The question now is that these bills be read a third time.
The House divided. [09:28]
(The Speaker—Mr Harry Jenkins)
Question agreed to.
Bills read a third time.
The question now is that this bill be now read a third time.
Question put.
The House divided. [09:34]
(The Speaker—Mr Harry Jenkins)
Question agreed to.
Bill read a third time.
During the divisions, the Leader of the House made an unparliamentary remark. I ask that he be asked to return to the chamber and withdraw. I know what he said is unparliamentary because I have been made to withdraw the same comment.
I did not hear the remark, so I say what I said on a previous occasion when somebody drew my attention to a remark that I did not hear and invited me to invite the member to return and withdraw: I am not going to entertain that. I make the point to the member for Barker that he has been here long enough to know that there is not a list of words; there is context. I say to the member for Riverina that sometimes there is context in other things that happen around this place. But one thing that is consistent, as the member for Indi found and the member for Riverina has just found too, is that we will not tolerate reflections on the chair. I take this opportunity to express my disappointment at the way in which people in the chair from the Speaker's panel were treated in last night's debate in the consideration in detail stage.
The other point I make to the member for Barker is that there were a number of remarks which I did hear during the divisions and which were foolish in the extreme. I have yet to see evidence that there are members in this place who value their vote in divisions enough to realise that they are in the chamber of the House of Representatives and that they should behave and contain their emotions. If members contain their emotions, I might be able to contain my emotions.
Last week the government convened a forum of almost 200 people to discuss the next steps in tax reform. By any measure, the tax forum was a great success. I am proud of the forward-looking discussion which occurred here last week and which confounded all of the critics and all of the cynics. We drew together representatives from across the country—we heard views from the boardroom, from the factory floor and from the kitchen table. No topic was off limits, and the conversation covered a broad range of ideas just as I had called for a month ago in this very parliament. We did not agree—it would have been pointless if we did—but we did find some very important common ground across long-standing political and ideological divides. The government will progress a number of the issues which came out of the forum as part of a second wave of tax reform.
The tax forum was not the start of a tax reform process; tax reform has been a central part of this government's economic agenda. We came to government after years of Liberal neglect of tax reform. Australians had seen largesse bankrolled by the windfall gains of repeated revenue upgrades from mining boom mark 1, but they had not seen anything approaching tax reform for many years. So we commissioned the Australia's Future Tax System Review to reinvigorate the tax reform debate, to give it some direction and to give it purpose. We gave the review an ambitious scope: taxes and transfers across all levels of government.
After receiving the tax review, we set about a broad and ambitious agenda of tax reform. The Prime Minister and I have spoken at length about our patchwork economy. Some sectors are booming—for example, the mining sector expects to invest $82 billion in this financial year alone—but other sectors struggle with the high Australian dollar, cautious consumers and increased competition for labour and resources. Our first wave of reform was a response to the pressures of a patchwork economy. We adopted the central thrusts of the tax review: firstly, to get a better return for Australia's non-renewable resources through a profits based tax; secondly, to cut business tax, helping struggling firms with a company tax cut and a billion-dollar tax break for small business; thirdly, to save some of the gains to prepare for an ageing population by boosting superannuation and making concessions fairer; and, fourthly, we tripled the tax-free threshold from $6,000 to $18,200.
But we are doing much more than this with something like 32 reforms that deliver on ideas in the tax review. We are boosting workforce participation through a suite of budget reforms which were widely welcomed and which included the phasing out of the antiquated dependent spouse tax offset and reforming transfer payments. We are simplifying personal tax with a standard deduction for work related expenses. We are fixing the FBT treatment of cars. We are revamping the R&D tax incentive to boost innovation. We are modernising the governance of the system. The list goes on and on. We are doing all this at the same time as keeping tax as a share of GDP below the level we inherited. This year, tax is expected to be 21.8 per cent of GDP. That is substantially lower than the 23.5 per cent we inherited and much lower than the all-time record of 24.1 per cent set by those opposite in 2004-05 and 2005-06. I know from experience that tax reform is never finished. It is a journey rather than a final destination. So we held a forum to talk about the next steps in tax reform, to discuss how to build on our existing tax agenda. As I said earlier, it was a great success. We heard from business big and small, we heard from community groups and we heard from unions. We heard from experts, we heard from tax professionals and we heard from our universities. We heard from people at the front line, we heard from small business and local accountants.
I would like to thank all of the participants in the tax reform for the goodwill that they brought to the table in the parliament last week. We did not always agree but we did find some very important common ground. An overriding theme was that responding to our patchwork economy is a priority. We agreed that parts of our economy are under significant pressure and there are a variety of different ideas on how to respond. For example, participants had different views about across-the-board company tax cuts. But there was also some very important consensus—for example, around more targeted measures like improving the tax treatment of losses—and there was some consensus about the best way to develop these ideas through a collaborative working group.
At the end of the forum I announced that we would bring together a business tax working group to be chaired by Chris Jordan. Its first job will be to look at losses and how to fund any changes within the business tax system. Its second job will be to look at longer-term ideas, like a deduction for equity, and compare them to alternatives like changing the company tax rate.
Another area where we forged a consensus was the vexed topic of inefficient state taxes. After roughly seven years in the Treasury portfolio I have not before encountered such a mature acknowledgement of the deficiencies of many of our state taxes. I see this acknowledgement, coming from state treasurers from both sides of the political aisle, as something of a breakthrough. Equally encouraging was the acknowledgement that the solutions lie not in the lazy option of jacking up the GST in a way which hits low-income Australians hardest. Coming out of the forum, the states—led by Queensland and New South Wales—will develop a plan for harmonisation and further steps in state tax reform. I am very proud that we helped such a productive discussion occur and of course we are happy to help facilitate change as we press ahead.
The third broad consensus was about improving the interaction of the tax and transfer payment system. We are already making major progress here, including tripling the tax-free threshold to $18,000 on 1 July next year. This will reward hard work, especially for secondary income earners. It also means that up to one million extra people will be spared the inconvenience and expense of lodging a tax return. At the end of the forum I announced that our priority for personal tax is to go further and to get to $21,000 for the tax-free threshold when the country can afford it.
These were some of the key outcomes but there were lots of other ideas that we will also take forward. We had a discussion about reform of not-for-profit concessions and about the rules governing superannuation annuities. A new tax study institute will be a centre for research excellence into the tax and transfer payment system. Many other ideas were also raised at the forum—too many to go into today. Some of these might work, some of them might not, but I expect and hope they will be the subject of much community discussion in the months and years ahead.
The tax forum showed just how constructive and positive the policy discussion can be in Australia when everyone comes together with goodwill and the cynics and wreckers are ignored. I just wish the discussion in this place could be as constructive and positive as it was in the tax forum last week. The challenge for this opposition is to throw its knee-jerk negativity out the window, throw its destructiveness aside and outline some ideas for the future of the country.
I think that they should look to the example of all of the forum participants. They really did rise to the challenge and that was very encouraging. What they were interested in was the national interest, not some selfish political interest that we see from those on the opposite side of the parliament. All we see are the empty slogans. They say things like they stand for lower taxes, when their policy is higher taxes on companies, higher taxes on small businesses and lower taxes for very profitable mining companies. That is their current position. They say they stand for simpler taxes, when they opposed the instant asset write-off for small business—a huge tax cut for 2.7 million small businesses. They opposed that, they opposed the standard deduction and they opposed the tripling of the tax-free threshold. It is absolutely incredible. They say they stand for fairer taxes when they want to abolish the instant asset write-off, a huge boon to small business, and when they want to take away an addition to the super savings of 3.5 million low-paid workers. They have an agenda which will hurt working people in this country and damage our economy for the long term.
I am an optimist. I look forward to hearing the opposition's ideas today about how they are going to fund and reform the tax system, given how negative they have been. But for our part, what we will do is continue to put in place policies which will build retirement savings for the future and promote workforce participation. We have a plan—unlike those opposite, who have no ideas whatsoever. (Time expired)
More huff and puff from the Treasurer—it is good to have a summit forum, discussion group, working group, whatever it may be called—and they are celebrating the fact that there was lots of constructive discussion and no outcome. As the Treasurer leaves the chamber, so too has he left behind 200 people that assembled last fortnight, in Canberra, at a tax summit that was forced upon him by the member for Lyne. That was a great win for the member for Lyne. He got the government to hold a tax summit that did nothing. So let us just go back over the history of this, the government's process on tax reform.
It began with the 2020 summit. We all remember that. The then Prime Minister, the member for Griffith, was sitting on the floor taking copious notes, engaging people in discussions. One of the recommendations was to have a full review of the tax system. He said it was an 'exciting initiative aimed at harnessing the best ideas for building a modern Australia ready for the challenges of the 21st century'. The 2020 summit had over 1,000 delegates, received over 8,800 submissions, produced 962 ideas and nine were accepted—962 ideas and nine were accepted—and it cost $2 million to hold. So that was about $200,000 per idea adopted and, if I recollect correctly, one of the recommendations made was to hold the summit again in a few years time so really there were eight recommendations from the tax summit. One of them was to have a full review of the tax system, so the government then commissioned Dr Ken Henry to head a review of the tax system. As I have said previously, it is an error of judgment to have a public servant head an independent review because once that review is delivered the public servant, because they have obligations to serve the government of the day, cannot be advocate for the recommendations of that review. That is one of the reasons why the government was so comfortable in neglecting to implement most of the recommendations of Dr Henry, and I am sure Dr Henry would regret that he was the chairman of that review. It is because the government does not know how to govern. When we were in government, whether it be the Wallis review into banking or a range of other reviews, we had members of the private sector head those reviews so that they in turn would keep the government honest when it came to implementation.
This government commissioned the Henry tax review in its first budget back in 2008, the Henry tax review took two years to complete, cost over $10 million, received 1,500 submissions, had five panel experts, produced a report of 1,332 pages, came up with 138 recommendations and the government accepted 2½. The government accepted 2½ recommendations—that was their total response to Dr Henry. The government claims that it has now implemented 32 of the recommendations. We are struggling to find where those 32 recommendations have been accepted and fully implemented, but this is a government that is focused on spin.
The government had no intention at all of proceeding with anything other than a revenue-raising measure in relation to mining out of the Henry tax review, but the member for Lyne, to his great credit, forced the government into having a tax summit. The Treasurer, in his own befuddled mind, could not work out whether it was a summit or a forum. Whatever the case—whether it was a forum, a discussion, a working group, a summit or whatever you call it—it was about tax and he invited 200 delegates to come along. It illustrates the spin of the government that he did not ask us to come along. He did not ask us and, when he was embarrassed by the media about the fact that he asked everyone on earth except Her Majesty's opposition, he claimed that he invited us. That is just deceit from the Treasurer, nothing short of that. We open our mail on our side of the House and there was no invitation to this grand wedding. But that is their call and, of course, the member for Lyne did not say the opposition should be there—no, because, as we have just seen, the member for Lyne is party to so many of the tax increases and new taxes that this government is a proponent of.
So 200 delegates assembled here in Canberra, it cost a million dollars of taxpayers' money to hold with two days of talk on tax and what do we actually factually have to show for it? 'Good news! A working group is being established to report to the government this November with a final report in March next year. It is a working group—as if there have not been enough summits, there have not been enough reviews and there have not been enough panels of experts—'so good news, Australia: you're going to get a new working group.' Every one out in workerland must be cheering about that! But, wait, there's more: an announcement that the government would like to hear everyone's views on whether it should set up an advisory board to provide the Australian Taxation Office with an independent, external source of advice and counsel on organisational matters. So the government's great landmark tax reform is they want to hear the views of the public. Even after the 2020 summit, the Henry tax review and this new summit or forum, one of the key recommendations is to have a further consideration of public views.
There is the announcement of a million dollars in funding per year to create an independent tax studies institute, as if there is no-one in Australia that is a self-proclaimed expert on taxation and as if there is no university in Australia that has part of the department of commerce or department of economics in the university with tax experts in—'No, we'll spend another million dollars on a tax institute.' The piece de resistance, the one that was the greatest con of even some of the people at the summit and even some of the journalists outside of it, was that the government said some time in the future they have an intention when the fiscal position is right to increase the tax-free threshold to $21,000.
