Industry (Supervision) Act for the purpose of reducing the risk posed to superannuation funds invested in limited recourse borrowing arrangements. In straightforward terms this bill seeks to protect the superannuation savings of Australians by prohibiting superannuation fund trustees from borrowing money against assets in a way that exposes those assets to the risk of loss as a result of a default on the loan.
This bill amends the act to make sure that superannuation fund assets are protected in the event of a default on a limited recourse borrowing arrangement by ensuring that the right of the lender to recover against the superannuation fund in the event of a default is limited to the asset in question. This bill ensures that the term ‘asset’ will now be read in the singular so that it cannot be interpreted as allowing borrowing arrangements of multiple non-identical assets. This definition does permit borrowing arrangements over assets that are known collectively as a single asset or a single collection of identical assets. Also, the asset within the arrangement can only be replaced in prescribed circumstances that arise from owning the original asset. These amendments respond to issues arising within the regulatory framework surrounding superannuation investment which were raised by the Australian Taxation Office, the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.
This bill is a further step in a genuine trend by Labor governments to progress policy in relation to retirement incomes and to safeguard the retirement incomes of Australians. This is a good opportunity for us to examine some of the history of superannuation and retirement incomes. A fairly cursory examination shows that Labor governments have achieved a great deal while our conservative colleagues have a history of failure and vacillation. Bills such as this provide a good opportunity to look at those issues. Back in 1900 the New South Wales Labor government introduced a means tested age pension of ₤26 a year. It would be pretty hard for us to live on that amount today but I assume it bought a lot more then than it would now. This was funded out of general revenue; it was a pension rather than a superannuation scheme. This scheme was replicated in Victoria and Queensland shortly thereafter.
In 1901 the Constitution established that the Commonwealth should have express power to legislate on the provision of aged care and invalid pensions. This has subsequently been interpreted to include superannuation—a very important step. In 1923 the conservative Nationalist government of Stanley Bruce established a royal commission to examine the possibility of a comprehensive national insurance scheme—which I suppose could be described as superannuation—but, after receiving the results of that royal commission, chose not to introduce the bill, which was known as the National Insurance Bill.
It is quite interesting to examine Stanley Bruce. It is a little-known fact that he was the only Prime Minister other than John Winston Howard to lose his seat in a general election. So he was outstanding not only for his failure to take action on superannuation but also for his electoral fortunes. He was also awarded a peerage to the House of Lords, which he took up later in his life. So, all round, he was a fine and outstanding member of the conservative political community.
We then had to wait until 1945, when Ben Chifley’s government introduced an additional levy on personal income tax which was credited to the National Welfare Fund. There was initially no direct relationship between the National Welfare Fund and pensions but it was envisaged that it would form the basis for a national superannuation scheme some time in the future. However, political events intervened and no further steps in this direction were taken.
At the time of the election of the Whitlam government in 1972, only 32 per cent of workers were covered by superannuation. For many people, particularly for working-class Australians, retirement meant a period of near-poverty and difficult circumstances. This was particularly the case for people who did not own their own homes and for whom the pension was their sole source of income, which can be quite difficult. In 1973 the Whitlam government established the National Superannuation Committee of Inquiry, chaired by Keith Hancock. It made a number of recommendations in 1975. In particular—and I think this is still important—it recommended that pensions be pegged at 25 per cent of average weekly earnings. That is a principle we still adhere to, and I think many people who rely solely on the pension still find it a very important principle.
The Hancock inquiry recommended a partially contributory universal pension scheme with an earnings related supplement. A minority recommendation suggested a non-contributory flat rate universal pension, a means-tested supplement and the encouragement of involuntary savings through expanded occupational superannuation. Labor again clearly put superannuation on the political and national agenda.
With the election of the Fraser government: further inaction. The Fraser government decided in 1977 not to establish a contributory national superannuation scheme—something that I think would have been greeted with a great deal of disappointment by many people out there in the community. He went on in 1979 to reject the recommendation of the Hancock inquiry, which recommended regular increases in pensions. I think the period of the Fraser government was very difficult for people on limited incomes and those who relied solely on the pension—a phenomenon that was repeated during the period of the Howard and Costello government.
In 1983 with the election of the Hawke government there was strong support for superannuation. It was certainly part of the political agenda as I recall. The May economic statement after the election began the process of reforming the taxation of superannuation: for lump sums at age 55 or later, the first $50,000 would be taxed at 15 per cent, the remainder at 30 per cent; and lump sums taken below age 55 would be taxed at 30 per cent.
People may recall that in 1986 Labor joined with the ACTU in seeking a universal three per cent superannuation contribution by employers to be paid into an industry fund or in lieu of a wage rise. That was a major principle embraced by Labor and the union movement to say that it was important for superannuation to be accumulated and that it was a partial way of those employed in the workforce to be paid and to ensure that in retirement they could rely on a standard of living close to what they enjoyed during the time they were working.
In 1988 only 51 per cent of people had their own superannuation. In 1989 the conservative government established the policy in Australia based on the twin pillars of age pension and private superannuation, therefore rejecting the idea that there should be some sort of compulsory superannuation. This tended to mean that those who were on lower incomes, working members in Australia, were less likely to have superannuation while those on high incomes were able to take advantage of superannuation and the beneficial taxation arrangements.
In 1991 in the budget, Treasurer John Kerin announced that from 1 July 1992, under a new system to be known as superannuation guarantee, employers would be required to make superannuation contributions on behalf of employees. This was groundbreaking not only in Australia but internationally. The argument I am putting forward today is that the superannuation system that we enjoy in Australia and the beneficial retirement incomes that will be enjoyed by Australians for many years to come is a direct result of the policies and far-reaching vision of Labor in government.
The superannuation guarantee also extended retirement savings to 72 per cent of workers—a sudden leap of 22 per cent in one stroke of the pen, essentially. Super contributions were to be progressively increased from 1992 to 2002 from three per cent to nine per cent, a figure which the superannuation guarantee was at at the time of the present budget.
There have been a number of changes made to superannuation in an incremental manner since then. But the boldest decision that has been made in relation to superannuation by this government has been the continuation of the co-contributions for low-income earners on a dollar-for-dollar basis. There was also the decision announced in this budget, arising from the Henry review, to increase the superannuation guarantee over time to 12 per cent—a very important decision which will ensure that everyone in Australia has a reasonable standard of living in retirement. A secondary but equally important step is to ensure that the savings of all Australians have increased and that investment in our local businesses has increased as a result.
I commend the bill to the House. Certainly it is in line with a continuing commitment by the Australian Labor Party and the government to maintain superannuation for all Australians. We are heading towards a 12 per cent guarantee, and I certainly believe it is in the interests of all Australians to continue to adjust and improve the superannuation system as we have here in this bill today, the Superannuation Industry (Supervision) Amendment Bill 2010.
I, too, am very happy to be speaking on the Superannuation Industry (Supervision) Amendment Bill 2010. I want to congratulate Chris Bowen, the Minister for Financial Services, Superannuation and Corporate Law and Minister for Human Services, for his hard work in this area and his ongoing commitment to ensuring proper, appropriate and timely reform in what could be said to be one of the most critically important areas of the Australian economy—individuals’ superannuation.
Before the member for Robertson leaves the chamber, I just want to congratulate her on speaking not only on this bill but also on the history of superannuation in this country, because I think it is important to remember and note the longstanding commitment that the Labor Party and Labor governments have had, over 100 years, to superannuation in this country.
We sometimes talk about superannuation but forget to mention what it really is, and that is people’s retirement incomes. Superannuation is really about ensuring that people in their retirement have sufficient income to be able to survive—to be able to maintain a reasonable and decent standard of living. That is why it is so important, and that is why it is so important to get the settings right and to make sure there is continual reform and change to keep up with changing financial or demographic environments.
The member for Robertson spoke about that historical perspective. More recently, the Hawke-Keating government era was the one where the major changes to Australia’s superannuation system took place. That system now forms a substantial part of Australia’s financial standing in the world. We have a AAA rating and more than $1 trillion under management in funds—the fifth largest funds under management in the world and in the OECD. A whole range of other accolades have been bestowed upon Australia as having financial expertise and experience and corporate governance in these areas. That it is no small feat and is due in no small part to all of those key decisions that were made during the Hawke years, the Keating years and in Labor governments before those. I think it is fair to say that, for Labor governments, superannuation has always been a priority, and this government, the Rudd government, is continuing the tradition of making it a priority and ensuring that superannuation does move into the 21st century.
That is being done through very much needed reforms. They are being supported by the other side—as they should; these are good measures. Further than that, we are ensuring that there is a continuation in the growth of superannuation. We are doing that particularly through the superannuation guarantee—lifting it from nine per cent to 12 per cent. That is probably a little overdue but, given that we have not been in government for 12 years, you could expect that it would be overdue. It was one of our very first acts—reflecting our continuing commitment in this area to achieve that goal.
I heard one of the opposition members, in fact the shadow minister, speaking before about this area, about the resource tax, and a range of other tax issues, and giving a very poor picture of what that taxation measure would do. I want to speak specifically about that, because I do not know that this message has got through to as many people as should understand it. That resource tax will in large part be the catalyst for the increase in people’s superannuation from nine per cent to 12 per cent, ensuring that people have long-term sustainability in their retirement incomes. That is not something that should be looked upon lightly.
While the shadow minister, the member for Cowper, is back in the chamber, I will take the opportunity to rebut some of the comments he made on the resource tax and look more closely at issues such as share prices, markets and sovereign risk. They think that a tax that had not yet been introduced—that had not even been considered—somehow caused the global financial crisis. There seems to be a bit of a disjointed argument from the opposition in terms of what this means. If I understand them correctly, they believe that all the markets around the world collapsed on the basis of us going to introduce a resources tax.
When we made the announcement we saw opposition frontbenchers buy resource stocks. Obviously they personally see it as a good investment. Mind you, so do the rest of the community. Stocks in resource companies, such as Rio Tinto and BHP, have actually increased since we made that announcement. You will find there has been more of a decline in global markets and where there have been declines in resource companies in Australia they have been less than their counterparts in other markets around the world. I am not sure which ones the opposition were referring to, but all the ones I am looking at show only positive stories and positive increases.
The world is going through a tough financial time. In no way are we through the global financial crisis; it continues. This government took on the difficult job of dealing with it. We not only ensured reform but acted quickly to deal with the necessary issues at the time—we ensured we maintained our economy, we ensured that people remained in work and we ensured we retained our AAA rating. All of those things have been achieved. We ensured that there was not a run on the banks by guaranteeing wholesale finance and retail finance. We made sure that our banking sector would survive and be sustained through this.
This is part of the reason—I will not claim it is all of the reason—why we have not seen the banking collapses that have happened in other jurisdictions overseas, why there remains a high level of confidence with Australian consumers in the Australian market, why there continues to be strong growth in mining exploration, resource companies and their related share prices, and why there remains great confidence internationally about our corporate governance, our general governance and our markets from overseas investors.
There will, of course, be some concern whenever there is talk about a tax in the resources sector, but at the end of the day we are talking about a greater share of what in the end is a resource that belongs to all Australians being more appropriately distributed. I am more than comfortable to talk about this issue, but it is quite disingenuous of the opposition to come into this place and try to wrap up every ill in the world into the resources tax. That is completely disingenuous.
What we have before us is a bill that makes some very necessary and good amendments. It does relate to the most important of investments for ordinary Australians—that is, their superannuation. This government is making sure that we get on with the job of maintaining confidence. People ought to have the utmost confidence in their superannuation and markets should as well.
The bill enhances the regulatory framework governing superannuation fund investments in leveraged products. We want to make sure that the borrowing exemption under section 67 of the Superannuation Industry (Supervision) Act 1993 is not used in a manner that places the superannuation savings of everyday Australians at undue risk. I think that is a commitment and view shared by everybody in this place. The bill contains a number of amendments that reduce that risk to fund assets from limited recourse borrowing arrangements that would involve personal guarantees on lending or related borrowings, particularly in relation to multiple assets or the replacement of the asset.
When the minister spoke on this bill he detailed in a range of areas what that actually means. The current regulations say that ‘asset’ could be taken as meaning multiple assets. This amendment clarifies that to mean a singular asset. This is very important. It means that, if you are borrowing and there is a guarantee against a particular asset, it is just that asset and not all other assets in a superannuation fund. That is an important amendment.
There has been extensive consultation with the sector, in particular on issues that were raised by the Australian Taxation Office, the Australian Prudential Regulation Authority and also the Australian Securities and Investments Commission, as well as concerns that were raised in consultations with the industry stakeholders. We have acted on that basis. This is good reform. It is timely reform. It continues to demonstrate our commitment to ensuring that we have sound regulatory frameworks surrounding superannuation that are robust and that superannuation funds are prudently managed—managed in a correct way.
If you look at industry numbers, certainly the largest part, about two-thirds of all superannuation funds, are being managed by the large industry players, retail funds or other funds, but a very large proportion, about one-third of all of the moneys, is held in the greatest number of accounts by almost tenfold—that is, self-managed superannuation funds, small funds with an average of about $500,000 across the sector. Those funds are of particular interest to me. While they are on the whole well managed, they are more vulnerable in a range of areas to particular discrepancies or areas of concern in regulation.
We have made a number of changes to ensure the robust nature of self-managed super funds. There is one that came out of my committee’s recent report on financial services and products. We are taking out of the hands of ordinary accountants the ability to set up self-managed superannuation funds and putting it into the area of those who are specifically licensed, who hold an Australian financial services licence, to not only manage but set up a fund. There was an anomaly which entitled people who could not manage funds to set them up. I think that has been one other good reform in this area.
Prudently managing a person’s superannuation funds is of critical importance. I will just mention a recent event which highlights the risks that can be taken and the catastrophic outcomes that can occur. If we look to the not-too-distant past, to the collapse of the Storm Financial business, which took with it the life savings, homes and superannuation savings of thousands of Australians, we can see just how critical it is to get regulation right in this area. Storm Financial had 14½ thousand clients. It used a whole range of mechanisms to invest in funds. In the end, I think the most dangerous thing it did was to use highly leveraged products and use people’s superannuation savings bundled together, putting all of those people’s assets, life savings and superannuation at risk in one lot. The catastrophic outcome, of course, was that an unfortunate number of those people with Storm Financial lost not only their home and their life savings but all their superannuation as well.
This government has not only done a review but taken action to minimise the potential for these things to happen again in the future. It goes without saying but it is obvious to most people that there will always be people who do the wrong thing out there, and you can never prevent all circumstances taking place. But, once you find problems, I think you have a very strong responsibility to fix those matters, and that is what this government has done.
While I commend the amendment bill before us to the House, I add that it is part of a broader agenda that this government has taken on board. In the short 2½ years since we came to power, we have taken on a very serious agenda in financial services reform and are slowly progressing to that end. I believe this reform, in consultation with the sector, has been very positive, even the difficult decisions, because the sector can understand and see our strategy in getting to a sound position, providing certainty, providing strong direction and leadership and providing a basis for where the sector could be in five or 10 years time. We are certainly raising the levels of education and professionalism within the sector, ensuring some timely updating of a whole range of regulatory frameworks that need to be updated and doing that as quickly and efficiently as we can to make sure that the regulatory environment today reflects the changing global environment that exists right now.
I am very proud to be part of a government doing that. We heard before the member for Robertson talking about the proud history and tradition of Labor governments dating back 100 years in ensuring that we provide for people in their retirement either through a pension or through some form of superannuation. Nothing could be stronger than the reforms brought out a little over 20 years ago by the Hawke-Keating governments which ensured that working people in this country would have those two levels of choice, between either a pension and/or their own private superannuation, to help support them in their retirement. I commend the work done by all agencies involved and the minister in bringing this forward, and I commend the bill to the House.
