by leave—I move:
That the order of the day be referred to the Main Committee for debate.
I ask that I be associated with the comments of the Prime Minister and the Leader of the Opposition on the loss of this great Australian.
Question agreed to.
by leave—I move:
That statements, by indulgence, in relation to the death of the Honourable David Bruce Cowan AM be referred to the Main Committee.
Question agreed to.
by leave—I move:
That further statements by indulgence in relation to the death of Mr Claude Stanley Choules be referred to the Main Committee.
Question agreed to.
Mr Speaker, on further indulgence, this is the first time the House has been able to reflect on the news that the world's No. 1 terrorist, Osama bin Laden, was killed on Monday of last week in a targeted operation conducted by a small team of US forces. Those personnel have our nation's gratitude. The death of Osama bin Laden is of course a great blow to terrorism. It is also a measure of justice for his victims and for a world that he has changed forever. As a nation, we are simply relieved that his long career of destruction is over—a two-decade campaign that cost thousands of innocent lives, including the lives of many people of Islamic faith. Those victims also include 10 Australians killed on September 11—9-11—and more than 100 Australians who have lost their lives in terrorist attacks inspired by or linked to al-Qaeda in the years since.
Osama bin Laden's death is a landmark in our campaign against al-Qaeda and it is no surprise that, like any other major event, this operation has given rise to internet conspiracy theories alleging that bin Laden is not really dead or he did not even exist except as a CIA construct. Of course, even al-Qaeda itself has acknowledged bin Laden's death—a warning to all those tempted to credulity or gullibility in this age of information overload. Bin Laden is dead, but we must not allow ourselves to become complacent. Al-Qaeda is still a resilient and persistent terrorist network and al-Qaeda inspired terrorist groups remain active elsewhere in the world.
Our long watch against terrorism is by no means over. The challenges in preventing terrorism and home-grown extremism in Australia and in the Asian region will remain. The challenges in bringing security and stability to Afghanistan will remain as well which is why on my recent visit to London I discussed with Prime Minister Cameron the need to continue our efforts in Afghanistan to take the fight to the insurgents, to train the Afghan National Army, to improve governance in Afghanistan and to work with elements amongst the insurgents who are prepared to renounce violence and adopt a path back to a constructive and purposeful civilian life. We also recognise here the crucial ongoing role Pakistan will have in defeating al-Qaeda and its affiliates, and note that many ordinary Pakistanis have been killed in al-Qaeda's ruthless attacks against their fellow Muslims.
On Saturday morning our time, I was able to speak to President Obama, who was on Air Force One returning from a visit to congratulate the special forces personnel involved in the operation against bin Laden. In our conversation, I offered Australia's thanks to the President and the US military personnel and officials who planned, supported and conducted this operation. I was also able to confirm Australia's commitment against global terrorism and the work that remains to be done in Afghanistan. I made it clear that Australia will see the mission through in Afghanistan, so it can never again become a terrorist safe haven. The operation against bin Laden strikingly affirms President Obama's resolve and capacity to fight terrorism—a resolve I have come to know well in my own meetings and discussions with him. We have in the White House a man of character, of sober judgment and of intellectual clarity. The operation against bin Laden is not the end of our journey. It is important and it will make a difference but the job is not yet done. Our resolve endures and our purpose remains right and we will prevail.
I rise to support the remarks of the Prime Minister. The death of Osama bin Laden is an important breakthrough in the fight against terror. As the Prime Minister said, it certainly does not mean that the terror threat is removed, but it is grounds for optimism and an unmistakable sign that this is not an unwinnable war. The Australian forces who have served so long and so well in Afghanistan are entitled to feel very encouraged by this breakthrough, and the families of Australian victims of terrorism are entitled to feel quiet satisfaction that the author of the worst terrorist atrocity in world history has finally been brought to justice.
On indulgence, and on a far happier topic, on behalf of all Australians, I rise to place on record the best wishes and congratulations of the Australian parliament and the Australia people on the marriage of Prince William and Catherine Middleton, now the Duke and Duchess of Cambridge. Along with the Governor-General and Mr Bryce, Tim and I were honoured to represent Australia at Westminster Abbey.
Opposition members interjecting—
I thank members of the opposition for their sterling support. This was, of course, a highly formal and symbolic occasion for the Royal Family, for the British system of government and for the entire Commonwealth. It was also a very human occasion: two young people, very much in love, having the courage to build a life together amid the glare of publicity and scrutiny.
Opposition members interjecting—
They are romantics on the opposition frontbench, Mr Speaker. It is obviously a huge pressure to know that your wedding will be watched by probably two billion people—that is an amazing statistic. The upside of that pressure is the joy that is given to so many. I had the opportunity to see that joy personally in the abbey and beyond with other prime ministers and governors-general. We watched the crowd outside Buckingham Palace as they saw William and Kate and the Royal Family come out onto the balcony. It was a truly amazing site, to literally see tens of thousands of people on the move, walking together, happy, no pushing, no shoving; nothing but happiness from the crowd itself and even from the police who were marshalling the crowd.
For many in the world this was a moment of uplift from the pressures of daily life. For the Royal Family, it was pomp and ceremony blended with a truly family wedding. At Buckingham Palace, before the cutting of the cake, the speeches given by Prince Charles and Prince William were the kind of speeches you would have expected to hear at any wedding in any suburb in any town in our nation—the father gently joking about his young son and his humour being returned by the young son as he joked about his old man; humour and emotion woven together. Around the world, of course, people celebrity spotted as they watched the royal wedding. Elton John, Posh and Becks were among the celebrities they wanted to spot. But there was an absence that was keenly felt—the absence of Princess Diana. I am sure she would have been very proud of her son, who has grown up into an exceptional young man, and of his choice of Kate Middleton, whose grace and self-possession spoke volumes about the character she brings to her new role. I am sure we all hope that the world has learnt and the media has learnt some lessons from the way Princess Diana was treated, and that we will all give the royal couple our best wishes as well as the space and privacy they will need to pursue their lives together.
We wish the Duke and Duchess all the best in the busy and demanding years that lie ahead. Their wedding is a great time of renewal for the Royal Family and for Great Britain, and none of us would wish it any other way. For those of us who have a different view about Australia's constitutional future, it highlights the fact that our debate should not be centred on individual qualities but on issues of principle debated in an atmosphere of civility and reason. If Australia ever chooses a different path, it should be at the right time for the right reasons. In that spirit I welcome the marriage of William and Kate. It is good for Britain and good for the Commonwealth. May they enjoy a long and happy life together, as united at the end as they have been at the beginning.
Mr Speaker, I rise to support the gracious remarks of the Prime Minister and I congratulate her for representing our country so well at this important occasion, the wedding of Australia's future king. It has rightly been celebrated throughout the world.
I want to dwell for a moment on one facet of this celebration, namely the prayer which Prince William and Catherine wrote for their nuptials. I want to quote it, if I may:
In the busyness of each day, keep our eyes fixed on what is real and important in life and help us to be generous with our time and love and energy ... help us to serve and comfort those who suffer.
What an inspirational young couple they are; what a beautiful lesson they have given us that should be heeded by all in public life. I have always wanted to say this in this chamber, so let me say with heartfelt conviction: May God save the Queen.
I inform the House that the Treasurer will be absent from question time. I think everybody might know where he is. The Assistant Treasurer will answer questions on his behalf.
My question is to the Prime Minister. I ask the Prime Minister whether, now that the East Timor solution is dead, the PNG solution will not happen and the latest one for five people swap with Malaysia is unravelling, the Prime Minister will finally pick up the phone to the President of Nauru, who is ready, willing and able to open the Australian funded detention centre within weeks?
I thank the Leader of the Opposition for his question, but I regret to advise him that the premises on which he has based his question are wrong. He does give me the opportunity, though, to explain some facts to him and this House about the arrangement that I have entered into with the Prime Minister of Malaysia. Either the Leader of the Opposition does not understand this arrangement, or he is misrepresenting it in the public domain. This arrangement of course is to break the people smugglers' business model and to take out of the hands of people smugglers the very product it is that they sell. They seek to prey on misery; they seek to say to people that they can get them to Australia, that their asylum claims will be processed here and if those claims are found to be valid, they will be able to stay. The arrangement that Prime Minister Najib and I are committed to is an arrangement that will break this business model. The message to people smugglers and to asylum seekers would be that if you risk your life and spend your money on getting on a boat trying to come to Australia, you risk being taken to Malaysia and being put to the back of the queue. Malaysia is a country with tens of thousands of refugees who have genuine claims which have been processed and with no prospect of resettlement. Of those refugees we will take 4,000 extra, on top of our current humanitarian intake.
The Leader of the Opposition has been out there first and foremost trying to pretend to the Australian people that the 800 asylum seekers who are taken to Malaysia will somehow come back to Australia within the 4,000 quota. This is not right. The 4,000 refugees taken from Malaysia will be people who are in Malaysia now, whose claims have been processed and who are genuine refugees. The Leader of the Opposition has been trying to say to the Australian people that somehow we, the Australian government, will not be able to have a say in the selection of those 4,000 refugees. Of course this is wrong. Right around the world we take people through our special humanitarian intake system and we work with UNHCR and others so that refugees who have valid claims come to this country and settle in this nation.
Finally, the Leader of the Opposition has been representing that somehow it is the wrong thing to do to increase our humanitarian intake. He went to the last election saying he would increase that he would increase the humanitarian intake to 15,000. In a private conversation with the member for Dennison he said in the pursuit of his naked political interest that he would double it, costing the federal budget $3 billion. Let no Australian succumb to the analysis that the Leader of the Opposition can, without hypocrisy, criticise our decision to increase the humanitarian intake. The difference is that we explain it and we do it for a reason in the national interest. The Leader of the Opposition wanted to do it behind closed doors in his narrow political interest.
Mr Speaker, I have a supplementary question. Can the Prime Minister confirm that it will be Malaysia and not Australia who will choose the 800 people they are supposed to take under her people swap deal?
That statement is completely untrue.
My question is to the Prime Minister. Prime Minister, how is strong economic management vital in delivering job security for Australian families?
The guffaws have already started because the opposition does not care about this government's top priority and that is having a strong economy. We are dedicated to making sure Australia has the benefits of a strong economy. The chief benefit of a strong economy is that Australians are able to get jobs. This government is proud of its record in creating 750,000 jobs in the last 3½ years at a time when unemployment increased around the world. Even in the second year of its recovery after the global financial crisis, the US unemployment rate is still at nine per cent. In contrast, our unemployment rate is at 4.9 per cent. We are on track to fall to 4.5 per cent during 2013, meaning that around 1.25 million new jobs will have been created since this government came to office. This has been our focus because of the importance to Australian families of people having a job.
We recognise that there are challenges in our patchwork economy, our two-speed economy, which is why, in ensuring that our economy is strong, we will also make sure that families who are at risk of being left behind also experience the benefits of this mining boom, that they do not get left behind as the economy grows. We understand that there are still far too many Australians who are not sharing in the benefits and dignity of work. There are around 230,000 Australians who have been without work for more than two years and there are 250,000 families where no adult works. The youth unemployment rate is more than double the unemployment rate generally and we know that there are some pockets in our nation where it exceeds to even greater figures.
In my view, there is nothing more important we can do as a government than make sure every Australian gets the benefit of opportunity, that we do not leave these Australians behind. With that opportunity comes responsibility. I have said that before. I believe that people must be in a position where they are expected to seek work and to perform work if they can do work—opportunity and responsibility working together.
We will continue to make sure that our economy is strong. We want to spread the opportunities of the mining boom, to make sure in our patchwork economy, in our two-speed economy, that there are not Australians left behind. We will do all of this while returning the budget to surplus in 2012-13, on time, as promised, as I said to the Australian people at the last election. This is the right thing for the economy; it is the right thing to do with the budget; it is the right thing to do for Australian families—not adding to the inflationary pressures that will come with this period of growth.
Now there is also a test for the Leader of the Opposition this week. On three occasions he has failed to make his figures add up—the election campaign, an $11 billion black hole; the flood package earlier this year a farce; last year's budget reply speech where he delegated to the shadow treasurer who delegated to the shadow finance minister for a press conference which even his own press secretary could not bear to watch. On Thursday night the Leader of the Opposition must come into this parliament and, for the first time ever, make his figures add up. We will be very interested to see whether he can get that done.
I inform the House that we have present in the gallery this afternoon members of a parliamentary delegation from the National Assembly of Malawi led by the Speaker of the National Assembly, the Right Honourable Henry Chimunthu Banda MP. On behalf of the House, I extend a very warm welcome to our visitors.
Honourable members: Hear, Hear!
My question is to the Prime Minister. Will the Prime Minister guarantee that unaccompanied children will not be amongst the 800 asylum seekers sent to Malaysia as part of the government's latest asylum seeker policy?
Let me tell you one thing: I am not going to take lessons on compassion from this opposition given its track record in government on children in detention, including unaccompanied minors. I am not going to take lessons on compassion from people who soiled themselves in government with a track record—
On a point of order, Mr Speaker: the Prime Minister was asked a very straightforward question without any hyperbole and I would ask you to ask her to answer it directly.
The Prime Minister has been asked a question. She will directly answer the question.
On the question of treatment of children, this government has a record of ensuring that children of asylum seekers in this country are treated better than they were by the government that the Deputy Leader of the Opposition was a cabinet minister of. So let us not make any assumptions about treatment of children and who understands the needs of children best; let us just look to comparative track records—ours versus yours—and I will highlight ours in comparison with yours any day of the week.
Order! The Prime Minister will direct her remarks through the chair.
On the question of the arrangement with Malaysia, I am not going to stand here in this parliament today and engage in a game with the Leader of the Opposition or the Deputy Leader of the Opposition on something as serious as this. What we are going to do is send the clearest possible message—
Opposition members interjecting—
Order!
One royal wedding invitation and you think you are a queen.
The six-week break was obviously not long enough for people to think about the dignity of the House. I just hope that, for the rest of the day, you might think of the dignity of the House. The Prime Minister will respond to the question as required by the standing orders. The standing orders also require that she be heard in silence.
Thank you, Mr Speaker. The last words I used before you intervened to deal with the opposition were that I am not going to play a political game with the opposition about this today. The fact that this is all a political game for them was then verified by the interjection of the member for Indi. What this government will do is send a strong message to people smugglers that they cannot represent that they can get people to Australia, because when they make that representation the people they are making it to are at risk of being taken to Malaysia and ending up at the back of the queue.
I can also say to the Deputy Leader of the Opposition that, with our increase of 4,000 in the humanitarian intake, I bet some of them are children. She like might like to explain why the Leader of the Opposition is opposing that intake.
My question is to the Assistant Treasurer and Minister for Financial Services and Superannuation. Will the minister update the House on the government's plan to return the budget to surplus and of any threats to these plans?
I thank the member for Holt for his question and I can report to him that the budget will—
Ms Julie Bishop interjecting—
Order! The Deputy Leader of the Opposition will withdraw.
I withdraw.
I am pleased to report that the budget will be back in the black, that we will have more jobs for Australians and that we will spread the opportunity of the mining boom across this nation. We will bring the budget back into surplus by 2012-13. The government has a strong fiscal strategy in place that has us on track to return to surplus well ahead of our peers. The strategy will ensure that, as we go forward, our public finances continue to be amongst the strongest in the developed world. This is the right economic strategy for the times and the right strategy for an economy which is expected to be pushing up against capacity over coming years.
We have a strict fiscal strategy to get us back on track. We are allowing the level of tax receipts to recover naturally as the economy improves and we will be maintaining the government's commitment to keep the tax share of GDP below the 2007-08 level left by our predecessors. We have a strict spending cap in place. We have been offsetting every single dollar in new spending. In fact, over the last three budgets, we have saved something like $83.6 billion. Members of the House might be interested to know that that number is seven times the savings put in place by the former government in their last three budgets. I have been asked to talk about what risks there are to these plans. Mr Speaker, I can tell you that the risk to these plans sits opposite. The Leader of the Opposition is a risk to these plans to get us out of deficit. If we were to use the opposition numbers as economic strategy, we would be in deficit every year over the next four years. On their latest reckoning, not only are the Liberals stuck in the red next year but they remain there for every single year of the budget. This would be three years after the shadow Treasurer, interestingly, the other day committed to getting the budget, if they were in charge, to surplus by next year; yet their other numbers show it would take them at least another three years. The mob opposite have a track record and well might the opposition—
Opposition members interjecting—
The opposition are yelling out because they know what is coming. They know that in the election they had an $11 billion con job. Remember the con job. Treasury and Finance dissected their savings after the election and it was found that they had an $11 billion black hole. Hang your heads in shame, Coalition. And then, when they tried to work out where to find some new ideas, let us not forget that they went down the road to the outhouse of conservative politics and asked One Nation for their ideas. There is no doubt that there is a very real risk to this budget surplus, and they sit opposite.
On Thursday night the opposition have a clear choice: they can support the plans to return this budget to surplus by 2012-13 or they can squib the challenge. Budget week is not just about the government but about the opposition, and our challenge to the opposition is don't squib the challenge of taking the budget into surplus. None of us will forget, of course, that the opposition leader squibbed it last year. He handballed it to Joe Hockey the next Wednesday, who handballed it to poor old Andrew Robb, who was left to try and find the cuts.
My question is to the Minister for Immigration and Citizenship. Will the minister confirm that during the 11 days that detainees were on the roof of the Villawood Detention Centre they were free to come down from the roof, including to charge their mobile phones, and then allowed to return without interference from Serco staff, Immigration staff or the Australian Federal Police?
I thank the honourable member for his question. In fairness, the honourable member has criticised me in recent weeks about this event, which I acknowledge. It appears that the honourable member for Cook, if he were to hold the office that I hold, would ignore the advice of the Australian Federal Police that it would have been unsafe for the Australian Federal Police to get on the roof to remove the detainees who were protesting.
Mr Speaker, on a point of order: it was a very specific question. Were they allowed to come down from the roof and then go back without interference?
I would suggest that this is an occasion when, if people would stop interjecting and actually listen, they might actually receive a response to their question.