As soon as I heard that announcement as to a tax summit, I thought to myself I had heard that before. I went back to 2007 when Kevin Rudd, as opposition leader, said 'we have an intention to reduce the number of marginal tax rates from four to three and to have a top tax rate on of 40 per cent'. I thought, hang on, that was Kevin 07 and he was more likely to keep his word than Julia 2010—we know that. But, no, this is serious: 'We've got an intention when the fiscal position is right to increase the tax-free threshold to $21,000'. So let us set the record straight. This government has introduced or increased 19 taxes since it was elected. They cannot name one tax that they have abolished, not one. If there is a problem in any way in any place and they cannot regulate it, they tax it. There is a problem with teenage alcohol consumption, so there is an alcopops tax. There is a problem with people smoking too much, so there is a massive increase in the ciggies tax. There is a problem with the Australian motor vehicle industry, so they increase the taxes on motor vehicles—and, oh, what a mistake that was right before the financial crisis but, no, they did not back down. There is a problem with carbon dioxide emissions, so tax it—'That's what you should do: tax it!' There is a problem with miners earning too much money, so tax them—'Go for it!' And they wonder why they are sitting on a below 30 per cent primary vote. You do wonder, don't you. There is a flood in Queensland. Tax it; that is what you have to do! Tax everyone for the flood in Queensland, even though the $1.8 billion being raised by the flood levy is inconsequential compared to the $4½ billion hole on the carbon tax that the government does not want to talk about. But of course this is a government addicted to spin, the same spin that says, now that he has got his carbon tax through, how good it is to have budget neutrality on the carbon tax—a $4½ billion carbon hole. Crikey, what a joke this mob is.
I am disappointed that the member for Lyne and others have attached themselves to you, because quite frankly I think there is genuine desire in Australia to have tax reform. But do you know what tax reform is? Reducing the number of taxes. Do you know what tax reform is? Simplifying the taxation system. Do you know what tax reform is? Reducing the tax burden on everyday working Australians. That is what tax reform is. It is not about increasing taxes and it is not about introducing taxes—all of the lazy approaches that the Labor Party and some of the Independents choose to side with. That is bad governance. That is not smaller government. That is not reform. That is a government addicted to spending and a government that has no solution to the tax challenges of modern Australia.
I certainly welcome the parliamentary debate on the back of the tax forum in what I hope is a quest, as per the final words of the member for North Sydney, for comprehensive tax reform in Australia. For that to happen I hope we have a comprehensive parliamentary debate, but I have to say that, from the first two speakers so far in this debate, we can juxtapose what happens in this chamber—as to part of the problem of tax reform—and compare it with what happened in what was a detailed, thorough and much more mature debate at the tax forum last week.
I did not rise to correct the record on comments made by the member for North Sydney but I have to, because he made direct reference to the fact that I have not mentioned that the opposition should have been at the tax forum. I have done so, quite publicly, and also in my speech to the tax forum. In fact, I have my speech here and I will directly quote what I said. I said: 'It is disappointing, for example, that the potential next government are not here today. They should be, but at the same time we should be buoyed by comments that they welcome an independent office of tax simplification. I think in their absence they have, either by accident or design, just put the first offer of this forum on the table for government to accept and I will be doing what I can to see that happen.' That is to correct the record on what was just said by the member for North Sydney.
As well, on the comment in regard to the tax research institute and the $1 million per annum that came out of the forum, it is incorrect to say that that is not linked to the university sector. That is very much part of what the tax research institute is doing—to try and put a divide between the very good work done by people in the university sector now and this money and greater research in tax in some very necessary areas. These areas were exemplified in the tax forum in the debate around negative gearing, for example, where all the arguments about the rights and wrongs of its impact on housing affordability had merits. The tax research work and money will help the best and brightest minds in academia to assist in some of those detailed issues, as per the example of negative gearing.
The third issue I need to correct is the campaign to somehow position lifting the tax-free threshold as bad. What we have just had as a vote in this chamber today is a significant win in the lifting of the tax-free threshold from $6,000 to $18,200—$19,400, I think, in 2015—with the aspiration that came out of last week of lifting that to $21,000 and the target from the Australia's Future Tax System Review report, which mentioned $25,000 as the goal. These are good and sensible steps for very low-income earners in Australia and for the great challenge that we have in regard to the casualisation of the workforce, returning mothers to the workforce, the whole interrelation between the tax and transfer system, participation rates of the long-term unemployed, and any blocks there are in current policy in decisions made by individuals in returning to the workforce. This is good and sensible work that is being done right now, so I am somewhat surprised by the campaign that seems to be emerging from the opposition, including by what I saw from the motions at the National Party conference in Port Macquarie. The National Party looks to be opposed to lifting the tax-free threshold to $25,000 at all, which surprises me a lot.
The need for a parliamentary debate to put some of the positions from all the public policy leaders in regard to some of these issues is important. I hope that the debate that flows within the parliamentary chamber can at least come close to the maturity and the detail of the debate that took place last week. I hope that is a challenge that all MPs take up as this debate unfolds. I certainly invite input from as many MPs as possible, and all ideas on the table for comprehensive tax reform will be welcome.
I will put a motion to the House next week to continue to push for the road map from government for comprehensive tax reform. I think we do have unsustainable tax settings in Australia. This is not the curse of one political party or the other; this is something that has happened over a long period of time from many governments. We have seen the Sara Lee cake of tax upon tax added to the system, offset on offset, concession on concession, all without any removal or any campaign between local, state and federal governments to simplify the tax system, make it more efficient and reduce the number of taxes, which was the underlying theme in the Australia's future tax system report, done and led by Ken Henry. The underlying theme that seems to have been missed by all governments is that we have got 10 efficient taxes collecting 90 per cent of the tax base in Australia and we have 115 doing 10 per cent of the work—arguably the nuisance taxes, the inefficient taxes and the ones that are ripe for the picking if we can build a system as part of comprehensive tax reform to reduce those taxes and lift the burden on Australian community life. That is our challenge. It is not owned by one political party or the other and—particularly in the 43rd parliament, where anyone can get to the number of 76 on the floor of this chamber—all ideas should be welcome.
So if a private members bill comes from the opposition, for example, for an independent office of tax simplification, I will do what I can to advocate it. That is the challenge for the member for North Sydney and the coalition to consider. If there are any ideas around tax swapping, where Liberal state premiers and state treasurers are engaged alongside Labor state premiers—as we saw come out of the tax forum, where we saw the Queensland Labor Treasurer and the new New South Wales Liberal Treasurer agree to a process of working on the state tax reform plan through to the end of 2012 on harmonisation on some of the key, inefficient bad taxes that are run at state level; and additional steps, which in my view is hopefully code for looking at options such as minimisation elimination or all the ideas around tax swapping. The one that is floating around at the moment as an example is with the National Disability Insurance Scheme picked up by the Commonwealth entering disability back into the Commonwealth transfer system. There is an opportunity there for a tax swap for service opportunity, where the states could arguably start to look at some of the bad taxes that they all agree are bad taxes for stamp duties on property, insurance taxes and the like. They now have an opportunity through this state tax reform plan to look at those and negotiate with other levels of government as to getting more efficiency in the tax system.
What do we mean by 'efficiency'? With some of those bad taxes at a state level, such as insurance taxes and stamp duties on property we burn somewhere between 50c and 67c in the dollar of the tax raised in the actual process of collection. That is nuts! That is completely inefficient in collection and adds to the burden of tax life in Australia unnecessarily. So if we make it as simple as disregarding whether it is a local, state or Commonwealth tax and we rank them on their efficiency or inefficiency, and we do all we can within public policy to work our way through eliminating and minimising the inefficient and maximising the efficient, it is a pretty simple exercise on paper. The problem is the partisan nature of debate in Australia today, which seems to be only to look at two years in advance when a core part of our business as MPs of all political persuasions is to at least look 20 years in advance. Yet we do not seem to be able to look beyond two years. We do not seem to be able to look past the partisan in public policy consideration. Obviously vested interests have an awful lot of say in a lot of the debate, as we have seen this morning and as we are going to see with the introduction of another Henry recommendation, the mining tax.
I welcome the parliamentary debate. I hope it is a mature one. I hope many people participate and I hope the goal of comprehensive tax reform can be achieved. (Time expired)
Order! The time for statements on tax reform in the House has concluded. There will be an opportunity for all other members to make statements on tax reform later today in the Main Committee.
I move:
That this bill be now read a second time.
The National Classification Scheme (NCS) is a cooperative scheme between the Commonwealth and the states and territories for the classification of publications, films and computer games. Procedures for the classification of publications, films and computer games are set out in the Classification (Publications, Films and Computer Games) Act 1995 (classification act) and the provisions regulating the sale, demonstration and advertising of this material are in state and territory laws.
The National Classification Scheme has not had any significant changes made to it since it was created in 1996. When the National Classification Scheme began, classifiable content and the way it was delivered to consumers was relatively static. There was no online gaming. Phones were still only phones. Mobile devices as we now understand them were not on the horizon.
Consumers now have ready access to an increasing number and range of computer games on a variety of platforms, including on mobile devices and other network services. The business model for computer game design and delivery is increasingly moving to mobile and online markets.
Although the National Classification Scheme was not established to cater for the classification of these types of computer games, the definition of computer games under the classification act includes games played on mobile devices and online.
The numbers of mobile device and online games that are currently being introduced into the Australian market presents many practical challenges for regulators.
At present the significant majority of mobile device and online computer games are not classified prior to being made available to consumers. This is in breach of a range of relevant state and territory laws concerning the sale, demonstration and advertising of computer games.
If the present legal requirements were enforced, the Classification Board in its present form would be unable to sustain the administrative burden that would be imposed. It would also result in significant compliance costs for industry and may threaten the existence of smaller operators.
This presents a significant compliance issue for the National Classification Scheme. Industry has expressed concern over this regulatory uncertainty and expressed the need for government to clarify the present legal requirements for the classification of mobile device and online games.
The government is committed to ensuring that our classification system maintains community confidence. That is why the Australian Law Reform Commission has been asked to conduct a review of classification in Australia in light of changes in technology, media convergence and the global availability of media content. As part of this review the commission is considering the best way to classify computer games; however, any solution arising out of the commission process is still some time away. This bill is intended to provide an interim solution to address concerns that have been raised by industry and the Director of the Classification Board about the legal requirements and obligations for the classification of games that are playable online and on mobile devices.
This bill will result in mobile device and online games being treated in a similar way to other online content. It is designed to provide assurance to industry in the short term that it is complying with classification requirements for computer games and that it is not in breach of state and territory laws.
This bill will introduce a new category of exempt online games into the classification act for a period of two years. Games that meet the definition of an 'exempt online game' will not need to be classified. This exemption will not be available for those online games that are likely to be refused classification. This includes games that would offend against the standards of decency, morality and propriety generally accepted by reasonable adults. Current safeguards relating to computer games that would be refused classification will be preserved, including offences in state and territory legislation against the sale, advertising, and demonstration of these games, as well as offences in some jurisdictions against the online transmission of material likely to be refused classification.
The term 'exempt online game' will be defined to include two different categories of computer game. The first type covers computer games that are only available by means of a content service and can only be played on a mobile device onto which they have been installed. This is intended to cover computer games that are downloaded via the internet and installed onto a mobile device. The term 'mobile device' is defined as 'a device that is designed to run a mobile operating system'. Examples of mobile operating systems include, but are not limited to Apple iOS, Google Android, Microsoft Windows Phone 7, Nokia Symbian, Research In Motion BlackBerry OS, and embedded Linux distributions such as Maemo. However, the term 'mobile device' excludes personal computers. This category of online game is intended to cover games played on smart phones, personal digital assistants, and tablet computers running these types of mobile operating systems. This definition captures the Apple iPad and iPod Touch, Samsung's Galaxy Tab models, the Motorola Xoom, the Blackberry Playbook, and the ASUS Eee Pad Transformer.
The second type of 'exempt online game' covers computer games that are only available by means of a content service and can only be played on the internet. This is intended to cover those online games that are only available to play online and cannot be downloaded and played offline. It is useful to cover these computer games although they are often hosted offshore and are therefore not currently submitted for classification in Australia.
Consumers, the general community, the computer game industry, and government will be able to rely on a number of existing protections to exercise suitable control over 'exempt online games'.
Under the classification act, any person may submit a computer game to the Classification Board for classification upon payment of a prescribed fee. This option will continue to apply to exempt games.
Under the Broadcasting Services Act 1992 anyone may lodge a complaint with the Australian Communications and Media Authority about any 'exempt online game' that is reasonably suspected of containing material likely to cause the computer game to be classified MA 15+ or above that is not behind a restricted access system. ACMA will investigate complaints and may refer material to the Classification Board for classification.
In addition, the Director of the Classification Board will retain the power to call in a computer game for classification if it is reasonably suspected to contain material likely to be classified M or above, or if the director suspects that the computer game may not be an 'exempt online game'.