On behalf of the minister responsible for superannuation, I thank the members for Cowper, Robertson and Oxley, who contributed to this debate, for their support for the bill. The Superannuation Industry (Supervision) Amendment Bill 2010 introduces amendments to the Superannuation Industry (Supervision) Act 1993 to reduce the risks for superannuation funds investing in limited recourse borrowing arrangements. It contains amendments that reduce the risk to superannuation fund assets arrangements involving personal guarantees on lending or related borrowings, multiple assets or the replacement of the asset. The bill ensures that the term ‘asset’ should now be read in the singular so that it is not interpreted as permitting borrowing arrangements over multiple non-identical assets. This will ensure that funds are not exposed to the greater risk of borrowing arrangements over multiple differentiated assets.
The bill amends the act to clarify the circumstances under which refinancing and related expenses are permitted. Industry stakeholders were uncertain whether the existing borrowing exemption allowed refinancing on related expenses to be incorporated into borrowing arrangements. The bill amends the act to list the specific circumstances in which a replacement asset is permitted. This will prevent replacements that increase the risk to fund assets. The bill introduces amendments to ensure that the rights of the lender or any other person against a superannuation fund trustee are limited to the rights relating to the acquirable asset. This will protect fund assets from guarantees and other charges that may circumvent the limited recourse nature of the borrowing in the event of a default.
The amendments respond to issues with the regulatory framework surrounding superannuation investment in limited recourse borrowing arrangements such as instalment warrants, raised by the Australian Taxation Office, the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission. The amendments also reflect concerns raised in consultations with industry stakeholders. The bill demonstrates the government’s commitment to ensuring that the regulatory framework surrounding superannuation is robust and that superannuation funds are managed prudently in a way that maximises the income of Australians in retirement. On that basis, I commend the bill to the House.
Question agreed to.
Bill read a second time.
Ordered that this bill be reported to the House without amendment.
Debate resumed from 17 March, on motion by Dr Emerson:
That this bill be now read a second time.
It is certainly a pleasure to speak on the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010. This bill follows the Trade Practices Amendment (Australian Consumer Law) Bill (No. 1) 2010, passed in the parliament in April. Taken together, both of these bills complete the initial text of the national consumer law regime, as approved by the Council of Australian Governments in 2008. With the passing of this legislation, the Trade Practices Act will be named the Competition and Consumer Act. The purpose of these bills is to update the Trade Practices Act to implement a national uniform consumer law. Creating a national consumer law and removing the inconsistencies across states and territories has bipartisan support in this parliament. I welcome the constructive approach taken by the government and by the minister.
The first Australian consumer law bill implemented uniform unfair contract provisions which the coalition supported in principle. The coalition was able to work with the government to amend the bill and to ensure that these provisions operated as intended and did not create legal uncertainty for businesses and consumers. We also made a number of recommendations to the bill today which have been accepted by the government and which I will detail shortly.
The provisions in this bill will implement a range of measures in areas of consumer law where there are legal overlaps between various state and Commonwealth laws. It is intended that a national system of consumer law will provide both businesses and consumers with certainty in their dealings.
The measures addressed by the bill relate to four main areas of consumer law, which I will outline in detail. The bill also makes a number of changes to minor areas, which I will also mention briefly. Firstly, the bill addresses deceptive and misleading conduct. The provisions inserted by this legislation will ensure that a person must not, in trade or commerce, engage in misleading, deceptive or otherwise unconscionable conduct or conduct that is likely to mislead or deceive. These are largely adoptions of the misleading and deceptive conduct laws currently in the Trade Practices Act, but the new laws will replace all currently operating state and territory provisions. These provisions relating to misleading or deceptive conduct do not apply to an information provider if the information provider made a publication in the course of carrying on a business of providing information, unless the publication is related directly to the business activities of that person. This prevents publishers of information from being held liable where a link cannot be drawn between that information and the providing of a service.
Secondly, the provisions implement statutory guarantees for consumer goods at a national level. The bill extends laws currently operating in the TPA and will provide a remedy where the goods are not of acceptable quality; where the goods are not fit for a purpose that the consumer made known to the supplier or manufacturer, and where goods do not match their description. Further amendments with relation to guarantees will be implemented to ensure that consumers have a statutory basis for seeking remedies where the services are not rendered with due care and skill and where the services or goods are not supplied within a reasonable time.
Thirdly, the legislation implements a national product safety scheme by clarifying and implementing various state and territory laws to provide for a national product safety system. The system will allow the responsible Commonwealth, state or territory minister to remove consumer goods or product related services from the market. These powers will be exercised where the minister believes that the goods or services in question pose a risk of injury to any person, either through their normal use or a reasonably foreseeable misuse. Included in the administrative powers provided to the responsible ministers are the power to make standards for particular consumer goods or product related services, to ban the supply of particular goods or services, to require a supplier to recall particular consumer goods, and to issue warning notices to the public about consumer goods or product related services. The legislation will require suppliers to report to the Australian Consumer and Competition Commission where the supplier is either undertaking a voluntary recall or becomes aware that consumer goods or product related services supplied have been associated with a death, serious injury or serious illness.
Fourthly, the bill will implement laws in relation to unsolicited selling. The bill clarifies unsolicited selling laws in the TPA and in the states and territories to regulate the making of unsolicited offers to supply goods and services to consumers. These laws include express supplier obligations about the way in which consumers are approached, including permitted hours of visitation and the duty to clearly advise the consumer at the outset of an approach and about the making of an agreement. A 10-day cooling off period will also apply for products and services purchased as a result of an unsolicited agreement. The intent of the laws relating to unsolicited agreements is to protect a vulnerable person from entering into contracts for the purchase of goods and services where that person would not have entered into the contract if it were not for the kind of approach made by the supplier.
As I mentioned, there are also a number of smaller provisions to be implemented by this bill. These areas broadly relate to four additional areas of consumer law, which I will detail briefly. Firstly, the bill clarifies national laws with regard to the unfair practices of making unsolicited supplies such as credit or debit cards, pyramid schemes, bait advertising and coercion into purchasing a product or service. The bill will also ensure that a supplier must not sell goods for more than the lowest of prices displayed in the instance where multiple prices are displayed for that good and ensures that suppliers will be required to provide a proof of transaction when the goods or services have a total price of $75 or more.
Secondly, new provisions will be inserted into the act to regulate lay-by agreements in terms of the characteristics to be included in these types of agreements. For instance, a lay-by agreement must be made in writing and a consumer may terminate the agreement at any stage prior to the delivery of the goods. Suppliers may only terminate a lay-by agreement in specified circumstances, and in the event of cancellation the consumer is entitled to a full refund of amounts paid.
Thirdly, the Commonwealth minister will be provided with the ability to prescribe information requirements when supplying particular goods or services by making information standards and prohibiting the supply of goods or services that do not comply with a relevant standard which is in force. Suppliers will be prohibited from supplying particular kinds of goods or services that fail to comply with information requirements in an information standard issues for that good or service.
Finally, the bill extends trade practices laws to the states and territories which provide that manufacturers are liable for goods with safety defects where an individual has suffered loss or damage because of injuries arising from that safety defect.
The coalition has supported each of these provisions that I have outlined in principle. As the legislation is considerable, it was decided to send the bill to the Senate Economics Legislation Committee for consideration and to ensure there were no unintended consequences of the provisions as drafted. Through the excellent work of my Senate colleagues Senators Eggleston and Bushby, it became evident there were a number of areas where the legislation could have been improved. Unfortunately, the Senate inquiry also highlighted that the Treasury could have undertaken a more extensive consultation process to get the legislation right before introducing it into the parliament. Many stakeholders giving evidence to the inquiry suggested that better public consultation could have taken place and pointed out that, under the COAG agreement that agreed to create a national consumer law, the Commonwealth was required to conduct a consultation period with stakeholders before introducing this legislation. As Consult Australia told the Senate committee:
Under the COAG agreements there was meant to be April to June exposure draft consultation process, and instead this bill was drafted and introduced into the parliament in March. It probably would have taken three months.
This evidence is supported by COAG documents detailing the time line for implementation of this bill. Whilst I congratulate the minister for consulting with the opposition following the Senate inquiry, the failure to properly consult on legislation and policy has become a frequent feature of the Labor government’s approach to governing this country.
Of course, we now have the government’s great big new tax on mining—the resource super profits tax—which the government is now claiming to consult on, well after the details of the tax were already announced. These details have already done considerable damage to Australia’s international reputation and this damage could have been mitigated by a proper consultative period before announcing the tax. This government has always been more interested in announcing policy rather than considering how the details will impact upon stakeholders and upon individuals.
I congratulate the approach by the minister to consult with the opposition on this bill before parliament today. The minister worked through the recommendations made by the coalition in the Senate inquiry report and will be making some responsible amendments to the bill in the Senate. These amendments improve the legislation’s intent and minimise some of the unintended consequences raised in the Senate inquiry.
There were five areas of recommendation made by the coalition which have been addressed by the government through the minister. I will go through these recommendations and amendments in detail. Firstly, the coalition recommended that the definition of consumer should allow for a class of consumers that would encompass small businesses for the purpose of statutory guarantees on purchases. The previous legislation allowed for all goods purchased under $40,000 to be considered as consumer goods, allowing small business purchases to be covered under the legislation. The coalition recommended for this threshold to be retained, and this recommendation was accepted by the minister. It was important for the coalition that small businesses continue to be protected under this legislation and I am pleased to say that this will continue to be the case.
Secondly, the bill as drafted would have removed the exemption for the architects and engineers professions against the implied fitness for purpose consumer warranty that existed in the Trade Practices Act. The coalition recommended in the inquiry report that the existing exemption for these professions be retained. It is our view that engineers and architects are already well regulated through duty of care provisions. The imposition of an implied fitness for purpose warranty would unfairly place potential liability on professional engineers and architects where those professionals are only usually responsible for the design rather than the construction of the finished product. The coalition welcomes the amendments to reinstate the exemption.
With regard to the product safety scheme and the requirements of suppliers to provide reports on incidents causing serious injury or death, the coalition recommended a risk based system rather than an incident based system. This was because the incident based system created a number of burdens for business in terms of monitoring the product after sale, and would have created the position where all suppliers in the supply chain would be forced to report on the same incident. The bill as originally drafted also created confusion amongst stakeholders, who interpreted the association test between the product and the incident as requiring competitors to make reports on the products of other suppliers.
Whilst the government did not accept the coalition’s recommendation for a risk based system, the amendments being made by the minister will ensure that the coalition’s suggestion that a more stringent test than that the incident must be either caused or may have been caused by the product be implemented. This removes the uncertainty of when a supplier will need to report. The amendments will also ensure that reports are kept confidential by the minister unless there is a public interest, and will clarify that suppliers are not required to report on competitors’ products.
Fourthly, concerns were raised with the reporting scheme by specific industries, such as the auto industry, which are already required to report incidents through state based systems and through industry regulations. The coalition recommended that the legislation provide a means for these industries to be exempt where reporting is already occurring. The amendments will allow the minister to accept a report from a body other than the supplier where the minister is satisfied that a reporting regime is already effectively in place. This amendment has been accepted by stakeholders already operating in industries with extensive reporting obligations.
Finally, the definition of an unsolicited consumer agreement will be expanded to include circumstances where consumers are contacted through indirect means. This includes the circumstance where a consumer is contacted in relation to the supply of goods or services after providing his or her name or contact details to a person, and the predominant purpose for providing those details was not to supply those goods or services. It will also include the circumstance where a consumer contacts a dealer in response to a missed call. Once again, the coalition welcomes these amendments to be moved in the Senate and the approach taken by the minister.
There are other stakeholders who have raised concerns with this legislation, and whose concerns are not addressed by these specific issues. In particular, there are a number of issues in relation to unsolicited agreements concerning the hours which salespeople must operate under and the requirement for a salesperson to gain agreement to contact the consumer outside of these hours. This agreement cannot be completed in person and must be arranged through mail or telephone. There are also some questions as to how the legislation will operate surrounding unsolicited agreements at trade parties and where computer technology is an aspect of the agreement.
The coalition believes that some of these issues can be clarified by regulations. However, the range of issues canvassed after this bill’s introduction highlight the many issues present in consumer and competition law in Australia. That is why the coalition will review the operation of the competition provisions in the act. We are committed to constantly improving consumer protection and competition in the Australian market. This bill as amended contains provisions that the coalition has been able to agree with the minister. Through these amendments, we have been able to improve the legislation whilst maintaining our broad support for uniform consumer laws. I commend the bill to the House.
Debate interrupted.
I move:
That order of the day No. 4, government business, be postponed until a later hour this day.
Question agreed to.
Sitting suspended from 12.59 pm to 4.01 pm
Debate resumed.
I rise today to support the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010. The bill completes the introduction of Australia’s first national consumer law, a development which is long overdue in this country and is now being delivered by the Rudd Labor government. The bill expands the definition of ‘consumer’ to include small businesses where the goods and services they purchase are less than the value of $40,000. It retains the exemption in the Trade Practices Act by which services provided by a qualified architect or engineer are exempt from the requirements, that they are fit for a purpose or achieve the result made known to them by the consumer. I imagine that has a fair bit to do with the fact that members of the profession are required to be registered and also are subject to their own indemnity provisions.
The bill also broadens the definition of ‘unsolicited consumer agreement’ to include consumers who are contacted indirectly in circumstances such as entering a competition or alternatively returning calls of a supplier where they have initiated the contact, but nevertheless treats them as being what they really are at the end of the day, consumers, when they receive the services or the product. It also provides protection for consumers in relation to unsafe products. It offers greater choice for consumers when deciding whether a contract of supply should be terminated because of rejected goods. At the same time, the bill clarifies the obligations for suppliers to refund moneys when goods and services have been rejected. The bill provides that the return of moneys in those circumstances extends only so far as the services have not at that stage been delivered.
Overall, the bill is a win for consumers and certainly for small business. That is something I know a little about. As I think most people in this place are aware, prior to coming into this place, I ran my own business and so I understand that small business is under constant pressure and is facing ever-changing circumstances. This bill will go a long way to address issues for small business and give a greater degree of clarity.
Small businesses are the backbone of our community, and my electorate of Werriwa alone has some 10,000 registered small businesses. Organisations such as the Liverpool Chamber of Commerce and Industry, under the guidance of Harry Hunt as President, and the Cabramatta chamber of commerce, headed up by John Medich, cater well for small business communities in their locations. I know they do a powerful and good job in supporting local charities, community groups and community organisations and they always turn up to support local events. Importantly, they provide guidance, support and networking opportunities to allow local businesses to grow, to flourish and to further contribute to our local economy, particularly and most importantly through the provision of employment opportunity.
It is important for the government to continue to support small business, as it is the driver behind our local economy and very important in the way we go about addressing the global financial crisis. I am very pleased to say that this bill very much goes to the heart of that in the way it supports small business. The bill also supports consumers, particularly through those provisions for the national laws on product safety for consumer goods and services. I am certain that most members in this place would agree that consumers deserve protection from unsafe products or practices. The Australian consumer law completed by this bill allows the minister to take actions such as to ban products, to impose standards on their design in relation to construction or labelling and to order suppliers to recall a product or issue warning notices to the public. All these measures provide adequate protection for consumers for products that could harm them and certainly endanger health and safety.
The Australian consumer law also puts more responsibility on the supplier to notify the minister if they become aware that the product has been associated with the death, serious injury or illness of any person. These amendments should help put the minds of parents at ease, as we have seen a flourish of unsafe children’s products recalled over the last couple of years. Leaving aside toys and children’s equipment, these laws will apply to all areas covered consumer law. They will mandate these responsibilities, and that will be very good for consumers.
I would also like to commend the members of the Senate Economics Legislation Committee on their work in this matter. I note that the bill contains recommendations that were moved by the coalition members of that committee, and those recommendations were embraced in a bipartisan way. Hence, I look forward to the opposition’s support of the passage of this bill through the House. I commend the bill.
The Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010, which the previous speaker, the member for Werriwa, and the very capable shadow minister on our side, Mr Hartsuyker, outlined, comes to this chamber with the support of both sides of the parliament. That is not to say, though, that there are not still some reservations and some issues. The bill itself is several hundred pages long and introduces a range of provisions that have been canvassed for some time in the evolution of consumer and competition laws. It seems to be a step in the right direction. It is on that basis that I am pleased to lend my support to it, but I will add a few remarks about some of the provisions.