Opposition members interjecting—
All the interjections upon my utterances are well and truly appreciated, but it would help from time to time if ministers were heard in silence when responding.
As I was saying, the government took the advice of the Australian Federal Police about how to best manage what was a difficult situation, as I think the member for Cook would do if he were to hold the office I hold. If he were not to do that, if he ignored the advice of the Australian Federal Police, he would not be fit to hold the office that I hold. It was clearly the case, as I have previously said publicly, that the three detainees who were on the roof also accessed the roof cavity. I have said that publicly before. I am sure the member for Cook reads transcripts of my radio interviews. I have also made it clear that I authorised the appropriate use of force if the safety of the officers using the force could be guaranteed and could be justified. I made it very clear that the use of force was authorised by me if appropriate and if regarded by the Australian Federal Police as being safe.
My question is to the Minister for Sustainability, Environment, Water, Population and Communities and relates to four potential routes for a gas pipeline between Narrabri and Wellington by Eastern Star Gas. Given that all these options have caused angst and concern for those who live and work on the magnificent floodplains of the Liverpool Plains, is the minister aware that a fifth option exists, along the Newell Highway, which is supported by the community and has no detrimental environmental impact on the floodplain? Will the minister inspect all these sites prior to endorsing any options?
I thank the member for New England for the question. There are a number of referrals that have come with this gas project around the Liverpool Plains. The reference that the member for New England has made to a fifth pathway for the pipeline is not among the referrals that have come to my department. At the moment there are four separate referrals before the department. Three of them are decisions due this week as to whether or not they get called in for full approval. If they get called in for full approval then, in all probability, that will end up coming directly to me rather than being dealt with by my delegate. When the decisions are dealt with, they will not be able to deal with the full range of issues which sometimes come up through public debate. They are environmental approvals and have to be made under the EPBC Act under national environmental law.
Some of the pathways for these pipelines proposed at the moment do have issues that relate to some national environmentally listed species. There are issues with respect to the swift parrot and some gum woodlands listed that would be relevant to some of the pathways. I would be surprised if those issues were relevant to a pathway along a highway that the member for New England has referred to but, as I say, that is not among the referrals that have come to me.
When the department makes a decision as to whether or not it needs to be dealt with under national environmental law, if it is decided that that is not required, then it will not be dealt with by me any further. If it is called in for full referral, then those decisions will be made in accordance with the law and there will be opportunities for public discussion and input during those processes.
My question is to the Minister for Immigration and Citizenship. What are the benefits of the government's transfer arrangement with Malaysia, how has this announcement been received and what is the government's response?
I thank the member for Fowler for his question. The government has consistently said that it will pursue an international agreement to break the business model of the people smugglers and that is what the Gillard government has delivered. We have consistently said that we needed an international solution to an international problem and that is what the Prime Minister's of Australia and Malaysia have committed to agree to.
People smugglers now need to find 800 volunteers to part with their money, to risk their lives, to come to Australia only to return to Malaysia. Interestingly, Malaysia is the point of entry for most asylum seekers who come to Australia by boat. This is where they normally begin their boat journey. So why would you part with your money and risk your life to be returned to where you started?
Of course, the government has also used this opportunity to increase our refugee intake and to assist Malaysia with the challenges of managing the 92,000 registered asylum seekers in Malaysia. We will, over the next four years, take 4,000 refugees who have been processed and mandated by the United Nations in Malaysia. I note that this has come in for some criticism from the opposition, from the Leader of the Opposition in particular and from the member for Cook. The Leader of the Opposition says it is a bad deal and that we do not have a good enough deal. The Leader of the Opposition knows a bit about making deals when it comes to asylum seekers. We know he offered to double the refugee intake to the member for Denison in return for one vote on the floor of the House of Representatives. That would have been a bad deal. That would not have been a good negotiating tactic on behalf of the Leader of the Opposition.
We also see that the member for Cook has been criticising this arrangement. On one level that is his job as the shadow minister for immigration. But I must say I was a little surprised to see that. The other option available to the member for Cook would have been to claim credit for the idea. He could have said, 'Actually, this was my idea,' because, when the member for Cook saw the announcement on Saturday—I am sure he was sitting at home watching it on television—I am sure his mind went back to the speech he made on 30 November last year which was very modestly entitled 'A real solution: an international, regional and domestic solution to asylum policy'. The international component to the member for Cook's solution was in his words, 'a trade-off'. He said:
In my view, Australia’s participation in a regional solution for Afghanistan should seek to trade off Australia taking more refugees out of the camps in countries of first asylum in that region in return for the ability to return those who have sought to advantage their asylum claims through illegal entry to Australia, to those same camps or other safe places established for that purpose, as part of the regional solution.
'To take more out of refugee camps,' the member for Cook argued. He went on to say:
Under this proposal—
It was a good speech, Mr Speaker—
Australia would continue to honour our obligations under the Refugee Convention, but use the safe third country provisions provided under the Migration Act ...
When I heard and read that speech of 30 November last year I thought, 'He's onto us. He's onto our idea we are pursuing.' In fairness, he suggested that this deal should be done with Iran. I will leave the member for Cook to explain why Iran makes more sense than Malaysia. The people smugglers should be under no illusions. We will do what it takes to break the people smugglers business model.
My question is also to the Minister for Immigration and Citizenship. Why did it take the New South Wales police just three hours to forcibly remove protestors from the roof of the minister's own electorate office compared with 11 days for detainees to come down from the roof of the Villawood Detention Centre during recent riots?
I think that the first part of this question is actually problematic, because I am not sure whether it is in the province of the minister but I will allow the question.
Police forces, whether state or federal, when making decisions on operational matters, take into account all the evidence before them as to what is safe in the circumstances. If the member for Stirling is suggesting that he understands the situation better than the Australian Federal Police on the ground, if he is better qualified to make those judgments than the experts who make those decisions every day and the people who risk their lives in those situations, then he should explain that to the Australian Federal Police.
I move:
That so much of standing and sessional orders be suspended as would prevent the Member for Warringah moving immediately—That this House suspend proceedings forthwith so that the Prime Minister can stand before the Parliament and explain why:
(1) the Prime Minister refuses to consider an offshore detention centre in Nauru because, as she said in an interview on 8 July 2010, “I would rule out anywhere that is not a signatory to the Refugee Convention” yet now plans to send asylum seekers to Malaysia who hasn’t signed it either;
(2) the Prime Minister decried the use of Manus Island and the Howard Government’s so called “Pacific Solution” as “costly, unsustainable and wrong as a matter of principle” in 2003 yet is now desperately negotiating with the PNG Government to re-open Manus Island;
(3) the Prime Minister has damaged our national interest by agreeing to a deal with Malaysia that will see us accept five of their refugees for every one of the asylum seekers we send to them – with Australian taxpayers footing the complete bill;
(4) the Government allowed three people, identified by the NT Coroner as responsible for the fire aboard the people smuggling boat, SIEV36 which killed five people and injured 40, to be granted permanent residency in Australia;
(5) it took only three hours for the NSW police to remove protestors from the roof of the Immigration Minister’s office yet no action was taken against protestors on the roof of Villawood for 11 days;
(6) rioters at Christmas Island faced no penalty for burning down buildings and risking the lives of people at the facility;
(7) the Prime Minister promised an East Timor solution before the election knowing very well that it was opposed by the Government of East Timor and was nothing more than a dishonest election smokescreen; and
(8) the Prime Minister doesn’t just come clean and reinstate the Howard Government policies that worked rather than try to maintain this elaborate fiction that Labor has a plan to stop the boats.
This is a tragedy for our country. The Howard government found a problem and created a solution. The current government has taken that solution and turned it into a tragedy for this country, for our region and for the boat people themselves. The Prime Minister might turn her back on me, but she should not turn her back on this problem, which is of her making. She should turn around and face this problem, not try to shuffle it off to Malaysia, which she is trying to do right now.
This is a very serious problem, and it is not helped by sanctimony and self-righteousness of the type that this Prime Minister has shown in question time today. Since she became the Prime Minister, we have seen more people than ever coming illegally by boat. We have seen further suffering and, I regret to say, further deaths and all this Prime Minister can do is come in here and engage in the kind of sanctimony and self-righteousness that we saw from her earlier today. We do not want sanctimony, Prime Minister; we want solutions. That is what we want, and that is what we are not getting from this government.
Let us be clear on how the Howard government stopped the boats. We stopped the boats with Nauru, with Manus, with temporary protection visas and with a willingness to turn boats around where it was safe to do so. I call on the Prime Minister to swallow her pride, to end this stubborn refusal to do what works and to pick up the phone to the President of Nauru and reopen the centre there. Since this Prime Minister has come to office, we have had almost three boats a week—that is, three boatloads of suffering humanity, three boatloads of people exposed to death on the high seas because of the policies of this government.
This is a problem that is going from bad to worse, and it is going from bad to worse because of the incompetence and the untrustworthiness of this government and in particular this Prime Minister. Let us remember back to that day, 24 June, when the Prime Minister made her 'the government has lost its way' speech. I say to the Minister for Foreign Affairs: do you remember that day when the Prime Minister said that the government had lost its way? He is pretending to have a conversation with the Minister for Infrastructure and Transport, but he is marking every single word of mine. This Prime Minister said that the government had lost its way and that one of the things she was going to fix was the boat people problem. How did she fix this? She fixed it by promising before the election an East Timor detention centre that she had not even bothered to pick up the phone to the President of East Timor about. What incompetence, what ineptitude and, in the end, what absolute deceit of the Australian people on the eve of an election.
We now know that the East Timor detention centre has sunk without trace somewhere in the East Timor Sea, as it always was going to. It was yet another example of the incompetence and the untrustworthiness of this weak and indecisive Prime Minister. But it just goes from bad to worse. This Prime Minister has the Midas touch in reverse when it comes to public policy. Late last week she rushed out into the media—or had her briefers rush out into the media—to say, 'We have an answer: it's Manus Island.' That was the answer. This is the same Prime Minister who had said of the Howard government's Manus and Nauru detention centres that they were 'costly, unsustainable and wrong in principle'.
The Prime Minister is carefully studying her notes and pretending to write on a piece of paper. What she is writing is, 'What the hell do I say now? How do I answer this?' How do you answer it, Prime Minister? How could something that was costly, unsustainable and wrong in principle be wrong for the Howard government and right for her? It is simply impossible to justify, other than by concluding that this is a Prime Minister utterly without conviction or consistency.' But it gets worse. The Manus solution was unravelling within 24 hours of its announcement. And so at three o'clock on a Saturday afternoon, the week before the budget, she rushes out into the prime ministerial courtyard to say, 'We've got another plan. Manus isn't working; we've got a new plan. It's great! We are going to send one of ours to Malaysia and they're going to send us five of theirs!' A great deal for Malaysia; a terrible deal for Australia.
The Prime Minister thinks that, because the member for Cook thought a one-for-one swap might not be a bad deal, one for five must be even better. Really and truly: she is some negotiator! It originally started at one for one, then it became one for two and finally she settled on one for five. The longer she talks, the worse it gets—and we pay for every single one of them with borrowed money.
Not only is this against our national interest but it is hypocritical. Remember the reason the Prime Minister gave for not being able to pick up the phone to the President of Nauru? That Nauru has not signed the UN convention. I have news for the Prime Minister: Malaysia has not signed the UN convention either. Doodle something on your notes, Prime Minister! How do you answer that one? That cannot be answered either.
Finally, let me make this point: it simply won't work. It is absolutely crystal clear that Malaysia are not going to accept any 800 people. They are going to decide the 800 that come to their country and the circumstances under which they come, and they are going to leave the ones they don't like here in Australia, waiting to be dealt with by this Prime Minister. The other point I make is that plainly she is not going to send women and children back, which just gives the people smugglers another product to sell. It is weak and indecisive, from a bad government getting worse.
Is the motion seconded?
I second the motion. After selling the Nine Network to Alan Bond for a billion dollars and buying it back three years later for a quarter of that price, Kerry Packer once famously said, 'You only get one Alan Bond in your lifetime.' Well, Malaysia only gets one Julia Gillard. The great negotiator must explain to this House why she was completely rolled by the Malaysian government, who clearly saw this desperate Prime Minister coming—selling out Australia's interest in a fit of panic and desperation, as her government has lurched from crisis to crisis on our borders and in our detention centres.
Under the Prime Minister's panicked deal—five-for-one refugee swap—as the Leader of the Opposition said, we will send 800 to Malaysia at a cost of $95,000 each. We will pay for the privilege of taking back 4,000 at $54,000 each. These will be added to our existing program of refugee and humanitarian entrants, a program which is strongly supported by this side of the House, and the settlement services that support it. But it is a program under which, at its current level of intake, after five years one in three have a job and more than 80 per cent are still on welfare—and they want to add another 4,000 to the government funded program.
The other point is that on the weekend the Prime Minister said: 'It is 800 to be used as we want to use them.' Well, it is clear from today's reports that she did not read the fine detail, because clearly Malaysia, at the end of the day, will veto who gets to come to Malaysia—and, as the Leader of the Opposition said, not just who gets sent to their country, not just the circumstances in which they get sent, but how much the Australian taxpayers are going to pay for that privilege. The only big winner tonight from this government's federal budget will be the Malaysian government. They are the big winners. They are the ones who have secured the big deal out of this government with this five-for-one refugee swap.
On this deal, this Prime Minister needs to explain many things, because this deal just has not landed yet. Like all of the other things we have heard them bring into this place, the detail just never comes. And when it finally gets trawled over, the whole thing just unravels. We still do not know, as the Deputy Leader of the Opposition put to the Prime Minister today, whether children will be returned under this deal. No answer today. Who will monitor the welfare of the 800 returned to Malaysia and how, and who will pay for this monitoring? How will they ensure that those sent back to Malaysia do not find their way back into the people smugglers' queue and on another boat back to Australia? How will they be sent to Malaysia? The minister said on the weekend that it is an operational decision whether they will be sent by boat or by plane. Has the government got a firm commitment out of Malaysia that we will not have a repeat of the Oceanic Vikingdebacle, when people refused to get off the boat and the former Prime Minister cut a special deal with those asylum seekers on that boat that we all remember too well—and that, frankly, amongst other poor decisions of this government, set this whole crisis into the making?
This is a stopgap measure. It is a one-off desperate deal, a bilateral deal with one country, good for a dozen boats and then it is back to business as usual under this government—business as usual under which 224 boats arrived on their watch, business as usual under which over 11,000 people can turn up. We have 6,800 people in detention; half of them have been there for more than six months, and that includes a thousand children under this government's policies. That is their record.
What we have seen from this government is a series of bad decisions. This is just the latest. The first one, we will remember, was the asylum freeze, which this Prime Minister described at the time as being a deal in the national interest. It resulted in 58 more boats coming, carrying 2,800 more people. It resulted in a doubling of the number of people in detention and a tripling of the processing time, which I am sure has played a significant role in the riots we have seen.
Then there was the never-ever East Timor processing centre, the other great solution to this problem. Now we have the Malaysian people-go-round. This is a government that does not have the policy, that does not have the resolve and that does not have the necessary ticker to deal with this issue. 'Ticker' means strong decisions. You have the policies in front of you from the opposition; it is time to implement them. (Time expired)
I rise to reject this proposed suspension of standing orders moved today by the Leader of the Opposition. I state to the House that today we have made a little bit of history, because today is the budget day. Today is the day when, for every year since Federation, the opposition have come into this chamber and raised questions about the macro economy; they have raised questions about employment settings; they have raised questions about spending; they have raised questions about revenue; and they have raised questions about the fiscal state of the economy. But we have seen today for the first time in our history an opposition come into this chamber on budget day and not ask a single question about the economy. They have abandoned the debate about the economic future of this nation, and it is not surprising, because essentially they have nothing to say about the future of this country. They regard the economy as something boring. How do we know that? Because Peter Costello in his book nailed the Leader of the Opposition when he said that the Leader of the Opposition was—
Order! The Leader of the House will resume his seat. The Leader of the Opposition on a point of order.
Reluctantly, Mr Speaker. I would imagine that this is way outside the standing orders. It has nothing to do with the subject matter of the suspension and it has nothing to do with why it is urgent.
Order! The Leader of the Opposition will resume his seat. I will take a little bit of time and I apologise to the Leader of the House. I can tell you that this is the last suspension of standing and sessional orders where I will allow the purpose of that suspension to be the debate. From now on I will draw both the proposer and the seconder back. On that basis, that is why the Leader of the House is in order.
Hypocrisy, thy name is Abbott!
Honourable members interjecting—
Order!
They come in here and they refuse to debate the economy. They come in here and every day at 10 minutes to three they move a suspension, because this is the first opposition that have chosen not to even try to hold the executive to account. That is the purpose of question time. The purpose is to come in here and ask questions of the executive about the functioning of the government. But those opposite have given up on that. Perhaps Play School was not on today, because the Leader of the Opposition was 10 minutes late in his motion for suspension. And they are not fair dinkum, because they did not even ask for leave to move a motion. They just went straight to the moving of a suspension and, then, between the mover and the seconder of the motion, neither of them addressed why the suspension should occur.
There are two fundamental reasons that the suspension should not occur. The first is that today is budget day. Today is the day when Australians want to know about the economic future of this country. They want to know about employment settings and they want to know about how the economy will be set for this year and years into the future. They want to debate those issues.
Mr Morrison interjecting—
The member for Cook.
The second reason it should be rejected is that the member for Cook has lodged an MPI about this very issue. So, straight after question time today we will have a debate on this issue and the member for Cook will have 15 minutes to add to his five minutes and the minister will be responding to that MPI debate.
But those opposite will do anything rather than debate the economic future of this country. And it is not surprising, as we know from last year's budget reply, where they handballed off the costings of their budget response from the Leader of the Opposition to the shadow Treasurer to the shadow finance minister and to that great moment with the staffer. I wonder if that staffer is still around. I suspect that might be one fewer person employed by the those opposite after that event.