Law enforcement agencies will also continue to be able to apply for the classification of an 'exempt online game'.
People, particularly parents, need a system of classification in Australia that allows them to make informed choices about what they wish to read, see and hear. These amendments are an interim step on the way to ensuring our classification system continues to be effective in the 21st century.
Debate adjourned.
I move:
That this bill be now read a second time.
The Personal Property Securities Amendment (Registration Commencement) Bill amends the Personal Property Securities Act (PPS Act) to ensure that the PPS Act does not commence operating before the PPS Register can be made available for public use.
The PPS Register will be the single national online register of personal property securities which underpins this significant law reform.
The PPS Act, which was passed by the parliament in 2009, created one national law with one set of rules governing interests in property other than land that secure debts or other obligations.
The effect of the PPS Act is to simplify over 70 Commonwealth, state and territory laws, common law and the rules of equity, which govern security interests in personal property. It will also replace the many registers of personal property security interests that complement these state and territory acts, with the PPS Register.
PPS reform is a significant part of the Council of Australian Governments' deregulation agenda. The reform will deliver major benefits for business and consumers by reducing transaction costs, making lenders more willing to accept different kinds of personal property as security for loans and also facilitating the extension of credit to borrowers. The purpose of the bill is to amend the definitions of the migration time and the registration commencement time so that I can determine a time other than the default times that are contained in the PPS Act.
If I do not determine an earlier time, the migration time will be 1 January 2012 and the registration commencement time will be 1 February 2012.
This amendment will enable me to determine another time for both the migration time and the registration commencement time which could be earlier or later than the default times that are contained in the act.
The ability to determine the commencement of the PPS register will assist government to ensure that stakeholders have confidence that the online PPS register will operate effectively.
Conclusion
A comprehensive and consistent national PPS register will benefit many sectors in the Australian economy. These reforms will streamline the way in which lenders conduct their businesses, facilitate the extension of credit to borrowers and reduce borrowing costs. I am pleased that this reform is very close to becoming a reality.
Debate adjourned.
I move:
That this bill be now read a second time.
The Australian government has developed a comprehensive plan to move to a clean energy future. This plan includes introducing a carbon price, promoting innovation and investment in renewable and low emissions energy—which I understand is very important to the constituency of North Sydney—encouraging energy efficiency, and creating opportunities in the land sector.
Central to the plan is the introduction of a carbon price to reduce greenhouse gas emissions, by encouraging more efficient use of energy and driving investment in cleaner energy sources. A price on carbon, coupled with the 20 per cent by 2020 renewable energy target, provide powerful incentives to find ways of lowering carbon emissions when we produce and use energy.
With the introduction of a carbon price in Australia, the government is focused on ensuring that Australia's emissions reductions will be achieved at least economic cost, whilst maintaining adequate, reliable and affordable energy supplies and the international competitiveness of Australian industries.
We want you to be focused.
I am so pleased the opposition is focused on this very important bill, Mr Deputy Speaker.
There is a strong case for the Australian government to help drive down the costs of renewable energy and reduce the carbon intensity of the energy sector by encouraging innovation in clean energy.
Who wrote this for you?
At least I can read it, unlike you.
The government is substantially boosting its support for innovation in clean energy as a central element of its clean energy future plan.
A new $10 billion Clean Energy Finance Corporation will invest in the commercialisation and deployment of renewable energy, energy efficiency and clean energy technologies. A new Australian Renewable Energy Agency, or ARENA, will streamline and centralise the administration of $3.2 billion in existing support for renewable energy.
This bill establishes ARENA, the members of its board and its chief executive officer and chief financial officer and sets out how ARENA will operate and will be funded. To ensure that momentum in the renewable energy industry is sustained and quickly built on in the future, ARENA is to commence operation from 1 July 2012.
The government is currently providing substantial support for renewable energy across multiple programs and projects. The government will consolidate and reform the management of these programs and projects by creating ARENA as an independent statutory authority under the Commonwealth Authorities and Companies Act 1997.
ARENA will have oversight of around $3.2 billion in existing renewable energy grant funding currently managed by the Australian government and by Australian government funded renewable energy bodies such as the Australian Centre for Renewable Energy and the Australian Solar Institute.
Around $1.7 billion of this funding is currently uncommitted and will be available for ARENA to provide financial assistance for:
The definition of renewable energy technologies appropriately includes hybrid technologies.
The inclusion of hybrid technologies, by improving the economics of renewable energy projects, can allow ARENA to support more renewable energy projects than would be possible without hybridisation.
Likewise, ARENA will be managing a number of existing projects that involve hybridisation, such as the Solar Flagships Solar Dawn project, the King Island REDP project and the ACRE Solar Kogan Creek project.
ARENA will also be managing a number of existing programs that include hybrid technologies as eligible technologies—including the Emerging Renewables Program and the Renewable Energy Venture Capital Fund. ACRE's strategic directions explicitly recognise the benefits of hybrid systems, and ARENA will be mindful of this in carrying out its activities.
Under the definition of renewable energy I would expect that ARENA could support projects such as solar, biomass, biofuels, ocean and geothermal. Likewise, given that they are largely economic under the renewable energy target, it is not envisaged that ARENA would support stand alone wind projects.
The definition of renewable energy also includes enabling technologies, such as storage.
ARENA will also be responsible for policy advice to the Minister for Resources and Energy and will take over and expand on the activities of the Australian Centre for Renewable Energy in this regard.
A key priority for ARENA will be to act collaboratively with other interested and relevant parties to achieve its goals. To this end ARENA will continue and expand on the good work of:
The ARENA board will include renewable energy technology, business investment, commercialisation and corporate governance experience in order to deliver balanced decisions in terms of project viability and the choice of technology funded. The ARENA board will draw on the considerable talent we have in the Australian business and renewable energy industries. It is intended that the ARENA board be open to cross-membership with the board of the Clean Energy Finance Corporation once it is established. Likewise, recognising the need for a close working relationship with my department to deliver ARENA's objectives, the secretary of my department will be a member of the ARENA board. To advise and assist ARENA in its duties, ARENA will be able to form committees. ARENA will also be able to engage consultants to provide technical and specialist advice. The intention is that ARENA will form technology-specific advisory committees to assist it in performing its functions.
Importantly, the funding to be provided to ARENA each year will be prescribed in this bill out until 2020, providing long-term funding certainty to the renewable energy sector. To ensure efficient use of public funds, funding allocated to ARENA each year will be held by the Australian government and used to earn interest for the Australian public until it is required by ARENA.
An early task for the board will be to develop its funding strategy, guiding how it intends to allocate its uncommitted funds across the various renewable energy and related technology types, ahead of developing program guidelines outlining how eligible stakeholders can access funding.
The legislation also includes a number of accountability provisions—around the development of a funding strategy and around guidelines and procedures to seek approval for guidelines and projects if certain hurdles are met, as well as the need for merit based assessment. These requirements strike an appropriate balance between ARENA's independence and proper accountability.
I expect that the board will manage its affairs in a manner reflecting the highest standards of probity and highest ethical standards and accountability, with program guidelines developed according to merit based principles. As mentioned, the legislation includes provisions to help meet these standards.
This bill is the main bill of two bills related to ARENA's establishment that I am introducing in this session. The other bill I will introduce will provide for the transitional and consequential amendments necessary to transfer various projects and programs across to ARENA and wind up or incorporate the activities, staff and assets of the Australian Centre for Renewable Energy and the Australian Solar Institute.
I commend the bill to the House and simply note the support by the opposition for the renewable energy target of 20 per cent by 2020 and that this bill is central to achieving that objective.
Debate adjourned.
I move:
That this bill be now read a second time.
This bill is the second of two bills related to the establishment of the Australian Renewable Energy Agency, or ARENA, that I am introducing to this session of parliament.
As described when introducing the ARENA Bill, ARENA is to be an independent Commonwealth Authorities and Companies Act 1997 authority, tasked with oversight of around $3.2 billion in existing renewable energy grant funding currently managed by the Australian government and by Australian government funded renewable energy bodies such as the Australian Centre for Renewable Energy and the Australian Solar Institute.
This bill complements the main ARENA Bill by providing for the transitional and consequential activities that need to occur in order for ARENA to take over funding and administration of existing programs and projects transferring from the Department of Resources, Energy and Tourism and the Australian Solar Institute, or ASI, to ARENA.
This bill also provides for the wind-up of the Australian Solar Institute and the Australian Centre for Renewable Energy as a part of this transition process. This is a necessary step in the process to consolidate all of the various existing programs and projects supporting renewable energy technology innovation with ARENA, and is by no means a reflection on the performance of these organisations.
Under the arrangements proposed, ACRE is to be wound up, with ARENA to take over and expand on its responsibilities for advising the Minister for Resources and Energy. To give effect to this change the ACRE Act 2010 will be repealed upon ARENA's establishment.
It will be business as usual for the projects transferring to ARENA, with existing administration arrangements to continue until ARENA's establishment. Likewise, a number of programs, such as the Emerging Renewables Program and the Renewable Energy Venture Capital Fund will continue. At the same time, it is expected that ARENA will determine how to best direct unallocated funding from programs such as the Connecting Renewables Initiative and the Solar Flagships program.
The timing for transfer of the ASI's projects, assets, liabilities and staff to ARENA is to be deferred until after ARENA's establishment, with the transfer to occur some time before 1 January 2013. This is to allow the ASI time to complete its work in selecting and funding projects from the submissions received from its recent call for funding applications, before focusing on necessary transfer arrangements.
Following this transfer, the employees of the ASI are to become employees of the department and will join other department staff in providing operational and administrative support to ARENA. These arrangements will allow ARENA to benefit from the existing expertise and skills of the ASI staff, as well as embedding an established process and culture which has been highly effective in securing projects and leveraging funding.
To ensure that ARENA is able to pick up and carry on the work of the Department of Resources, Energy and Tourism and the Australian Solar Institute, this bill also will allow ARENA to consider applications that are undecided at the time ARENA takes over program administration. For example, this means that, should funding applications be received to a program or project announced between now and when ARENA is established, this would allow for those applications to continue to be considered by ARENA.
As minister, I will receive the recommendation of the ARENA board with regard to appointment of the chief executive officer, or CEO, of ARENA. To allow appointment of the ARENA CEO ahead of ARENA's commencement, this bill allows for members of the ARENA board, once appointed, to provide a recommendation with regard to the ARENA CEO ahead of ARENA's establishment.
The arrangements in this bill will provide for a quick and seamless transfer of existing programs and projects to ARENA and will allow for ARENA to commence operation with minimal disruption and loss of momentum in support for renewable energy technology innovation.
I commend the bill to the House.
Debate adjourned.
I move:
That, in accordance with the provisions of the Public Works Committee Act 1969 , the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report:
LAND 17 Phase 1A Infrastructure Project.
The LAND 17 Phase 1A Infrastructure Project, estimated at $46.5 million plus GST, will provide new and refurbished facilities to support the introduction of the M777A2 lightweight towed artillery platform. Facilities to support the introduction of the new artillery platform will be provided at: Gallipoli Barracks and Lavarack Barracks in Queensland; Bridges Barracks and Gaza Ridge Barracks in Victoria; Robertson Barracks in the Northern Territory; and at RAAF Base Edinburgh in South Australia. The project proposes to provide new upgraded working accommodation, gun hangars and gun maintenance workshops. Subject to parliamentary approval, construction is expected to begin early in 2012 with completion expected by mid-2013. I commend the motion to the House.
Question agreed to.
I move:
That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to parliament:
Specific Nutritional Capability Project for Defence Science and Technology Organisation at Scottsdale, Tasmania.
The Department of Defence proposes to redevelop the Defence Science and Technology Organisation's nutritional research facility at Scottsdale in Tasmania. The DSTO Scottsdale facility is vital for maintaining the nutritional and health status of Australian troops because it provides food and feeding regimes that enhance performance.
The works will include redevelopment of food technology facilities, upgrades to existing chemistry and nutrition laboratories and improvements to site infrastructure and working areas. The redevelopment will result in a modern food science facility equipped to meet the future nutritional needs of ADF personnel. The estimated out-turned cost of the proposal is $18.7 million plus GST.
In its report, in addition to recommending that the project should proceed, the Public Works Committee has recommended that the Department of Defence provide full and complete details on all options considered for all future proposals. The Department of Defence accepts in principle this recommendation and intends to address the issue by updating internal procedures to ensure further details of options considered during business case development are provided to the committee as part of the statement of evidence. Subject to parliamentary approval, construction will commence in early 2012 and be completed by early 2014. On behalf of the government, I would like to thank the committee for its support and I commend the motion to the House.