As my colleagues and the previous speaker, the member for Werriwa, have touched on, there are a number of amendments that the government has agreed to. Those amendments emerged from the analysis by coalition senators in the Senate inquiry process. A number of recommendations were made in terms of a definition of consumers that embraces small business. I obviously welcome that greatly and recognise that, when it comes to market power and the capacity to deal with contracts that are onerous, do not fulfil the spirit of competition, are not fit for purpose and involve unconscionable conduct, it is often hard to distinguish between a small business and a consumer. I find it remarkable though that the clarity that has been brought to this bill has not been carried over to the unfair contracts provision. For the life of me I cannot understand why the government’s commitment to include small business in the unfair contracts provisions of the laws has not been provided for. It is an enormous disappointment to the small business community that, although there is some protection here in the consumer space, in other areas to do with fairness of contracting the coverage and protection afforded to consumers does not extend to small business. We think that is a disappointment. The senators raised that point and sought to have it addressed. The government has gone some of the way, but I am sure that will be a subject of further debate in the time to come. I just flag that disappointment in the small business community.
On the issues around the amount that should be considered part of consumer goods and the allowance for small business: the fact that that has been provided for is quite encouraging. The recommendation from the Senate committee to carry forward the exemption from the trade practices law to cover architects and engineers is welcome. We think that was a sensible move. It is still not clear to the opposition why the recommendation around risk based reporting was not accepted. It seemed to be a practical and sensible response that put effort where it was justified and did not gum up normal business transactions with potentially repeated reporting of similar issues or incidents. This seems a strange position for the government to take. However, the ComLaw register identified 9,997 new or amended regulations introduced by the Rudd government up until the beginning of March this year and the repeal of only 52. It is hardly one in, one out. There is a tendency to embrace heavy intervention and heavy-handed regulation and perhaps that is the reason why this risk based reporting system has not been accepted and this desire for incident-by-incident based reporting has been maintained. The fog may clear on that. We do not know as we have not had a satisfactory explanation of why that is the case.
The changes to the section relating to carrying forward existing reporting schemes are a positive move, as are the changes to the section that appeared to create an obligation on business suppliers to report on competitors’ products. I am pleased that has been embraced by the government. There have been some changes to the unsolicited consumer agreement aspect, which are welcome. They relate to contact in relation to the supply of goods and services after contact details have been provided and the prominent purpose for providing those details was not necessarily the supply of goods and services, and also issues around missed calls and the like. I think they are all positive steps in the right direction and I congratulate the government for the steps it has taken. I look forward though to a serious examination of how this bill operates in reality.
I should declare a pecuniary interest: my darling wife is involved with the Body Shop at Home program, which is an area of direct selling. She is not only vivacious and the light of my life but also an outstanding retailer, as was reflected in our own former retail business. She has carried those skills forward as we juggle the cost-of-living pressures that seem to have been so turbocharged by the Rudd Labor government. While I am representing the electorate she is doing a remarkable job of being a wonderful mother and also seeking to bring extra income into the house. I use the Body Shop as an example but this applies equally to a range of other direct-selling mechanisms. These are techniques of bringing goods and services to the market in a non-traditional manner—that is, not through a retail store. Avon, the Body Shop, Nutrimetics and all these guys are involved in arrangements that do not seem to have been accommodated well in the machinery of this bill.
As happened last weekend, if my wife were involved in a Body Shop party in Langwarrin and people were keen to purchase some of the products, this concept of a cooling-off period and an inability to accept payment within a certain period of time would ignore the nature of that transaction; it would just completely ignore that point. Even in relation to supply of the goods that have been purchased—you know, saying, ‘May I recommend to you, Sir, the vitamin C range from the Body Shop; I am sure that would combine very well with the climate in Tasmania’—if someone is buying some stuff through that mechanism they actually want it as soon as they can get it, yet there are some concerns that that sales channel is not well conceptualised within the framework of this bill.
These were issues raised at the Senate Economics Committee inquiry. They are issues that DSA, the Direct Selling Association of Australia, sought to have canvassed. They were frustrated about poor consultation about these things. They have not to this date received a formal response to their concerns, but these are still real issues. The aspect that they are concerned about where there are independent distributors involved is the prohibition of supply and payment for goods during the cooling-off period—a completely contrary concept to what people want; they want their stuff as soon as they can get it. There are also issues around point of sale documentation and even questions about the receipt of payment.
Many of these provisions just pick up stuff that is already in state and territory laws, and in respect of the payment and supply issues this has not been a good way to go. There is no jurisdiction that restricts supply of goods, so that pick-up of existing state and territory laws has not happened in this case, yet this concept is being introduced into the bill and there is no road testing or experience in the state and territory jurisdictions to point to how that may work. This will present some problems about payment options and the rescinding of contracts after cooling-off periods. The point I am making is that transactions are not always carried out in a comfortable, familiar way. Retailing is not only done in retail outlets; there are other retail channels for consumables that use a range of technologies, and we need to be mindful that these concepts have to be adaptable enough to take account of what the contemporary marketplace is.
Sales channels in many cases are built on personal relationships. This is an underpinning of the trust people have in the product and the provider. Technology and consumer demands are placing pressure on traditional business models, and that does not always mean that store selling is the way to go. There are new technologies and new modes of marketing and sales that need to be reflected in these laws. We do not know how well these laws will accommodate the changing face of commerce. I accept that there will be some road testing and I imagine that, whichever side of parliament occupies the government benches, we will need to revisit some of this stuff. Some of the concepts are new and, as I have just touched on in those examples, some of them are untested and there is no case history to point to how well they are going.
The issue that I would like to extend further into is new technologies. I was speaking with eBay just last week, and they are quite concerned about how these provisions may impact on their business model. They are providing and facilitating a marketing and distribution channel without taking any custodial or proprietary interest in the products that are being sold through that channel. But, to the extent to which warranty expectations are already a part of their business, with people purchasing online using the mechanisms available through eBay, finding that that experience is not quite what they wanted as customers and then going back to eBay to raise the points with eBay, they are saying, ‘These aren’t our products. We are not endorsing the products; we are just facilitating a transaction between parties.’
I suppose eBay’s concern is that with this belief that they are somehow embedded in that transaction and with the warranties that are being implied in this bill they will be caught up in that even more. Again, we do not know whether that issue will materialise or not. What I do understand is that about one-third of eBay customers are churned each year, and eBay’s research suggests that that often has much to do with people’s dissatisfaction with a transaction from a buyer or seller point of view. It is not the technology, the platform or the marketing process that eBay facilitates but the parties that make use of it, yet eBay comes within that experience and is often contacted by people looking for a remedy for a transaction that they were not happy with.
These are a couple of areas that we need to look for and where we need to look at how they evolve over time. We need to recognise that this is an effort to bring together quite a range of concepts in competition consumer protection. I am all for protection for consumers. The ‘fit for the purpose’ concepts that are being embraced in here are quite well understood and appreciated but, as I have touched on, some of the other mechanisms are unproven and do not represent best practice by states and territories because they have not road-tested some of these. In other areas I am talking about a change in the nature of commerce and saying that even the traditional tools might not have the utility and the flexibility to cope.
The coalition is supportive of the passage of this bill. I again flag a need for all of us in this parliament—for whoever is in government after the next election—to re-examine the practical reality that emerges from these new provisions. The sense that small business was promised much about unfair contracts and then, in other areas, treated as consumers for the purposes of some transactions but then not treated as consumers for the purposes of other contractual terms and protections that are available to consumers is very bemusing. It is something that has the small business community quite upset. It is a bit like the debate around good faith conduct, which apparently according to the government, is such an incredibly difficult concept to have operating in some areas of commerce. Franchising is a notable one, yet in this parliament this week two bills are being debated. Not only is good faith talked about; it is actually legislated. There is a bit of eclectic behaviour and corporate knowledge that seem to pop up in different parts of the government’s rhetoric but disappear in other parts. There is no coherence as to how these concepts are embraced in the laws being debated by this parliament.
I congratulate the shadow minister and acknowledge that he has been accommodating and collaborative. I have also found him to be thus with regard to the Trade Practices Amendment (Infrastructure Access) Bill, which will be debated later. I think it reflects the season of trying to get stuff through this chamber and over to the other place as a non-controversial bill that will see its passage before the winter recess, because we might not be back for this parliament. When we are back next time it may be another parliament. On that note, I wish you well—but not too much luck—Mr Deputy Speaker Sidebottom. I commend the bill to the House.
I speak in support of the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010. The primary purpose of this bill is to make sure that the government carries through its proposal to create a seamless national market with respect to consumer law in this country. We are incorporating the fair trading and consumer protection provisions of the Trade Practices Act 1974 into the Australian Consumer Law. We are creating a national legislative framework for statutory consumer guarantees for the Australian community, a national legislative scheme for consumer product safety and an infringement notice regime with respect to the provisions of the Australian Consumer Law. We are changing the name of the Trade Practices Act to the Competition and Consumer Act 2010. That is the broad scope of this piece of legislation. It had its genesis in August 2008 with the Ministerial Council on Consumer Affairs. It was an agreement that was reached in terms of a formal intergovernmental agreement on national consumer law on 2 July 2009.
We in this government have done a lot to support the nearly two million small businesses. Approximately four million Australians work in small business. In fact, they are the lifeblood and the mainstay of the Blair community in South-East Queensland, which I have the honour and privilege to represent in this place. We have provided the small business tax break; the tax adjustment to provide cash flow in the year 2009-10; the $42 billion through the Nation Building Economic Stimulus Plan, which has created tens of thousands of jobs in my electorate; and the BER funding, which creates, on average, about 200 jobs on each project in the Blair electorate. We have been systematic in our cutting of red tape.
We have delivered training places and productivity places and we have built trade training centres. I look forward to the Deputy Prime Minister coming to my electorate of Blair in the next month to open the Ipswich Trade Training Centre. It is a wonderful initiative by St Edmund’s College, with the support of Ipswich Grammar School and Ipswich Girls Grammar School, two of the oldest schools in Queensland. Indeed, Ipswich Grammar School is the oldest high school in Queensland. I look forward to that event.
We have encouraged apprenticeships and we have the wonderful Apprentice Kickstart program. In the Ipswich West Morton community we have seen a reversal in the decline of apprenticeships and we now have a significant increase. The Jobs Expo in Ipswich is, again, a wonderful initiative. Hundreds of jobs have been created in our community.
I also think that the research and development tax credit has been an important part of supporting small business. There has been much other support. We have tremendous proposals for small business, such as the tax break, the instant write-off of assets valued at up to $5,000 and the head start on company tax rate deduction. From 1 July 2012, 720,000 small businesses will receive the reduction of two per cent, two years ahead of schedule. People involved in small business will also benefit through Registering Business Names Made Easy and the superannuation guarantee. That will help not just employees but employers as well.
The genesis of the eradication of the dingo fence in consumer law was a long time ago and this legislation has been a long time coming. In the late 19th century there were a number of decisions in the UK and also in Australia that dealt with issues such as fitness for purpose and quality of merchandise with respect to the sale of goods. In fact, the sale of goods legislation that we have seen operate for decades across the various states and territories of this country was in part legislated in the late 19th century, as well as the early 20th century. We have old legislation which has operated for decades with respect to our economy, consumer law and corporations law.
Under section 51 of the Australian Constitution, the Commonwealth has the power to deal with corporations. In fact, that was the lever by which the Howard government leveraged the Work Choices legislation through the parliament. It was a shame that they did that, that is for sure. It was a shame that the High Court decided five to two in favour of the Howard government in that case. Good on the dissenting judges, as far as I am concerned.
I know that Garfield Barwick had certain views with respect to consumer law, back in the Menzies days. I know there were certain advocates during the 23 long years from 1949 to 1972 that those opposite, with apathy, sat upon consumer law and did nothing,. It took the Whitlam government in 1974 to bring in the trade practices legislation, to bring in the kinds of concepts that we believe are important to help consumers and small businesses across the country. Prior to that, sadly, we had to rely upon judicial activism on concepts such as unconscionability. But it was the Whitlam government and subsequent Labor governments which supported small businesses with respect to trade practices legislation in this country.
These are concepts that we hold dear and believe are important. Take, for example, section 52 of the Trade Practices Act—the broad prohibition on misleading and deceptive conduct, which is being retained in the Australian Consumer Law without any change. That is a particularly important aspect which has been litigated upon and which has provided the benchmark, the aspiration and also the warning sign for many businesses. Many cases have been avoided by correspondence between companies and lawyers to warn people of that. Without that, businesses would have suffered.
We amend this legislation by schedule. The general provisions with respect to deceptive and misleading conduct are in there. The unfair contract provisions are in there. The misleading or deceptive conduct issues are in there. There are criminal sanctions in there. There are prohibitions against unfair conduct. There is a national legislative scheme for statutory consumer guarantees. For a long time we have had to rely upon the myriad and mystery of state government legislation with respect to this particular area. We have brought this thing together to reduce regulation and to bring certainty to consumer law in this country.
A national unfair contracts term law which will apply from business to consumer contracts is a very important initiative. We are pleased that those opposite will support us in this regard. It has been said many times that Australia’s 22 million residents face more internal regulatory obstacles and practices than the more than 500 million residents of Europe. The government is absolutely committed to getting rid of overlapping, inconsistent regulation to bring in a national approach because companies do not just exist within a single state or a single territory, they exist across the states and internationally. Our economy benefits from those small and medium-sized businesses which operate in that way.
The trade practices legislation and the legislation now before this chamber are important ways to equalise the balance between small and big businesses. The legislation allows the lever and the opportunity for small businesses—which are often bullied by the bluster of big businesses—to say the legislation and the Trade Practices Act support small businesses. When this new national consumer law is in place it will also protect small businesses across the economy. The bill enables the Australian Competition and Consumer Commission to impose infringement notices for specified contraventions of the Australian consumer law. This is another aspect in helping small business. I think the change in name also modernises the way we think about small business, competition and consumers. It means that we are taking the view that consumers are the first priority in the economy.
This entire area of the law is being brought into a national framework with the cooperation of the states and territories. Sadly, the Australian Constitution at times provides an obstacle and a barrier for constitutional change—in fact it is more than 30 years since we had a successful referendum in this country. But at times we are pleased that we are able to get agreement from the broad Australian community on matters like that. We have seen that in defamation law, corporations law and family law. Here we are seeing it in consumer law. This is a landmark piece of legislation. It is every bit as important as the Trade Practices Act and probably more important. This is the sort of legislation that I wish was in the chamber below because this is very important legislation not just for big business and small business but also for consumers and the Australian community generally. I commend the legislation to the House.
I rise to speak in favour of the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010. This is a bill which aims to streamline and unify existing consumer law for the benefit of consumers and business. This is an important area of reform that affects how market participants behave and interact and ensures that Australians are able to conduct business, purchase and trade with confidence in the knowledge that there are strong provisions that prosecute unjust conduct.
It is important to note that the coalition has a strong record of reform when it comes to the Trade Practices Act. During our time in government we proceeded with a number of areas of significant reform. We increased penalties for breaches of the competition law; we introduced new merger processes; we allowed for the notification of collective bargaining for small businesses; we ensured that there was an extension of the application of prohibitions regarding the misuse of market power for unconscionable conduct in business; we provided guidance for predatory pricing; and, finally, we also introduced reform of component pricing.
The coalition began the process of unifying Australia’s consumer laws and creating a clearer and simpler framework for protecting consumers. In 1997 it was the coalition government that commissioned the Productivity Commission inquiry into Australia’s consumer policy framework to investigate the ways in which the law could better empower consumers and harmonise state and federal provisions. This was the first substantial review of Australia’s consumer laws since 1984. Our main priority was to reduce as much as possible the burden on consumers and businesses created by unnecessary duplication, uncertainty and complexity. At the same time we recognised the need for an evolving body of law that accounted for new consumer products, new technologies and changing business practices.