The Leader of the Opposition has a big challenge on Thursday night, which is to actually put forward an alternative strategy on the economy—put it forward without the $11 billion black hole that was in their costings during the election campaign. It is extraordinary. They oppose all of the savings measures made by those on this side of the House. They did everything they could to stop savings measures in the area of health to create space for the reform of the program and the national reform of health undertaken under the leadership of the minister for health. They did everything possible to block that, but at the same time they go around the country and make promise after promise. Barely anyone on their back bench has not made a promise in my portfolio of transport, from a local road to a local railway line. But they never actually say where the money will come from.
Their fiscal credibility was blown apart after the election, and today's performance in question time and in moving this suspension shows that they have learnt absolutely nothing when it comes to dealing with the economic future of this country. Indeed, when the government put forward our economic stimulus plan two years ago in the 2009 budget, the Leader of the Opposition said:
I think what we are going to get is massive debt and a deep recession.
The Deputy Leader of the Opposition said:
It will certainly not ward off recession.
The fact is that our economic management of this country did prevent a recession. It did help to create 500,000 jobs. We have an unemployment rate in this country with a four in front of it—the envy of the industrialised world. We are continuing to build the infrastructure that the economy needs to run faster and smarter. Tonight's budget will see the Treasurer continue with that good and sound economic management to deliver for the Australian public. Thursday night is the time for the Leader of the Opposition to put his money where his mouth is. They have gone round the country making promises about the inland rail line, the Pacific Highway, the Bruce Highway—it goes on and on. Will they deliver this on Thursday night? We know that last time there was an $11 billion black hole. We have to see from the opposition leader serious, credible and properly costed proposals in the budget reply on Thursday.
Let us take just one issue that has been the subject of some debate in today's newspapers: the issue of the provision of support for pensioners to deal with the transfer to digital TV.
They are against that.
The minister says that they are against that. Actually, the member for Mayo had this to say on 25 May 2009 in this House when speaking on legislation:
It is right that the government does help Australians, particularly those at the lower end of the income scale, to switch over to digital TV.
Indeed, Senator Minchin, the mentor of the Leader of the Opposition—or one of them—had this to say in the Senate on 18 June 2009:
The coalition supports this amendment ...
For eligible households in Mildura, such as pensioners, this measure will provide some certainty about their capacity to access and utilise the equipment needed to view a digital picture.
But on Sunday when asked about the government actually doing something about it, the shadow Treasurer said, 'We wouldn't be spending so much money.' Does that sound familiar? We can go back to the comments by the Minister for Immigration and Citizenship. They were talking about us having a transfer agreement, but when it is actually real and happening it suddenly becomes bad and so they oppose. They are caught up in that.
One thing that I learnt growing up in a household with an invalid pensioner as a mum—one thing that was taught to me every budget day and every day of my life—is that it is only Labor that looks after pensioners and low-income earners, and we will see that again because those over there are only interested in looking after the entrenchment of privilege. Those opposite continue to oppose the sort of reform that has seen our economy looked after in the interests of all Australians. Question put:
That the motion moved by the Leader of the Opposition be agreed to.
The House divided. [15.29]
Question negatived.
In the absence of the opposition having any question on the economy, jobs, health or education, I ask that further questions be placed on Notice Paper
Whilst people are milling in the aisles, I indicate that one member of the public gallery did give me tremors but I acknowledge—so that everybody else can feel comfortable—that the former member for O’Connor, Wilson Tuckey, is in the gallery today. I welcome him back as a visitor, and I am sure that the House joins with me in warmly welcoming him back.
Honourable members: Hear, hear.
In view of the significance of proceedings tonight and on Thursday night, and the need to ensure that the dignity of the House is protected, I wish to make some general remarks for the information of members to ensure that proceedings and arrangements for the chamber galleries for the budget tonight and budget reply night on Thursday run smoothly.
As with any other proceedings of the House there is the principle that any member with the call is entitled to speak without interruption. The Chair will take the necessary action to ensure that is the case for both addresses. Where appropriate I will take action under standing order 94(a) and will advise any offending member by written note. Any further action that I consider warranted will be initiated at the commencement of the next sitting day. I ask members to ensure that their guests arrive at the galleries in a timely way for the addresses. Guests should arrive at the galleries about 30 minutes prior to the budget speech to ensure they can undertake the security clearance and be seated in the galleries in a timely way.
I trust that there will be cooperation from members and from their guests in the galleries and that budget night and budget reply night will proceed smoothly for the benefit of the House and for those watching and listening to proceedings
I present the Auditor-General's audit reports Nos 35-39 of 2010-11. Details of the reports will be recorded in the Votes and Proceedings.
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 Votes and Proceedings and I move:
That the House take note of the following documents:
Australian Meat and Live-stock Industry Act 1997—Report on the funding agreement between the Commonwealth of Australia and Australian Livestock Export Corporation Limited for 2009-10.
Dairy Produce Act 1986—Statutory funding agreement with Dairy Australia Limited—Report for 2009-10.
Department of Broadband, Communications and the Digital Economy—Investigation into access to electronic media for the hearing and vision-impaired—Media access review final report, December 2010—Correction.
Department of Finance and Deregulation—Campaign advertising by Australian Government departments and agencies—Half yearly report for the period 1 July to 31 December 2010.
Indigenous Education and Training—National reports to Parliament—
2007.
2008.
Telecommunications Act 1997—Funding of consumer representation grants program to telecommunications—Report for 2009-10.
Debate adjourned.
I have received a letter from the honourable member for Cook proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The failure of the Government to address their border protection failures with clear permanent, proven and consistent policies.
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—
The matter of public importance today sets out a very clear theme that we commend to the government to try to adopt, and that is to have clear, permanent, proven and consistent policies in dealing with what has become a crisis and mess of their own making when some almost three years ago this government decided to abolish the strong border protection regime that they inherited from the previous coalition government. The record since that time speaks for itself: over 11,100 people have arrived illegally by boat and we have had over 224 boats arrive during that period. We now have over 6,800 people crammed into detention centres. We have had a government that has announced and/or built some 7½ thousand new beds only to have some of those beds withdrawn later because of riots. We have a budget which has blown out by $1.43 billion and counting. These are the failures of a government that had decided to destroy, dismantle, and remove a border protection regime that was working. As we have said so many times, they took a solution and created a problem. The answer to this is not to engage in half-hearted half measures. The answer is to re-engage the policies that were proven, consistent and permanent. That is what we have called on this government to do, but instead their approach has been quite the reverse. The best way I could describe this government's approach to this crisis of their own making is 'directionless'. You could even say this government were 'rudderless' when it came to how they approached matters before this parliament. We have seen this government on what has been a painful and endless expedition to the blindingly obvious. This is a government that, inch by inch, admit their failures for abolishing the scheme they inherited and start to touch on—each day, each week—elements of those solutions but with the lack of a position from which to admit their mistake, be honest with the Australian people and say: 'We got it wrong. It is now time to restore what we took away.'
As I outlined earlier to the House, this government have had several goes at addressing these issues. The first one was of course the asylum freeze introduced in April 2010—a discriminatory asylum freeze that led to chaos in our detention network. We then had the East Timor never-never solution, which proved to be just that despite even most recently both the minister at the table and the Prime Minister claiming that it was still on. We had the Prime Minister forcing regional leaders to go through this endless procession; to run this gauntlet of polite conversation. They had to amuse themselves as they listened to this proposal, which was clearly a farce. Now, finally, the Prime Minister at the weekend admitted that it was unlikely to happen. I suspect that is the biggest admission of failure we will get from this Prime Minister.
Now we hear that they are going to re-engage the Pacific solution. But what we have said to this government all along is, 'If you would like to adopt our policies then don't do it in half measures.' The people smugglers are unconvinced by half-hearted measures from this government. They are unconvinced by a government that goes for the quick political fix rather than committing to policies that have been proven to work. The government is going to embrace a policy solution ultimately, in the fullness of time, when we have spent millions and millions more, and more and more people have arrived, and more and more people have gone into detention, and the costs have continued to escalate as they have. It will eventually get there, I am sure, but the process will be painful. And not only will it have to admit that those policies were right but it will have to walk back from policies that it not only criticised but also demonised.
I heard Michael Kroger say at the weekend that this government should take out a full-page advertisement and apologise to the former Prime Minister John Howard and, in particular, to the father of the House, the member for Berowra, the Minister for Immigration and Ethnic Affairs at the time, and say: 'You know what? We got it wrong. You were right all along.' As we see the government inch closer and closer to the policies they know they have to reintroduce, though they cannot swallow their pride to do it, we see this farce continue. This was, or rather is—I wish it was in the past tense but sadly it is still the present tense—a government that has a Prime Minister who said that Labor would end the so-called Pacific solution, the processing and detaining of asylum seekers on Pacific islands, because it is costly, unsustainable and wrong as a matter of principle. She also went on to say, 'We know it delivers absolutely no outcomes.'
The predecessor of Mr Bowen, the Minister for Immigration and Citizenship at the table, issued a statement on 8 February 2008 which went into the outcomes of the Pacific solution. That statement said that of the 1,637 people who were detained on the Nauru and Manus facilities, 705 people were resettled in Australia. That does not sound to me like an overwhelming majority. It actually does not sound like a majority. In fact, it is not; it is 43 per cent. Fewer than one in two people who were subjected to the Pacific solution as implemented by the previous government ended up in Australia. But this government likes to parade around saying, 'They all ended up here.' It is simply not true.
The other thing they like to talk about is that it was ineffective, but we know that in 2001 there were 43 boats that arrived. Then we introduced the Pacific solution on the back of temporary protection visas. How many boats were there in 2002? None, absolutely none.
This government also says the Pacific solution was costly. How much did it cost? The cost, according to the former minister, Senator Evans, was $289 million. That figure rings a bell because when this government came into this House in February this year and said, 'Can you top up our current year's budget?' how much did they ask for? It was $289.5 million. It also rings a bell because there is a figure just slightly higher than the $289 million it cost to run the Pacific solution, and that is the $292 million that it will cost to implement the five-for-one swap that this minister has so bravely negotiated. When he went to that table he started off with a one-for-one and he walked away with a five-for-one. If he had been in there another week it would have been 10 for one. The Malaysians must be beside themselves. If we had only asked for 10 for one, I am sure they would have agreed to it. They could see the veins popping out of the minister opposite, and the Prime Minister back here in Canberra saying 'Do whatever deal you can; pay whatever price is necessary' and that is what they have paid--$292 million.
It is not them who are going to pay it. It is the taxpayers of this country who are going to pay it. That is why the biggest winner in tonight's budget will be the Malaysian government, courtesy of the minister opposite who is happy to spend this much money on one deal to deal with about 12 boats. What happens after those 12 boats? It is business as usual, and we all know what happens with 'business as usual' in this area under this government. The hypocrisy on this issue is staggering. Why wouldn't they go to Nauru? That was put to the minister opposite and it has been put to the Prime Minister on many occasions. The answer, with hand on heart, has been, 'Because they are not signatories to the UN convention.' As we know, they are now going to send 800 asylum seekers, who are on their way to this country, to Malaysia, which is not a signatory to the United Nations convention and protocol on refugees.
The motion for debate in this matter of public importance today talks about consistency. This government, for all their other failures, have failed more in this area than anywhere else. There is a clear lack of consistency. They simply have nothing to guide and direct them in responding to these matters. They simply make it up as they go along. It is woolly-headed. It is unsophisticated. There is no clear sense of purpose or direction. But guess what? The people smugglers get it. They understand that this government is fuzzy when it comes to this issue. This is a soft government when it comes to this issue. It is a weak government when it comes to this issue. The people smugglers have the measure of this government. To quote the minister at the table who said, 'The people smugglers got the right minister and they got the right government'—in terms of what they wanted. The people smugglers have been making money ever since, whether from this minister or his predecessor, or from this Prime Minister or her predecessor. Whatever shade of red you want to give it, this is what people smugglers have got from this government and it is exactly what they are looking for.
Malaysia is not a signatory to the refugees convention. The minister's excuse for not picking up the phone and calling Nauru is vacant. He also said, 'Nauru won't work if the offshore processing centre at Nauru is run by Australians.' In defending the arrangement he is apparently negotiating with Papua New Guinea—and I hope he strikes a better deal there than the one he made with Malaysia, otherwise we better get the cheque book out, big time—on 7 May, he said, 'Discussions are continuing with Papua New Guinea but the basis of those discussions is that we will create an assessment centre and'—yes—'it will be staffed by Australian officials.' So the minister has given two big excuses for not going to Nauru but he has capitulated.
I can only think of one reason that this minister will not pick up the phone and call Nauru—that is, the pride of this government. This government refuses to acknowledge that they got it wrong when they opened the borders. As my colleague the member for Mackellar often says, 'This is not failed protection policy; this is an open borders policy from this government.' When you have had 224 boats turn up and more than 11,000 people, I think she has a good point. This is an open borders policy from this government that is cheered along by the Greens, who form the key support, the anchor, for this government being in office.
I mentioned before that this crisis has had an extraordinary impact on the budget: $1.43 billion and counting in terms of the blow-out in costs of offshore asylum centre management, including capital expenditure of some $376 million—what I and others can only describe as a building the detention centre revolution. Seven and a half thousand beds were announced. I notice that in the last few days the minister is starting to back down on that number—whether it is at Pontville or at Northam. Minister Bowen, who is at the table, is nodding that Pontville is still on track. That is news to the people of Pontville. I am sure they will be thrilled to hear it. I am sure they will be overjoyed. In Northam, where they have problems with cockatoos and various other things, I understand they are now backing down. They will still need the beds because they have closed 850 beds on Christmas Island following the riots. That is what I want to turn to now.
In the budget tonight, I am expecting the government to spend as much next year, and budget for that, as they have this year—if they tell the truth, and it is a big if when it comes to this government. There is no way that this government can pass off to the Australian people that they could not spend that much and that they will not need to spend that much. I expect there will be a blow-out of half a billion dollars in the current forward estimates. On top of that, we will have the cost of that magnificently negotiated deal by the government of $292 million. We can expect somewhere in the vicinity of $800 million as a further blow-out on top of the $1.43 billion.
This government should admit its earlier mistake and put the border protection regime it inherited back in place, and there would be about 2.2 billion reasons for health programs, particularly mental health, education and other programs right across the spectrum of government—not the least in government taxes that would not be needed.
The riots overseen by this minister in particular are the result of this government's devastating policy failure. The government lack resolve—whether it was Minister Rudd when he was Prime Minister doing a special deal with those on the Oceanic Viking or Minister Bowen allowing detainees to sit on a roof for 11 days while he did nothing. This government simply do not have the resolve. It is a government which is all carrot and no stick when it comes to border protection. It is a government that have allowed chaos to enter the detention network. It is a government that have a minister who thumps the table loudly and says, 'We will use the general conduct test under section 501 of the act.' Yet, when he was presented with the convicted rioters at Christmas Island in November 2009 he had the opportunity, but he did not deny their visas under the general conduct provisions. The minister knows he had the power to do it and he failed the test. This government continue to fail the test of resolve on border protection. This minister in particular has proven time and again when given the opportunity that he has no ticker when it comes to protecting our borders and protecting the integrity of our immigration system.
There are some things in this debate that the member for Cook and I agree on. The member for Cook and I agree that the business model of the people smugglers should be broken. We have different ways of expressing that. He talks about sugar on the table. He talks about pull factors. He calls people who arrive by boat illegal immigrants; I don't. But I think we do agree that we should break the business model of the people smugglers. We disagree, however, on methods to do that. I think he and I agree that boat journeys to Australia are dangerous. I think everybody would agree with that—every member of the House and almost every member of the community, I am sure, would agree with that, apart from a few extremists. The government should take action to discourage those sorts of journeys. The government should take action to make sure that people realise that that is not the answer to their problems and that the risks and costs to be paid are not worth it. I think the member for Cook and I would agree that we should not just focus in this national discussion on the people who happened to make it by boat to Australia but have a broader discussion about the hundreds of thousands of displaced people and refugees and asylum seekers in our region and about the 42 million displaced people around the world. I think the member for Cook and I, in our quieter moments, would agree on that. As an aside, one of the things I have been glad about over the last few days has been some of the coverage in the newspapers about the difficult circumstances faced by asylum seekers in our region who do not get on a boat and come to Australia. Perhaps some of that coverage has reminded some Australians who are concerned about these issues that we do need to focus on those people as well.
But, as I said, the honourable member for Cook and I disagree on other things—about the methods to be employed. The member for Cook outlined the coalition’s policy. They would introduce temporary protection visas. I understand the rationale for their introduction; I understand the previous government was searching around for solutions. I am not critical of that. But the evidence is there—when temporary protection visas were introduced, the number of people who arrived in Australia by boat increased in the two years that followed, including the number of women and children who arrived by boat. It is at least arguable that temporary protection visas, because they remove the right to family reunion, encouraged women and children to get onto boats. That is at least arguable.
We again hear the opposition say their policy is to reopen the Nauru detention facility. That is a well-known policy. If you asked the member for Cook any question over the last 12 months, his answer was ‘Nauru’. It does not matter what the question is, his answer is ‘Nauru’. On Thursday night the Leader of the Opposition will rise in his place and he will deliver the opposition’s reply to the budget. The Leader of the Opposition will outline an alternative approach, an alternative budget, and no doubt these matters will be mentioned in that response. If the Leader of the Opposition is fair dinkum, he will outline the costs of reopening the Nauru centre—operational and capital—and he will include those costs in the alternative budget of the opposition. The member for Cook says there is a detention centre there, ready to go, as though it could be opened for nothing. He could run it for nothing too, I presume. So they should tell us the costs of doing it—I have a pretty good idea of what they would be, and they are not small. We recall that after the opening of Nauru detention centre, which had a capacity of around 1,500 people, I think the member for Berowra would agree, 1,700 people still arrived in Australia by boat. Another point I disagree with the member for Cook about concerns his figures about where the people on Nauru ended up. If you look at the number of people who were accepted as refugees, 70 percent were resettled in Australia or New Zealand and now live in our community on permanent visas—they are permanent residents of this country. That does not break the people smugglers’ business model. Of the 800 we send to Malaysia, zero percent will be returned to Australia to be permanently settled here. This is the difference between the approach of the honourable member for Cook and me—the approach of the opposition and the government.