Question agreed to.
On behalf of the Joint Standing Committee on Treaties I present the committee's report entitled Report 120: Treaties tabled on 5 July and 16 August 2011. I ask leave of the House to make a short statement in connection with the report.
In accordance with standing order 39(f) the report was made a Parliamentary Paper.
by leave—Today I present the Joint Standing Committee on Treaties report entitledReport 120: Treaties tabled on 5 July and 16 August 2011which contains the committee views on, firstly, a series of treaties on Antarctic environmental and tourism issues which were tabled in the Commonwealth parliament on 5 July 2011. The report also reviews five taxation treaties and a social security treaty, which were tabled on 16 August2011.
I intend to briefly comment on all the treaties dealt with in this report. Firstly, there are three proposed amendments to the Antarctic treaty, which will: establish an environmental liability regime for those operating facilities and vessels in the Antarctic; require tourist operators in the Antarctic to have insurance to cover the cost of medical emergencies; and make environmental regulations previously self-imposed by the tourism industry mandatory.
These amendments align with and strengthen Australia's commitment to protecting the Antarctic environment, which is a place of special significance. It is the only place that could make a reasonable claim to wresting the name 'Down Under' from our country, and it is appropriate that Australia play a specific and critical role in protecting this far southern continent and it is incredibly stark, unique and precious environment.
I will now turn to the agreement between Australia and the Republic of Hungary on social security. This treaty provides access to Hungarian age disability or survivor's benefit for Australians of Hungarian descent who worked in Hungary long enough to establish an entitlement to these benefits. The treaty also ensures that people who move between Australia and Hungary will have their entitlement to benefits recognised in both countries.
I will now deal with the five tax treaties covered in the report, which involve the Marshall Islands, Mauritius and Montserrat. These treaties are part of Australia's implementation of the Organisation for Economic Development and Cooperation, OECD, standards on the elimination of harmful tax practices. The committee supports these treaties, as they are a powerful tool for transparency in international financial transfers. Previous tax treaties have resulted in a decline in fund flows from Australia of 80 per cent to Liechtenstein, 50 per cent to Vanuatu, and 22 per cent to Switzerland. In each case, the committee concludes that these treaties should be supported with binding action. I thank my fellow committee members and the treaties committee secretariat for their continuing dedication and professionalism. I commend the report to the House.
On behalf of the Standing Committee on Economics I present the committee's report entitled Advisory report on the Corporations (Fees) Amendment Bill 2011, incorporating a dissenting report, together with the minutes of proceedings.
In accordance with standing order 39(f) the report was made a Parliamentary Paper.
by leave—The Corporations (Fees) Amendment Bill 2011 is a very simple piece of legislation that allows ASIC to charge market participants, such as stockbrokers, fees to support its supervision of exchange markets. The fees will be set in regulations to be gazetted after the bill becomes law. The bill is part of a wider government policy to improve Australia's position as a financial centre. Previous government reforms have enabled other firms to operate exchanges in addition to the ASX. As a result, Chi-X Australia will commence operating a market for cash equity shares later in the year, subject to a number of conditions being met. This threat of competition has brought down ASX costs to market participants by approximately $20 million annually with the potential for further reductions. The ASX has also introduced a wider range of services for market participants.
There are several key reasons to support the bill. In particular it complies with the government's cost recovery guidelines which were developed by the previous government in 2005. Simply, the finance industry is receiving a direct significant benefit from ASIC's supervision of markets. Stockbrokers are responsible for a significant portion of the time and effort that ASIC expends on supervision. Asking stockbrokers to pay for supervision also presents the complications that occur if ASIC charges market operators a loan, and those operators then pass on the cost to stockbrokers. Brokers may be reluctant to give some of their business to new operators entering the market if the pass-through of costs affected the new entrants' competitiveness. Charging stockbrokers also prevents incumbent market operators from cross-subsidising the parts of their business that are subject to new competition.
Another important issue in the inquiry is the fees that ASIC will charge under regulations. This is currently the subject of Treasury consultation. Treasury has issued a comprehensive consultation paper which will serve as an appropriate basis for designing the fee structure. Industry raised legitimate concerns about proposals in the consultation paper, but the committee anticipates that Treasury will respond to these concerns either through further explaining its position or by making appropriate changes.
The bill should pass because it is an appropriate way of funding ASIC's market supervision activities. It is not the centrepiece of the shift to competition but it is informed by competition principles and will be an important part of the competition infrastructure. I would like to thank the organisations that assisted the committee during the inquiry through their submissions or by participating in the hearing in Canberra. I also thank my colleagues on the committee for their contribution to the report and the secretariat for the work they have done. I commend the report to the House.
On behalf of the House of Representatives Standing Committee on Social Policy and Legal Affairs, I present the committee's report entitled, Advisory report: Territories Self-Government Legislation Amendment (Disallowance and Amendment of Laws) Bill 2011, incorporating a dissenting report together with the minutes of proceedings. I ask leave of the House to make a short statement in connection with the report.
Leave granted.
The Territories Self-Government Legislation Amendment (Disallowance and Amendment of Laws) Bill 2011 was referred to this committee for inquiry and report. This is the fifth bill referred to the committee that I chaired in the last four months.
In September, I tabled the committee's advisory report on the Extradition and Mutual Assistance Bill and I thank the Minister for Home Affairs for his consideration of the committee recommendations and for the expediency of the government response. That process demonstrated the valuable contribution that committees can make in the scrutiny of bills before the parliament.
This week I rise to table the committee's advisory report on the Territories Self-Government Legislation Amendment (Disallowance and Amendment of Laws) Bill 2011. I would like to say that the committee has again made a valuable contribution to the scrutiny of a bill; however, this is a bill which has already undergone scrutiny and committee inquiry in the Senate, with over 200 submissions received and a series of public hearings held. The bill was then amended in line with the recommendations of the Senate inquiry.
When our committee considered the consultation and scrutiny that had already taken place, it concluded that a further call for submissions and a series of public hearings would duplicate the process without any discernible gain. The committee has examined the report of the Senate inquiry and finds that it fairly represents all views expressed through submissions and its hearings.
The bill aims to provide greater independence to the Australian Capital Territory and the Northern Territory by removing the power of the Governor-General to disallow laws of these territories. The parliament will continue to retain the power to make laws for those territories as this is provided under section 122 of the Australian Constitution. There was strong support for the bill from the legislative assemblies of both territories and from the majority of substantive submissions to the Senate inquiry.
The committee does note the concern of some submitters to the Senate inquiry that the bill might amend or enhance the capacity of territories to legislate on same-sex marriage or euthanasia. This is not the case, and the Senate inquiry took evidence from a range of legal experts who confirmed that this is not the case.
The committee also notes the dissenting report of Liberal members who suggest that a broader review of self-government for territories is required, and no doubt the member for Murray will make some comment following my comments. It is the view of the majority of the committee that the bill does not impede any broader review or reform of territories' self-government should this take place in the future.
It is the recommendation of the committee that the House of Representatives pass the Territories Self-Government Legislation Amendment (Disallowance and Amendment of Laws) Bill 2011. Thank you.
I seek leave to give my remarks in relation to the dissenting report which Mr Vasta and I from the House of Representatives Standing Committee on Social Policy and Legal Affairs presented.
Leave granted.
We of course agree that the issue of self-governance for the territories—the ACT, the Northern Territory and, indeed, Norfolk Island—is a very serious issue. It requires serious debate and bipartisan consideration. We are concerned that this bill appeared to be no more than an attempt by the Leader of the Greens, Senator Bob Brown, in the Senate, to introduce bills which were more about their own party political agenda than looking at the broader issue of self-governance of the Australian territories. We felt seriously concerned that there was not the scrutiny that was required in a bipartisan sense.
In particular, this bill changes sections in the self-government acts. It would repeal some sections in the following way:
The Governor-General may disallow a law or part of a law made by the relevant Legislative Assembly within six months after it is made;
… … …
If amendments are recommended, the time within which the law may be disallowed is extended by six months from that date;
Once the disallowance is published on the Federal Register of Legislative Instruments,[2] the law is considered to be repealed, and any law that was amended or repealed by the disallowed law comes back into force.
So we are concerned that we still need to have this debate. This particular piece of legislation which looks at the ACT and the Northern Territory, as proposed by the leader of the Greens in the Senate, even included Norfolk Island for some time, until that was seen as just too ridiculous to add without proper debate and consideration. We have put in this dissenting report. We believe, as did our colleagues in the Senate, that the territories' statehood and greater independence is a serious matter and we need a considered debate with engagement from the stakeholders in those places. We should not have it slipped through in the shadows with another agenda—for example, changes to marriage or euthanasia legislation, which need to be dealt with independently as they are matters that have their own import. Those matters should not be slipped through under the guise of a bill that purports to deal with statehood.
On behalf of the Joint Select Committee on Australia's Immigration Detention Network, I present the committee's interim report. I ask leave of the House to make a short statement in connection with the report.
Leave granted.
The joint select committee met on 6 October 2011 and agreed to present to the parliament this interim report on its inquiry into Australia's immigration detention network. The committee has received over 3,500 submissions and held hearings and site visits on Christmas Island and in Derby, Darwin and Sydney. However, the committee takes the view that it requires more time to adequately discharge its reference and present a properly considered report on this very important matter of public policy. The committee requests its reporting date be extended until 30 March 2012.
I understand we were waiting for the member for Lyne. He has not turned up; so be it. We are debating the Banking Amendment (Covered Bonds) Bill 2011, which the government has introduced to enable authorised deposit-taking institutions to issue covered bonds. People who are listening to this broadcast or who are in the gallery have probably often thought about covered bonds. This is a significant initiative because covered bonds are a form of fundraising widely used by banks in other countries, including in Europe and New Zealand.
You'd know about that.
No; I was more involved in securitised assets and the residential mortgage-backed securities market all those years ago. Covered bonds provide an alternative source of funding for institutions. It is an important part of the range of fundraising tools that are available to financial institutions. Institutions have to raise money either through deposits or the issuance of bonds in global capital markets or domestically in order to lend money to Australians for credit cards, business loans, home loans or whatever the case might be.
There is bipartisan support for what the parliament is debating today. I suggested this more than a year ago. Like so many good ideas I have, the government has chosen to follow. We welcome the Treasurer putting aside for a brief moment his hubris and introducing a bill that follows our policy lead. I am happy to say that all of my ideas are open to the general public and even to the Treasurer to implement.
The bottom line out of this is that previously in Australia covered bonds were not permitted under the Banking Act. This bill will amend the Banking Act to allow banks, credit unions and building societies to raise funds by issuing these securities. I formally proposed this as part of my nine-point plan on banking, which was announced by the coalition in October last year. The Treasurer ridiculed the nine-point plan, as he is wont to do, but then picked up pieces of it and ran with it. We are quite fond of Swanny over here for a range of reasons, some of which I will go into. On this occasion he has shown some alarming common sense. I wish he would pick up the other pieces of my nine-point plan.
I will remind the House and the general public—and I can see those in the gallery are interested—of my nine-point plan on banking. The Treasurer has picked up two of the nine recommendations that I made. The first is giving the ACCC power to investigate collusive price signalling—that is, oligopolistic behaviour. I am glad the Treasurer picked that up after we introduced a bill. My colleague the member for Dunkley introduced a bill dealing with this matter, and then the Treasurer decided to introduce his own bill. It was a bit like the Parliamentary Budget Office. It was the same principle: we came up with the ideas and introduced a bill and then the Treasurer introduced his own bill.
The second recommendation was covered bonds, which I have referred to. But wait, there are more. There are seven other hurdles that the Treasurer can jump over to get a bronze medal in the 110-metre hurdle race in the Olympics.
He's already got the gold.
You should listen to this. Another recommendation is to encourage the Australian Prudential Regulation Authority to investigate whether the major banks are taking unnecessary risks in the name of trying to maximise short-term returns that conflict with the preferences of taxpayers. Effectively, I am saying that the moral hazard that now applies in the international banking system needs to be properly recognised. Of course, in the Wallis report the recommendation was that taxpayers no longer guarantee Australian financial institutions against risk. When HIH fell over I met with the board of APRA. I said, 'How are you going to handle this?' They threw their arms up in the air and said, 'The Wallis report considered this and said businesses will fail.' The second biggest insurer in Australia fails. I said, 'That is not good enough; it is unacceptable because it happened on your watch.' There were literally tens of thousands of people affected, and not just those with existing insurance claims, from people I knew who tragically had broken their necks playing rugby and were living off the annuities provided by HIH right through to people who had had their houses burnt down and were waiting on a payout. After a period of time it became clear that the Australian government had to step in—and we did with over $600 million—to ensure that the people whose insurance company they believed to be viable and well resourced was going to step up to the plate when they most needed it.