We wanted the process to be driven by evidence and by an analysis of business and consumer behaviour. We wanted to create a flexible set of laws that allowed business to operate freely while prosecuting those firms that engaged in unjust conduct through deception, unfair pricing or unsafe products. We were conscious of the need to ensure that consumers were effectively protected without creating extra burdens and compromising the facilitation of trade. We knew that complex regulations like those that currently existed required a significant amount of centralised knowledge and expertise on behalf of businesses which gives a competitive advantage to larger firms with greater economies of scale. To prevent the conglomeration of firm activity and to ensure the optimal level of competition in the marketplace it is important that harmonisation of consumer law take place to provide the best benefits to consumers and business, especially small business.
Currently, the complex framework of different and disparate laws and regulations requires improvement. The coalition is delighted that the government has taken the opportunity to carry on our work and take the necessary steps towards a more unified set of consumer laws. The coordination of policy across jurisdictions remains an unfinished business in Australia. The current division of responsibility between federal and state governments is something that requires direct attention. The inconsistencies and duplications that currently exist create confusion for business and consumers. It is often difficult for market participants to know how the different state and federal provisions interact, and the subtle differences that may exist between two sets of laws mean that businesses have difficulty in ascertaining which laws apply to them and how, and individuals are likewise uncertain of their rights as consumers.
This bill will address a number of serious breaches in conduct, from misleading and deceptive conduct to a failure to render services with due care and skill. Misleading and deceptive conduct is an opportunistic attempt to cheat consumers whose expectations of a product have been falsely and deliberately formed by the seller. Misinformation about a product not only erodes confidence in the marketplace but is an unjust act that requires strict penalties. Similarly, unconscionable conduct requires penalties commensurate with the serious breach of faith it creates with consumers. The strengthening of civil penalties in relation to these protections is something the coalition supports.
Consumer protections have also been strengthened with the general prohibition on the making of false or misleading representations. The broadening of the definition of ‘misconduct’ is something the coalition again supports. In government the coalition also commissioned an inquiry into Australia’s product safety laws to identify areas of reform. The purpose of this inquiry was to establish how the law could best deal with potential product safety hazards with a focus on prevention as opposed to retrospective action after consumer safety had been affected. Again, we were conscious of the need to unify product safety legislation to promote more efficient outcomes in trade and to ensure that consumer choice, diversity of product range and innovation were not unnecessarily affected.
We are happy to see the government continue in the coalition’s footsteps by addressing the fragmentation in legislation in this area. The coalition began the process of establishing a national approach to consumer laws through the cooperation of the state governments. It is good to see that this process is well underway with the states agreeing that the Commonwealth will assume responsibility for issuing permanent product bans and standards.
The coalition had a number of concerns about this bill and subsequently submitted recommendations to the government that would improve the objectives of the law and create a fairer and more equitable arrangement for consumers and business. A number of these recommendations have already been detailed by my colleagues and I do not propose to detail them again. We commend the government for accepting the majority of our recommendations. The only recommendation that the government failed to incorporate into its policy was the implementation of a risk based reporting system rather than an incident based system. This is something we will continue to monitor as the law takes effect. I endorse this bill and thank the government for proceeding with the good work that we the coalition commenced.
The Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010 will mean that all consumers will have the same rights, all businesses will have the same obligations and, for the first time, all regulators around Australia will have the same powers to enforce consumer laws. As the minister indicated when introducing this bill, it is the most far-reaching reform in this area since the introduction of the Trade Practices Act in 1974 by the then Attorney-General, Lionel Murphy, which in turn was one of the defining pieces of legislation under the Whitlam government. The Murphy legislation dealt with monopoly, with anti-competitive and restrictive practices. Earlier acts, one dating back as far as 1906 and influenced by the American antitrust act, and another in 1965, had done that but they had fallen into disuse because of constitutional problems. The TPA also dealt for the first time with consumer protection.
The Murphy legislation was introduced into the lower house by Minister Kep Enderby on 25 October 1973 and he described its purpose with precision:
Restrictive trade practices have long been rife in Australia. Most of them are undesirable and have served the interests of the parties engaged in them, irrespective of whether those interests coincide with the interests of Australians generally. These practices cause prices to be maintained at artificially high levels. They enable particular enterprises or groups of enterprises to attain positions of economic dominance which are then susceptible to abuse; they interfere with the interplay of competitive forces which are the foundation of any market economy; they allow discriminatory action against small businesses, exploitation of consumers and feather bedding of industries.
In consumer transactions unfair practices are widespread. The existing law is still largely founded on the principle known as caveat emptor, meaning that the buyer beware. That principle was far more appropriate for transactions conducted in village markets than for modern consumer oriented transactions of today. It has ceased to be appropriate as a general rule. Now the marketing of goods and services is conducted on an organised basis and by trained business executives, the untrained consumer is often no match for the businessman who attempts to persuade the consumer to buy goods or services on terms and conditions suitable only to the vendor. The consumer needs protection of the law and this bill will provide such protection.
That is a long quote but it shows that the Attorney-General, Lionel Murphy, knew what he was doing, and at the time he pronounced the old principle of caveat emptor to be dead.
The Prime Minister at the time, Gough Whitlam, was well aware of the significance of the new legislation. I saw something in his book about his own government recently. He said:
The Act was far more than an amended version of earlier legislation. The approach to restrictive trade practices was completely changed, making the practices illegal by force of the legislation itself. The Trade Practices Commission was established to administer the provisions of the Act and these now included offences concerning monopolisation, exclusive dealing, price discrimination, restraints of trade by agreement or arrangement, anti-competitive mergers and consumer protection. The latter was covered under part V of the Act concerned.
He goes on to give some further details. He concludes this passage in the book The Whitlam Government with these words:
Businessmen recovered from their hysteria long before the Liberals in the Federal parliament.
Some form of intervention in markets has existed since the earliest times to protect consumers from fraud, through weights and measures regulations and, from the late 19th century, through sale of goods legislation, which sought to ensure fairness by implying conditions into consumer contracts. In the 1930s the emergence of the tort of negligence provided consumers with some form of legal protection against careless manufacturers who caused them harm. During the 20th century, but especially since the Second World War, as the mass market exploded, a consumer movement, led at first by women’s groups, began to develop. It was able for the first time to advocate a broad consumer interest in the market and to provide the kind of knowledge that would allow buyers to make informed choices about the fitness of products that they were purchasing.
The Australian Consumers Association was established in 1959, and with it the magazine Choice, and that was critical to a movement that developed some real political influence. A most useful article in the Treasury’s Economic Roundup entitled ‘Harnessing the demand side: Australia’s consumer policy’, by Hally-Burton, Shirodkar, Winckler and Writer, reminded me that it was the Labor MPs Barry Jones and Barry Cohen who brought Ralph Nader to Australia in 1969, amid great fanfare, to raise consciousness of consumer product safety. Those two Labor MPs both became ministers for consumer affairs later.
Consumer protection legislation was introduced at around this time in New South Wales, and then in other state jurisdictions, to set up consumer credit arrangements and to provide consumer protection and also some anticompetitive protections, like the prohibition of collusive tendering and bidding. The states were not, therefore, at first sympathetic to Murphy’s Trade Practices Act, seeing consumer protection as their established business. Later, however, they agreed to adopt so-called mirror legislation to reflect the consumer provisions in part V of the Trade Practices Act. Commonwealth and state agreements about the administration of consumer law were put in place. They brought some benefits, but the system was nevertheless clumsy and incomplete. To quote the Productivity Commission, the framework established:
… leads to variable outcomes for consumers, added costs for businesses and a lack of responsiveness in policy making.
There were:
… gaps and inconsistencies in the policy and enforcement tool kit and weaknesses in redress mechanisms for consumers.
Dr Steven Kennedy of the Treasury has pointed out that Australia’s general consumer laws consist of 13 acts covering the same broad subject matter, including two national laws in the form of the consumer provisions of the Trade Practices Act 1974 and the ASIC Act 2001, eight state and territory fair trading acts, plus, in three jurisdictions, another three laws dealing with generic protection for consumers, and some general consumer provisions in another eight state and territory laws about the sale of goods. Every jurisdiction has also got a number of sector-specific consumer protection laws. The bill before us, together with the previous consumer bill now in the Senate, replaces almost all of that.
Probably the most influential review of the Trade Practices Act was the Hilmer committee inquiry into national competition policy, published in 1993, which led in turn to an agreement between the Commonwealth and the states on the need for microeconomic reform of government trading entities and the professions and to the establishment by the Hawke government of the Australian Competition and Consumer Commission to replace the Trade Practices Commission—although that body, the TPA, was generally seen to have had many successes.
Issues of fairness and of economic efficiency have always been present in some form in consumer law policy. They existed together in the Trade Practices Act. However, Hilmer was quite explicit, perhaps more so than policymakers had previously been, that the protection of consumers and the development of more efficient markets through competition were complementary policy ideas. The National Competition Policy was not just about elimination of barriers to competition; it was about enhancing consumer welfare by making markets more efficient.
The bill before us represents a part of what has been an exemplary process of national cooperative action to harmonise laws and to coordinate enforcement. The Council of Australian Governments agreed to the creation of the Australian Consumer Law in October 2008 upon the recommendation of the Ministerial Council on Consumer Affairs, which was in turn based upon a powerful report by the Productivity Commission.
In recent years, initiatives to harmonise state and Commonwealth laws across the board, but especially those affecting commerce, have gathered pace to match the rapid emergence of a national market. That need is generally recognised by ministers. The Productivity Commission was told by groups as diverse as the consumer journal Choice, the consumer credit legal centres, the Real Estate Institute of Australia and the Australian Retailers Association that Australia’s policy framework had failed to reflect the fact that our market is now national in character.
The need to establish institutional arrangements that reflect the national market is beyond argument, and the need is met with this bill. It should be acknowledged that the bill has been drafted on the basis of the best practices in place across all jurisdictions. The bill includes general consumer protections mostly based on the Trade Practices Act provisions concerning misleading and deceptive conduct. The broad prohibition on misleading and deceptive conduct under section 52 of the Trade Practices Act establishes the norm for business conduct in the marketplace and it has been retained. The bill includes provisions prohibiting unconscionable conduct and the minister has indicated that, in a later bill, the government will make further amendments to these provisions in response to an inquiry by the Senate Economics Committee. Prohibitions on specific conduct that is a generally accepted as being unfair include making false or misleading representations concerning a variety of situations in commerce, employment and land transactions. Similarly, there is a prohibition on unsolicited dealing, on participation in pyramid schemes and on referral selling where a benefit associated with the referral is contingent upon another event.
The bill creates a national legislative scheme for consumer guarantees to replace state legislation concerning implied conditions and warranties in consumer transactions, and that has been based upon the successful New Zealand legislation. The bill introduces a national consumer safety system for consumer goods and product related services to replace existing provisions in both the Trade Practices Act and state consumer laws. The Commonwealth will have the power to make standards. All ministers will be able to impose interim safety bans in their own jurisdiction but only the Commonwealth will be able to make a ban permanent and apply nationally.
Consumers will be able to recover losses for damage suffered as a result of goods or services being supplied contrary to a safety ban. The Commonwealth will be able to make national information standards. The bill creates a national statutory liability scheme to enable consumers to recover losses for damage suffered as the result of a defect. It provides for—and this is especially important—a national approach to enforcement, better allowing regulators to deal with unprincipled operators. A full suite of remedies is available to allow flexible and appropriate levels of action and enforcement: criminal offence provisions for specific contravention but also, among others, civil pecuniary penalties, injunctions, compensation orders, orders seeking redress and adverse publicity orders.
I see with some sadness that the intention of the bill is also to change the name of the Trade Practices Act to the Competition and Consumer Act. A lot of people are comfortable and familiar with the old name, and some of us will feel a little uncomfortable with the new name. However, I suppose the government is entitled to do this. After all, the most important historical changes to legislation in this area have all been Labor initiatives.
I very much welcome and endorse the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010. The catalyst for the reforms in this package of measures was the decision by the former Treasurer, Peter Costello, in 2006 to ask the Productivity Commission to undertake an inquiry into Australia’s consumer protection framework. Clearly, the Treasurer’s focus was the inefficiency caused for both Australian consumers and Australian businesses in having to be aware of and comply with the patchwork of complex and inconsistent laws across Australia’s many jurisdictions.
When the Productivity Commission reported on this issue in 2008 it confirmed the increased costs which the existing arrangements imposed on business and the uncertainty which they imposed on consumers. It recommended the introduction of a national scheme and estimated that such a scheme would provide a net gain to the community of between $1.5 billion and $4.5 billion per annum. Later in 2008 both the Ministerial Council on Consumer Affairs and the Council of Australian Governments endorsed reform.
I look at this legislation with particular interest, drawing upon my experience, prior to entering parliament, as a senior executive in a large telecommunications company responsible for the legal and regulatory functions of that company. At that company, Optus, which serves around seven million customers on a daily basis, there is a need to deal with the legal and regulatory obligations imposed upon the company by both national law and state and territory law. The matrix of obligations is a complex one and complying with it involves the application of very extensive resources. I know well from my responsibilities over that period that significant costs and frustrations are imposed upon business and consumers through having to deal with multiple sets of inconsistent laws seeking to regulate the same activities. The efficiency benefits of standardising the law nationally are very considerable. In the case of large businesses with standard form contracts, which are used to serve millions of customers all around Australia in the six states and two territories, the cost consequences of having different laws are significant and the benefits to be secured, if the law is standardised, are equally significant.
To give one example, it was frequently a requirement when a customer was connecting and taking a product from the company that the customer service representative, after interacting with the customer on the phone, would then play a recording to the customer or read out key standard terms giving effect to the legal and regulatory obligations on the company, ensuring that the customer was fully informed of the key aspects of the contract that he or she was about to enter into.
When you consider the hundreds of thousands of customer interactions which occur every year there are substantial cost savings if even a 30-second reduction in that customer interaction can be achieved and, conversely, there are substantial cost burdens if that customer interaction is extended by a further 30 seconds, especially when multiplied by the hundreds of thousands of interactions that occur.
There was a specific instance some years ago of the confusion caused by the inconsistent requirements of multiple jurisdictions when the Victorian government introduced a new law dealing with unfair terms in contracts. At that point telecommunications companies were subject to not only the requirements in the Trade Practices Act but also the requirements in the Telecommunications Consumer Protection Code, which is registered by the Australian Communications and Media Authority and has the force of law under the Telecommunications (Consumer Protection and Service Standards) Act.
The standard form contracts used by all the major telecommunications companies had been carefully developed to achieve compliance with the obligations imposed on those companies under the Trade Practices Act and under the industry-specific code. Unfortunately, the legislation introduced by the Victorian government was at odds with the existing arrangements. Therefore, telecommunications companies offering national services were required to negotiate with Consumer Affairs Victoria regarding the application of the new Victorian laws and the expectation of that particular department that standard form contracts would be changed to meet obligations applicable in Victoria.
To give just one example of the ways in which the expectations of Consumer Affairs Victoria as to the application of the Victorian legislation caused difficulty and confusion for a national company, there was a specific issue faced by Optus, which, unlike Telstra, does not have identical and uniform fixed line networks across Australia. Instead, the company serves several hundred thousand Australian households in Sydney, Melbourne and Brisbane using the HFC, or hybrid fibre coaxial, network, which offers broadband and other services. Elsewhere in Australia the company uses different networks, including reselling Telstra services in some places and using something called the unconditioned local loop service in other places. The consequence of this is that Optus—and this is true of other telecommunications companies as well—is not able to offer the same service in every location. This became a point of considerable discussion between that company and the consumer affairs department in Victoria, which took the view that if a customer disconnected from the network and moved to a new location then the customer should be provided with identical terms, even if the customer was moving to a location where Optus did not have the HFC network operational and was therefore physically unable to deliver the same services that it had previously delivered to the customer in his or her previous location.