The third element of the policy is to turn back the boats. We heard a lot about this in the election campaign. We had the boat phone. The Leader of the Opposition, the alternative Prime Minister, was going to sit in Kirribilli House and issue instructions to the Navy while the member for Cook issued instructions to the Federal Police about how to do their jobs. The former government did turn some boats around, but what happened? It became unsafe to continue to do so, and we now know that Indonesia will no longer allow that to occur. If you turn back a boat, you have to have somewhere to turn it back to. Indonesia’s minister for foreign affairs said in response to the Leader of the Opposition’s policy:
I think going to this kind of approach of simply pushing back the boats to where they have come from would be a backward step. It would not be a useful step because it would be inconsistent with that approach [of] having the three elements of origin, transit and destination countries working hand in hand.
I do grant the member for Cook this, even though the foreign minister of Indonesia was specifically talking about the policies of the leader of the Liberal Party, not the government, as the member for Berowra should recall: turning back the boats did remove the incentive to come to Australia. It meant people were returned to their point of transit. That is what this transfer agreement that has been negotiated between these two governments achieves as well. Of the asylum seekers who come to Australia by boat, the vast majority begin their boat journey in Malaysia. They come by boat through Indonesia to Australia. If you come by boat from Malaysia through Indonesia to Australia, you get to Australia and you get returned to Malaysia. That breaks the people smugglers’ business model. That means you are back where you started your boat journey. It means that people smugglers need to find 800 volunteers to say yes, they will pay their money, they will risk their lives, they will get on the boat, and then they will enjoy the plane trip back to Malaysia—not a very enticing prospect. Our message is clear to people who are considering a boat journey to Australia: do not do it. It is not worth the risk, it is not worth the money and you will be sent back to Malaysia. The outcome that you are after is far from guaranteed; you are not likely to get the outcome you are after because you will be returned to Malaysia. I make this point. In the next four years, Australia will take 55,000 humanitarian entries, 55,000 refugees, as part of our normal program before this increase—that is, 13,750 a year—in return for absolutely nothing, because it is the right thing to do, because it is our obligation as a developed nation. Now we have added 4,000 more to that 55,000 in return for an agreement with a reasonable partner, which puts a huge dent in the people-smuggling business. But the opposition says, 'How dare you add 4,000 to that 55,000 intake in return for a deal.' In return, we get absolutely zero and nor should we get anything, but we add it to the 55,000 as part of a partnership under the Bali process with a regional partner and a close friend of Australia because it is the right thing to do. And the opposition says, 'How dare you!' when the Leader of the Opposition was prepared to double the refugee intake in return for one vote on the floor of the House of Representatives from the member for Denison. That would have been a bad deal costing $3 million. The Leader of the Opposition was prepared just to negotiate it away in those days following the election and he has the hide to criticise us for adding 4,000 over four years in return for an agreement with a regional partner.
These are important issues. These are vexed issues. These are complex policy areas which governments around the world face. I agree with the member for Cook that it takes resolve. I do agree with the member for Cook that it takes determination and that is what this government is showing in this agreement with Malaysia. As I said on Saturday, it is not easy. I expect there to be protests. I expect there to be resistance and I expect there to be challenges, but nobody should underestimate this government's resolve to do whatever it takes to break the people smugglers' business model and to do it in a way which protects our humanitarian obligations by increasing our refugee intake.
In the time left available to me, I want to deal with a couple of matters which the member for Cook raised—the recent riots at Christmas Island and Villawood and the matter of the government's resolve. The member for Cook has received his briefings. The member for Cook has received his legal advice. He wrote to me and asked for legal advice and I arranged for it to be sent to him—very clear. The member for Cook raised this issue and now he is saying that it is a separate issue. The legal advice sent to the member for Cook made very clear the need for the legislation I am introducing to the House, which shows that the current general conduct provisions may not be strong enough to deal with some of the instances we have seen in the last few weeks.
The honourable member for Cook has had his opportunity to participate and he will remain silent.
The shadow minister for immigration has now had a considerable period—several weeks—to announce the opposition's position on this matter. He has now had his briefing. He has now had the legal advice and now we need to hear from the member for Cook. Do you support the government's efforts to strengthen the character test? Will you vote for the legislation? The opposition wants to criticise this government and then play politics with an important piece of legislation which makes it crystal clear—without doubt.
Mr Morrison interjecting—
I warn the honourable member for Cook!
It is not a complex piece of legislation. If you commit an offence while you are in immigration detention, you automatically fail the character test and the opportunity of the minister and the department is enlivened to enable the cancellation or the refusal to issue a permanent visa. It makes it crystal clear that this legislation is improved. It makes it crystal clear that the minister or the department have the opportunity to ensure that bad behaviour within our detention network is dealt with appropriately.
The member for Cook has had the opportunity now for several weeks to say what he thinks. He has been given very comprehensive legal advice about the situation and he has not yet indicated whether he will support or oppose it. There are plenty of opportunities now. The member for Cook had another one today. He likes to talk about the general character test. He likes to talk about how people who have been sentenced to crimes with a sentence of less than 12 months—
Mr Morrison interjecting—
I remind the honourable member for Cook that he is under a warning!
He would not want to miss budget night. The member for Cook has been given legal advice which shows that if somebody is sentenced to a prison term of less than 12 months, the opportunity for the minister and department to deal with that in an appropriate way is severely curtailed. He knows it is the case. Now it is his chance to join with the government in fixing it. If he will not, he has no right to lecture this government about matters of resolve or determination when it comes to behaviour in our detention centres because he will be part of the problem. He will be part of the issue, which means that people in detention centres think they can commit offences with sentences likely to be less than 12 months and not suffer the result of having no permanent visa. We will be back in a situation like we were after the riots at Woomera and Baxter under the previous government where those rioters are now living in our community with a permanent visa. For all the chest-beating of the Leader of the Opposition, for all the chest-beating of the member for Cook, the rioters in those very serious instances at Woomera and Baxter are now living in the community with a permanent visa issued by the previous government. The member for Cook has gone a bit quiet on us, Mr Deputy Speaker. I am glad he is adopting your admonitions. I suspect it is partly out of respect for you and the office you hold and partly because he knows it is true. He knows he has been beating his chest and that there is no substance to his argument and he knows, if he is going to be taken seriously on this debate, that, in the deal with Malaysia, he will join with the government and support the legislation before us. (Time expired)
The former finance minister Lindsay Tanner has been in the news lately. One of the things he says about politics, which I think a lot of people would agree with, is that everybody exaggerates everything, but let me tell you one thing: with this government, when we say that things are actually this bad, I can genuinely say to the Australian people that they are. It is hard to remember that this government is only 3½ years old. It seems so tired, so incompetent and so incapable of moving Australia in any coherent direction. In fact, it seems so incapable of outlining any direction it would like to see Australia go in that it looks as old, as tired and as ready to be assassinated as the former New South Wales government which fell in March. For all the failings of this government, nowhere are their failings more apparent than on the issue of border protection, because the same strands of incompetence that are so obvious across the whole range of policies of this Labor government are magnified when we look at the failure to protect Australia's borders. First, one of the characteristics of this government—something that the Leader of the Opposition outlined again in question time—is that they have the reverse Midas touch. Everything they touch has turned sour. Any policy area that they turn their attention to becomes an absolute disaster. No matter how good the intentions—such as 'It is a good idea to insulate houses,' or 'It is a good idea to have faster broadband,'—and no matter how good the kernel of the idea, everything they do turns out to be a complete and utter disaster.
Yes, it is a good idea to insulate homes, but the way they do it we end up with those houses being burnt down and people killed. Faster broadband is a good idea. We all believe in that. Yet the way they tackle it is to waste literally tens of billions of dollars on an outdated scheme that is going to be an absolute millstone around the necks of all Australians for a generation to come. We will probably see the same tonight with set-top boxes.
But border protection is probably the worst of these failures, because when the Labor Party came to office they inherited a solution to this problem. The previous government had faced challenges in this area and they had shown some resolve and they had solved it. So all Julia Gillard, Kevin Rudd and the Labor Party needed to do when they came to office was nothing. If they had just left well enough alone, we would not have been inundated with the almost 11½ thousand illegal arrivals we have had since the Labor Party weakened the robust system of border protection they inherited when they came to office.
The second characteristic of this government is that it is wildly inconsistent in a way that I think highlights to the Australian people that they have absolutely no idea what they are doing. They do not appear in any way, shape or form to be competent stewards of the national interest; they just appear to be out-of-control victims of circumstance with no ability to shape events and no ability to control the direction of the country. They wind back the tough but fair provisions that the previous government introduced with Welfare to Work, yet tonight, apparently, they are going to announce a crackdown on welfare recipients. They promised 'no carbon tax' but, within months of being re-elected, they explicitly repudiate that promise and now they are going to bring in a carbon tax.
But yet again, it is border protection which most exposes their complete inability to shape events, their lack of conviction and their blatant hypocrisy. This government and the members of it spent years criticising the previous government for the Pacific solution, the solution that was part of a suite of measures implemented by the Howard government which actually ended the people-smuggling business and took control of this problem on behalf of the Australian people. The current Prime Minister derided the Pacific solution for years as the opposition shadow spokesperson for immigration. In 2003, in this place, she said:
The so-called Pacific solution is nothing more than the world's most expensive detour sign. It does not stop you getting to Australia; it just puts you through a detour on the way while Australian taxpayers pay for it and pay for it. Instead of stunts like this—
referring to the Pacific solution—
it is time the Howard government faced up to engaging in a long-term solution in relation to refugees and asylum seekers.
A long-term solution—the next eight boats! She went on to say:
The so-called Pacific solution is not a long-term solution. Can anyone in this place really imagine that Australia will be processing asylum seeker claims on Nauru in 10 or 20 years?
Well might we now ask: can anyone really imagine that Australia is going to take 10 to 20 years to get these 800 people who are now going to be transferred to Malaysia?
Earlier on, in a grievance debate, the Prime Minister—the then opposition spokesperson for immigration—said this about third-country processing:
The so-called Pacific solution—stripped of the other policies that the government has scrambled around and tried to put in place since the Tampa—is really no more than the processing of people offshore in third countries. It is a policy that Labor does not support, because it achieves nothing and costs so much in so many ways—in money, in goodwill in our region and in division in our community.
This is the hypocrisy that this government has now become famous for and this is why the Australian people understand that they stand for nothing, that they are enormous hypocrites and that they will do whatever they deem to be in their political interests. The Prime Minister today spoke about children in detention—another area in which they are rank hypocrites. When they came to office in 2007, not one child was in detention in Australia. There are now over 800 children in detention, specifically because of the failed policies of the Labor Party.
The third characteristic of this government is that they never tell the truth. They have a habit of making grand announcements, but you need to unwind those announcements and have a look at the detail before you can see what is really going on. We saw it with the mining tax—a big announcement followed by an unravelling once we saw how silly the details of that tax were. Again this characteristic is evident in border protection. The Prime Minister announced to great fanfare during the election campaign that one of the areas she was going to fix when she became Prime Minister was border protection. She was going to do that by creating a regional processing centre in East Timor. Sadly, and I think rather astonishingly, nobody thought to ask the East Timorese. We know that foreign affairs is not the Prime Minister's forte, because she has admitted that, but really I think it would fall into the category of commonsense that, if you were going to push for an East Timorese processing centre, you would pick up the phone and talk to your counterpart, the head of government of East Timor. That is something that never happened.
What has happened is that as this policy has completely and utterly unravelled the Prime Minister and her ministers and other members of the Labor Party have run around in what became a pythonesque farce. There was all this silliness of running around saying, 'No, this idea is not dead; it is only sleeping.' But mercifully the East Timorese regional processing centre was put to bed on Saturday when the Prime Minister announced her new thought bubble—the Malaysian solution.
Wouldn't you want to play poker with these guys? Wouldn't you want to sell them a car? In fact, I would like to sell them a bridge—the Malaysian government will take 800 asylum seekers in exchange for the 4,000 they are going to send here to Australia. You can picture the minister going up to Malaysia and starting off by saying: 'Look, what about we have some swapsies? What about we go one for one—we will give you one of ours and we will take one of yours?' And the Malaysians would have said, 'Mmm, no.' And so the minister would have said, 'What about two for one?' 'No.' 'Three for one?' 'No, I don't think so.' 'Four for one?'
You can just see the desperation that would be leeching off the minister by now. 'No, not four for one.' And finally they went with four for one—and wouldn't the Malaysian government be kicking themselves that they did not ask for more. This government has become a regional embarrassment and it is the dignity of Australia that suffers when we have a government that negotiates from such an enormous position of weakness.
The fourth thing that characterises this government is a complete disregard for taxpayers' money. We have seen it with pink batts, we have seen it with school halls and we see it with border protection. This time last year we had a $1 billion blowout on the government's failed border protection policies, although I suspect that that effort is going to look amateurish compared with what they will announce tonight. We already know they are going to blow $300 million on the Malaysia deal. There has already been a blowout of half a billion dollars to manage our detention centres, let alone the damage that has been done on Christmas Island that would run into the tens of millions of dollars which we had a chance to look at over the last fortnight.
This government has no resolve to deal with the issue of border protection and the chaos it has created is completely a chaos of its own making. If they had come to office and done nothing, Australia would not be in this position. They need to take responsibility for the chaos they have caused and they need to adopt policies that we know will work and that the opposition is now proposing. (Time expired)
The issue of refugees and asylum seekers is a global challenge. According to the United Nations High Commissioner for Refugees, in 2009 there were 43.3 million forcibly displaced people throughout the globe and, of those, 15.2 million were refugees. These are vast numbers for the international community to deal with and there are also huge numbers around the world who are affected by the challenge of asylum seekers. Just to give the House a sense of the scale of the number of internally displaced people and refugees, I want to quote a couple of statistics from a Parliamentary Library paper by Janet Phillips. She points out that, in 2006, over 72,000 people arrived by boat on the coasts of Italy, Spain, Greece and Malta alone.
The arrival numbers in Australia are actually very small compared to global asylum seeker applications. The paper makes the point that, in 2009, Australia received 6,170 asylum seeker applications, which is just 1.6 per cent of the 377,160 applications received by the 44 industrialised nations for which the UNHCR tracks figures. Of those 44 nations, Australia was ranked 16th overall and 21st on a per capita basis. It is critical to put the numbers into perspective and to remember that Australia has a long and proud history of accepting refugees for resettlement.
Many people who have come to Australia have made vast contributions to our wellbeing—including Frank Lowy and many people who came to Australia at the end of the Vietnam War. Australia is better off for being a nation that has welcomed refugees into our midst. There are only about 20 developed nations that formally participate in the UNHCR refugee resettlement program and we are one of those nations. But those developed nations do not house the majority of the world's asylum seekers and refugees. The majority of the world's asylum seekers and refugees are housed in developing countries where millions of people already live. Pakistan currently hosts approximately 1.7 million refugees, Iran hosts over a million refugees and some 115,000 asylum seekers and refugees are in Thailand. Malaysia hosts around 100,000 asylum seekers and refugees and Indonesia faces significant numbers of irregular migrants moving through its territory.
It is critical that we keep the global challenge in perspective. The Minister for Foreign Affairs said in Bali early this year that worldwide transnational crime represents a business of two-thirds of $1 trillion a year and a large portion of that is the crime of people smuggling and human trafficking. This is the challenge that Labor's policy is aiming to address. We are aiming to address the challenge within our own region of the 3.9 million refugees amongst us. It is important to recognise that Australia's policy fits in a global environment. The opposition would very often like us to think that Australia exists in a little bubble and that the rest of the world does not affect us. But we know that is not the case.
There are international institutions set up to deal with the challenge of refugees and asylum seekers and we are marking the 60th anniversary of the 1951 Convention Relating to the Status of Refugees and the 60th anniversary of the International Organisation for Migration. These two great international institutions have played a major role and Australia is looking to work with those institutions.
But beyond the statistics there is also a set of very personal stories that accompany them. I spoke in my maiden speech about my own experience with my mother's parents, a boilermaker and a teacher, who always lived by the credo that if there was a spare room in the house it should be used by someone who needed the space. As a child, I remember eating at their home with Indigenous families and new migrants from Hong Kong, Papua New Guinea, Chile, Cambodia and Sri Lanka. That early experience informed my lifelong passion for Australia's multiculturalism.
Last year I attended a prize-giving ceremony for an art competition held as part of Refugee Week and first prize went to a Karen-Burmese woman who had woven a traditional crimson tunic. Because she did not have a proper loom the woman had taken the mattress off her bed and fashioned a loom from her pine bed base. It is hard not to be overwhelmed by the courage and spirit of Australia's migrants.
That brings me to the announcement made on the weekend by the Prime Minister and the Minister for Immigration and Citizenship. It was an announcement aiming to do two things: to put people smugglers out of business, to ensure that fewer people are put on those boats, particularly women and children, to brave a dangerous and unnecessary sea journey to Australia; and it is also trying to ensure that Australia resettles more refugees than it has in the past.
As the minister has set out, the next 800 irregular maritime arrivals, who arrive in Australia after the date on which the agreement comes into effect, will be transferred to Malaysia. In return Australia will resettle an additional 4,000 refugees currently residing in Malaysia. Australia is going to fully fund that agreement, which will be overseen by the United Nations High Commissioner for Refugees, which is playing a more active role in Malaysia than it has ever done in the past.
This will be the largest increase in the asylum seeker-refugee intake that has occurred since Labor was last in office. That increase of 1,000 a year reflects the fact that Australia is a generous country which is able to resettle refugees. I think that bipartisan commitment to resettling refugees has in the past—alas, not so much now—been a hallmark of Australia's social fabric.
What we are doing is not a bilateral deal. It is the beginnings of a regional framework. We recognise that refugees and asylum seekers are a global challenge. We recognise the way to tackle that challenge is through a regional agreement. That is very different from the bilateral deals that we saw under the Howard government and the temporary protection visas. Temporary protection visas did not work. They were introduced in October 1999 and, following the introduction of TPVs, the number of irregular maritime arrivals spiked.