I remember the night when the provisional liquidator was appointed to HIH. I was standing in Lane Cove Plaza when I got a phone call to advise that HIH had just had a provisional liquidator appointed. I asked Graeme Thompson, the head of APRA, what this meant and he did not know. That was the thing that most alarmed me at that time. The prudential regulator did not know what it meant. Instinctively, having been a banking and finance lawyer, I asked how many people had car insurance with HIH and FAI. APRA could not answer. All of those people driving cars at that moment suddenly had no insurance—not even third party—and they did not know it. It was ridiculous. I asked how many builders had warranty insurance with HIH. APRA could not answer. All of a sudden, builders warranty insurance—remember that—closed down. The market closed down. I asked how many people who were travelling around the world and were no longer covered because FAI and HIH and all of the various subsidiaries that had provided travel insurance had had a provisional liquidator appointed knew that they were not covered. APRA could not answer.
It was a failure of the prudential regulator to understand the business that they were regulating that was most alarming. But, ultimately, the taxpayers are on the hook, whether we like it or not, and that was most graphically displayed during the financial crisis. We are rapidly entering into a phase where major banks around the world are either owned by governments or guaranteed by governments. The current European crisis involves potential sovereign debt default. When you consider the balance sheets of banks like BNP and their exposure to the sovereign debt of Greece, Italy and others, Societe Generale, Deutsche Bank and a number of other financial institutions in Europe—potentially UBS and Credit Suisse as well—you ask, 'Come on, guys, what is the exposure of the taxpayers to the risk involved in these products?'
More significantly, an issue that has not been properly assessed is the exposure of other banks around the world to derivative products based on that sovereign debt, whether it be a currency risk or some derivative product where the main holders of the sovereign debt have laid off some of the risk. Of course, they have primary risk, but should they in turn fall over in the case of a sovereign debt crisis the contagion impact through the derivatives market may be extreme. These are the issues that need to be properly assessed. That is one of the reasons why there is a significant endeavour in the United Kingdom by the Financial Services Authority and the government to separate out the retail banks from the investment banks. That in itself will raise significant issues and is not an easy process.
I wanted APRA, as the second point in my nine-point plan, to properly investigate the major banks in Australia to reassure the public. I do not think there is any reason to be concerned, but we need to ensure that short-term profit taking by Australian financial institutions is guided by the principles of proper risk management, given that we are now underwriting that risk effectively.
The third recommendation, which I regret the Treasurer has not taken up, is formally mandating the Reserve Bank to publish regular rather than irregular reporting on bank net interest margins and returns on equity profitability to determine whether the major banks are extracting monopolistic profits—that is, whether taxpayers are subsidising supernormal returns. I do not think there is any particular cause for concern again here, but I know the Reserve Bank does have irregular reporting in this area.
Mr Ripoll interjecting—
I am getting to it, don't worry. This is part of the package. Therefore, I think it would be a good idea to have a regular reporting mechanism. Fourthly, I suggested that we should look at using Australia Post's 3,800 branches as a more sophisticated distribution channel for smaller authorised deposit-taking institutions. Now, I have emphasised that Australia Post should not have a banking licence. It is not the role of government to get into banking, although this government seems determined to do so—whether it be Ruddbank, which was going to be a lender to the property industry, or Gillardbank, which is a $10 billion fund that is being set up as part of the carbon tax package. They love banks, the Labor Party, but they have a terrible record with them. Look at the State Bank of Victoria, Tricontinental, the State Bank of South Australia and Beneficial Finance; you guys have a terrible record. The Labor Party should keep well away from banks, let alone set up another one. That is one of the reasons why we think Australia Post would be a good distribution channel. David Murray actually suggested that originally, and I think it is a positive idea.
We obviously have supported the government in trying to make the residential mortgage backed securities market more liquid. For the people in the gallery, that is the market that originally helped to fund Wizard Home Loans, Aussie Home Loans and all those guys, because they are not deposit-taking institutions; they had to raise money on the bond markets and they used securitised instruments in order to do so. So they would get a pool of assets, home loans, and the pool would be properly diversified, and they would sell the bonds into the market and, in turn, raise the money that allowed them to go and lend more money.
That residential mortgage backed securities market was an important market in helping to create competition in home lending, and it was encouraging that they started to get into credit cards. Even though there are a huge number of credit cards and credit card products out there, this is a market that is an alternative source of funding, not just to keep the mortgage originators in play—well, not so much these days, but previously like RAMS, Aussie Home Loans, Wizard, Yellow Brick Road and so on—but also for smaller banks, enabling them to raise money. Even Westpac, I think, is involved in the RMBS market, and maybe some of the other major banks, as an alternative source of funding to bank deposits and the issuance of bonds into the global marketplace.
The sixth recommendation I made was to simplify the Financial Services Reform Act. This is an act that I introduced and I think it is hugely important. However, the Financial Services Reform Act was completely undermined by the onerous red tape that ASIC introduced into the process. It was overinterpreted, overanalysed and overlegalised. At the time, I was reshuffled into the small business and tourism portfolio so I missed the opportunity to see the full implementation of FSR, but I really regret that I did not ride shotgun on that process. So I would like to go back to that and try and simplify it.
The seventh recommendation directs APRA to explore whether risk weightings on business loans secured by residential properties are punitive. This is something that small business continually raise with me, and I think they are perfectly justified in doing so. I do not think there has been enough discussion about this matter. So many small businesses go and borrow money from banks and pay a premium—a significant premium at times, up to 200 basis points, or two per cent, above a home loan rate, because it is a small business rate; yet it is secured against their home. That is the security. Whether it is a home loan or a small business loan, it is the same asset for security. And it is the same income, the income from the business, that is going to make the repayments to the bank. Yet, if it is a small business loan as opposed to a home loan, it ends up being two per cent more expensive, maybe more, which is ridiculous. I think small businesses have a legitimate gripe about it and I do not think there has been enough said about that to date.
The final recommendation I identified was to have a full review of the Australian financial system, which I am absolutely determined to do and is part of the coalition's policy going forward. It is. The nine-point plan stands. The reason why we want a full review is that it is about 30 years since the Campbell review was commissioned by John Howard as Treasurer. It was a full review of the financial system which led to deregulation and greater competition in the financial system in the eighties. Keating claims credit, but it was John Howard who initiated the Campbell review and it was a hugely important review. Then it was Peter Costello as Treasurer in 1996 who commissioned Stan Wallis to undertake the 'son of Campbell' review, a full review of the financial system which, in turn, helped to design the Australian financial services industry and inoculate it against the challenges that were to come forward. For example, it allowed Australian financial institutions to diversify from simply banking into insurance and superannuation, even equities. Similarly, it allowed AMP as a life insurer—and general insurer, to a lesser degree—to diversify into banking and superannuation. It meant that there was this consolidation of the financial services industry so that banks in particular could not be accused of having lazy balance sheets, an accusation that was the great fear of the banks in the late nineties. In the case of Europe and the United States, it drove so many banks to engage in riskier behaviour, and that resulted, in part, in the contagion impact of the financial crisis.
But in Australia, even though financial institutions wanted to merge with other institutions—I well remember Westpac wanting to merge with DBS, but we would not allow it, and at the time that was a very wise decision—we were convinced that the aggregation and conglomeration of the Australian financial services industry ensured that we could better supervise a smaller number of institutions with a diverse range of products. But each product of course had its own product disclosure regime and, depending on how the product was sold—whether it was over the phone, face to face or through agents—different regulatory regimes applied, and that is when FSR came into play. This is the nine-point plan that represents coalition policy on banking. This bill is just one of the nine points. As I said, we would welcome the government supporting this initiative.
To be clear, covered bonds are attractive to investors because they are a very low credit risk. The bonds issued by a financial institution are secured or covered by a pool of assets. The legislation provides that the value of assets in the covered bond pool must be at least 103 per cent of the value of the covered bonds. In this sense, the bonds are oversecured. There is an argument that issuing covered bonds is expensive for the banks, but they are important as a diverse funding entitlement to the banks, particularly when there is the looming threat of a blowout in the cost of overseas money.
An important point is that in the event of insolvency the holder has recourse to the pool of assets underpinning the bonds—that is the difference. Depositors usually or almost always rank No. 1, ahead of everyone else, when it comes to a bank falling over—they have first dibs on the assets of the bank. Under this situation the holders of covered bonds have first right to the pool of assets that covers the bonds. This is a contentious aspect to the covered bonds bill, but the government has wisely limited the exposure of the banks so that they can raise only a limited amount of money in covered bonds as per their balance sheets.
Even though covered bonds sound similar to asset backed securities like the RMBS which I talked about, they differ in two crucial respects. The first is that asset backed securities are backed only by certain specified assets and the cash flows are linked directly to those assets. If those assets go bad, as happened in the United States with some mortgage backed securities, then the cash flows and value of the bonds commensurately fall. With covered bonds the pool of assets can be substituted; bad assets can be rotated out and good assets can be put in. Inevitably there will be some impaired loans that may be part of the asset pool from time to time, particularly if there is a slight economic downturn. Covered bonds are a good initiative in that the assets can be rotated. The other difference is that the covered bond debt and the underlying asset pool remain on the issuer's balance sheet. In the event of default, the investor has recourse to both the pool assets and the issuer.
These advantages mean that covered bonds carry lower risk than other secured investments. They also mean cheaper funding for financial institutions although the returns might not be as high as they might be, but the costs of funds are not as high as they would be for other instruments. I see this an important step forward in broadening the financing options for Australian ADIs. I recognise that APRA had deep reservations about this and I think even Treasury had some reservations, but this bill properly addresses those concerns.
Of course, covered bonds are likely to be mainly used by the four major banks in Australia because those institutions have the capacity to issue bonds in a size likely to be attractive to institutions. The government's bill appropriately does provide for smaller ADIs to enter into an aggregating entity to issue covered bonds. This means that two or more smaller institutions can join together to issue bonds over a combined pool of assets. This will help achieve a marketable size of issue that could not be achieved independently.
This leads me to current financial conditions which are important because the government, after doing nothing for the 12 months after I suggested this idea, came to us and said this needed to be dealt with urgently so that banks in the current environment can issue covered bonds to the market before Christmas. There has been an express concern about a dramatic blowout in the cost of funds for Australian financial institutions raising money in the international marketplace because of the sovereign debt crisis in Europe. European and, to some degree, American financial conditions have deteriorated in recent months. Obviously lenders are more risk averse and are looking at the exposures of banks and the asset quality of their counterparts.
Some European banks are now experiencing significant difficulty in raising funding in the wholesale markets. Large-scale recapitalisation of banks by European governments is looking increasingly likely. It is important to emphasise that Australian banks have not been directly affected by these concerns because their exposure to European sovereign debt appears to be low. However, any tightening in the global funding environment can indirectly impact on the availability and cost of funding for Australian banks, given their relatively high reliance on offshore wholesale markets. I understand that access to long-term funding markets in Europe through the issue of traditional banking instruments has become more difficult for Australian banks. In this environment it is prudent to broaden the funding opportunities available to Australian banks.
To reassure people that covered bonds are not a wildly new financial instruments, their first recorded use was in 1769 in Prussia. They have been widely used in Europe since then. In July 2008 US Treasury Secretary Paulson announced that the Treasury would take steps to encourage a market for these securities in the US to provide an additional form of fundraising. In June 2010, the Bank of New Zealand announced that it had launched the first covered bond program in Australasia. So we are quite late to the marketplace and that is perfectly understandable—we have always been cautious in moving ahead of others in relation to some of these areas.
Banking reform, as I said, is not yet finished. There is much to do in banking reform and it is an ongoing area of challenge. The reason that I do want a granddaughter of Campbell or a son or daughter of Wallis is because Australia deserves to have the very best financial system in a part of the world that is increasingly complicated but also, importantly, increasingly competitive. The lesson out of both Campbell and Wallis was that we prepared for the next round of challenges. That is what happened. This government has a history of calling for reviews, summits, working groups and everything and not accepting the recommendations and not implementing them. Just look at Henry, the 2020 Summit and so on.