I raise this issue not to canvass the merits of it one more time but because it is a good example of the costs that are imposed on business in dealing with multiple inconsistent regulatory requirements covering the same area—in this case, the protection of consumers from matters such as unfair terms and unconscionable terms—when a national company is required to operate under regimes which are not always consistent. I am disappointed to have to record that the attitude of the officials of Consumers Affairs Victoria was in no way sympathetic to the difficulties faced by a national company. It was clear that they regarded that as being wholly outside their remit and not something that concerned them at all.
It is therefore, I think, very encouraging that we have now policy going in a different direction and that we are seeing the introduction of a national regime which addresses the difficulties of the kind that I have talked about, difficulties that were well summed up in a paper published in 2008 by the Business Council of Australia, which stated:
… doing business across Australia is made unnecessarily confusing, complex and costly by the inability of governments to make adequate progress in harmonising and rationalising existing regulation.
I have given a very good example of the way that difficulty applied in one particular industry. Standardisation therefore is a very desirable goal and one that I very much support.
I do think it is important that, to the extent that this legislation should also involve any extension of existing consumer protection arrangements, those are properly justified in accordance with standard cost-benefit methodology. In that regard I note that, in a couple of areas at least, the bills as originally presented tended to overreach, although I would acknowledge that the government has generally been receptive to amendments proposed by the coalition to rectify such overreach.
This bill, as I have mentioned, is the second of a package of three and deals with implementing a national consumer law regime in relation to such matters as misleading and deceptive conduct, unconscionable conduct, unfair practices, consumer transactions, statutory consumer guarantees, a standard consumer product safety law and product related services.
The Senate Economics Legislation Committee, having reviewed the legislation, made a number of sensible recommendations, with the support of coalition senators, and the consequence has been the need for some amendments to this bill. It is unfortunate that aspects of the consultation process have been rather rushed, and regrettably this does appear to be a consistent feature of the way the present government approaches the legislative process. Happily, on this occasion the coalition has been able to identify some of the errors which occurred and suggest corrective measures, which have in large part—not entirely but in large part—been accepted.
One of the specific issues that we pointed out is that, under the law as it presently stands, any goods purchased below a certain value, which is currently set at $40,000, are taken to be consumer goods regardless of the purpose for which they are purchased. The consequence of that is that the present law affords protection to small businesses, which in many cases will be purchasing goods below that value. The bill as drafted proposed to change this and impose an additional requirement that, for the legislative protections to apply, the goods must be purchased for a personal, household or domestic purpose. I am pleased to note that the government has accepted the coalition’s suggestion that the status quo on this point should be maintained.
We have also raised concerns about the way in which an exemption which presently applies to architects and engineers was proposed to be removed in the bill that was before the House. There was inadequate consultation about this removal. We are pleased that the government has now accepted the point made by the coalition that the exemption which it was proposing to remove should in fact be retained.
The coalition also raised concerns about product reporting, particularly the incident based nature of the approach which is proposed in the legislation. We proposed an alternative, that being a risk based approach, and we continue to believe that that would be a superior approach. We acknowledge, however, that the government has to some extent taken account of the arguments raised by the coalition and has agreed to make changes to the incident based approach to appropriately narrow its scope.
One issue that has been discussed in the process of the legislation moving through the House is the question of the existence of industry-specific regimes, and this brings me back to the topic that I addressed when I was speaking earlier. In the telecommunications industry, there is a set of industry-specific consumer regulations, and there are other industries—such as the banking industry with the Banking and Financial Services Ombudsman—which have similar industry-specific consumer protections.
I note that clause 65 of the bill would allow for the creation of regulations to exempt gas, electricity and telecommunications from the ‘fitness for purpose’ provisions. As I understand it, this is designed to recognise the existence of industry-specific regulation. Members of the telecommunications industry have raised a question about the interaction of the new legislation with existing industry-specific regulation, and there is certainly a serious policy question to be asked. If we are purporting to cover the field with universally applicable consumer regulation, it does raise a question as to the appropriateness of existing industry-specific regulation. Conversely, to the extent that there is industry-specific regulation which deals with the particular complexities of products and services delivered by particular industries—and, again, I gave an example of that earlier—there may well be a logic for the proposal to allow for exemptions. I note that the chair’s report from the Senate committee expresses some caution on this point, stating:
The Committee recommends caution in applying exemptions to telecommunications services, in particular telephone services, to remote areas and other types of connection problems in the ordinary course of business.
I would suggest that the policy in this area has not been fully developed and there is a need to more carefully consider the appropriate interaction of uniform consumer legislation which is designed to cover the field and the needs of specific industries such as telecommunications and banking. That involves asking whether the existing industry-specific regulation remains appropriate. If it is concluded that it does remain appropriate, it certainly raises the question of whether sufficient care has been given to address any inconsistencies between the industry-specific regime and the uniform legislation designed to cover the field.
In closing, I think it is important that we acknowledge the role of the former Treasurer, Peter Costello, and the role of the coalition government in initiating a process which is designed to deliver greater efficiencies for business, particularly business which operates on a nationwide basis, while at the same time protecting consumers and offering appropriate and widely available consumer protections, recognising the well-understood case that consumers engaging in contracting with businesses of any kind need to ensure that their rights are protected and any imbalance in bargaining power is not taken advantage of. I believe that to move to a uniform approach nationally rather than the previous approach, under which the legislation of states and territories in some ways conflicted with federal legislation and under which there were troubling inconsistencies in regulation covering the same territory, is a sensible move which will achieve greater efficiency for business and, therefore, economic advantages while at the same time maintaining the protections for consumers, which are very important in ensuring confidence on the part of consumers in engaging with suppliers of goods and services which they acquire on a day-to-day basis.
I too rise to speak on the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010. I would like to start off by congratulating all of those involved in the moulding of these new laws and the reformation of existing laws in such a way as to make producing, selling and buying easier and more straightforward throughout Australia for the consumer. This bill is the second half of a package of legislation put to this parliament by the government in the formation of a single national law on consumer protection. It comprises elements of 17 existing laws around the country. It is 17 bits and pieces of legislation from the states, territories and Commonwealth which have been rolled up into one national Australian consumer law. Further to the work of the government in the drafting of the bill, we have had the input from the Senate Economics Legislation Committee and additional recommendations that have been made by the coalition senators.
The government has taken on these positive, very constructive contributions, and it is pleased that they are to be reflected in the final Australian consumer law. I am pleased that the opposition senators have expressed a favourable predisposition towards the intent of this bill and that they have recommended that it be passed by the parliament. This is, of course, for a very good reason. The Productivity Commission has stated that streamlining these myriad laws into one consistent Australian consumer law applied universally throughout Australia will save our economy some $4.5 billion a year in compliance costs and waste minimisation. That is almost $5 billion simply from getting the whole country on the same page using the same legislation: the Australian consumer law. This is just one element of a highly significant remodelling of the Australian business landscape that this Labor government has undertaken and is making terrific progress in achieving.
The remodelling is the removal of barriers to business activity across our country, the removal of the myriad details which businesses have previously had to wade through and the removal of compliance costs of these obstructions which have been characteristic of doing business in Australia since colonial times. This pro-business, pro-consumer, commonsense government has been consolidating myriad laws around the country, laws which are typically the same in terms of purpose and desired outcomes within respective jurisdictions but still cost unnecessary additional time and unnecessary energy in compliance. Myriad laws affecting the practice of doing business in Australia are being consolidated. They are being morphed into one single, national, universal Australian law which removes the unnecessary additional costs to interstate businesses and creates a smooth and more cost-effective, business-friendly service in which to work and achieve.
A seamless national economy is the target, establishing Australia as a place with one set of laws under which to conduct business. There are 27 areas of regulatory reform on which the government, with the states and territories, has been working to unify our national economy, 27 reforms to reduce waste and better enable people to get on with the job they do best, professional accreditation, an environmental assessment, occupational health and safety approvals, rail safety, unifying trustee corporations, mortgage broking and margin lending laws, and development and construction. The list goes on, with 27 areas of regulatory reform which I expect the opposition cannot help but support.
Consumer protection has always been a hot topic. Something like one in four phone calls to my electorate office deals with consumer issues. I receive in the electorate of Hindmarsh many calls which are connected to consumer protection. Whether the matter deals with telcos or with banks, a new vehicle or some other transaction, the constituents in my electorate know that they should be able to have an expectation that contracts do not deceive or manipulate and that contracts entered into give them what they understand they have requested and agreed to. It is very simple: what they have requested and what they agreed to, no more and no less. There is an overwhelming belief in the notion of fairness across South Australia, my home state, and I am sure that in the rest of the country people expect a fair deal. Often, regrettably, a fair deal is difficult to realise. I applaud the Minister for Finance and Deregulation, the Hon. Lindsay Tanner, and the Minister for Competition Policy and Consumer Affairs, the Hon. Craig Emerson—the good doctor—for their ongoing work in this area, and of course the work of Chris Bowen also. People understand that simplicity and fairness in the realm of government can be a deceptively tall order, but the benefits extend beyond consumer contentment. As I have already reminded the House, some $4.5 billion worth of productivity increases will stem from this Australian consumer law alone.
Those opposite know how low Australian workplace productivity improvements had sunk over the previous decade. From the best practice productivity increases of 2.5 per cent to 3.3 per cent per year in the 1990s, the previous administration presided over the loss of so much of that competitive edge and advantage which businesses had racked up under the Hawke-Keating government. We were becoming slower, sloppier and consequently poorer as a nation and as a workforce, and throughout most of the life of the Howard government our competitiveness, our job security and our pay packets were becoming comparatively smaller year by year. There is absolutely no doubt that this is unsustainable and has to be corrected—that is self-evident. That it has fallen on a reformist Labor government to correct this dissent and decay is no surprise. If there is going to be substantial reform in this country aimed at doing better, working smarter for the greater reward or establishing the mechanisms for the public desire to save, invest and provide for our future, it is typically a Labor government that will deliver.
Reworking the business landscape to reduce the compliance costs of doing business across state borders—that is one thing. Reworking the health landscape to improve efficiencies for and accountability to the Australian public—only Labor is capable of that. Reducing company tax, for example, from 30 per cent to 28 per cent in the short term—yet another of Labor’s pro-business, especially pro-small-business, policies—is only being supported by Labor. Having greater incentives for new investment in job creation, reworking the mining taxation system to tax profits instead of activity, to tax the most profitable more and the least profitable less—should we hope for anything less in that segment of our taxation system?
The opposition’s great push was for the regressive GST, taxing those with the least capacity to pay the greatest proportion of their disposable income. Now, again, they are proposing a schismatic shift. They are saying we should keep taxing those who do not make a profit and lower the tax paid by those who make the biggest profits of all. In the public debate whirling around us over taxation, we have proposed government action to improve businesses’ capacity to survive and prosper. Those who oppose for the sake of it want to slug the poorest mining companies—those at most risk of shedding jobs and wasting plant and equipment, most at risk of going belly up and contributing nothing to our national economy—the same as the biggest mining companies with the biggest profits in the world.
That is what the Liberals do and that is what the opposition have been doing. They skew the system to protect the biggest businesses of all and forget the rest, forget the entrepreneurs, forget the start-ups, forget the new ventures, forget the new ideas and industry spin-offs, and forget the job creation. Typically, when it comes to economic reform and making the Australian business landscape fairer and more productive, they simply do not care. But I am pleased that, on this occasion, there has been a lack of obstruction for the sake of it and a collaborative effort where both sides of parliament have contributed meaningfully.
I commend this bill to the House. I commend this government to consumers around the nation. And I welcome the improvements to fairness, clear contracts, consumer protection and a seamless national economy that are just some of the results of this Labor government’s action in bringing the Trade Practices Act into the 21st century.
in reply—I want to take this opportunity to thank all members for their contributions to the debate on the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010. This represents the final step at the Commonwealth level to implement the most significant reforms in consumer laws in more than 30 years since the passage of the Trade Practices Act. This important reform of the Council of Australian Governments will bring about benefits of up to $4.5 billion a year for Australian consumers and businesses. The government, with the cooperation of our state and territory colleagues, Labor and Liberal, is on track to create a single national consumer law by 1 January 2011.
On 18 March 2010 the bill was referred to the Senate Economics Legislation Committee for inquiry and report. The committee received more than 40 submissions from stakeholders and members of the public. I thank the committee for its deliberations on this bill. On 21 May 2010 the committee recommended that the bill be passed. The committee and coalition members also made a number of other recommendations. The government has considered these recommendations and, after constructive discussions with the opposition, will move amendments in the Senate to address their concerns.
I want to take this opportunity to thank the shadow minister for consumer affairs, the member for Cowper, and the shadow minister for competition policy, the member for Dunkley, who is here in the chamber with us this evening, for their very constructive approach to the development of this legislation. I found the report of the Senate economics committee to be a valuable contribution. We have implemented a large number of the recommendations of the coalition members of that committee because they were developed with a constructive approach to seek to improve the law, and I thank the Senate economics committee and the coalition for their constructive approach to that. Often we have arguments about policy matters. Sometimes that is not so visible when we reach agreement, but it is very important because this is a major reform and a very important day as this legislation moves through the House of Representatives and towards the Senate. I understand it will be non-controversial legislation. Again, I thank the member for Cowper and the member for Dunkley for their contribution to that particular status of the bill, which gives it the maximum chance of passing during this session.
I want to also thank my colleagues on the Ministerial Council on Consumer Affairs for their hard work on the Australian Consumer Law over the past year, particularly at the meeting on 4 December 2009 which agreed to the content of this bill. I look forward to the start of next year, when all Australian consumers can enjoy the benefits of consistent rights, wherever they may be, and all Australian businesses can reap the benefits of a simplified, single national consumer law. I commend this bill to the House.
Question agreed to.
Bill read a second time.
Ordered that this bill be reported to the House without amendment.
Debate resumed from 27 May, on motion by Dr Emerson:
That this bill be now read a second time.
I rise to speak on the Competition and Consumer Legislation Amendment Bill 2010and, for those who are listening, this is a different one from the one we have just been discussing. There has been quite a lot of traffic through Dr Emerson’s portfolio around these issues. This bill has two particular aims. The first is to clarify the operation of provisions relating to mergers and acquisitions by removing potential ambiguity in the definition of the market that is applied by current law. The second is to insert interpretive principles into unified unconscionable conduct provisions for consumers and business related provisions to assist the courts in applying the law and to assist stakeholder understanding of the law.
In the past 10 years concerns have been raised within the community about market concentration in key sectors, including retail, fuel, groceries and banking, and the ability of section 50 of the Trade Practices Act 1974 to deal effectively with what is known as creeping acquisitions. The Baird committee considered creeping acquisitions in its 1999 Fair market or market failure? report. The committee recommended a code of conduct be established requiring the mandatory notification of supermarket acquisitions by publicly listed corporations. The Baird committee also recommended that section 50(6) be amended to specifically allow consideration of regional markets in order to address creeping acquisition concerns at a regional and rural level.
The interpretation by the ACCC of section 50(6) has not been tested by the courts. However, it was considered by Justice French in his 2003 decision in the Federal Court case of AGL v ACCC. Justice French left open the possibility that whether a market is considered substantial under section 50(6) may be determined by reference to Australia as a whole. It has been conveyed to the ACCC that a major supermarket chain may press this interpretation to resist any objection to acquisitions in geographically confined markets from being considered under section 50.
Given the lack of jurisprudence, the bill seeks to remove the term ‘substantial’ in defining the market to be considered that might otherwise prevent the application of section 50 to a local or any other relevant market. Put in simple terms, the concern, and the argument advanced by an experienced and highly regarded trade practices lawyer to the ACCC, was that if there was a challenge about whether a market could be defined as a regional, outer metropolitan or contained area and there was a suggestion that that would prohibit the acquisition of a greenfields site or of a site generally or of a property then they would run the argument that it needs to be considered against the market of Australia as a whole.
You and I, Madam Deputy Speaker, would probably realise that if we are looking for choice and variation in our supermarket shopping we do not tend to commute right across the continent of Australia to determine what supplier we might choose. So that common sense practical application of the law was being challenged by a threat, not in a malicious sense but challenged by an argument the prospect of which may have been put in challenging some determinations by the ACCC where a supermarket chain was unhappy with their conclusion. As a result, the bill contains no new provisions to deal with creeping acquisitions but simply removes the prospect of this broader definition of the market under the banner of ‘substantial’ from being a constraint in the application of the law.