By contrast the current policy proposal that the government has put forward has been welcomed. The UNHCR's regional representative, Richard Towle, said:
I think in that sense it has the potential to ... make a significant practical contribution to what we're trying to achieve in the region. And if it's a good experience other countries can look at it and say "yes, that's a positive way of managing these issues. Perhaps we want to embark on similar or other initiatives under a regional cooperation framework".
He also said:
Well the core on which I think everyone agrees on and that's ... what we call the principle of non-refoulement: that's non-expulsion of asylum seekers and refugees out of the country to face persecution. We would want to see that and I think we are seeing that as a commitment from both Governments.
By contrast the opposition has taken the narrow and parochial road. They are the ostriches of the Australian political system. They are willing to put their head in the sand and pretend the rest of the world does not exist. We have seen this with several issues.
During the global financial crisis we saw the opposition's refusal to support the stimulus and their willingness to talk now as though the GFC never happened. On climate change we saw their startling readiness to reject both the science and the economics. On migration we saw the return of Hansonism wrapped in a blue ribbon. Whereas the former member for Cook, Bruce Baird, would stand up for principle, the current member for Cook is only willing to spread fear.
Migration has strengthened Australia. Refugees have strengthened Australia. What this policy seeks to do is to increase our humanitarian intake and, in an equally humanitarian way, to discourage the dangerous sea journey and to see fewer young children set adrift in leaky boats to brave a dangerous sea journey to Australia. In those twin regards this is a humanitarian policy and one that I am proud to support as a member of the Labor Party.
The failure of this Gillard Labor government to address their border protection failures with clear, permanent, proven and consistent policies is out of control. This was seen as recently as this week when Malaysia out-negotiated a desperate, panicked Gillard Labor government who used their desperation to overturn a one-to-one deal to a one-to-five deal. How good is that! This deal is just another panicked, desperate thought-bubble from a government which is literally drowning in problems of their own making. Labor does not have a plan. They are negotiating from a position of weakness. They are completely in a flop.
The coalition has a proven recipe for baking the cake which we will call border protection. For some reason the Gillard government refuses to reach into the cupboard and pull out the Howard government recipe book. Rather, they want to bake a cake without a recipe. They insist on making it up along the way. It goes something like this: two cups of Christmas Island, add a tablespoon of Vashti. a pinch of Villawood, then mix it all together into a bowl of suburbia and bake it in an oven. Where is that oven, again? Is it in East Timor; is it in Papua New Guinea or is it in Malaysia? There is a perfectly good oven in Nauru but the Prime Minister refuses to warm it up.
The Labor border protection cake has flopped. They will not be calling for this recipe on MasterChef. Forget this half-baked cake that you have, Prime Minister, and try the recipe that we all know has worked. The Prime Minister should swallow her pride, pick up the phone, ring the President of Nauru and put in place the full range of policies that have been proven to work. The temporary protection visas should be reintroduced and, where possible, boats should be turned around. But instead we have a deal where we take five for every one person sent to Malaysia.
That is not a very good deal for Australia, is it? Malaysia takes one and sends five and Australian taxpayers pay for the lot. Taxpayers seem likely to fork out $54,000 for every refugee brought to Australia, but for every person arriving by boat who has been rejected and sent to Malaysia we pay $90,000. What a deal for you.
The Labor government's latest attempt to distract from its appalling border protection is a disgrace. A recent visit to Darwin by the Minister for Home Affairs, Brendan O'Connor, served only to draw attention to this government's failed border protection. His claim that Labor has significantly cut the number of illegal fishermen in Australian waters is open to criticism on two accounts. The first is that the coalition government was responsible for reducing the number of illegal fishermen. Secondly, under Labor's soft border protection policies there is no denying that boats that might otherwise have been used for illegal fishing are now more likely to be involved in people smuggling.
The money is so good.
The money is so good. Mr O'Connor asserts that it is a long bow to draw, but he is wrong. In 2006, federal Treasurer Peter Costello made a very clear statement to illegal fishermen when he set fire to a boat caught in waters off Darwin. Images of this were broadcast widely throughout South-East Asia, and the tough rhetoric was backed up with added surveillance infrastructure. At the same time, the coalition government was taking a very strong stance against illegal arrivals through its offshore processing regime and temporary protection visas. In 2006 there were just six people-smuggler boats and 60 illegal arrivals. So far this year we have 80 people-smuggler boats and 4,445 arrivals. You cannot tell me that the boats are not being diverted to people smuggling.
Unlike Labor, the coalition took a tough stance against people smuggling and illegal fishing. The results speak for themselves. Since the last election, Labor has announced an additional 4,000 beds in Australia's immigration detention network as the system fails to cope with Labor's border protection failures. I have said this before and I will say it again: Labor has opened more beds in detention centres than it has in public hospitals or aged-care bed facilities. Since the last election its only answer to more and more boats has been to provide more and more detention beds. The cost of providing these beds, plus the thousands more that Labor needs to establish during the first term, has been more than $350 million.
As I have mentioned in this House previously, my office is inundated with calls from people who have grave concerns about the large number of detention centre beds being announced in the Territory. They are also concerned that this government has lost its way and lost control of our borders. People are concerned by the vision of riots and demonstrations in our detention centres around the country, including in the Northern Territory.
Prior to the last election the Prime Minister denied all the way to polling day that they were expanding facilities, while taking up her clearly farcical plan to establish the regional processing facility in East Timor. Since then not one bed has opened in East Timor, but 4,000 beds have been opened and announced across Australia. For me in Solomon, this includes 1,500 beds at Wickham Point, which is near Darwin, and another 600 beds at the Airport Lodge. As a consequence of Labor's failure, our detention network is stretched beyond its capacity. If you want a more visible example of the depth of the crisis that Labor has created, you need look no further than the Asti Motel in suburban Darwin. The shadow minister and I were fortunate enough to go and have a look there recently, and we were very surprised to see it was at full capacity.
In my electorate we have experienced riots, protests and breakouts from the Berrimah secure facility, including in March this year and in September 2010 when 90 detainees escaped from the facility and staged a day-long roadside protest. This facility is located on the main highway—the one road in and out of Darwin.
Lucky they did not burn things down.
That is exactly right. Territorians have also raised with me that at the Airport Lodge facility there are limited physical recreation areas. Locals are also concerned about the proximity of this facility to an international airport, of which this facility is at the back door. There are serious safety and security issues.
The facilities at Wickham Point were announced as a 1,500 bed facility. However, concerns have been raised about whether each asylum seeker will have their own room or whether there will be more than one person in each room, as there are 1,500 rooms on the plans before the Department of Planning and Infrastructure. This facility is also designed to be built in a biting midge area, which raises serious health concerns and will put increased strain and pressure on our stretched health services. How can this Labor government say that there is no pressure on Territory services as a result of its failed border protection policies? There has to be a significant impact on the Northern Territory Police resources. There also has to be an impact on the health resources. There are cases where riots have resulted in hospitalisations at Royal Darwin Hospital. Territorians know, and I have said this before, that RDH is stretched to capacity. That this is a no-fail border protection policy and that it will not impact on Northern Territory services is a joke.
When the plans for another onshore detention facility were announced for Darwin, the government said it would cost $9.2 million but, as we found out, it cost $83 million. That is just for starters. I think Labor's detention crisis is a mess. It is a mess of their own making, but it is the Australian taxpayers who are having to foot the bill. If the minister is such a good negotiator, I would not be surprised if he bought a genuine Rolex at the markets in KL for a special morning price of $500 the day he negotiated the agreement of a five-to-one deal. This government has indeed failed and has terrible border protection policies.
Once again the opposition has returned to its natural path in these debates. It reverts to sloganeering. I hope we are not going to have an issue when discussing something like border protection by making light of it. This is not like making a cake or seeing whether the souffle rises; this is about protecting Australia's borders while looking at the real issues of protecting our humanity in accordance with Australia's international obligations. Talking about Australia's obligations to refugees, we were one of the most forthright countries in setting those up. This is not something that was simply bequeathed to us; this is something that we were a part of. We went into it with our eyes fully open, with a view to doing something positive for those people less privileged in the world than we are—people who suffer persecution—and making a genuine attempt to assist them. That is what a civilised country does. As I said, the opposition on this occasion, as on every other occasion in this debate, has reverted to type. Its standard operating practice is to move to fearmongering and to simple sloganeering.
I have the honour of representing the people of Fowler. As you know, Mr Deputy Speaker, it is the most multicultural electorate in the country. As a matter of fact, some 20 per cent of my electorate is Vietnamese. I actually spoke at a rally two weeks ago, on 30 April. That was the 36th anniversary of the fall of Saigon. The significance for this country of the fall of Saigon was that we accepted in excess of 200,000 boat people, refugees. We did the right thing. What this is about is us making decisions. What we have entered into with Malaysia, and the way we are going about this arrangement—which is a bilateral arrangement, as opposed to what occurred under the Howard government—is to move to attack the business model of people-smuggling. You will recall, Mr Deputy Speaker, that in the past we decided to change, on coming to government, and to put the emphasis on the crime of people-smuggling. I think if you look back through the respective law texts, those who were convicted of people-smuggling used to get up to about five years. We have changed that. We have made it a crime punishable by 20 years imprisonment. We are taking a hard line on those who trade in the people-smuggling business. We are also moving to attack, as I said earlier, the business model of this particular crime. We are moving to ensure that people who want to buy a ticket on one of these leaky old vessels will know that, in doing so, they will not be buying a ticket to Australia but will more than likely end up in Malaysia.
I recently had the honour of spending a couple of weeks with some of the Australian Federal Police, working in cooperation with the Indonesian police on people-smuggling. I had a pretty rare insight into the dynamics of that illicit trade. On the 17,000 islands that make up the archipelago of Indonesia, people who venture onto one of these leaky vessels pay up to about $10,000 for the privilege of doing so, to secure a right of passage to Australia. They are seeking to exit a country where 95 per cent of people earn less than A$5. It gives some indication of why people take the chance. But the point is that people are making those vessels available because they can get $10,000 to give these people transport to this country. That is why people are buying a ticket. They are coming through places such as Malaysia, through to Indonesia, and then to the ultimate destination of this country. What we are doing is applying a regional solution to a regional problem. This is not just a problem for us here in Australia; this is a problem that must be addressed within the region itself. That was what was discussed at the Bali conference. That was what people entered into agreements to move to do something about—and that is precisely what we acted upon: we entered into an agreement with the Malaysian government.
What is being said on the other side, in terms of the deal that was cut with us accepting, over four years, another 4,000 refugees, is absolutely hypocritical—coming from the Leader of the Opposition, who, when he had the chance to try and negotiate to form government, he went out and entered into discussions with the member for Denison with a view to doubling Australia's refugee intake. Let me remind you what our refugee intake is: 13,750 people per year. So he was actually prepared to buy government by placating the member for Denison and saying that they would double that on an annual basis. This is the hypocritical nature of the opposition: they want to come in here and challenge us on what we are doing with our bona fide position to attack the criminal model that underpins the crime of people-smuggling.
There is a very clear distinction in what we are doing as compared to the Howard government's Pacific solution. You will recall that the Pacific solution was solely the product of this country. It was a unilateral position where we used other, impoverished countries to provide accommodation for people that we wanted to extricate from this country for processing offshore. What we are doing with Malaysia, however, is entering into a bilateral agreement. We are involving the offices of the UNHCR. We are involving the office of the International Organisation of Migration. Those are simply matters of fact. The Prime Minister of Malaysia said this: 'What is important is that the entire operation will be conducted under the auspices of the UNHCR and the IOM as well. The international bodies will be involved to make sure that we adhere to the international laws of human rights and certain practices.' So it is fully acknowledged what those responsibilities are in this respect. The fact is that the UNHCR and the International Organisation of Migration will oversee the way this is being conducted. It is also of note that the regional representative of the UNHCR also said:
I think in that sense it has the potential to ... make a significant practical contribution to what we're trying to achieve in the region. And if it's a good experience other countries can look at it and say 'yes, that's a positive way of managing these issues. Perhaps we want to embark on similar or other initiatives under a regional cooperation framework.'
You have the UNHCR talking about the regional cooperation framework, not just some country wanting to belt people over the head and simply run the line that they are boat people.
A couple of weeks ago I had the opportunity to speak with a number of boat people who came here 36 years ago. The boat people of that time—refugees who were part of the 200,000 people admitted to this country after the fall of Saigon and defeat by the communists—have made a remarkable contribution to this country. To simply come out and engage in this debate with sloganism and simple fearmongering is to not take this matter seriously.
I would have thought that if anything the opposition would be coming out and simply agreeing to what has been proposed. I know you do not like doing that as a matter of course. There are two things the opposition have been constantly belting on about: firstly, stopping the boats and, secondly, increasing our humanitarian intake. Both of those are now capable of being achieved through this solution, which has been adopted on a bilateral basis with the Malaysian government. Those opposite should stay silent on this matter if they cannot add anything constructive to it and let us get on with the job of defending our shores with a proper and defendable border protection policy.
Order! The discussion is now concluded.
by leave—I move:
That the following bills be referred to the Main Committee for further consideration:
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
International Tax Agreements Amendment Bill (No. 1) 2011
Aviation Transport Security Amendment (Air Cargo) Bill 2011
Customs Amendment (Export Controls and Other Measures) Bill 2011
Intelligence Services Legislation Amendment Bill 2011
Question agreed to.
by leave—I move:
That Mr Secker be appointed a member of the Parliamentary Standing Committee on Public Works.
Question agreed to.
by leave—I move:
That Mr Neville be made a participating member of the Joint Standing Committee on the National Broadband Network.
Question agreed to.
by leave—I move:
That, in accordance with the provisions of the National Library Act 1960, this House elects Mr Adams to be a member of the Council of the National Library of Australia and to continue as a member for a period of 3 years from 13th May 2011.
Question agreed to.
I ask leave of the House to make a statement on behalf of the Joint Committee of Public Accounts and Audit concerning the draft budget estimates for the Australian National Audit Office for 2011-2012, and also for leave to present a copy of my statement.
Leave granted.
The Public Accounts and Audit Committee Act requires the committee to consider draft estimates for the Audit Office, with the chair ultimately making a statement to the House on budget day on whether in our opinion the Auditor-General has been given sufficient funding to carry out his or her duties. In support of this process the Auditor-General is empowered under the act to disclose budget proposals to the committee, which we then consider in making representations to government as necessary. This process reflects both the committee's status as the parliament's audit committee and the Auditor-General's status as an independent officer of the parliament.
The committee met with the Auditor-General in March to review the Audit Office's budget proposals for the coming financial year. The Auditor-General advised that, although facing a number of cost pressures, he is conscious of the overall pressures on the government's budget and is not seeking additional budget supplementation at this time.
The Auditor-General advised that, in common with other agencies, the ANAO is facing increased employee and supplier costs. He again reiterated that the Audit Office has had to absorb the impact of recent changes to the Australian Auditing Standards, which came into effect from 1 January 2010. Despite the support of the previous committee the ANAO was not successful in receiving additional supplementation in the 2009-10 and 2010-11 budgets to offset these costs. The Auditor-General advised the committee that the ANAO is now managing significant additional costs in this regard. The Auditor-General advised that further pressure could result from the possible implementation of the JCPAA's recommendation in report 419, Inquiry into the Auditor-General Act 1997. The recommendations would require the Auditor-General to review the adequacy of agencies' performance indicators. This is not expected to affect the ANAO's 2011-12 budget, as the report still requires formal government consideration. However, if implemented, in addition to initial set-up costs, ongoing costs of between seven per cent and 10 per cent of the cost of the financial statement program could be required. The committee would expect the Auditor-General to seek additional budget supplementation to cover this extended mandate in 2012-13.
The committee appreciates the efforts of the Auditor-General and his staff to establish a strong working relationship with the new committee. They have made themselves available to brief the committee regularly and have been responsive to our requests for information on a variety of topics. The committee looks forward to continuing a productive relationship with the Audit Office over the term of this parliament. The committee recognises the important role that the Auditor-General plays in scrutinising the government and will continue to support that role. The committee does not want to see the discretionary work of the Audit Office suffer due to future budget constraints and will endeavour to ensure that the office remains adequately resourced. This acknowledges the importance of the performance audit program and the contribution that the ANAO makes to better practice across agencies.
The Audit Office's total revenue from government will be $74.891 million in 2011-12. The Auditor-General has advised that his appropriation for the year ahead is sufficient for him to discharge his statutory obligations and planned audit work for 2011-12. He also advises that his office will be able to absorb the increase in the efficiency dividend over the next two years. Therefore, we endorse the budget proposed for the Audit Office for 2011-12. I present a copy of my statement on behalf of the Joint Committee of Public Accounts and Audit.
On behalf of the Joint Select Committee on Gambling Reform, I present the committee's report, entitled The design and implementation of a mandatory pre-commitment system for electronic gaming machines, which incorporates a dissenting report, together with the transcript of evidence, submissions and tabled documents.
Ordered that the report be made a parliamentary paper.
by leave—I present the first report of the Joint Select Committee on Gambling Reform entitled The design and implementation of a mandatory precommitment system for electronic gaming machines. There are 95,000 Australians addicted to poker machines and another 95,000 at risk. For every problem gambler, between five and 10 people are adversely impacted. Poker machine losses amount to some $12 billion a year, 40 per cent of which is from problem gamblers. Individual losses average $1,200 an hour on current high intensity electronic gaming machines. Even if the industry estimate of $3 billion for the cost of implementing precommitment is proven correct, this still represents little more than half what problem gamblers lose in a single year.
The implementation of a mandatory precommitment system on electronic gaming machines—or poker machines—was a major recommendation of the Productivity Commission and is a key aspect of my own limited support for the government. Mandatory precommitment—requiring players to preset limits before they start to gamble—will reduce the harm of poker machines and encourage all players to make rational and conscious decisions about their gambling behaviour. It will result in fewer people becoming problem gamblers in Australia.
This report makes 43 recommendations, most significantly the fitting of mandatory precommitment on all high-intensity poker machines by 2014. Players will need to pre-set their loss limit and will be locked out when that limit is reached. There will be cooling-off periods for limit increases, safeguards to prevent venue or machine hopping and an effective self-exclusion function. There will be no licence to punt and no fingerprinting. Venues will have the choice to change some or all of their poker machines for low-intensity machines having a $1 maximum bet and other loss-limiting features. The 88 per cent of poker machine players who currently wager a dollar or less will barely notice the change except that they will almost always finish their gambling session with more money in their pockets.