Our commitment is to follow a process very similar to Campbell and Wallis in that you have the private sector looking at the challenges for the financial system on a global basis, recognising those challenges, and preparing a suite of initiatives that allow us to innoculate Australia against some of the volatility that we are going to see in the financial system for the next 15 to 20 years. Let's be fair dinkum. The financial system globally is going to be volatile. Capital markets are going to be volatile for the next 10 to 15 years until the debt challenges of Western nations and the trade imbalance across the globe is properly resolved. Therefore, let's be fair dinkum about inoculating the Australian financial system. All wisdom and knowledge does not come through the air conditioning here in Parliament House, down at Treasury or anywhere else, it has to come from those people involved in the industry day to day. Our commitment to considered, balanced further reform in banking is undiminished and this is a good step forward which the coalition as the initiator of the idea is happy to support.
What an extraordinarily long contribution for such a simple set of proposals and changes as are in the Banking Amendment (Covered Bonds) Bill 2011. Anyone listening would have understood that it was more of a history lesson and the shadow Treasurer acknowledged that it was a history lesson but with an interesting twist. It left out 12 significant years of the Howard government. It is as if, in financial services and banking and financial reform, the world only began in 2007 when Labor was elected—that was when all the work had to be done. The coalition says: 'Why hasn't the government done this? Why hasn't the government listened to me?' They blame ASIC, they blame APRA, they blame the ACCC, they blame all the states but there is this convenient gap, a 12-year gap, in the history of the shadow Treasurer's nine-point plan. Where was the nine-point plan for more than a decade? Was it just sitting in the bottom of his drawer? Was it conveniently not accepted by his own party? Where was it for all those years?
Thank you very much to the shadow minister for coming in here and entertaining people with a great history lesson. As he leaves the chamber I thank him very much, but he spent very little time addressing the key points of what is really good about this bill. It is nice to have the coalition's support on at least something acknowledging the good work that the Treasurer and this government have done in making some necessary changes as they are needed in this country to deal with a set of circumstances that we have found ourselves in, particularly after the global financial crisis.
This bill amends the Banking Act and allows Australian banks, credit unions and building societies to issue covered bonds. Covered bonds are a debt mechanism, they are a debt security backed by cash flows from either mortgages or public sector loans. They are quite a safe mechanism and something that is well supported. Treasury estimates that this will allow Australian institutions to issue something in the order of $130 billion of covered bonds in coming years. That will strengthen and diversify the Australian financial systems' access to cheaper, more stable and longer term funding not only in our domestic but also in our offshore wholesale capital markets. This is really significant and it is really important because covered bonds are well established already overseas and they are well understood. They are one of the most resilient funding markets and that was very evident during the global financial crisis. What is really welcome here though is that during the financial crisis it was foreign banks as well as a range of other things that actually helped to underpin our financial system. They did it through covered bonds and that same opportunity should be available to Australian banks. They should also be allowed to issue covered bonds in similar conditions, particularly to our local superannuation funds.
Covered bonds will also assist our banks in meeting our Basel III liquidity reforms and are an important step forward in the continuing reform, the continuing development and the continuing support that this government has provided the banking system. In turn what that actually means is support for consumers, for the clients of banks.
This bill also contains an express framework to allow smaller lenders to pull together and jointly issue covered bonds. It is about providing an understanding that flexibility is needed in this market, that it is not just about the big four, that there are groups of smaller banks, smaller lenders, approved deposit-taking institutions that can actually work together to provide those same facilities.
We want to make sure that the consumers are protected. This was not just a case of coming out and saying that we are going to allow this mechanism. Even though it is well understood, even though it is a safe mechanism and it is covered by cash flows, we want to make sure that consumers and depositors are protected. This bill includes a regulatory cap on the amount of covered bonds an institution can issue. There needs to be that safety mechanism in place. The cap will be set at no greater than eight per cent of an institution's assets in Australia. Additionally, depositors will continue to have certainty over their deposits under the financial claims scheme.
When this government announced the financial claims scheme we made sure that people would have certainty and safety about their deposits. I think it is pretty safe to say that all Australians when it comes to a bank have an image in their minds that, when they have put their money in, at any time that they want they can go to the bank and take their money back out. That money is there, it is held safely and it is accessible. As a government, we want to make sure that actually is the case—that it is backed.
The government has recently announced that the financial claims scheme will have a $250,000 per person per institution protection mechanism from 1 February next year—2012. This will protect the savings of about 99 per cent of Australians' deposits in full. In the unlikely event though that you actually needed to use this particular facility, and in the even more unlikely one of the sale of a failed authorised deposit-taking institution where their assets could not cover depositors' funds in full, then the financial claim system will allow the government to levy the banking industry and to recover the outstanding amounts. The bottom line for depositors is that your money is safe; that is an important understanding to have.
This bill is another essential reform in the Australian banking industry. It continues the government's commitment to greater competitiveness and a sustainable banking industry for all Australians. The government, for example, has banned mortgage exit fees quite simply because they were just bad. They were bad for customers and they were bad for consumers, particularly consumers that wanted to switch loans to cheaper loans. Mortgage exit fees, for the majority of people, actually prevented them doing that. We have banned those; we want to make sure that there is true, fair and open competition in the banking system.
The legislation introduced will also help customers. We have introduced legislation to make sure that customers can actually compare loans. I think one of the biggest issues for many people is that when you try to compare apples and oranges and bananas at banks it is all just a little bit too difficult to actually see where the value proposition is. What sort of value am I getting for the interest rate that I am being charged? We have introduced the provision of a simple one-page fact sheet for consumers to help them to compare loans. You actually can compare down a sheet and say, 'Okay, the rates might be slightly different but there is an advantage, maybe, with paying a little bit more interest rate than there is with going with the slightly cheaper loan'. We have made sure that consumers can understand that in its simplest form.
We have also instituted reforms to protect credit card consumers and to save them money. This is in the way you pay your credit card and where those payments first go. They should go to your highest interest rate periods and debt first, rather than coming off the cheaper end of the credit card. These are all little changes, but really important changes for ordinary consumers trying to save some money and to get better value.
We are making it easier to switch deposit accounts. We are also building a fifth pillar in the banking system from the combined competitive power of our mutual sector organisations. We have also boosted the government's investment in AAA-rated RMBS by $4 billion, which is helping smaller lenders to secure cheaper funding. That transfers; it means that more money is available in the system for when people want to borrow money to buy a house. One of the biggest problems we are facing today is when people genuinely can afford a loan but cannot quite meet the requirements because liquidity is tight—because cash is tight. By providing these extra funds through the RMBS—an extra $4 billion—that money will be available to young families trying to buy their first home.
The government's reforms in this area are having an enormous impact, and we are having that enormous impact in four years not 12. Particularly following the global financial crisis, where tough decisions had to be made, we needed a government that would actually take action; not just talk the talk but walk some of it as well. Banks are now more competitive than ever, and this means there is more choice in products as well as more choice in banks. This can only be good for consumers because they can choose with their feet. You can walk, you can go from one bank to the next. Your loyalty ought to be based on their loyalty to you, not the other way round.
This bill continues the government's reforms, and will ensure that our financial institutions will have the capacity to lend safely for many years to come. I commend the bill to the house.
I rise to speak today on the Banking Amendment (Covered Bonds) Bill 2011. This bill amends the Banking Act 1959 to enable authorised deposit-taking institutions, including banks, credit unions and building societies, to issue covered bonds.
This proposal allows complying ADIs to raise a relatively small portion of their total funds by the issuing of covered bonds up to a limit—as the previous speaker has said—of eight per cent of the total value of the institution's assets. It will provide greater flexibility by increasing financing options for domestic Australian deposit-taking institutions. This will go some way to reducing their exposure to volatile overseas markets.
The proposed use of covered bonds is supported by the coalition, in part because the member for North Sydney first raised it back in October 2010. We have had a long interest in the role that covered bonds may take, certainly in the uncertain international financial climate that we face and given our dependence as a financial sector on wholesale funds from credit markets overseas. The government has lifted this idea, if you like, from the coalition's competitive and sustainable banking system plan. Covered bonds will increase the scope of ADIs to source funds domestically and will reduce their reliance on offshore markets for funding.
There will be an increase in domestic sourcing of funds because the wholesale price will in all likelihood be cheaper using the covered bonds than trying to access funds on international markets. Covered bonds are likely to be mainly used by the big four banks, although the bill does provide for ADIs to enter into an aggregating entity to issue covered bonds. This gives some scope to the smaller institutions to be involved in this market. Nevertheless, it is unlikely that the smallest ADIs will use this funding facility. Any increase in domestic sources of funding for the financial system as a whole, though, is certainly worth while. In the specific case of conventional bonds issued by a bank, Australian law has always required that the bank's depositors have the first claim on the remaining assets of the institution in the event that it fails and that they rank ahead of bond holders. Compared with the traditional claim by depositors on all assets with conventional bonds, the key feature of the covered bonds is that they entail the issuing bank setting aside a pool of assets specifically to back the bond, with this asset pool required to be topped up periodically as needed if the value of the assets in it falls. The value of assets in a covered bond pool must be at least 103 per cent of the value of the covered bonds. In the event of insolvency, the holder has recourse to the pool of assets underpinning the bonds and covered bond holders have first claim on these assets over other depositors. That is the key difference that has been introduced.
Despite that preference now being given to covered bond holders, having first claim on the assets of any institution that might fail, the rights of other holders of debts are protected in this bill. Firstly, the proportion of Australian assets which can be committed to the covered bonds pool is limited to eight per cent. That is a very important component, as we are seeing at the present time in Europe, given that there is a capacity and has been for a long time, as I understand it, to issue covered bonds. What is happening at the moment is that many of the financial institutions, given the parlous financial state of the credit markets in Europe, are issuing covered bonds which are simply being bought by other banks. It is becoming a very circular activity and, in many respects, further undermines confidence and the prospect of the European financial system finding an answer to the crisis that currently confronts it. So it is quite important to put a cap on the proportion of funds that banks can hold which are made up of covered bonds.
Secondly, the Financial Claims Scheme provides a government guarantee for small depositors, currently up to a limit of $1 million and reducing to $250,000 from February 2012. As a last resort, there is a measure where the government could levy the financial sector to protect the depositors in any failed institution. So, on a number of accounts, the longstanding preference given to your normal depositor is protected, I feel, in this bill. Unfortunately, during the global financial crisis this government botched the handling of the government guarantees—that is, the $1 million government guarantee on depositors, which is in the near future to be reduced to $250,000. By providing that guarantee initially to the four big banks we saw a rush of depositors' money flood out of smaller ADIs, regional banks and building societies. We saw some very longstanding and reliable trust funds find that they had a rush on the deposits that they held.
As a consequence, the position in the market, quite contrary to what the previous member has claimed—that there is an increase in competition—is that the opposite in fact happened. The botched use of the guarantees led to the big four banks having a massive increase in their deposits, all at the expense of other financial institutions, and it added further pressure for the amalgamation of the St George Bank that would never have happened outside of the global financial crisis. It has further diminished the competition and further enhanced the position of the big four banks. The government loves to belt the big four banks, but I think it was hoodwinked on this occasion. There was a sense of panic running through the government and on a number of measures, including of course the extraordinary and massive spending that went on as a consequence. In this instance it has materially improved the market power of the big four banks by the way in which it botched the handling of the guarantees.
The government was not satisfied with just giving a preference to the big four in the first instance. We have now seen so many small institutions, particularly some of the trust funds which had been specialising in small and medium business financing for 50 years—they had been around forever, had been very reliable and had very deep experience in the way in which they serviced particular parts of the market—disappear; they have gone forever. In some cases, people are still waiting and still have their deposits frozen. Here we are, some years after the global financial crisis but, because of the way in which the government panicked, gave preference to the big four banks and saw a rush on all of our smaller financial institutions, we still have people who cannot access their own savings. Their funds are still frozen in a number of institutions. So we now see continued tinkering with the guarantees and, again, I think it is going to disadvantage the smaller players in reducing it, as is in prospect, from $1 million down to $250,000.
The big banks have an implicit guarantee already because they are too big to fail. In fact, the government really inferred that by the preference given to the big four banks during the global financial crisis. The government inferred that these banks are too big to fail. Most people would deposit money in all of our big four with that assumption. Those with investments which exceed $250,000 will see no advantage in keeping their accounts with the regional institutions, and I refer particularly to, say, local government. So many local governments have placed money in local regional banks in order to support their local industry and, in this case, their local banks. They might have $600, $700, $800, $900 or $1 million deposited in regional banks. Now, with the reduction of the depositor guarantee to $250,000 and with the big four banks being too big too fail, we are going to see the credit unions, regional banks and smaller players again materially disadvantaged. Their customers and others will walk from them, which is understandable because they will seek to take advantage of the extra layer of implicit guarantee afforded to the big banks.