So, essentially, that first provision is seeking to change the law so that the law is implemented in a way the law was intended to be implemented. It is a bit of a stretch. The minister has left, but I was going to point out to him that his second reading speech is a Herculean projection of what he hopes this bill is about—that is, the claim that it fulfils a government election commitment to enact new laws to deal with creeping acquisitions. This is not really a new law. In fairness, he did not use the word ‘law’. I will quote:
The bill will implement the government’s election commitment to enact laws to deal with creeping acquisitions by amending section 50 …
That bit ‘by amending section 50’ is an addition to what the election commitment was. This is a modest measure at best. It is a very modest measure. It is really an action taken in anticipation of the prospect that a lawyer might run an argument that was mooted in a discussion in a court many years ago to challenge the application of the law as it was intended.
This is what has caused some disquiet in the community, where there is legitimate concern about creeping acquisitions and at times a seeming inability or unwillingness to address market concentration issues achieved by creeping acquisitions. Sadly, this amendment adds no new tool to the toolkit—nothing. For people claiming it is some miraculous beefing-up of the toolkit available to the ACCC in relation to creeping acquisitions to create dominant market positions, they will be very disappointed. There are no new tools in this. On the suggestion that the election commitment would introduce a law, technically a bill is a law. I am sure people who read that election commitment from Labor prior to the last election probably expected a little bit more than a line being put through the word ‘substantial’. In fact, I am certain that was their expectation.
So to some extent the small business community in particular have been wooed by the prospect of some more meaningful change in this area and have been, frankly, underwhelmed by the nature of the change that has been proposed, the change that, as I have said, will not change in any way the intended operation of the law or the toolkit. It is designed to cut off at the pass the prospect of a legal argument, not put at this stage anywhere, not advanced, but a prospect of it. This is cutting off that possibility. I can just sense how, having been seduced by the prospect of genuine strengthening of the tools, many in the small business community will feel somewhat betrayed by what has been produced.
Having said all that, we are not opposing that change. We do not think it will achieve much, but it causes no harm. But it is important to note it is still an issue. The step-by-step acquisition of properties and sites to accumulate a dominant market position is still an issue. This is why the opposition have signalled our intention to review these provisions—not to pronounce some prescription now. That is a very difficult proposition for an opposition to do. We do not have the enormous resources of government and access to football teams of trade practices lawyers and the like. We are not so blessed. What we do, though, is confront the reality of the issue and the need to properly diagnose that issue so that any response is properly calibrated, objectively tested and implemented to achieve what it intends.
I say that because in more recent times there has been quite a discussion around this subject and in relation to Senator Xenophon’s Richmond amendment that was being canvassed in the Senate. Considerable attention was given to that. It was called the Richmond amendment because it related to a petrol station in the Adelaide suburb of Richmond where it was believed that some of the actions of a major petrol retailer were going to greatly compromise and in fact blow out of the water an independent petrol retailer. There are not many independent retailers, they are an endangered species, and Senator Xenophon brought forward some ideas about how that might be responded to. Both major parties concluded that the remedy being advocated by the Richmond amendment was not going to achieve the outcome people were looking for, so both Labor and the coalition agreed that the Richmond amendment was not in a form that could be supported.
Where the major parties diverge, though, is that the coalition recognises that there is still an issue there. The Rudd Labor government seems to think there is not. In fact, upon the announcement of our intentions in relation to an examination of competition law the minister was quite vitriolic in his response, suggesting it had all been done and that there was no real challenge or issue that needed to be addressed. I suspect he has very few people who agree with him there. As I move around Australia and talk with business organisations and individual enterprises, small and large, and I talk with academic experts of considerable stature and insight such as Professor Zumbo, and as I talk to trade practices lawyers in major firms and smaller firms with a whole range of clients, I can only think of one occasion where it has been asserted that there is no need to examine these issues. That was from the minister. That was a crushing blow to all those in the business community that see conduct that is unbecoming in the marketplace, that feel that either the toolkit available to the ACCC is not adequate or perhaps its application is inconsistent and needs further consideration. To all those people the words of the minister in being very hostile to the opposition’s approach came as a great disappointment. This is perhaps an example why.
Some organisations have welcomed these changes because they change nothing. If all you value in public policy is certainty, the best thing you can do is change nothing; you are certain to get certainty. Change nothing and you will get certainty because nothing has altered. But that is a very narrow and self-serving view of public policy by those advocating the no-change case when there are legitimate concerns that need to be addressed. If those legitimate concerns and some suboptimal outcomes in terms of the national interest and sound public policy objectives remain, arguing a do-nothing strategy is abandonment of the responsibility and duty of all of us in this place.
So on this creeping acquisitions issue and the Richmond amendment, which was Senator Xenophon’s private member’s bill, as I mentioned, the two major sides of politics did not support that, feeling it was not fit for the purpose it was intended for. But let me be clear, and I concur with the coalition senators’ remarks in the report, that that does not mean that the issue is not legitimate and that certainly does not mean that we should stop the constant pursuit of examining what is required to deal with it. So that is the issue around creeping acquisitions. There is a question mark about ‘substantial’. Okay, we are putting a line through that so that there is not an argument that can be mounted that ‘substantial’ needs to be judged against the continent as a whole.
The second area relates to its application to greenfield sites. There are no specific provisions in the bill to deal with that. The operative segment of this debate that deals with that are the words delivered by the minister in his second reading speech. He is asserting the intention of the law to extend to greenfield sites, and that is appropriate, that is an interpretation that I agree with and I think most people would, and that is certainly the intention of the parliament.
And whether the acquisition of greenfield sites can be argued to be part of the normal course of business and not subject to the oversight and intervention of the ACCC may also be challenged. This is designed to say to someone who might consider running that argument that that is not the intention of the parliament. The minister has made it clear that, if the court subsequently interprets a matter in that way, it will be revisited by the parliament. You are looking for some substantive change, but that is jawboning the judiciary to make it clear what the parliament is on about. There is no change to the tool kit that is available to deal with creeping acquisitions, and I would say that the bill falls a considerable way short of the expectation that was created in the small business community. In that respect, it is situation normal. Labor went out prior to the election with all these enormous expectations and seduced people into thinking everything was going to be new, shiny and different. They got elected and have done what can only be described as a stealth-like set of reforms that are so minimal they will make not a jot of difference whatsoever—and they now claim that that fulfils an election promise! I understand the deep cynicism in the small business community because of that behaviour—but I will not call it unconscionable conduct, because I am about to get onto those provisions.
The other area of the bill relates to the unconscionable conduct provisions and essentially does two things: it seeks to bring together and harmonise the unconscionable conduct provisions as they might affect consumers and business—therefore removing any potentially confusing distinctions that may exist between those two audiences—and it sets out a range of principles. This is another area where Labor in government and in opposition created considerable expectations that it would address the concerns within the small business community—in my view, legitimate concerns—about the accessibility of unconscionable conduct relief. The expectation was that there would be some meaningful action. Quite a lot of work was done to deal with the legitimate concerns about the fairness of conduct towards business and consumers. That issue has been dealt with and provisions have been in place since 1986 and 1988.
The provisions in this bill, though, seek to implement the recommendations of an expert panel that was set up to consider the recommendations of a Senate economics committee inquiry into whether there was a case for a statutory definition of unconscionable conduct. The motive behind that was to try to create a greater sense of certainty and dependability in the relief and protections of unconscionable conduct. There was a sense that they were complex concepts that were not well understood in the marketplace. Many in small business felt that the relief was not there when they felt that the conduct that they had been subjected to by, in many cases, larger businesses was indeed unconscionable.
The Senate committee recommended that the government set up this inquiry process to determine what examples could be incorporated to provide greater clarity. In the end the committee that examined the Senate committee’s report came back to the government and said that the proposition was so difficult that they could read into example A, with certain characteristics and certain factors taken into account, a judgment of unconscionable conduct. Someone who is aggrieved might see that case study and project their circumstances into that set of facts and feel quite convinced that an act or behaviour that would fall within the definition of unconscionable conduct had been inflicted upon them. That has its dangers. An individual can look at cases that have the outcome they desire and then conclude that a similar set of circumstances and the law and the precedent apply to them. That is hazardous. It does not rule out the need, though, for greater clarity and greater certainty. It certainly does not do that. But going about it by, let us say, modelling cases to project them into other circumstances does have its hazards.
The expert panel found that these provisions have been regularly enforced since their inception and that the case law is still developing. For many in the small business community that would probably come as a surprise, but I do understand, from briefings from the ACCC, that an amount of enforcement activity has been undertaken and that the case law is still developing. Many would like to see that case law accelerated and the ACCC more prepared to take on cases that may be challenging and hotly contested but may well add to people’s understanding of the case law and the way in which these provisions apply.
The other thing that needs to be talked about is this. So much of the decision about whether to pursue an unconscionable conduct case happens through internal processes within the ACCC. It is quite fair enough for them to work through their own processes and arrive at their own judgments about which cases to pursue and which not to pursue. I guess what I would like to see, though, is the broader Australian public and enterprises understanding why those decisions are being made and what the decision support framework looks like. Is it that the case is poor? Is there some aspect of the case that might undermine a successful litigation? Is there a conflicting or problematic precedent that might fly in the face of what might seem on the surface to be a very clear case of unconscionable conduct?
I guess the point I am making is that there is so much mystery surrounding unconscionable conduct that it is hard for me and many others to see that the way in which the law is being applied is actually promoting conscionable conduct. That is, are we getting the message out that certain cases and enforcement activity proves that this kind of behaviour is wrong and that therefore the market should not go there or should take these factors into account? I just do not think that that educative process is working terribly well at the moment.
I am hoping that these principles will add something. They seek to tease out the kind of conduct that can fall within the reach of the unconscionable conduct provisions. They seek to provide some clarity to the business community, consumers, enforcement agencies and the courts. They seek not to give rise to confusion and misguided expectations as to case law. They do not say: ‘Here is a case study; do you fit into one of these?’—a kind of cookie-cutter approach. They do not do that. But the interpretive principles do seek to tease out some of these legal concepts. They seek to make sure that the courts do not apply too narrow a definition; the common law concept of one of the parties being disadvantaged in some way and the other taking advantage of that disadvantage—that is quite a narrow interpretation. But the law seeks to say, ‘No, it goes beyond that’—that it can include the nature of the relationships between the parties; go to questions about the way in which contracts are formed, and the terms and the manner in which contracts are carried out; and go to questions of systematic conduct and patterns of behaviour. And there is no requirement to identify a person at a disadvantage to pursue and enforce those provisions. So that is all reasonably good stuff but, again, it does not change the tool-kit. Hopefully it will inform people more, in a legal sense, about what is going on.
I have sought and I hope to get more advice about how the ACCC will carry out its role in the context of these principles. At the end of the day, the way they are applied and utilised is as important as the black letter law, and that is often where there seems to be some confusion and inconsistency in the marketplace.
So the opposition is happy to support this bill because, frankly, its provisions are unobjectionable. They do not achieve much. In fact, to use the medical analogy, these are placebo provisions. They do not do a whole lot of anything. They do not harm anybody. They do not present any new tools for the tool-kit. They resolve a problem that may possibly arise if someone takes a particular argument to the courts—we have cut that off at the pass. Had someone wanted to run the line that greenfield sites were not included, Dr Emerson has given the parliamentary jawboning exercise here to the courts to make it clear that that was the intention. And we have got these principles, which tease out the law as it currently stands but which do not, of themselves, alter the law. So that is where we are today.
I have touched on why I think there is a need to revisit the tool kit. I have provided some examples about where I think suboptimal outcomes are occurring. I am not so reckless and lacking in care as to stand before you and prescribe what the remedy is. I am saying, though, that an objective evidence base examination of whether the tool kit is fit for purpose and relevant for the current state of commerce and future trends in competition is the way to go. Having established that quite clearly, then we can be careful and thoughtful in the remedies we seek to bring to the parliament. That is our approach.
Just in closing, I would like to place on record the opposition’s condolences to the family of John Martin, who has passed away. John is a former commissioner of the Australian Competition and Consumer Commission. He held that role for a decade. He passed away quite suddenly over the weekend. He served the nation in a very distinguished way. I think his family can be very proud of John and his contribution, not only on the ACCC but also in other areas. He was chairman of the International Air Services Commission, he held an executive director role at the Australian Chamber of Commerce and Industry and he made a very important contribution on the board of Standards Australia and also in international work representing Australia on a business and industry advisory committee to the ACCC. He served the nation through those roles and also as a policy adviser and program manager in Treasury and the department of industry and as a regional consultant for the UN in Bangkok. He was a distinguished Australian. He will be missed. By those in the small business community he was admired for his supermarket inquiry in the Australian Capital Territory and for trying to make a positive contribution around issues of dominant presence in that sector. His family and those near and dear to him, particularly his children, must be having a terrible time now. I would like to put on the record the coalition’s condolences and hope that in this difficult time the family can comfort each other and take great comfort from his contribution to Australia, to the Commonwealth government and also here in Canberra.
I thank the Deputy Speaker for facilitating this opportunity for me to speak on this bill. My comments on the Competition and Consumer Legislation Amendment Bill 2010 will focus on schedule 2 of the bill. I entirely agree with the member for Dunkley, my colleague, that this does not really take us any further than we have been for a very long time. It just tinkers around the edges. The provisions of schedule 2 before the House arise from the Strengthening statutory unconscionable conduct and the Franchising Code of Conduct report delivered to the government in February this year. To frame my remarks, I will say that despite the report’s name the recommendations regarding franchising and unconscionable conduct—especially in regard to ‘good faith’—do little to strengthen the statutory regime. It is very disappointing.
Since I first came to this place—and I was shadow minister—successive governments have talked about strengthening the provisions and there have been some changes made—we made some when we first came into government in 1996—but they have proven not to be satisfactory in cases where there does not seem to be good faith bargaining between the parties in the franchise sector. The response by the government was an opportunity that has been missed, especially given the importance of franchising in Australia’s business sector. The importance of franchising was recently highlighted by the Minister for Small Business, Independent Contractors and the Service Economy in March this year when he spoke at a BRW conference in Sydney. He said that buying a franchise was an increasingly popular way of getting into business. He is right about that, with 71,000 franchise agreements in place across the nation. It is true that most of them operate fairly successfully. He went on to say:
Australian franchises employ more than 400,000 people and turn over $130 billion a year—that’s a lot of jobs, and a lot of money. When a franchising agreement works well, it can be a great way for people to break into business.
I agree with him about that and I agree with a number of commentators who rightly say that most of these agreements work reasonably smoothly but we do get a few rogue elements within the sector. Because it is such an important sector within the business community, we need to make sure that the integrity of the franchising sector is retained. We can only do that by making sure in this place that we have laws that are meaningful and laws that are fair to both parties in these agreements.
The minister’s focus on the entry into a franchising agreement is echoed in the reforms presented in this bill, but little attention has been paid to the ongoing relationship between the franchisee and the franchisor, which sets the franchising model apart from other types of business systems. As the minister’s own figures show, franchises employ a vast number of people and generate a significant amount of money. That is exactly why the conduct surrounding agreements must be framed with greater certainty.
False analogies are often drawn between franchises and retail leases. Retail leases are a simple quid pro quo—a business pays money for space to sell their wares. The relationship between the parties is quite distinct. In contrast, franchises are characterised by a cooperative, symbiotic nature. The franchisor’s part of the bargain is to provide value through trademarks and the system of operation, while the franchisee’s part of the bargain is to earn the net profits from which a royalty is paid in recognition of the value of the trademark and system. Obviously it is also incumbent upon them to run the business according to the agreement.