The report also recommends that smaller venues—those with 15 machines or less—be given until 2018 to implement the scheme and the establishment of a transition fund to assist them. Foreign tourists in casinos will have the option of being given a 24-hour card to override pre-commitment. And a new independent national body will be established to oversee implementation.
The committee received 119 submissions and heard from a wide range of witnesses from industry, from social service and church organisations, from academia, from experts and, most importantly, from a number of former problem gamblers who bravely chose to share their stories with us and offer their insights. I sincerely thank all these witnesses, as well as the members of the committee and the secretariat staff, for their contributions and efforts.
During the course of the inquiry, it became clear to me from various articles and public comments that unfortunately coalition committee members had already decided their position and that this would be one of dissent. This is disappointing given that they were, like other members of the committee, so strongly affected by the stories of those brave problem gamblers to whom the committee spoke. So too the poker machine industry has been a strident critic of these poker machine reforms. But the industry's multi-million dollar advertising campaign against the reforms—a fear campaign—not to mention intense political lobbying and a smear campaign against me personally, shows how desperate some in the industry are to overturn this historic opportunity for federal intervention in problem gambling.
Yes, we did hear many in the industry express their concern for problem gamblers and I believe that many of these concerns are genuine. But I ask of the others in the poker machine industry why they continue to criticise the Productivity Commission's work and its considered estimates of problem gambling, continue to misrepresent the evidence of precommitment trials, continue to exaggerate the costs, continue to complain about unachievable timelines, continue to overstate community contributions and continue to blame problem gamblers for an addiction caused by a fundamentally unsafe product. The number of Australians touched by or at risk of poker machine problem gambling in one form or another can be measured in the millions. No wonder our children will judge the members and senators of the 43rd Parliament on our willingness and success in seizing this historic moment and doing something about it, as they should. I commend the report to the House.
I seek leave to make a statement on the report.
Is leave granted?
Mr Deputy Speaker, I reluctantly grant leave but point out that the government itself rightly stipulate the program for the day, which states that Mr Wilkie would move that the House take note of the report, the debate be adjourned and Mr Wilkie would then move that the order of the day be referred to the Main Committee. We make the point that it is interesting that government members themselves do not want to follow the program of the manager of government business, but that is obviously a matter for them.
I understand that there has been no real objection to leave being granted. Leave is granted. I call the member for Wakefield.
I thank the member for Casey for his forbearance. The issue of poker machines is an issue that is very close to my heart. In my maiden speech, I spoke on how poker machines might be regulated in the community and this has been an issue that I have spoken on in the House many times since. So it is a great honour and pleasure to speak on the tabling of the Joint Select Committee on Gambling Reform's report in the House.
It was an honour to work with the committee, particularly with the member for Denison and Senator Nick Xenophon. I think they have done a good job in putting this issue in the public's mind and to the forefront of the business of this parliament. So I hope that the report is read and considered by members and that it helps form a policy response for members.
Great damage is done by poker machines, electronic gaming machines, in our community. If you take the time to meet with people who have become addicted to these machines, you hear a lot of stories about the hardship and sorrow for the victims of these machines: the addicts, and their families, as well as the people around them. We know that one in six Australians who regularly plays these machines becomes addicted to them. We know that on average they lose $21,000 a year. We know that the losers, the addicts, contribute about 40 per cent of the $12 billion in profits that are generated by these machines. Nearly $5 billion is poured into these machines by problem gamblers.
I have seen the damage done by these machines in my own electorate, which I have outlined to the House. I have a treatment service in Salisbury, and I can tell you that some of the people attending that treatment service lose a lot more than $21,000 in a year. The damage that is done by these machines demands a policy response. The two major reports by the Productivity Commission and this parliamentary report provide, I think, a strong foundation for a coherent policy response by this parliament.
There are a number of important recommendations in this parliamentary report entitled The design and implementation of a mandatory pre-commitment system for electronic gaming machines. I would ask the House to pay particular attention to recommendations 2, 11 and 34, which look to having a national jurisdiction for the regulation of these machines, the harmonisation of the standards—the so-called national standard—and also a national research capability. We simply do not regulate these machines appropriately, and we simply do not research their effects enough. Recommendation 12, which outlines our commitment to a pre-commitment system, is particularly important, as is recommendation 23, which outlines the committee's strong support for a self-exclusion scheme that will help addicts exclude themselves from playing these machines when they do not want to. It effectively allows them to bar themselves. I think recommendation 36, which recommends low-intensity machines, is a great step forward. It will do a lot of good in the community and prevent a lot of harm. Finally, recommendation 39 proves that the committee did listen to clubs and small venues and that it is aware of the very genuine concern that they would have trouble in the transition. The committee did listen to industry, to the addicts of these machines as well as to the social welfare organisations.
In conclusion, it has been a great privilege for me to be deputy chair of the committee. Again, I would like to thank the member for Denison for his very good work in chairing the committee. He was very fair to all members of the committee and ran a very good inquiry into this issue.
This is a very important report for the parliament, as I said. It will receive the strong support of the government. I sincerely hope that the recommendations find strong support in this House, and I commend the report to it.
I move:
That the House take note of the report.
The DEPUTY SPEAKER: In accordance with standing order 39(c), the debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.
by leave—I move:
That the order of the day be referred to the Main Committee for debate.
Question agreed to.
I move:
That the amendments be considered at the next sitting.
Question agreed to.
Debate adjourned.
Thank you, Mr Deputy Speaker. It is nice to see you after the break nice and comfortable in your seat. I rise to give my strong support for the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Bill 2011, or, as I call it, the 'handbrakes for handshakes' bill. I say from the outset how proud I am to be speaking on a bill that addresses an issue that has long been a bone of contention for many Australians but, unfortunately, has been all too readily relegated to the political too hard basket.
Most Australians would agree that executives who put in the hard yards, who produce good results for their shareholders, their company and the community, and who treat their employees well deserve an appropriate remuneration. Certainly, in an increasingly global jobs market, Australian companies need the flexibility to compete for the best CEOs and executives. Our world-class companies need world-class leaders. Hopefully, they will be led by Australians, but sometimes the best person for the job might be from another country. Nevertheless, many Australians are fed up with the largesse of executive salaries and the gross excess of corporate greed.
For example, in 2010 the Commonwealth Bank's CEO, Ralph Norris, pulled in more than $16 million in total remuneration, including salary, incentive payments and bonuses, superannuation, shares and other benefits, or $43,835.62 per day. That is about $8,000 per hour before tax, rounded up. Woodside Petroleum's Don Voelte took home $8.3 million—up a ridiculous 210 per cent from 2009. I choose these two companies first and deliberately, but also we could look at Rio Tinto's Tom Albanese, who earned $9 million—a staggering 328 per cent rise on the previous year. I worked in industrial law for awhile, and you do not often find increases such as a 328 per cent rise slipping through Fair Work Australia. With average yearly earnings for ordinary Australians at around $60,000, even the most diehard free marketers opposite would have to agree that these numbers and increases are nudging towards greedy. People of faith, whatever their god or creed, might even suggest that for every individual there is actually a salary ceiling and that once one goes beyond this amount one can only be defined as avaricious.
Thankfully, my good friend the Parliamentary Secretary to the Treasurer, David Bradbury, has demonstrated the courage and the conviction to do something about excessive CEO pay packets. In the last parliament, the Labor government passed legislation to address excessive payouts for executives and company directors by giving shareholders greater veto power over the so-called golden handshakes. This bill implements the recommendations of the Productivity Commission to beef up the regulation of executive pay. It is about: (1) improving accountability, (2) giving shareholders more information and (3) eliminating conflicts of interest in the process. It amends the Corporations Act 2001 to strengthen the non-binding vote on remuneration. It introduces a two-strikes test—not a three-strikes test but a two-strikes test—that requires the board to stand for re-election when they do not adequately respond to shareholder concerns over two consecutive years. When a company's remuneration report receives a 25 per cent or more 'no' vote, they receive a strike. Two strikes in two years will trigger a spill resolution whereby the board will be required to stand for re-election within 90 days. That is: two strikes, not three, which would then mean that they are out of here.
Directors and executives will also be excluded from voting in the non-binding shareholder vote on their own remuneration and on the spill resolution. This provision strikes the right balance and sends a strong signal to boards that want to push the boundaries of executive pay. Those boards that approve excessive packages for directors and executives will run the gauntlet when it comes to the shareholder vote. No longer will they be able to use shareholders as a rubber stamp for outrageous pay packets.
This bill will also put a stop to directors and executives hedging their incentive remuneration. This will ensure that their remuneration is linked only to performance. This initiative ensures that management is rewarded for looking after the interests of shareholders and vice versa, not themselves exclusively. It will also simplify the remuneration report by limiting disclosures to the key management personnel of the consolidated entity only.
Recent surveys that have received a bit of media attention show that more and more Australians are investing in shares; therefore we need to make it easier for all shareholders—both the experienced investor and the novice—to understand a company's remuneration arrangements so that they can then make an informed vote.
The legislation before the House will also reduce the regulatory burden on companies, which is another example of the Labor government slashing red tape. The bill also seeks to eliminate the conflict of interest that can arise with remuneration consultants. It is sometimes the case that these consultants are asked to provide advice on the remuneration of officers who can influence whether their professional services are used again in the future. It could be seen to be in the consultant's interests to provide advice the executive directors want to hear concerning their remuneration, and obviously this does not pass the common sense transparency test. So, to ensure greater independence, this bill will require these consultants to first report their advice to non-executive directors or the remuneration committee rather than the actual company executives.
This bill will help address the growing community concern about the executive pay of our companies. Most importantly, it also sends a strong signal to corporate Australia that enough is enough. To be fair, all companies have had their chance to rein in corporate greed but some have failed to do so. The Gillard government have had no other option than to act and I am very proud that we have. I look forward to the next speaker supporting this legislation along with the rest of the opposition. I commend the bill to the House.
I rise to support many of the provisions contained in the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Bill 2011. However, the member for Moreton presented me with an interesting opportunity to make comment on some of the intentions of the Gillard government and their methodology in conduct their legislative program in this House, and I am happy to take up that opportunity. I start by making a deeply personal confession to this House: my rugby league team is not doing very well at the moment. It is a source of great personal concern to me and it is something I struggle to cope with every day lately. I note the member for Moreton also supports a very lousy NRL team for different reasons.
Premiers.
Yes, they are much worse than mine. The Eels are doing badly at the moment, but I know the member for Moreton would agree with me that when Wayne Bennett became available this year and was seeking to coach another club, he would not have been concerned at the thought of his club paying the $3 million, $4 million or $5 million price tag to get Wayne Bennett. They certainly need him! He knows that you have to pay the price for the best in the business. Many Australians would understand that when you want someone to do a job, you have to pay them the remuneration that they deserve.
Instinctively, I do not have a problem with shareholders and boards setting an appropriate level of remuneration for their executives. I think it is lame for members of the government to come into this House and provide specific examples of executive remuneration, without reference to the performance of those companies. This legislation is intended for those people who take what is regarded as an unacceptable remuneration when the company involved has not performed, where there is no return to the shareholders. But it is the responsibility of shareholders and the owners of these companies to set that remuneration and to rise and fall on the merits of their decisions.
Once again, we are seeing a constant procession of Gillard government backbenchers in this place, whether it be the member for Fraser or the member for Moreton, wanting to dictate terms on how to run corporations and what should be a fair level of remuneration. It is a notion that I reject. I am more a proponent of the Adam Smith model, the invisible hand in the economy, that says that these things will work themselves out—and they should be worked out by those people.
Too often in our society today we want a great return, big bucks, for our shares. That is a great thing, a good instinct, but when a company fails, we cannot separate the concept of risk from return. There is a risk in investing in companies and there ought to be risk. There are successful companies and we want to make sure that we have a government that runs a great economy that allows for great success. But of course there will be failure.
Some of the provisions in the legislation before the House today improve the ability of shareholders to have a greater say over the management of their corporation. We do not instinctively oppose those provisions. There should be transparency in regulation. There should be great transparency for shareholders in what happens within their own entities. It is important that government backs up that principle wherever possible. Some of the provisions in this legislation can assist that. We are reducing the level of complexity through some of these provisions and they are noncontroversial from the opposition's point of view. However, in other ways, this legislation does not recognise that in recent years there has been a great correction in many businesses and in the activities and interests of shareholders. And that is a good thing. I note Wesfarmers capped salaries and reduced bonus payments a few years ago. That was a great example of the market correcting itself. If I was a shareholder in an enterprise and I was speaking to shareholders around this country, I would tell them that this is something they should pay attention to. This is something they should take a great interest in. For every good example of course there is a bad example, but I say to every member in this place: we have more good examples than bad examples, and Wesfarmers is a very good one.
I agree with the member for Bradfield who made the peculiar point about baseball, where too often in public policy we seek to make simplistic policies, two strikes and you are out, referring to a sport that really has no connection with good public policy. In reality, if baseball had five strikes and you are out, it would be five strikes in policy. It is quite populist nonsense. As proposed, the coalition have some concerns with this two-strikes rule. I agree with the coalition's amendments. The member for North Sydney and others have foreshadowed an amendment when it comes to the level of support required to reject a remuneration report, which can lead to a spill of the board—a very dramatic turn of events within a corporation—where the bar has been set too low. This amendment will reduce the two-strikes rule not just to 25 per cent of votes cast but 25 per cent of the total amount of votes. I think it is a very worthy amendment for the government to consider.
If you set this threshold too low, we will not be assisting the ability of companies to perform well and to get on with the business that they need to be getting on with—that is, running their own entities, primarily. We should not disconnect what a senior executive is and the source of those business traditions. In the 1800s, as corporations grew, there was a need for particular managers to not just manage the business but manage the interests of shareholders within corporations. This is a very important concept. Today that is still the role of senior executives. They are there to manage the interests of shareholders, the people who have invested funds in those businesses. Any good senior executive sees the interests of his or her shareholders as their prime responsibility, and so it should be. Of course there will be those who do not do that. Telstra, notably, is a good example of the system not working. But I say to those sceptics: in situations like Telstra where there was a massive government monopoly, the process of deregulation and the privatisation of Telstra will be fraught with difficulty until we get to a more free market approach in this country. In Sol Trujillo's time there was a very interesting situation. When the company was performing badly in terms of its share price, the situation of the chief executive's pay structure and the board's pay structure was outrageous. Shareholders have a right to do that and an obligation to regard it as unacceptable and to do something about it. So, in terms of what this bill proposes, you can see in the government's efforts some good attempts to fix some of these problems. When we say remuneration should match performance, again that is something that is very difficult for us to regulate specifically. The proposal in this bill to change regulation with respect to the use of remuneration consultants is fraught. We cannot design a regulation or legislation to say you should use consultants in a certain way and should derive a certain outcome. That is going to be fraught with a whole series of undesirable and unintended consequences if this law is passed. Businesses are complex; the modern economy is complex. Often these attempts by Labor governments in particular, where their instinct is to regulate first and think later, lead to things that we do not want. While we may be doing things like prohibiting the hedging of incentive remuneration, and there are certainly issues around that and some worthy objectives about how proxies can vote and other things, specifically mandating about the use of consultants and how to apply a remuneration consultant again I do not think is going to add a lot of value to this process. It will not deal with what the member for Moreton just raised as a concern. I do not think it will deal with what the member for Fraser raised as concerns. Yet it does have the capacity to create opportunities for inadvertent criminal conduct. The fact that this will be backed by criminal sanctions again expands the concept of personal risk at the senior management level.
When you think about why someone would be paid such an amount of money, we need to remember that this is not the Middle Ages; this is not a person who has been born into this role—not a person who has inherited it; not someone who has the absolute force of government to appropriate wealth off ordinary citizens. These are people who primarily earn their wealth; who are being paid to perform at a very, very high level under pressure that most of us are not under, at a personal risk level, and in the face of criminal conduct. This bill adds to that burden, and I note that for the House. We are adding to the personal risk taken on by a director and the potential opportunity for them to be sent to prison by the government for acting inappropriately. Of course the government has a role to regulate and legislate, and company directors need to act ethically and within the law. It is important that we make sure they do.
The member for Fraser came into the House and went on with an expansive diatribe about who has wealth in our society. In one sense I am happy about that because it is the genuine socialist intention of the Labor Party coming to the fore in the member for Fraser, and I say we should have more of it. When socialists were socialists and conservatives were conservatives, I think things were better. With the modern Labor Party today it is hard to work out what they are. The member for Fraser certainly went on with a diatribe about who holds wealth in our society. What he failed to recognise with the increase in personal wealth of the top one or two per cent or the top five or 10 per cent was that with that increase in personal wealth came a massive increase in the wealth of our entire society. What we are seeking as a government and as a nation is to increase the wealth of all of us, to increase the ability of a person to earn a living, to have access to opportunity to make good for themselves. We should not instinctively get upset about it when somebody does well for themselves and earns a great pay packet, even if it is more than ours. I can tell you, each one of those people named by the member for Fraser and the member for Moreton earns probably more than I ever will in my lifetime, but I do not have a problem with that. It is the best system devised by man. As Winston Churchill once famously said, democracy is the worst of all systems, except for all the rest. He was right about that. Some people lament that capitalism produces very wealthy people, but capitalism lifts everybody in our society. Every other system that the member for Fraser mentioned drags everybody down—workers get dragged down, corporations get dragged down, executives get dragged down. That dragged-down model that the member for Fraser highlighted as a paragon of virtue makes us all poorer. It has been established in every Eastern European country and other parts of the world that experienced communism or socialism that to the greater degree they had such a system, the poorer their nations were. Many of them are still going through great reconstruction.