The other issue, of course, is that when the government provided that million-dollar guarantee it imposed a fee, which was not unreasonable. But the fee for the big banks was 70 basis points cheaper than it was for the smaller institutions. So on several counts during the global financial crisis the position of the big four banks was materially advantaged by the government's actions. There is no case if you are providing a positive guarantee. We were talking about a risk factor, but with the deposit guarantee there is no case for discriminating between the different financial institutions as they have done. It is still unclear what the government will do with the cost in the case of the $250,000 deposit guarantee, but I urge the government to consider not disadvantaging the smaller institutions, because they have already been put under enormous pressure in trying to access funds to keep their activities and their ability to compete with the big banks going.
In relation to covered bonds there is an expectation that investors in this class of asset will be satisfied by a lower interest rate than they would demand for a conventional bond given the greater security they are provided. For this reason covered bonds are often argued to be a way in which banks would be able to raise funds more cheaply and therefore, it is suggested in turn, lend at lower rates. The use of covered bonds as outlined by this bill will positively increase the product range offered by ADIs. It will also cater to a class of investors who would not otherwise consider putting their money into Australian bonds but who might do so if covered bonds with their more secure characteristics were available. In theory the allowance of covered bonds will increase the total supply of funds in the market and certainly the total supply of funds sourced locally, thereby reducing borrowing costs and in turn reducing Australia's exposure to needing to borrow wholesale funds on international credit markets.
There is no doubt that international credit markets will come under increasing pressure. In my view, funds will be dearer over the next few years as Europe seeks to grapple with their massive sovereign debt problem. In particular, the idea that the use of covered bonds by banks would allow them to hold their standard variable home rates lower than otherwise has been put forward in the media as one of the key benefits such bonds would bring were they to be permitted in Australia. While this may be right, I think it should not be overstated. As the RBA has noted, to the extent banks have to commit high-quality assets to back any covered bonds they issue, the average credit quality of their remaining assets will be commensurately lower. Hence the rate lenders will presumably demand for the ordinary bonds that banks issue to obtain the rest of their funding will likely be higher than otherwise, offsetting the lower rates the banks can expect to have to pay on their covered bonds.
Covered bonds are not a panacea, but properly managed they contribute a useful addition to the suite of financial products available to be offered. As such, the coalition supports the bill. (Time expired)
I found myself nodding in agreement through much of the speech of the member for Goldstein, which leads me to wonder why the coalition will not be joining the Greens in opposing this bill. The effect of this bill is enormously significant. There have been some historic votes taken in this place this morning that have rightly gained significant attention in the media. It is disappointing that on the same day we are about to change a fundamental element of the Australian banking system that it does not attract the same level of scrutiny. Fundamentally, today, after this bill passes, depositors will lose top spot when it comes to protection of their deposits in banks. This is a fundamental point that should be on the front page of newspapers because it is significant.
It is said that that will be okay because the government through the Financial Claims Scheme will step in and protect depositors. There are two points. One is that all that is effectively doing is shifting the risk that is currently borne by the banks onto the taxpayers. It is shifting it onto the taxpayers without any recompense from the banks to the taxpayers. In other words, what the banks who are able to issue these covered bonds will get is a reduction in their risk with the government and the taxpayers effectively picking it up for free. Not only that; as the member for Goldstein pointed out, there will also be a class of depositors who have deposits over the amount guaranteed by the Financial Claims Scheme, which may drop to $250,000, who will now permanently in respect of that amount be knocked off the top spot. In other words, if a bank ever goes under, a covered bond holder will be able to front up and say, 'I want you to pay me in respect of my claims before the claim of an Australian who's got more than $250,000 in that bank.' That is something that should be attracting the attention of everyone in this country.
It also said that it will allow banks to access a cheaper source of funding. It will only allow the big banks to do that. The smaller banks have been very clear that the covered bond market is not one that they consider they will be able to access. They have explored perhaps pooling their assets and going together with a number of banks to access the covered bond markets and have basically said it is impractical and will not be doable. In other words, yes, there will be a cheaper source of finance available because it is underwritten for free by the taxpayer; but it will only be the big banks who are able to access that cheaper source of financing. What that is going to do in turn is make the lower ranking securities in that bank—the other sources of finance—potentially more expensive as they now become riskier, knowing that covered bonds are going to sit ahead in the queue of other forms of instruments.
It is said that we ought to feel some comfort because only eight per cent of the bank's assets will be able to be in covered bonds. I note with interest that, if my memory serves me correctly, at the time the government first floated this as an idea the figure they were considering was somewhere around four or five per cent. Obviously, the big banks have got in in the meantime and said: 'Well, no, that's not enough; we'd like a bit more, thank you. We'd like up to eight per cent of our assets guaranteed by the taxpayer at no charge to us.' And they have got it.
This comes at a time when smaller institutions have been making the complaint in the media and elsewhere that the promised support to them from the government has not been forthcoming in the way that it was proposed. In other words, we have here yet another measure that is going to make the market dominance of the big four banks that much easier to hold, because they will be able to access a cheaper source of funding with taxpayer support that other banks will not. It is going to add to the concentration of assets in the Australian banking industry at the top end without any countervailing measure on the other side. It is no wonder that at the moment the Australian banking sector is at its most concentrated for a hundred years and this bill is only going to entrench that. When one looks at the nature of the security one sees it is obviously a security that is underpinned by charges over houses. In other words, what we are about to see is a massive expansion of overseas borrowing to fuel the domestic property sector at a time when other sectors of the Australian economy talk about how it is increasingly difficult to find finance. One wonders why it is that we think now is the time to give free support to the big four banks to go and expand the domestic property sector. We do have, as others have noted today, a too-big-to-fail policy with respect to the big four banks and this is another pillar of it.
The view of the Greens is that we should call a spade a spade. If we are going to have a too-big-to-fail policy, and if we are going to be providing support to these big four banks that allows them not only to get through the financial crisis but also to increase their profitability and increase their market dominance after the financial crisis at taxpayer expense, then we should be asking them to give a commensurate response to the taxpayer: to make a contribution in the form of a too-big-to-fail levy if we are going to continue to provide this support. As the member for Goldstein pointed out, it is not only that we do not ask for a levy but also that, when you look at the wholesale funding guarantee, for example, we give the big banks a leg-up. We have said to the big banks: 'Yes, we will give everyone access to wholesale funding but we will make it cheaper for the big four banks,' and then we wonder why at the end of the financial crisis it turns out that they have increased their market share.
The Greens will not be supporting this bill and I will be asking that our dissent be recorded. This is a day when the Australian depositor gets knocked off the top spot and the public is asked to bear an enormous share of risk simply so that the big banks can access finance cheaper and we get nothing in return. There will come a day when depositors who have amounts over and above that guaranteed by the financial claim scheme find that they are no longer able to have first claim on a bank's assets and this bill will be the reason, and for that reason we do not support it.
The Banking Amendment (Covered Bonds) Bill 2011 ultimately seeks to make amendments to the Banking Act 1959 to enable deposit-taking institutions, which include banks, credit unions and building societies to issue covered bonds. This initiative is designed to increase the funding options available to Australian domestic deposit-taking institutions and it is designed to allow them to increase the amount of funding they can get from domestic sources and thereby reduce their reliance on offshore markets for funding. It is important to note that this bill reflects one of the components of the coalition's nine-point banking plan released in October 2010 to reform Australia's banking system. It is another example of the coalition's positive contribution to developing a strong and sustainable economic and financial framework for Australia's future. It is hoped that this legislation will help to level the playing field for smaller ADIs to enable them to have better access to capital to compete against the big four banks. It is important to note that any increase in domestic sources of funding for the financial system as a whole is worth while. It may provide additional portfolio options for the national wealth being accumulated in our growing superannuation pool.
The clear attraction of providing increased domestic sources of funding is that it reduces our reliance on foreign capital, thereby reducing our interest payments to foreign lenders and, consequently, retaining a greater share of our accumulated wealth onshore. Covered bonds are bonds issued by a financial institution covered or secured by a pool of assets and the value of these assets must be at least 103 per cent of the value of the covered bonds. In the event of insolvency, the holder of a covered bond has recourse to the pool of assets underpinning those bonds and the holders of covered bonds have first rights to the pool of assets covering them ahead of shareholders and any other holders of debt. The rights of other holders of debt are protected in two ways. Firstly, a proportion of Australian assets which can be committed to covered bonds is limited to eight per cent, which is largely in line with the current capital adequacy ratios for ADIs today. Secondly, the financial claim scheme provides a government guarantee to small depositors with a current limit of $1 million. However, it should be noted that this will reduce to $250,000 from February 2012. Whilst the coalition is not going to oppose this bill it is interesting to note the piecemeal process by which the government is going about reforming the banking sector. The Australian Bankers Association submission to the Senate inquiry into banking competition on 3 December 2010 stated:
The ABA supports this proposal. Covered bonds represent another source of term funding for banks. Having said that, we consider that the introduction of covered bonds should be part of a package of reforms aimed at addressing the cost and availability of funds in Australia.
For nearly 12 months now, the coalition has had a nine-point banking plan to reform Australia's banking industry. In summary it is as follows: giving the ACCC power to investigate collusive price signalling; encouraging APRA to investigate whether the major banks are taking on unnecessary risk in trying to maximise short-term returns that conflict with the notion of building sustainable long-term businesses which do not require taxpayer bailouts; formally mandating that the RBA publish regular reporting on a variety of key risk measures to ensure that Australian banks are not extracting monopolistic profits; investigating David Murray's proposal for Australia Post to make its 3,800 branches available as distribution channels for smaller lenders—and it should be noted that this is not about Australia Post assuming balance sheet risk and getting into the banking business itself; instructing Treasury and the RBA to investigate ways to further improve the liquidity of the residential and commercial mortgage backed securities markets, which is a significant alternative source of funding for our smaller lenders—and we also include in this consideration of a coalition proposal to extend the credit rating to AAA rated commercial paper in these markets to improve liquidity; exploring further simplification of the FSR Act to make the business of actually getting out and doing business easier and simpler; directing APRA to explore whether the risk weightings on business loans secured by residential properties are punitive and making it more difficult for small to medium business to obtain finance—and we also note that what this legislation refers to with covered bonds was raised by the coalition almost 12 months ago; and, finally, commissioning a full review into the Australian financial system.
As noted earlier, the coalition will not oppose this bill as it is based on one of our key nine-point banking reform plan points and reflects the coalition's positive contribution to public policy development. Overall I think this bill will go a long way to providing those additional funding sources that we need to broaden the base of our economy and banking system. I really hope that, through providing these additional sources of funding to our smaller banks, they can provide that additional level of competition we need in our banking system to give the Australian community more options and access to finance. As to whether it actually reduces interest rates, who knows at this point. We will need to see what happens in financial markets globally, in which there is a lot of turmoil at the moment.
One of the attractions of this, as I pointed out earlier, is that, by creating an avenue for more funding onshore, it starts to reduce some of that risk of us having to source at least 50 per cent of our private debt funding from overseas sources. So it reduces the risks to our economy because we are using more of our accumulated national wealth for our own economic purposes. As I said, we are not going to oppose this bill, because we think it is a step in the right direction. But ultimately we call for a full and comprehensive review of our banking system because this is just another piecemeal step. In reality, to get a comprehensive reform to our assist our economy we need a full review of the system.
The coalition welcomes the debate on the Banking Amendment (Covered Bonds) Bill. I note that back on 25 October last year the shadow Treasurer announced on behalf of the coalition a nine-point plan to reform Australia's banking industry. This gives the lie to the government's claims that the coalition always says no. We oppose bad policies—of course we do—and this government has given us so much material to work with in that regard with bad policy after bad policy. We embrace good policy and we most certainly develop our own policies even though we are in opposition.
The coalition's nine-point plan is a case in point. Point 8 of our plan was 'to commission a resolution to the debate about whether banks ought to be able to issue covered bonds in the same way other jurisdictions allow their banks to, which provides a more affordable line of credit'. The government copied this idea—without attribution, as we have now come to expect—and in December 2010 announced the coalition's policy as part of its own package on a competitive and sustainable banking system. It has taken a while—almost a year—but we are finally debating the legislation.