The differences affect how the business is run. Retail tenants organise their finance to ensure it is repaid at the end of the term. The franchisee model promotes investment in the business with the aim of growing and expanding the business over time. This fact is not only recognised but promoted by John O’Brien, the CEO of PoolWerx and chair of the Franchise Council of Australia. The PoolWerx website informs would-be franchisees:
A … franchise is not a ‘job’, but rather a path to success through careful growth strategies.
I have always been somewhat at a loss to know why the peak industry body, of which Mr O’Brien is currently the CEO, has been implacably opposed to introducing a good faith provision to ensure that there are sensible agreements between franchisors and franchisees.
As franchising focuses on growth and expansion through the term of the agreement, attention should be paid to both the precontractual disclosure and the end-of-term conduct and that does not happen. But the provisions of this bill focus only on precontractual disclosure. The rationale is stated by the minister in his press release of 4 June this year, is that:
By requiring disclosure upfront, potential franchisees have the information they need to decide whether the franchise is the right business for them.
What the minister does not take into account is that many potential franchisees face a ‘take it or leave it’ standard contract which does not recognise the value of the growth of the business through the franchisee’s hard work and business acumen.
A potent example of that is the case of Competitive Foods Australia and Yum! Restaurants International. It is a well-publicised, well-documented case. Competitive Foods operates 46 KFC outlets, primarily in Western Australia, on a franchise agreement. In 2007 the Rockingham KFC was forced to close after Yum! decided not to renew the franchise agreement. The remaining stores are all expected to close progressively as their 10- to 20-year contracts expire. It was reported on Channel 7 in Western Australia at that time that Yum! had told Competitive Foods that they wanted to take over the Western Australia KFC outlets. They offered to buy the physical facilities of the restaurants at their depreciated book value, with no ongoing concern value even though they are $2 million-a-year stores.
Over the years of the contract, Competitive Foods diligently worked to build the business to the point of turning over $2 million a year. If the company were to agree to Yum!’s proposal, they would essentially be handing over all of the goodwill that their hard work, along with the franchisor, had developed, with no compensation or monetary recognition of the built-up value. It is a no-win situation for Competitive Foods, frankly. They cannot onsell the business, because their franchise rights have expired, and they are left holding leases to buildings branded with KFC’s logos. The logical buyer is therefore the franchisor who has a vastly superior bargaining position. Essentially, Yum! can offer to buy the established sites—if they do not already own them—but if their terms are not agreed to they can simply enter into a new franchise agreement with another party and leave the new franchisee to find suitable sites. Competitive Foods has no bargaining leverage in this case. But, if, hypothetically, the franchise was just breaking profit, the franchisor’s interests might best be served by renewing the franchise, because they would still receive the royalty for using the trademarks and system. The decision is in the hands of the franchisor.
The point is highlighted by the evidence given by Mr Bryden on behalf of Yum! to the 2008 Parliamentary Joint Committee on Corporations and Financial Services which produced the Ripoll report, in which Mr Bryden, speaking about the reasons why Yum! may or may not grant a renewal, commented:
The point is that the contract is absolutely clear. … If it is just a matter of strict reliance on contract, then our motivations, intentions, whether it is lack of trust or anything else, are absolutely irrelevant.
It seems extraordinary to me that this is an issue that cannot be resolved. I know that members on both sides of this House have the goodwill to see that something is done to make these agreements fair—where you have something that talks about what happens at the conclusion of a contractual period, where it is not going to be renewed and, obviously, where the franchisee has met the conditions of their contract.
In any other business agreement, in a partnership—and these are not unlike partnerships—you would have a situation where there would be some arrangement, some agreement, on how the partnership would split and who would get what out of that partnership. The assets of the business would be valued, including the goodwill, and there would be an arrangement as to an equitable split. I cannot see why it is so difficult to have those kinds of arrangements in existing franchise contracts. If the contracts remain silent on that, then we should ensure that there is an arbitration or tribunal system that makes a determination based on proper valuation of the business, including its goodwill. I have here every review about this since 1976. This matter has been reviewed and reviewed and reviewed. In 1976 it was the Swanson inquiry. In 1979 it was the Blunt inquiry. There was the Petroleum Retail Marketing Franchise Act in 1980. Service stations in that era were facing similar sorts of problems to what franchisees face today, and that was dealt with under that act—into which there was an inquiry.
There were the failed exposure drafts of a Franchise Agreements Bill 1986. There was the Beddall committee report in 1990, just prior to my coming into this place and taking on the job as shadow minister. There was the voluntary franchising code of 1993 and related reports. There was the Reid committee in 1997, the franchising code and section 51AC. There was the Matthews review 2006 and code amendments, and state inquiries in both Western Australia and South Australia in 2008.
Madam Deputy Speaker, I know that time is short, and I had wanted to speak to my full time because I see this as a very serious and important matter.
The honourable member can speak to her full time.
Thank you, but I will try to keep my speech to the minimum. If you go through some of the evidence that has been given over the years, there has been plenty of evidence to suggest that a good faith provision is a logical step forward. Professor Warren Pengilley stated in his submission:
There are good grounds for inserting in the Franchising Code an obligation for parties to act in good faith. This obligation should be imposed on both parties and not on one party only …
He also stated that he recommended in 1981 to the Minister for Business and Consumer Affairs that an obligation to act in good faith could be enacted, and that his belief has strengthened since then because, he said:
… a franchise (properly defined) is an ongoing relationship involving the trust of one party in dealings with another.
He gave evidence to similar effect again when he said:
I have no objections at all to an obligation to act in good faith. I know lawyers say that the cases differ, the law is developing and so on.
I have to say that it is taking an awfully long time to develop. But he goes on:
It almost seems to me to be a case for saying, ‘Let’s put it in so that we know clearly where we are.’ It is not true that the concepts are unknown. There are obligations in insurance law and partnership law, for example, to act in good faith, and no doubt there are many more.
I say, ‘Hear, hear!’ to that.
The Law Institute of Victoria, representing 15,000 legal professionals in Victoria, recognised the need for franchisors to have certain scope to their allowable discretionary powers when dealing with franchisees, but they concluded:
The LIV recognises the uniqueness of franchising in commercial relationships. They are based on a high degree of trust and universally accepted notions of goodwill. Therefore, it is important to balance this against the arguments not to regulate, which by their nature present an unworkable economic model which assumes all franchise relationships have equal power balance and remedies to resolve disputes cost effectively. This is simply not the reality in our emerging commercial markets.
They go on to say:
The addition of a statutory obligation on franchisors to act in “good faith” is not out of step with the approach by some courts.
They give an example of a case in the New South Wales court and then go on to say:
Although there is currently some uncertainty about the exact extent of the content of an obligation of “good faith”, the insertion of a statutory obligation will allow the courts to flexibly apply the concept to individual factual circumstances.
My colleague the member for Dunkley mentioned Professor Zumbo, who has long argued the case for a good faith provision in this legislation and has considered this quite closely—he is probably one of the foremost experts on this matter. And he argues that enacting a statutory duty of good faith:
… offers considerable potential as a mechanism for promoting ethical business conduct—
and submits:
Such a statutory duty of good faith should operate generally—
within the franchising relationship—
… including requiring the parties to resolve disputes in good faith.
I do not understand why successive administrations have been so implacably opposed to doing what is really a good-sense measure in the interests of maintaining, as Professor Zumbo said, ethical business conduct and the integrity of the great franchising industry that we have in this country—there seems to be no reason in the wide world. But the South Australian government submission to the 2008 federal franchising inquiry stated:
The Committee recommends that the exclusion or inadequate determination of goodwill or other such exit payments by a franchisor during negotiations with a franchisee regarding a franchise agreement constitutes “unconscionable conduct” …
I agree with that. I think it is like robbing somebody. If you are working together in a partnership to build the goodwill of the business in the interests of both parties, there is absolutely no reason in the wide world why there should not be an equitable split, all things being equal, at the end of the contractual period of that agreement. To do otherwise is to continue to perpetrate what is a very, very unfair practice that prejudices the rights of the little people, the franchisees in most cases. The submission goes on:
The Committee recognises that goodwill presents a challenge to the franchise industry because of the unique structure of franchise businesses, the location of brand ownership and the distribution rights and responsibilities between the parties. Yet inherent in recognising that the success of a franchise depends on both parties is the need to recognise and, where necessary, quantify the value of the franchisee efforts over the term of the contract.
This cannot be too difficult. I spent many, many years in business before I came into this place and I do not understand why this cannot be done in a fair way. While an individual franchise may not succeed without the brand power and resources provided by the overarching system, the efforts—(Time expired)
I rise today, as I think every member so far has, to support the Competition and Consumer Legislation Amendment Bill 2010. The bill before the house today does two very significant things in bringing clarity and certainty to the applications of key provisions in competition and consumer laws. Firstly, it implements the government’s election commitment to deal with creeping acquisitions by clarifying the Trade Practices Act to ensure that the Australian Consumer and Competition Commission has power to reject acquisitions that would subsequently lessen the competition in any local, regional or national market. Secondly, and equally importantly, it also provides greater clarity in relation to unconscionable conduct provisions, implementing the recommendations of the expert panel appointed by the minister in 2008, which made recommendations in November 2009.
These are two significant pieces of kit, if I can use the member for Dunkley’s analogy, to improve the consumer competition law in this country. This has by no means been put forward as a total panacea to all business conjecture or all business difficulties. Like you, Madam Deputy Speaker, being a person who came from a business background I know that the challenges out there are often great, but this is moving to deliver a greater degree of certainty in an area where it is clearly required. People have asked for this and we are trying to deliver that certainty so they have a degree of understanding of how to propose their businesses and run them into the future.
There has been a long-standing concern in most communities about creeping acquisitions, whether they be the discussions a few years ago about banks or petrol stations. Certainly in my own backyard in Werriwa every time one of the mainstream supermarkets wants to set up we are inundated with concerns about what that does to local competition, the local fruit grower and the local community. The local community, apart from everything else, has a fair degree of association or perceived ownership of who supplies the goods and services to them. There is an element of parochialism. Essentially, when it comes down to dealing with mums and dads locally, we need to ask: is this good for us? Can people come in and undercut now and force us to suffer a higher price regime in the future through their monopolistic powers? This very much applies to local supermarkets.
Following the release of the ACCC’s grocery inquiry in 2008, the government committed to undertake a consultation process to evaluate the various models to address creeping acquisitions. It is important to bear in mind that what we are talking about here is creeping acquisitions. Essentially, a series of small-scale acquisitions individually do not substantially lessen competition in the market but a series of acquisitions may over time substantially impact on the market. This is very significant. These small retailers are being bought out systematically with a view to eventually having a dominant pricing position in a market.
In 2008 and 2009 two discussion papers were released by the government. Four broad models of reform were put up for discussion. Regrettably, like a lot of things we deal with in business, there was not substantial agreement or consensus in terms of the outcome. There were certainly varying views about how to address these problems and, regrettably, there was no consensus for any one model.
As a result of the public consultation, the government identified two areas of existing law where clarification would assist in addressing growing creeping acquisition concerns. These were set out in the 2008 publication entitled Merger Guidelines. In taking this approach the government responded to the specific problems with specific remedies rather than with general remedies that could have unintended consequences elsewhere and impact on economic activity—and, when we talk about local communities, it could very much impact on employment.
In January 2010 the government announced that it would amend the Trade Practices Act to ensure that the Australian Competition and Consumer Commission had the power to reject acquisitions that would substantially lessen competition in any local, regional or national market. That is significantly different to saying that an acquisition can have a substantial impact on a market. This is going to address that on a multi-level plane, if you like.
Importantly, in its announcement the government also confirmed the view that site acquisitions, including entry into a lease for land or acquisition of freehold land, are acquisitions of an asset under section 50 of the Trade Practices Act. This policy announcement reduced the uncertainty surrounding the application of section 50 in the Trade Practices Act to leases and acquisitions of greenfields market sites.
South-western Sydney, where I come from, is Sydney’s growth area at the moment. It is predicted that Camden alone is going to double in size within the next 15 years and Liverpool is likely to grow by one-third of its current size. All this land is being developed out there, and it is certainly being looked at in terms of developing various business components of that as well. When we look at not only the markets of today but also the markets that will develop in those regional committees, the development of greenfield sites becomes very important. I think it is quite significant that the ACCC will have powers in that respect. The amendments to section 50 of the act will clarify for the courts and for the ACCC the ability to consider more geographically confined markets where there might be regional markets. Small acquisitions can be assessed in relation to section 50. It also clarifies for the courts and for the ACCC that they can consider the impact of a proposed acquisition on the competition in any market, ensuring consideration can be given to the competition impacts of acquisitions in a multi-market regime.
These amendments go a long way to respond to community concerns and matters that have been raised with me by the chambers of commerce in Campbelltown, Ingleburn and Liverpool. These matters are significant to small players who want to remain in a market, and they are equally important for assessing not only the effect on business but also the effect on the market itself. That is why it is quite crucial to clarify these provisions, particularly as they apply to the small and regional markets within my electorate.
Another thing the Senate Economics Committee recommended in 2008 was that the government engage in an inquiry process to consider the merits of introducing a listing of examples or a statement of principles into the law, particularly with regard to retail tenancy leasing and trend sizing, which you, Madam Deputy Speaker, have spoken about at great length. I acknowledge your commitment in this regard, and it is not the first time you have dealt with these matters in this place.
As I stated at the outset, the Minister for Competition Policy and Consumer Affairs, Dr Emerson, appointed an expert panel near the end of 2009 to consider whether a listing of examples or a statement of principles would assist in defining the application of unconscionable conduct and should be incorporated into the Trade Practices Act. It comes as no surprise that the panel, all of whom have considerable knowledge and experience—and I do not think anyone would challenge that—came up with a recommendation that the principles should be incorporated into the Trade Practices Act. The proposed changes will do two things. Firstly, they will identify that the consumer and business related provisions of the Trade Practices Act and the ASIC Act are fundamentally the same. This unification will ensure that the provisions will be interpreted in the same way by the courts and that any legal precedents will apply equally and consistently to proceedings brought by either consumers or businesses. Secondly, they will introduce interpretive provisions to the Trade Practices Act and the ASIC Act.
This principle is not intended to change the law. Unlike what my colleague the member for Dunkley said, it is not designed to do something other than deliver consistency. But in terms of unconscionable conduct it will draw upon existing cases applying statements of principles which will assist the courts or the ACCC in assessing these matters. It will actually give greater codification, if you like, to the courts as to what the intention of the parliament is in making these laws and aiding their ability in statutory interpretation of these provisions. It will be a good thing to have this in relation both to actions taken by consumers as well as businesses. The changes reflect the view of the Senate Standing Committee on Economics, and the recommendations are clearly now reflected in this bill.
In conclusion, all the amendments contained in this bill will bring greater clarity and certainty to the application of key provisions in competition and consumer laws. I commend the efforts of the minister for introducing the bill and his continued contribution to improving laws that will protect Australian small businesses and consumers. It is true that all Australians prosper when there is competition in our markets. These amendments will ensure that competition can be more effectively promoted and that conduct designed to undermine that competition can be addressed more effectively. I commend the bill to the House.
In rising to give my strong support for the Competition and Consumer Legislation Amendment Bill 2010 I commend you, Madam Deputy Speaker, for your contribution to the debate, and I also commend the member for Werriwa.
I love going to the Gabba in Brisbane to watch the Brisbane Lions or the Queensland Bulls, or even going to Lang Park to support the Broncos. I have even been to see some Brisbane Strikers’ games in recent years. Unfortunately, as a politician I do not have a lot of time to do that nowadays. But anybody who has been to the Gabba or to Lang Park and bought a pie knows something about the concept of a monopoly. A simple pie and a drink will set you back quite a hefty sum; you almost have to take out a mortgage.
I love a meat pie—especially with sauce!
I love a meat pie, and it is for a captive audience so it just goes with the sporting event. I know that stadium owners need to make a quid, but it is obvious to all sporting fans that when there is no competition consumers lose out.