I do think that, every time a government backbencher comes in here and says that we have some individuals in our society, whether they be a Wayne Bennett or a company executive, who make more than the rest of us, we have to remember that Wayne Bennett is lauded as a hero in our society regardless of how much money he makes. And so he should be. We should not deride and denigrate those architects of great wealth in our society who are in the private sector. Every time this government says it has created all these jobs, I say it has not created those jobs; they have been created by the capacity of the private sector to invest and to create and grow the wealth of our nation. They are the people who do those things. They are the people who generate the jobs. Every day the Prime Minister says they have created so many jobs. The only jobs she has created through her pink batts scheme and other great spending schemes have come at an exorbitant cost that nobody would pay. If we had the same accountability that company directors face every day from shareholders and regulation, and other systems in this place, I do not think this government would stand up to much scrutiny at all in terns of its expenditure and use of public money and the cost per job of the jobs it says it has created. Any cost-benefit analysis of the jobs created by government expenditure would show they are not competitive with jobs in the private sector. In fact, the cost is exorbitant, lavish and unsustainable.
That is why on legislation like this I am happy to speak in favour of provisions that empower shareholders and give them greater transparency and allow them to carry out their legitimate function, but I do say to the government that this is not an opportunity for them to denigrate those individuals in our society who work so hard and produce great wealth for everybody. It is not the opportunity to lament a system which allows all of us to earn more and do better. We have great small businesses in our country that can become medium enterprises or large enterprises, and that is a great thing. We have people who can start their own enterprise and become very wealthy, and that is a great thing. We have people who choose to become senior executives or managers of companies in our society, and they should be free to earn what they deserve to earn, as decided by their shareholders and other people. This narrative that the government is building around this bill does not match the reality of what these provisions are actually going to do. Many of these provisions are good and ethical, and many of them I think will add to the regulatory burden, which will create greater and greater risk. My main point in supporting this bill is simply that we should not always seek to regulate first and think later.
I support the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Bill 2011. When I heard the member for Mitchell speaking about communism and socialism I thought I was back in the 1940s and 1950s. He never gets past history lessons—it is extraordinary. The member for Mitchell and so many of those opposite truly believe in Reaganomics, the trickle down, giving bits and pieces, cents and pennies to the serfs, while they suck up to the captains of industry. It really is quite extraordinary.
We are looking at transparency and accountability in corporate Australia. Those opposite parade and pose about being supporters of the market and free enterprise. Yet it took a Labor government to bring in trade practices legislation in 1974 and consumer and competition reform. Those opposite did not do it. Did those opposite want to open up the banking system? No, they did not. It took a Labor government to do that—to lower tariffs, to internationalise the economy, to float the dollar, to bring in superannuation, all the great reforms with respect to economic development. But the idea of those opposite when they were in power was simply to tax the Australian public and they never found a rort they did not want to support with respect to middle-class welfare. They always side with big tobacco, big distillers and big business.
We hear speeches from those opposite saying this sort of thing all the time, accusing us, through this legislation, of communism or socialism. For heaven's sake! We are trying to empower shareholders. We are trying to strengthen the regulatory framework to empower shareholders when their outrageous and egregious rorting of what the average person would think is overly generous executive remuneration takes place. That is what we are trying to do. I have heard the member for Mitchell speak. You would not think he was speaking in support of the legislation. You would not think those opposite actually support the legislation but in fact they do because they know very well that when you go to AGMs for public companies and to corporate boardrooms executive remuneration is always a topic of discussion.
We know that the Australian public does not like egregious executive remuneration packages and we know that particularly in view of the global financial crisis. We know what happened in America, across Europe and in this country at that particular time. Did we see a diminution in the payouts given to executives? Many of those companies failed. I am not going to start naming those companies here. It was on the public record. Australians, Americans, Europeans and people across the globe saw payouts from government, we saw bank guarantees and massive amounts of taxpayers' dollars propping up the corporate sector—banking, finance and business. Yet did we see the reciprocity of stringency? Did we see thriftiness? Did we see cutbacks generally from the corporate barons? No, we did not. We saw those people take the public money but they kept the private money for themselves in their profits.
Middle- and working-class Australia supported the corporate sector during the global financial crisis. Taxpayers did it. That is why we went into deficit—to support jobs and to support the business sector. Still there was no mutuality from the corporate sector. We did not see the same degree of frugality that was necessary.
Here we are making sure that mums and dads who are shareholders, small business operators, middle Australia, battling Australia, people who have been doing it tough in the past few months, in cyclones, floods and fires across this country, who are shareholders through their superannuation funds or privately in their family financial arrangements, have a better say with respect to corporate democracy and greater transparency and accountability, but those opposite cannot even see that. They make speeches in this place like the member for Mitchell, putting up straw men and hailing to the chief of Reaganomics.
The trickle-down effect is what those opposite believe in. We believe in free markets and we believe in free enterprise. We think that giving small business operators and mums and dads who are shareholders a greater say in corporate democracy will be good for the Australian economy, good for financial security and good for regulatory and corporate practice. That is why we are doing what we are doing. And, I say to the member for Mitchell, we are following the advice of the Productivity Commission.
As far as I am aware, the Productivity Commission is not affiliated to the Australian Labor Party. It is full of people who actually believe in free enterprise, who recommend in the main that we adopt free enterprise solutions with respect to economic prosperity and the economic development of the country.
In April 2010, the government announced reforms to strengthen the remuneration framework in response to the Productivity Commission's report. Does the member for Mitchell think somehow that the Productivity Commission is a bunch of closet communists or socialists? I do not think so. You can read any of their reports with respect to so many areas—for example, they handed down a draft report on aged care earlier this year. I cannot see that somehow that is full of communist rhetoric or is something Karl Marx would have loved. We have taken up this particular recommendation from the Productivity Commission and we have carried it out.
The Productivity Commission actually said that corporate Australia in terms of its governance and remuneration framework was amongst the best in the world and ranked high internationally. That is what they recommended. They made a number of recommendations which would improve that and this bill contains those measures. The Productivity Commission made clear that directors need to be accountable to shareholders for decisions with respect to executive remuneration, to address conflicts of interest, particularly with respect to setting the processes for executive remuneration. The Productivity Commission recommends things and we have followed up those recommendations. The point of the matter is this—and those opposite should really take note of this. The catalyst for this inquiry was the concern that executive pays had got out of hand. Some people in this place have actually listed some executive pays. Let me say this about the banking sector in this country—the big four—which, through the global financial crisis, benefited from the federal Labor government's management and its provision of bank guarantees. They have some of the highest paid executives in the country, with the Commonwealth Bank of Australia now at the top of that list. Their chief executive, Ralph Norris, earns a remuneration package of $16.2 million. He might have skills, talent and ability which deserve money in the marketplace, but if you were a police officer and your wife a part-time secretary and you were living in flood affected Booval, in my electorate, you would think that $16.2 million is a pretty large salary.
That is not the only example. There are people like Westpac chief executive Gail Kelly, who earns $9.6 million. We want to make sure that, if these types of salaries are paid, shareholders have a say in decision making about it and that it is not simply driven from above, with boards of directors running the show in a way that lets them set their own remuneration with little transparency, accountability or corporate democracy.
The chief executive of the Australian Shareholders Association recently welcomed this report, saying:
The Global Financial Crisis demonstrated the consequences of excessive risks taken by many companies and their executives. We saw corporate collapse and billions of dollars of shareholder value disappear into thin air from poor management decisions. However, executives were never really held accountable.
He also said:
We have long argued that the interests of directors and executives should be aligned with those of shareholders and the community. It seems somewhat difficult for the average Australian to comprehend how his or her job and financial survival can be constantly questioned, while senior executives can preside over huge losses and destruction of value, and at the same time receive a bonus.
This bill does address those concerns. It contains a provision to subject directors to greater scrutiny and accountability through the two strikes test, which people have talked about, if they do not respond to shareholder concerns on remuneration issues. The provision will give shareholders the opportunity to remove directors if the company's remuneration report receives a 'no' vote of 25 per cent or more at two consecutive annual general meetings.
New transparency requirements will apply to remuneration consultants—and I know the member for Mitchell is not happy about that—where there are conflicts of interest. The package eliminates those conflicts by prohibiting directors and executives who hold shares from voting on remuneration issues. I cannot see how that is a problem. If there are conflicts of interest in local government, people abstain. I have been on the board of numerous church and charitable organisations and, if there are conflicts of interest, people abstain. I cannot see a problem in that regard with respect to corporate Australia.
The bill will ensure that shareholders have the ultimate say in the composition of the board. Public companies will be required to obtain the approval of shareholders in order to declare, at a company meeting, that there are no vacant board positions. And that is the way some boards of directors run the show at times—you get your little group together and, if you are all of one mind, you can all look after one another. We want to make sure that that is open and transparent as well.
I think the bill demonstrates the proactive leadership of the government in this regard and I think the average Australian will think it is appropriate to empower shareholders in this way. I think the average Australian in my electorate—in Blair, in Ipswich or in the Somerset—will think that we are responding appropriately to the Productivity Commission report and that we are doing the right thing by investors.
I think that corporate Australia needs to have a look at community trust. I think there is a fundamental issue in that regard. I think corporate Australia really needs to have a look at that. We understand that there is a shift to incentive pay structures. We understand that—that is what is happening globally and, if Australian companies want to compete in the global market, that has to occur. We can understand wanting to hire the best person for the job and the need to pay that person appropriately—to structure the pay, the salary and the remuneration to maximise their performance. When I was in business myself, as a senior partner of a law firm, and I hired staff, I did that—I made sure I got the best person possible and I paid them the best salary I could to do so. It has often been described as a war for talent. We know that.
But we cannot pay egregious salaries in a way that betrays community trust. The instances of excessive executive payments and perceived inappropriate behaviour simply reduce the confidence of investors and reduce the confidence of Australian taxpayers, and the Australian community generally, in the corporate sector. We do not want corporate Australia to be criticised by the Australian public; we want the Australian public to support the corporate sector. We want that because we want to make sure that every kid who lives in my electorate and electorates across the country can have a job, get financial security and achieve everything they want in life. We want those kids to aspire to become teachers and doctors and lawyers and company executives and engineers and politicians and physiotherapists. We want them to achieve everything they want in life, but we do not want them to lose trust in the employment arrangements of corporate Australia, whether the employer is in banking, finance, superannuation or anything else.
This legislation is good. It is not about communism; it is not about socialism; it is about supporting community trust in the corporate sector in this country. It is about transparency and accountability. It is about good practice. It is about making sure that boards are accountable to shareholders in the way the Productivity Commission recommends. This is not about a betrayal of free enterprise and the market system; this is about strengthening that. It is only Labor that truly believes in free enterprise and it is only Labor that truly believes in the market economy. Those opposite say one thing but when they get into power they do something else. The whole history of the Liberal Party is about betraying the workers and the forgotten people that Robert Menzies claimed the Liberal Party should aspire to support. Their whole purpose has been to betray and to be on the side of big business, and that is why the member for Mitchell make speeches such as the one he made tonight. (Time expired)
Debate adjourned.
by leave—I wish to inform the House that our ambassador in Indonesia has informed me that the Indonesian Supreme Court has today accepted Scott Rush's appeal against his death sentence and has instead sentenced him to life.
Australians will greet this decision with relief. The Australian government welcomes this decision by the Supreme Court. It is a bipartisan policy in this country that we oppose the death penalty. The government remains in close touch with Mr Rush and his family. Mr Rush's parents have been informed. His parents have shouldered a heavy burden over these years of waiting.
There are, of course, two other Australians on death row in Indonesia, and Mr Chan and Mr Sukumaran have also launched judicial appeals against their death sentences. We will continue to provide consular support to both men and their families.
Having spoken to the Rush family, who come from Brisbane, on a number of occasions over a period of time, I am sure the family will welcome this decision with great relief.
I rise to support the comments made by the Minister for Foreign Affairs in relation to the news on Scott Rush, one of the Bali Nine, who was convicted of drug trafficking and whose appeal to reduce the penalty from death to life imprisonment has, as we understand it, now been successful.
Scott Rush was a young man, aged 19, at the time. It was his first visit to Bali, but he had a somewhat troubled past. If ever a lesson was needed for people to understand that, whatever we might think of the judicial system or the penalties in place, we must abide by the laws of other countries then this is it. I note that at the time of his sentencing Scott Rush put up on a website these words:
I apologise for bringing shame on Indonesia and Australia, my parents, family and friends. I am very, very sorry for my actions. I know many people have been hurt by illegal drugs, such as my parents, and people who take illegal drugs, and I am so sorry. I did say all this publicly in court.
He is a young man who has learned a very harsh lesson. Our thoughts are with his family and his friends. However harsh it may seem to Australians, we welcome this decision of the Indonesian courts.
I rise to speak on the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Bill 2011. The coalition, as indicated by the shadow Treasurer, largely support the bill but we have reserved our right to move some amendments at a later time and in another place. We support the bill because it implements some of the recommendations made by the Productivity Commission in its recent inquiry into executive remuneration in Australia, which reported on 14 January 2010. It was one of the myriad reports and inquiries that the Labor government has implemented since it came to office in November 2007.
Of course, talking on a financial bill on budget day is a coincidence. I note to the House that tonight we will see some of the consequences of the Labor Party's mismanagement of Australia's finances and Australia's budget situation when we see, in just a couple of hours, one of the biggest deficits ever laid down in this place.
It is a concern any time the Labor Party moves any sort of regulation in this space because we see that when they move into this space they do not do it well. The action usually has more of a consequence than was intended in regard to the problem that they are seeking to solve.
The coalition understands that there is broad community concern about executive remuneration, particularly during the bank reporting season. In some respects I understand that the numbers paid to some top executives are beyond community expectations. It should not surprise anyone that those concerns are raised through the media, through our offices and through discussions at community forums around the place. However, there is always a danger in this game that we identify problems without any reasonable expectation that we can solve them. It is easy to play the politics of envy and it is easy to do the 'us versus them', but we do our constituents a grand disservice if we raise expectations of fixing a problem we cannot ever realistically address. The truth is that company directors and the shareholders of companies make decisions on how much they pay their executives, their CEOs and their staff.
The other fact of the matter is that we are part of a global economy and we have to compete for labour and skills at all levels. And this is one of the areas in which we have to compete for skills. So we do need to be careful, in some of the contributions from members opposite, that we are raising expectations in the community that these amendments will massively change the way that these salaries are brought about and the amounts that do seem at times to be beyond community expectations, because the fact is that even with these changes we are not going to see smaller executive remuneration in the very near future. In fact, I would hazard a guess that this year we will see some quite extraordinary amounts of money paid to individuals based on the performances of their companies. In particular, as we have a very strongly performing mining sector, we are going to see some very large amounts paid to people involved in it. The government is not going to stop that, and constituents in my electorate will understand that the government and, for that matter, those of us on this side do not seek to do so. What we do seek to do is empower shareholders more, particularly when the Productivity Commission, whose work I have a very high regard for, is making some sensible recommendations on how we do that. The recommendations in this bill, as I said at the beginning of my contribution, in large part are recommendations that the coalition can and will support in amending the bill.
I referred to the politics of envy that those on the other side occasionally like to play on these matters—the raising of 'us versus them' because it is cheap and easy politics to get a run out of. Recently we saw a very bad example of that. The Treasurer, who will shortly deliver the budget, a budget in which he is handing down a $50 billion deficit to add to our massively building debt, a month or so ago made some ill-informed and unfortunate comments in the media in relation to the payment structure for the Governor of the Reserve Bank. I know there have been people on my side of politics who have been critical of some of the actions of the Governor of the Reserve Bank, but while those on the other side like to pat themselves on the back for their management of the economy during the global financial crisis I think there is little doubt that Glenn Stevens, through the actions that he took through monetary policy, played a very significant role in ensuring that Australia survived the worst of the global financial crisis. He has had a very well thought through and clearly set direction in the way in which he has managed Australia's monetary policy in recent years, and it was a big mistake to raise the issues in relation to his salary, given the amounts that people who are managing similar institutions are paid in his industry not just in Australia but also around the world. The governor goes about his job in a very competent fashion and he does what we in this parliament ask him to do, which is manage Australia's monetary policy. He does an excellent job particularly within the band of inflation. It was very ill-informed of the Treasurer to go down the populist road and raise those issues just a few weeks ago in a 'politics of envy' style. Unfortunately, it was what we have come to expect from a man who should really be focusing on how to bring the Australian fiscal position back to a much more reasonable position. If the Treasurer did his job half as well as the Governor of the Reserve Bank does we probably would not be seeing some of the numbers in tonight's budget.
As I said at the beginning of my contribution, the coalition largely supports the direction of this bill. We will have some concerns in the Senate, which the shadow Treasurer so ably, as usual, outlined in his contribution to this place some time ago, back in March. Amendments to the bill will be well thought through and well-considered. It is a bill which seeks to empower, largely, shareholders. It seeks to make some changes around voting. It seeks to make some changes in relation to remuneration consultants. I understand that the member for Mitchell reflected on those earlier, which seemed to start up the comical contribution of the member for Blair; it got him a little bit worked up earlier. The bill deals with the hedging of incentive remuneration. It deals with the declarations of no vacancies at annual general meetings. It deals with the way that proxies and remuneration reports are dealt with and with recommendations out of the Productivity Commission, which should be taken seriously. I do not think there is any doubt about the quality of the work that the Productivity Commission does for the Australian public; it is always there.
In those respects the coalition is broadly supportive of this bill and will not oppose it, but we will be seeking to make some changes at a later time.
Debate adjourned.
Sitti ng suspended from 17:58 to 19:30
I move:
That this bill be now read a second time.
Introduction
The purpose of this Labor government, and this Labor budget, is to put the opportunities that flow from a strong economy within the reach of more Australians.
To get more people into work, and to train them for more rewarding jobs. So that national prosperity reaches more lives, in more corners, of our patchwork economy.
To take full advantage of the seismic shift in global economic power, which positions us as a prime beneficiary of tremendous economic growth in our region.
And to succeed in the good times as we did in the bad—by choice, not by chance—by applying the best combination of hard work, responsible budgeting, and well-considered policies to the difficult challenges ahead.
This budget is built on our firmest convictions:
That just as our focus on jobs helped Australia beat the global recession, so too can a focus on jobs ensure we maximise our advantages in the Asian Century.
And just as deficits are the right thing to fight a global recession, or to rebuild from natural disasters, so too are surpluses right for an economy set to grow strongly again.
We have imposed the strictest spending limits, delivering $22 billion in savings to make room for our key priorities, ensuring our country lives within its means.
We are on track for surplus in 2012-13, on time and as promised— and this provides the solid foundations for the targeted investments we announce tonight.
Australia emerged strongly from the global recession, creating hundreds of thousands of jobs while our peers shed millions of jobs.
Our public debt is a tiny fraction of that carried by comparable economies, our fiscal position is the envy of the developed world. An investment boom is gathering pace.
Yet our patchwork economy grows unevenly across the nation.
Natural disasters have devastated families, cities and towns. The high dollar hurts our tourism and, of course, many manufacturing industries, especially small businesses.
For some, talk of an investment boom seems divorced from reality. Wages are growing, yet many live paycheque to paycheque. Not every region prospers. Not every health service is as good as it can be, especially for the mentally ill.
Unemployment has a four in front of it, yet some households have never had a breadwinner. The economy cries out for workers, yet too many are left behind, unwilling or unskilled—and untouched by the dignity of work.
That is why the core of this Labor budget is:
a plan to build the more productive workforce our economy needs, including a $3 billion training package, new ways to get people into work, and critical new investments in economic infrastructure;
a plan for better schools, hospitals, and health care, including a total of $2.2 billion for mental health services and $1.8 billion for regional health facilities;
and cost of living relief for families, investments in a sustainable Australia, and new assistance for small businesses and manufacturers.
All while making the difficult decisions necessary to get back in the black by 2012-13—light years ahead of other major advanced economies.
Economic Outlook
Nobody will forget the recent natural disasters which destroyed lives and livelihoods, here and abroad. The human tragedies are foremost in our minds, but there are economic consequences as well.
The floods and Cyclone Yasi will cost our economy $9 billion in lost output and reduce real GDP growth by ½ of a percentage point in 2010-11.
Combined with the impact of disasters in New Zealand and Japan, the hit becomes ¾ of a percentage point this year—pushing growth well below its long-term average.
These events have shaken our economy, but they have not knocked our economy off its course. Real GDP growth is forecast to be a strong four per cent in 2011-12 and 3¾ per cent in 2012-13.
Over 300,000 jobs have been created in the past year and the unemployment rate is forecast to fall further, to 4½ per cent by mid 2013, creating another half a million jobs. Mining investment will rise to around eight times the level preceding the boom to $76 billion in 2011-12, underpinned by the highest sustained terms of trade in 140 years.
But not every family or business is feeling the immediate benefits.
The dollar is around post-float highs and this makes it difficult for some sectors, particularly those that compete in international markets.
We see lingering effects from the global recession in consumer caution, a slow improvement in people's wealth, and tighter credit, all of which have had an impact on government revenue.
But with the investment pipeline ramping up and unemployment falling, the boom will test our economy and our workforce, and price pressures will re-emerge.
That is why we have strict spending limits—so that we do not compound these pressures—and why this Budget will help get more Australians into better jobs, improving productivity and participation.
Building the Productive Workforce our Economy Needs
Tonight I announce Building Australia's Future Workforce, a plan to help industries get the skilled workers they need, to modernise apprenticeships, and to ensure more Australians enjoy the economic and social dividends of work.
Training
Our plan begins with a new approach to training:
Putting industry at the heart of a $558 million National Workforce Development Fund that will deliver 130,000 new training places over four years;
Better meeting the needs of industries and regions with a $101 million national mentoring program to help 40,000 apprentices finish their training;
Accelerating apprenticeships, letting them progress as they acquire the right skills, by investing $100 million in more flexible training models;
Plus up to $1.75 billion, in addition to our existing $7 billion investment, to leverage ambitious reforms of the vocational education and training system with the states;
And funding 30,000 more places in the Language, Literacy and Numeracy Program to provide the basic skills essential for a job.
Along with training more Australians for work, we also need to attract highly-skilled migrants to live and work in regional Australia.
For the first time, we will allocate 16,000 skilled migration places to the regions, complemented by Regional Migration Agreements for communities with skill shortages, and we will introduce Enterprise Migration Agreements for large resource projects in return for a financial contribution to train Australians for the future.
Participation
Better training is essential for the workforce our economy needs, as is encouraging, rewarding, and insisting on the participation of more workers.
Providing opport unity, demanding responsibility
We believe in extending the benefits of work to every capable Australian—single parents and jobless families, young Australians, the very long-term unemployed, the disabled, and older workers whose experience we need and value.
In a growing economy like ours, we cannot justify the fourth highest proportion of jobless families in the developed world.
A wealthy country like ours has no excuse to leave people out of work.
So we will cut effective tax rates for 50,000 single parents by up to 20c in the dollar, invest $80 million in their skills, and transition more parents with high school kids onto job search payments.
To remove tax breaks that encourage people without kids to stay at home, we will phase out the dependent spouse tax offset beginning with partners under 40.
To remove incentives for young people to leave study for the dole queue, we will extend Earn or Learn requirements to 21-year-olds and create new pathways to full-time employment for early school leavers.
To get the very long-term unemployed into work, we will invest $233 million in new support programs and 35,000 targeted wage subsidies—encouraging employers to hire those who have not worked for more than two years.
To slow the growth of disability support pension numbers and get more people in the workforce, we will bring forward strict new work tests, update the definition of incapacity, introduce new requirements for younger recipients, provide more wage subsidies, and allow more hours to be worked before payments are suspended.
To address entrenched disadvantage, we will introduce participation plans for teen parents and new requirements for jobless families. We will extend income management, and develop new place-based programs to support local and regional employment.
For seniors, our work bonus now allows an extra $125 a week of earned income before their pensions are affected, and we will better recognise their skills and experience.
Infrastructure
Our focus on training and participation is crucial to building productivity, as is our focus on infrastructure.
That is why we are building the National Broadband Network and investing $36 billion in vital roads, railways and ports, like the Moreton Bay Rail Link in Queensland, the Gateway project in Western Australia, the Western Ring Road upgrade in Victoria, and now additional funds to duplicate the Pacific Highway.
Tonight I announce new approaches to supplement our proud nation building record.
We will help remove barriers to private investment in nationally significant public infrastructure by reducing the tax uncertainty that lengthy and complex projects face.
We will strengthen Infrastructure Australia with extra funding and greater independence, and we will produce the first ever national construction schedule to give super funds and other investors the certainty they need to invest with confidence.
Better Hospitals, Health Care And Schools
We will keep our economy strong so that we can invest in the things all Australians rely on: better health care and education wherever they live.
Health Care
We are already guaranteeing $16.4 billion in additional growth funding for public hospitals over six years, and another $3.4 billion over four years for emergency departments, elective surgery and 1,300 subacute hospital beds.
I announce tonight a total of $1.8 billion in investments in hospitals and health care for our regions, from the latest round of the Health and Hospitals Fund.
New funding of $717 million over five years will expand access to diagnostic imaging services and make new medicines and immunisations more affordable.
An extra $53 million will improve access to public dental services, particularly for those on low incomes, as a first step towards significant reform in 2012-13.
Tonight I am particularly proud to announce new improvements to mental health services.
Untreated mental illness can lead to disengagement, unemployment, family breakdown, substance abuse, homelessness and, sadly, suicide.
We demonstrate our commitment to addressing mental illness by making the room in a tight budget for $1.5 billion in new initiatives, as part of our $2.2 billion package to deliver better care.
This package will focus on support for the severely ill by funding organisations to co-ordinate both clinical and social support and helping to relieve the pressure often felt by families and those with a mental illness in navigating a complex system.
We will also address prevention and early detection for young people, by investing a further $419 million in headspace and early psychosis prevention and intervention centres, as early intervention often avoids a tragic cycle of hospitalisation and social isolation.
We will also invest in better access to primary care, a more responsive system and a new National Mental Health Commission that will drive future reforms.
Schools
This budget also builds on our proud record of lifting education standards, providing $425 million to reward top performing teachers.
The Teach Next initiative will provide $18 million for new pathways into a teaching career.
We will invest $200 million to support disabled school students and we will also extend the National School Chaplaincy program, taking new investment in schools to over $800 million in this budget.
Helping Families, Regions And Businesses
While our national economy is strengthening, not all Australians automatically share in the opportunities this creates.
So this budget will help families under financial pressure, regions under pressure to modernise and grow, and industries under pressure from the rising dollar.
Cost of Living
We take seriously our responsibility to deliver financial assistance when it is needed and to provide extra support for families with kids at school.
From July this year, we will deliver up to a further $300 a year of the low income tax offset into pay packets, rather than at the end of the year.
We will increase family tax benefit part A for older teenagers by up to $4,208 a year, $161 a fortnight, on top of the $460 million we are providing to extend the education tax refund to cover school uniforms.
We will allow payment advances of up to $1,000 for family tax benefit part A recipients at any time to meet unexpected family expenses and give parents greater choice in when they receive childcare support.
And we recognise prisoners of war from World War II and the Korean War with an additional payment of $500 a fortnight from 20 September 2011.
We know too many Australians are squeezed by rising costs of living and we help where we responsibly can.
That is why we cut income taxes substantially in each of our first three budgets, so that an average income earner now pays around $1,000 a year less tax and that is why we have ensured pensions are now $128 a fortnight higher for singles and $116 higher for couples since the announcement of our historic boost two years ago.
Regional Policy and Sustainable Australia
We want prosperity and opportunity to reach all corners of the nation, especially our outer suburbs and regional towns. This is crucial to managing population growth and promoting sustainability right around the country.
Among the most important things we can do to help deal with population pressures is to make regions more attractive places to work and raise a family.
This budget delivers for regional Australia like no budget before it.
Our Sustainable Australia strategy starts with $4.3 billion of investments in regional hospitals, health care, universities and roads.
These investments, along with the NBN, will help lift living standards outside the big cities, provide better health services and educational opportunities and help regional communities reach their potential.
These are crucial investments, but they are only the beginning.
The Prime Minister will lead a rigorous COAG process that asks state premiers to partner with the Commonwealth on reforms of particular relevance to their jurisdiction: from labour mobility to our west to easing congestion in Sydney.
We will begin with $232 million in new strategic investments, including $100 million for suburban employment hubs and $61 million for smarter motorways.
Small Business and Manufacturers
Australian businesses embrace fierce competition, but many are feeling the pinch of workforce shortages and our rising dollar.
So in this budget, we do what we can to help small businesses in particular, by replacing the narrow entrepreneurs tax offset with tax reforms that are available to all 2.7 million small businesses.
Last year we announced that from 1 July 2012, we would allow small business to immediately write-off assets below $5,000.
We know the main asset of many small businesses is their ute or van, so the first $5,000 of the cost of a vehicle can now be immediately written off as well.
Because cash flow is the lifeblood of small business, we will reduce tax instalment payments by $700 million in 2011-12, giving vital relief when conditions are tough.
We will give small businesses a head start on the company tax cut that will be funded by our minerals resource rent tax.
And to make sure local enterprises can seize the opportunities presented by the boom, tonight I announce a $34 million package to help Australian manufacturers better supply resource sector projects.
Getting the Budget Back in the Black
Mr Speaker, 2011 has been a difficult year for many Australians who have endured floods and cyclones. We have made the necessary decisions to rebuild their communities, including a modest temporary levy.
Despite the total cost to government of over $8 billion, our commitment to tightening our belt has not diminished one bit.
We will be back in the black by 2012-13, on time, as promised.
The alternative—meandering back to surplus—would compound the pressures in our economy and push up the cost of living for pensioners and working people.
We will reach surplus despite company taxes not recovering like our economy.
Losses built up during the global crisis are larger and lingering longer, contributing to reduced company taxes of $8 billion in this budget over two years.
This overhang from the GFC and the global recession, along with a higher dollar and record mining investment and associated tax deductions, are all slowing revenue growth.
Since the last update, tax receipts are down $16 billion in the first two years, taking the whole write-down since the crisis to $130 billion over five years.
The lower tax receipts in this budget account for all the increase in the deficit for 2010-11 and about two-thirds of the increase over 2010-11 and 2011-12.
It means the deficit for 2011-12 becomes $22.6 billion, and net debt will now peak at 7.2 per cent of GDP that year, a tiny fraction of comparable countries.
Our spending restraint means real growth in spending averages one per cent a year over the budget estimates, the lowest average rate in a five-year period since the 1980s.
This is putting us on track for a $3.5 billion surplus in 2012-13.
Just as it was right to step in and support the economy during the downturn, it is now right to step back and make room for private sector activity.
Good decisions now will avoid unnecessary pain in the future.
$22 billion in difficult savings in this budget will strengthen our structural position over time.
We will reform the fringe benefits tax arrangements for cars by introducing a single rate regardless of how far a car is driven, saving $954 million over five years.
This is one of 12 reforms since the last budget which deliver on directions identified by the tax review, including the phasing out of the dependent spouse tax offset, and replacing the entrepreneurs tax offset with better small business policies.
Extending the freeze on the higher income limits for family payments for two more years will also save $1.2 billion and make the system more sustainable. And we will increase the public service efficiency dividend, saving $1.1 billion.
We don't take our savings decisions lightly, and we take no joy from making them. But we take comfort in knowing they are right and necessary to ensure we don't compound the pressures of the boom.
Economy in Transition
Labor governments of the past managed the transition from a closed economy to an open economy competing in the world.
Now that the world is changing, we must change as well.
Ours is again an economy in transition.
Global economic weight shifts from west to east—bringing growth and dynamism closer to Australia than ever before.
Our economy transitions from sluggish growth to stretching at the seams; our budget from deficits in tough times to surpluses in better times.
Our industries must transition to the clean-energy technologies of the future, encouraged by a price on carbon.
Having beaten the global recession, we now face these new challenges.
Managing them is the key to our future.
With the right policies and decisions, we can convert an unprecedented mining investment boom into an opportunity boom for more of our people.
We believe in the Australian promise; that if you work hard, you won't be left behind.
We believe our economy can't afford to waste a single pair of capable hands.
And we believe this budget, our tax reforms, and our plans for a carbon price, will set Australia up for the prosperous future all our people deserve.
I commend the bill to the House.
Debate adjourned.
For the information of honourable members, I present the following documents in connection with the Budget of 2011-12:
Budget Strategy and Outlook 2011-12,
Budget Measures 2011-12,
Australia's Federal Relations 2011-12, and
Agency Resourcing 2011-12
Ordered that the documents be made Parliamentary Papers.
I present ministerial statements as listed in the document now being circulated to honourable members in the chamber. Details of the statements will be recorded in the Votes and Proceedings.
I move:
That this bill be now read a second time.
Appropriation Bill (No. 2) 2011-2012, together with Appropriation Bill (No. 1) 2011-2012, is one of the principal pieces of legislation underpinning the government's budget.
Appropriation Bill (No. 2) 2011-2012 proposes appropriation for agencies to meet:
Appropriation Bill (No. 2) 2011-2012 seeks approval for appropriations from the Consolidated Revenue Fund totalling $7.396 billion.
Appropriation Bill 1 and Appropriation Bill 2 include a one-off contingency clause apportioning the appropriation for the Department of Human Services between the Department of Human Services, Centrelink and Medicare Australia should the Human Services Legislation Amendment Bill 2011 not receive the royal assent by 30 June 2011. This will enable the three agencies to continue operating from 1 July 2011 until the legislation receives the royal assent. Importantly, these clauses will not change the total amount appropriated by the bills.
Bill 2 also provides for amendments to the Commonwealth Inscribed Stock Act 1911. The amendments will increase the limit on the face value of stock and securities on issue to $250 billion and repeal the special circumstances provision. These amendments provide for the government's financing requirements over the forward estimates and ensure flexibility in implementing the government's objectives for maintaining a liquid and efficient Commonwealth government securities market.
In addition, amendments to the CIS Act will establish two special appropriations. One is for the costs and expenses incurred by the Commonwealth in relation to the issue or sale of stock and the other is for the costs and expenses incurred by the repurchase and redemption of stock prior to maturity. These special appropriations are intended to provide greater flexibility in managing the debt portfolio and thereby support the efficient management of the government's debt portfolio.
These amendments increase the legislative limit on Commonwealth government securities issuance and borrowings as well as establishing two special appropriations for borrowing and debt management activities.
Details of the proposed appropriations are set out in schedule 2 to the bill, the main features of which were outlined in the budget speech delivered by my colleague the Treasurer earlier this evening.
I commend the bill to the House.
Debate adjourned.
I move:
That this bill be now read a second time.
The purpose of the Appropriation (Parliamentary Departments) Bill (No. 1) 2011-2012 is to provide funding for the operations of the three parliamentary departments.
The total appropriation sought through this bill is $180.166 million. Details of the proposed expenditure are set out in the schedule to the bill.
I commend the bill to the House.
Debate adjourned.
I ask leave of the House to move a motion relating to arranging a cognate debate on the appropriation bills.
Leave granted.
Imove:
That so much of the standing and sessional orders be suspended as would prevent the following from occurring:
(1) when the order of the day for the resumption of debate on the second reading of Appropriation Bill (No. 1) 2011-2012 is called on, for a cognate debate to take place with Appropriation Bill (No. 2) 2011-2012, and Appropriation (Parliamentary Departments) Bill (No. 1) 2011-2012;
(2) at the conclusion of the second reading debate, including a Minister speaking in reply, and thereafter, without delay, the immediate question, or questions, necessary to complete the second reading stage to be put, and when resolved Appropriation Bill (No. 1) 2011-2012 then being considered in detail and then any question or questions necessary to complete the remaining stages of the Bill to be put without amendment or debate;
(3) at the conclusion of the proceedings on Appropriation Bill (No. 1) 2011-2012, separate questions to be put without further debate on the motions for the second readings and any further motions necessary to conclude consideration of Appropriation Bill (No. 2) 2011-2012, and Appropriation (Parliamentary Departments) Bill (No. 1) 2011-2012 as required; and
(4) any variation to this arrangement to be made only by a motion moved by a Minister.
Question agreed to.
Debate adjourned.
House adjourned at 20.08