That is why it is so important that in the broader marketplace, beyond pies at the footy, that we have strong and effective competition policy. That is what our economic system is based on. We need strong competition laws to keep down grocery and fuel prices and the many other cost-of-living pressures. I should go on the record and say that my pecuniary interests state that I am a shareholder in one of the major supermarkets. Nevertheless, I think there was a Choice investigation that showed whenever you have Woolies and Coles it is almost like a duopoloy. But when you put an Aldi in the same area, the prices go down at all three supermarkets. It just goes to show that it is not even simple enough to have Woolies and Coles, or two competing people; you need a real market. A real market is where you have the best possible price for the consumers.
This is why the Rudd government made an election commitment in 2007 to address threats to market competition such as creeping acquisitions. It is where the market is not operating as it should. These are acquisitions that of themselves are no threat to competition, but together with a number of small acquisitions over time actually lessen competition. That is when the economic system breaks down and we end up paying too much for goods.
The bill before the chamber amends section 50 of the Trade Practices Act to ensure the courts and the ACCC have the power to consider local or geographically confined markets. This will enable individual acquisitions to be assessed in small markets under section 50 of the act. Section 50, subsection 6, of the Trade Practices Act limits the power of the court and the ACCC to substantial markets, so this bill before the chamber will remove the word ‘substantial’ to ensure that even geographically confined markets are covered by the act. In doing so, this bill removes any legal doubt about the power of the ACCC or a court to look at creeping acquisitions in small local markets, as detailed by the member for Werriwa, in the merger guidelines publication.
The bill also clarifies that a court or the ACCC can consider the impact of a proposed acquisition on competition in any market—that is, a local market, a regional market or a national market. It ensures that a court or ACCC ruling cannot be challenged on the grounds that competition would be impacted in markets other than the primary market.
This bill also implements the recommendations of an expert panel set up to investigate the benefits of introducing a statement of principles into the Trade Practices Act. Workable unconscionable conduct provisions are important in trade and commerce to ensure that no party is disadvantaged in dealings with another party. It is a basic tenet of law. I would differ with you slightly on a couple of these points, Madam Deputy Speaker Moylan, but it is not appropriate while you are sitting in the chair, I guess, that we have that exchange. The bill amends the unconscionable conduct provisions of the Trade Practices Act and the ASIC Act to cover both supply and acquisition of goods under the one provision. It also expands what a court should consider when judging whether conduct is unconscionable. The bill also attempts to mirror the principles previously applied by the courts when making rulings on unconscionable conduct.
The interpretive principles do not change the effect of the law but will help the court interpret and apply unconscionable conduct laws. The principles include: (1) unconscionable conduct is not limited by the unwritten law, (2) the prohibition on unconscionable conduct may applied to systems of conduct or patterns of behaviour, and, (3) the court may consider the terms and progress of a contract—because it is important that we see it in the particular circumstances. As well as helping courts interpret the law, these principles will give all stakeholders a clearer understanding of the meaning and scope of unconscionable conduct law.
The Rudd government is committed to putting downward pressure on the cost of living. That is what Labor governments do. It might have escaped the media’s attention, or your attention, Madam Deputy Speaker, but to do that we have proposed a resource super profits tax. This would give tax relief to the 770,000 companies throughout Australia, bringing down their company tax rate from 30 per cent to 28 per cent, something that could then flow on to people at the petrol pump, flow on to people in the small businesses, flow on to people at the supermarket. There is an alternative policy, obviously, about whacking two per cent on top of it—the maternity leave for millionaires rate, which would then flow on to people at the checkout—but that is an alternative policy that hopefully will not see the light of day. We are also, as part of the RSPT, talking about tax breaks for the 2.4 million small businesses throughout Australia who, as anyone knows, are the drivers of our economy—the people who get tangled up in red tape, the people who are benefiting from so many of the initiatives that we have put forward.
What else do you do to apply downward pressure? You look after people when times are tough. That is why we have been able to come through the global financial crisis with an unemployment rate of only 5.2 per cent. When you look around the world you see it is a disaster in the OECD countries. If we had not brought the stimulus into the economy when we did, we would have had 200,000 extra people out of work—200,000 households, 200,000 families, 200,000 sad stories spread throughout the community, 200,000 people who are not going into the shops, the small businesses and the companies that we need to tick over to keep the economy strong. It is only a few days until the tax cuts will kick in, from 1 July, which will benefit many people throughout Australia to keep the pressure down.
Who do you thank for that?
You thank the government; that is who you thank. Someone making over $50,000 will effectively have received about an 18 per cent cut from about three years ago, and that obviously helps to make sure that households can manage the cost of living.
It is true that in our global capitalist market there are many pull factors that influence local prices. World commodity prices can impact on things—the terms of trade, local demand et cetera. Most of these factors the government cannot control. There are not a lot of levers we can pull. However, what government can do—and good government does—is to ensure that our regulatory bodies have the power to ensure that real competition exists in our local markets. This bill gives the ACCC the power to reject acquisitions that would substantially lessen competition and ensure that Australian workers and their families get the best deal possible. That is what capitalism is about. You must make sure that the market is real and where the market fails you step in and have some guidance and control. Do not just let it rip. That is a system that brings tears to families.
Finally, I thank the Minister for Competition Policy and Consumer Affairs for introducing this bill and, in doing so, recognise his strong commitment to Australia’s 2.4 million small businesses—and 770,000 companies—and to competition in the marketplace generally. I know he has a PhD in this and he is quite passionate about small businesses and the economy generally. I look forward to hosting the minister in my electorate next week when he will address the South-West Chamber of Commerce at the Pat Rafter tennis centre in Tennyson, a beautiful place to visit. I recommend you come up there next January if you have any time on your hands—
Okay; fine.
and if we are not getting ready to come back to parliament, to look at the Brisbane tennis tournament. I will be happy to host you.
The South-West Chamber of Commerce does great work. Under its president, Alice Langford, who is a quality community leader on Brisbane’s south side and a great supporter of the local business community, the chamber has been getting on with the job of making sure small businesses are supported and guided through the tough times. I particularly commend them for their work during the global financial crisis. More importantly, they also make sure that local businesses are ready to take advantage of the good times—or perhaps I should say the less bad times. This has also been the approach of the Rudd Labor government. We have learned from the efforts of governments during past downturns: do not just stand back and let the market rip; step in and help when you can. Look at some of the things we are doing for small businesses. We have standard business reporting, which will start on 1 July; the superannuation clearing house, which is obviously a good thing for some of the smaller businesses; and the national small business name registration, to name just a couple of the efforts of Minister Emerson in terms of reducing red tape.
I have already touched on the RSPT earlier in the speech, but I am sending a letter out to my small businesses talking about it because there is obviously a lot of misinformation out there. Not a lot of the small businesses are aware of the tax breaks that will be in it for them, the benefits for the 2.4 million small businesses—and the companies, for that matter—with the tax rate going down from 30 per cent to 28 per cent. Obviously it is hard sometimes to get the message through, because the fear campaigns can be strong, but if we had gone the way of those opposite and, obviously, the people who voted no all the way through to the economic stimulus package, our local council would not have benefited. I have a Liberal local government, a Liberal lord mayor—
And they love it.
They love it. Every local government throughout Australia loved it—the infrastructure project and the libraries. We have 2,000 libraries. What did the Howard government give the Australian public? He gave 2,000 flagpoles. We believe in education, knowledge and the future; they believe in symbolism. I love the flag and a flagpole but you have to have a better plan than just having flagpoles. We give language centres and classrooms to schools such as Gracefield State School, Kuraby State School, Eight Mile Plains State School, Southside Christian College—just to a name a few that I have been at in the last couple of weeks.
The Competition and Consumer Legislation Amendment Bill is a fantastic piece of legislation which goes a long way towards cutting the red tape. I commend the bill to the House.
I welcome the introduction of the Competition and Consumer Legislation Amendment Bill 2010 and the opportunity to speak on it. Members of this House might recall that on 22 January 2008 the government directed the ACCC to carry out an inquiry into grocery prices. That inquiry was effectively concluded in July, with a report being received by the government on 31 July 2008. On 5 August 2008, the government responded with a preliminary action plan in respect of that inquiry. I well recall the inquiry because I made a lengthy submission to it. I also well recall that at the time there was widespread community concern in respect of the uncompetitive nature of some of the major retailers throughout this country. As a result of the uncompetitive business being carried out by the two main companies, there were also, I recall, substantial submissions made to the inquiry at the time.
As a result of the report handed down to the government of the day a number of recommendations were made. I believe that this bill goes a long way to responding to and implementing some of the matters that were raised in the course of an inquiry. While the bill raises several matters, I want to highlight three of them. They are the matters relating to what is generally known as creeping acquisitions, consistency between the ACCC and the Trade Practices Act in the interpretation of the laws, and guidance with respect to the interpretation by the ACCC and the Trade Practices Act of the term ‘unconscionable conduct’. While this bill will provide some guidance in respect of that interpretation, I have no doubt that, once it is passed and becomes legislation, it will ultimately have to be tested in the courts, as most pieces of legislation often are.
We live in a free-market society in which ongoing healthy and fair competition benefits consumers. The member for Moreton used an example of purchasing food products at some of our sporting venues. He is absolutely right in using that example, but that example applies in respect of a range of measures right throughout the country when it comes to the sale or resale of any product. It is with respect to ensuring that healthy competition is ongoing that this bill is so important. We often see competition in the marketplace for a short period and during a time in which perhaps a major player in the marketplace is simply competing in a very deliberate fashion in order to put the opposition out of business. Once that happens, the competition is no longer there and we begin to see an escalation in prices.
One of the most important things we can do for small business in this country, as well as for consumers, is to ensure they are able to survive in the face of the opposition from much larger operators in their very industry. I am sure that all of us in this place can think of so many small businesses which have literally been squeezed out of the marketplace by the unfair advantage which larger operators have. If time permits, I am happy to talk about some of them, because I have seen it at first hand. I have been in business myself, I have competed with chain store operators and I have seen exactly how they operate. Having said that, I accept that competition, if it is fair and reasonable, is in the interest of consumers and does benefit the Australian people. It has to be the case that that competition does benefit the Australian people and not disadvantage them.
I mentioned earlier that the government has committed to a number of reforms in regard to the grocery prices inquiry to which I referred earlier. I want to go through the five critical areas where the government has already made some announcements. They include, firstly, relaxation of foreign investment rules for overseas-owned supermarkets; secondly, the removal of restrictive clauses in tenancy agreement between major supermarket chains and shopping centre owners which inhibit the entry of rivals; thirdly, the agreement of the Council of Australian Governments to begin removing unwarranted, uncompetitive provisions in planning and zoning laws; fourthly, the announcement of amendments to the competition laws to address the issue of creeping acquisitions; and, fifthly, the introduction of compulsory unit pricing in large supermarkets to empower consumers to identify the supermarket items representing the best value for money
Let me go through each of those points one at a time. Firstly, I referred to the restrictive provisions in leases. We are all aware of shopping centres in years gone by that would be dominated by one major retailer or another who effectively had control over that shopping centre in the form of a lease which said that no competition would be allowed into the shopping centre. I understand that there were something like 750 such leases around Australia. The government has reached agreement with the two major retailers, Coles and Woolworths, to ensure that, of those leases, at least 80 per cent will cease immediately and those that have only been implemented in recent years will be phased out over the next five years. That effectively does away with that monopoly that individual retailers have within shopping centres.
I can use a classic example of that. In the largest shopping centre closest to where I live, that provision has existed from the day the shopping centre opened in the seventies up until now. When some floor space became available within the shopping centre, the retailer that was already there actually took up the vacant space just to prevent anyone else coming in and being in competition with them. That kind of thing needs to be stopped.
On the foreign investment rules, I welcome the decision by the government to give an investor up to five years to get their planning and development underway. We all know that, if you purchase a parcel of land for the purpose of putting up a development, five years is not a long time and quite often it takes every bit of that time to see a development put into place.
I also welcome the issue relating to planning laws and the negotiations with local government and the Council of Australian Governments, because ultimately planning laws in each state are administered by the state government. Again, I can talk about a personal experience. When I was the Mayor of the City of Salisbury, in the major shopping centre of the town there was one key retailer. That retailer owned some land that it no longer required. The land was allowed to deteriorate to the point that it became an eyesore. I travelled to Melbourne to negotiate with the CEO of the company concerned to enable the local council to purchase the land to do something for the community with it. Their fear was that we would in turn on-sell it, perhaps to another retailer. For years that fear prevented them from selling it, even to the local community, so as to ensure that they would not have competition in the town. That kind of practice needs to be stopped. Ultimately, after many years, we did purchase the land and it was turned into a community open space public area.
I am familiar with the issue of creeping acquisitions as well. I note that it was only towards the end of last year that Caltex was prevented by the ACCC from purchasing some 300 Mobil outlets. I am very familiar with this; I have seen it. As I said earlier, I have been in businesses where we competed against chain stores. One of those businesses, years ago, was a petrol outlet business. I can recall that at the time we went into the business—this was some three decades ago—there were probably 10 different operators in the market. Today you would be lucky to have four or five major operators, because all the others have been bought out and, along the way, so has the competition.
The question of unit pricing has been introduced. I am aware that it is already in existence in the USA and the European Union. I think it makes shopping much easier for consumers. It certainly makes it much easier for consumers to determine where they are getting the best price.
Can I just sum up by saying that there are a whole raft of measures that affect competition throughout this country. I could talk about not only the matters that I have already spoken about but other matters that need to be addressed. The minister came into the chamber just a few moments ago. I take this opportunity to commend the minister for all of the reform work he has done since being made Minister for Small Business, Independent Contractors and the Service Economy with respect to not only providing the kind of support that small business needs but, just as importantly, putting through the law reforms that were required to ensure that consumers and business get the best possible deal out of the opportunities that are available in this country.
This bill is just one of a number of measures that the minister has put to the parliament. I have absolutely no doubt that these measures will be very welcome and will be supported by the broader community at large. Certainly in my electorate I have had numerous representations from people over the last almost three years urging me to pass their concerns through to the minister to bring about these kinds of reforms. I welcome the reforms and I certainly commend the minister for having brought them in. I commend this bill to the House.
in reply—I thank members who have taken part in the debate today on the Competition and Consumer Legislation Amendment Bill 2010. I take this opportunity to reciprocate the comments of the member for Makin. He has displayed again in that speech that he has just given a deep understanding of the issues affecting competition in this country and the need to generate conditions where there is more competition, including, in particular, in grocery retailing. The member for Makin outlined a number of important measures that the Rudd government have taken in relation to foreign investment rules and the removal of restrictive covenants. We are also working in the area of planning and zoning laws to ensure that rivals to major supermarket chains in this country have the opportunity to compete head to head with those supermarket chains, because in our view competition is good and more competition is better for consumers.
It is in this context that we have developed this bill, the Competition and Consumer Legislation Amendment Bill 2010. The bill amends the mergers and acquisitions provisions of the Trade Practices Act 1974 to enable the Australian Competition and Consumer Commission to reject acquisitions that would substantially lessen competition in any local, regional or national market. The reforms remove the requirement that a market in which the competition effects of a merger are assessed must be a substantial market. The amendments will also ensure that the courts and the ACCC can consider the totality of the competitive effects resulting from an acquisition, including those where creeping acquisition concerns have been raised within the community.
The bill will also clarify the meaning of ‘unconscionable conduct’ by inserting interpretive principles into those acts to assist consumers, businesses, regulators and the courts. On 27 May 2010 the bill was referred to the Senate Economics Legislation Committee for inquiry and report. Public hearings were conducted and the committee reported on 15 June 2010. The government will consider the committee’s recommendations prior to debate in the Senate.
I thank all those who made contributions to the consultation process. I also thank my colleagues on the Ministerial Council on Consumer Affairs for their ongoing cooperation. I thank members of the expert panel, Professor Bryan Horrigan, Mr David Lieberman and Mr Ray Steinwall, for their hard work in developing recommendations for reform to the unconscionable conduct provisions of the Australian Consumer Law. I commend the bill to the House.
Question agreed to.
Bill read a second time.
Ordered that this bill be reported to the House without amendment.
I move:
That the Main Committee do now adjourn.
Question agreed to.