Covered bonds are a financial instrument that will be used mainly, although not exclusively, by large banks. Formally, it will apply to banks, credit unions and building societies that are defined under the Banking Act 1959 as 'authorised deposit taking institutions', or ADIs. According to the explanatory memorandum to the bill a covered bond is a dual recourse bond or secure debt instrument issued by banking institutions, which in Australia are ADIs. The ADI issuing the covered bond has an ongoing obligation to make principal and interest repayments to covered bond holders—that is, the investors. The word 'covered' simply means secured—in this case by a pool of assets which represents at least 103 per cent of the bonds. In the event of insolvency the holders of covered bonds have first rights to the asset pool—ahead of shareholders and other holders of debt. In short, covered bonds should increase financing options for Australian banks, allowing them to increase the amount of funding they get from domestic sources. This will reduce the bank's reliance on offshore markets for funding. It will diversify the funding base. Hopefully, it will inject further competition into the sector, which will be to the benefit of financial customers.
There are, however, protections provided in the bill because the claiming rights of depositors are being changed. The two protections are that the proportion of Australian assets which can be committed to covered bond pools is limited to eight per cent, and the financial claims scheme will provide a government guarantee for small depositors, which is currently up to a limit of $1 million, reducing to $250,000 from February 2012. We support these protections.
Legal firm Blake Dawson, in an online note on 20 February 2009, said that in the past covered bonds were not looked on favourably by the regulators. They noted:
Australia has a relatively unique depositor preference regime. In particular, section 13A(3) of the Banking Act 1959 (Cth) provides that if an ADI becomes unable to meet its payment obligations, its Australian assets must be used to meet its deposit liabilities in priority to all other liabilities.
Covered bonds grant a first call over certain assets of an ADI, and covered bondholders would have priority over the ADI's assets ahead of depositors on a winding up of the ADI. It is predominantly for this reason that APRA has repeatedly expressed an in-principle objection to covered bonds and structures with a similar effect. In APRA's view (expressed, for example, in APS 120), "covered bonds are not considered to be consistent with depositor preference provisions set out in the Banking Act and hence are prohibited." More recently, in a letter sent to all Australian ADIs on 29 April 2008, APRA further stated that "other synthetic or structured transactions that are in economic substance equivalent to covered bonds will also not be acceptable."
However, on the urging of the coalition, views have changed. The Wall Street Journal online today quotes Australian Treasury sources:
… the legislative framework will allow Australian institutions to issue 130 billion Australian dollars (US$129.9 billion) of covered bonds in coming years.
It also notes:
Su-Lin Ong, the head of Australia economics and fixed-income strategy at RBC Capital Markets, said in an emailed statement to Dow Jones that the new law would provide offshore investors with a greater suite of Australian products to participate in and give Australian banks a broader investor group.
Covered bonds are likely to become an important part of Australian banks' funding tool kit, and the market will grow over time, she added.
Legal firm Clayton Utz—a firm I can personally attest has expertise in this field—in their online briefing of 13 December 2010 noted:
It has often been said that a covered bond is a corporate bond with one important enhancement: recourse to a pool of assets that secures or "covers" the bond if the issuer becomes insolvent. This enhancement typically results in the bonds being assigned AAA credit ratings by credit rating agencies
Clayton Utz went on to note:
One major advantage of covered bonds for investors is that both the debt and the underlying asset pool remain on the issuer's consolidated balance sheet, and issuers must ensure that the asset pool adequately secures or covers the covered bonds. In the event of default, the investor has recourse to both the asset pool and the issuer.
Finally, Clayton Utz noted that this:
… is seen as a step towards giving such Australian ADIs access to cheaper, more stable and longer duration funding in the wholesale capital markets. This is because the credit rating ascribed to covered bonds is often higher than that of the issuer itself, as covered bondholders have recourse to a segregated asset pool which the issuer is obliged to maintain in accordance with the asset coverage test. The offshore covered bond market has traditionally been accessed by highly rated financial institutions. It will be interesting to see whether the Australian covered bond market will evolve along similar lines.
The coalition is proud of putting forward this reform proposal and is particularly pleased that this generally anti-reform government has taken up our idea.
However, covered bonds were only one element of the coalition's nine-point plan. The nine points announced by the coalition in 2010 were: (1) give ACCC power to investigate collusive price signalling; (2) encourage APRA to investigate whether major banks are taking on unnecessary risks in a bid to maximise short-term returns that conflict with the preferences of those that backstop the system, namely taxpayers; (3) formally mandate RBA to publish regular, rather than irregular, reporting on bank net interest margins, returns on equity and profitability to determine whether major banks are extracting monopolistic profits—that is, whether taxpayers are effectively subsidising supernormal returns; (4) investigate David Murray’s proposal for Australia Post to make its 3,800 branches available as distribution channels for smaller lenders—to be clear, the coalition does not endorse Australia Post assuming balance-sheet risk and getting into the banking business itself; (5) instruct Treasury and the RBA to investigate ways to further improve liquidity of residential and commercial mortgage backed securities markets, which are an alternative source of funding for smaller lenders, including consideration of the coalition's proposal to extend the government’s credit rating to AAA-rated commercial paper in those markets to improve liquidity; (6) explore further simplification of the beloved Financial Services Reform Act to make getting out and doing business easier and simpler; and (7) direct APRA to explore whether risk-weightings on business loans secured by residential properties are punitive. The eighth point related to covered bonds and the last point, (9) commission a full review of the Australian financial system.
As I indicated previously, in its 12 December 2010 package the government picked up some of these points. It is a pity that the government does not take into account more of the coalition's policies. Nevertheless, we urge the government to adopt as many of the nine points in our plan as possible. In fact, with the dark clouds of the on-going global financial crisis still rolling in over the horizon there is simply no excuse for the government to ignore the need for further reform.
Instead, as we have seen today, the government have implemented one of the worst anti-reform pieces of legislation ever seen in this nation. The carbon tax will not help but will damage the Australian economy's ability to weather further financial storms. It is the ultimate example of the most incompetent government in Australia's history.
The Deputy Leader of the Opposition must be relevant to the bills before her and I would bring her back to the bills. I have given a great deal of latitude. I will give no more.
The fact is that the government simply does not appear to take heed of the warnings that are coming from overseas. The most stark and chilling of these recent warnings have been those of the Governor of the Bank of England, Sir Mervyn King. Last week he stated:
This is the most serious financial crisis we have seen at least since the 1930s, if not ever, and we are having to deal with very unusual circumstances but react calmly to this and do the right thing.
In essence Sir Mervyn is warning that the current world financial crisis is possibly worse than the 1930s. These are sobering statements that the Treasurer and the Prime Minister do not appear to be heeding. Covered bonds reform is a step in the right direction; however, these reforms are overwhelmed by antireform actions like the carbon tax and the mining tax. They are overwhelmed by the anticompetitive NBN proposal, which the—
The member will resume her seat.
What about relevance?
Mr Lyons interjecting—
The member for Bass is not assisting. The minister at the desk is not assisting. I can see where this is going with the list of speakers before us. I have given a great deal of latitude. Either the Deputy Leader of the Opposition will refer to the bills or I am going to sit her down.
The financial stability of Australia relies crucially on the financial stability of the federal government. The government must lead by example and secure its own finances. The coalition welcomes this bill and is happy to support its passage. However, it is not enough. It is nowhere near enough to meet the massive economic challenges facing Australia today and into the future.
I rise following my colleague and friend the member for Curtin to also support the Banking Amendment (Covered Bonds) Bill 2011 to enable authorised deposit institutions—ADIs—including banks, credit unions and building societies, to issue covered bonds. In doing so, I am very pleased that the government is following the lead of the coalition in introducing the issuance of covered bonds, one of the key points in our nine-point banking plan.
What is a covered bond? I look to a very good speech by John Lonsdale, of the Markets Group in Treasury, which he made in August this year. He said that the characteristics of covered bonds seem 'straightforward and widely accepted', but in fact in particular countries they can be different. He said:
As defined by the European Covered Bond Council, covered bonds have four essential characteristics:
Covered bonds allow banks to diversify away from unsecured debt sources. Covered bonds will be secured by a pool of assets. The value of assets in a covered bond pool must be at least 103 per cent of the covered bonds on issue. In doing so, they will increase the financing options for domestic authorised deposit-taking institutions. This is extremely important at a time of global financial uncertainty, particularly as we see the problems play out in Europe and the United States. They will reduce ADIs' reliance on offshore markets for funding and they could also increase competition in the mortgage market by decreasing borrowing costs.
Importantly, these reforms have the support of the big four Australian banks. These Australian banks are four of only nine in the world that have a credit rating of AA or higher. I note that Ralph Norris, when he was still the CEO at the Commonwealth Bank of Australia, said that 60 per cent of its mortgage book—and it is the biggest mortgage book in Australia—was funded by retail deposits. This will expand the sources of funds for the Commonwealth Bank. So, too, Gail Kelly at Westpac has been extremely supportive and other institutions, like Macquarie Bank or Suncorp, could issue AA rated covered bonds by virtue of their underlying credit rating.
Importantly, in a situation of insolvency, holders of covered bonds can have recourse to the pool of assets ahead of other debt holders and shareholders. There are safeguards for other debt holders—namely, the proportion of assets that can be committed to the covered bond pool is eight per cent of the value of the local assets. This is a figure that is actually a bit lower than what we have seen in Europe. But there is also the Financial Claims Scheme, which provides a guarantee for small investors, and APRA, the Australian Prudential Regulation Authority, will have the powers to regulate the use of these covered bonds.
Interestingly, when it looked at the initial draft legislation, Standard and Poor's, a well-known ratings agency, raised some concerns around the asset-liability mismatch of the risk of issuing covered bonds. They put out a research paper, which was covered by an Australian Financial Review article in April, which said:
These include considering the legal framework supporting the timely and full payment of covered bond obligations, availability of any payment moratorium or restructuring, cover pool servicing, and use of over-collateralisation if an issuer fails.
They were some of the concerns that they raised, but I am pleased to say that in this final draft of legislation now before the House many of these issues have been addressed. I know that once we implement this change in the Australian financial markets the covered bond market will grow gradually, and many expect it to be including up to a quarter of wholesale issuance over time. The Treasurer has said that Australian banks could issue up to $130 billion of covered bonds over the next few years.
Importantly, this will enable Australian banks to be on equal terms with some of its international counterparts. We have seen banks from Canada and Norway come to Australia with the issuance of covered bonds, where Australian banks have had their hands tied. Interestingly, this had already been put in place in New Zealand. So this will be an important reform for the Australian industry and it has the support of the Australian Bankers Association, including, as I mentioned, a number of the major banks in Australia.
As I said at the beginning, the coalition has taken the initiative on finance and banking reform with our nine-point plan, which was announced on 25 October 2010. I just want to mention these nine points because unfortunately the Treasurer—and I see here the Assistant Treasurer—have not taken heed of these nine points and introduced them. Hopefully, with the adoption of the covered bonds point they will also adopt our other suggestions. No. 1 was to give the ACCC power to investigate collusive power signalling. No. 2 was to encourage APRA to investigate whether the major banks are taking on unnecessary risks in the name of trying to maximise short-term returns that conflict with the preferences of those that backstop the system—namely, taxpayers. No. 3 was to formally mandate the RBA to publish regular, rather than irregular, reporting on bank net interest margins, returns on equity and profitability so that it could be determined whether the major banks were extracting monopolistic profits—that is, where the taxpayers were effectively subsidising supernormal returns. No. 4 was to investigate David Murray’s proposal for Australia Post to make its 3,800 branches available as distribution channels for smaller lenders. To be clear, the coalition does not endorse Australia Post assuming balance sheet risk and getting into the banking business itself.
No. 5 was to instruct Treasury and the RBA to investigate ways to further improve the liquidity of the residential and commercial mortgage backed securities market, which are an alternative source of funding for smaller lenders, including consideration of the coalition proposal to extend the government’s credit rating to AAA rated commercial paper in those markets to improve liquidity. No. 6 was to explore further simplification of the beloved Financial Services Reform Act, to make the business of actually getting out and doing business easier and simpler. No. 7 was to direct APRA to explore whether the risk weightings on business loans secured by residential properties are punitive. No. 8, and this is what we are discussing today, was to commission a resolution to the debate about whether banks should be able to issue covered bonds in the same way other jurisdictions allow their banks to, which provides a more affordable line of credit—and thank goodness the government is following the coalition's lead. The final point was to commission a full review into the financial system: something that should be done immediately.
I commend the leadership that the shadow Treasurer, the shadow minister for finance and our leader have taken on this issue. The issue of covered bonds will assist the financial services industry here and will assist consumers. We are following the developments in other markets, including New Zealand, where this has already been in operation. It has the support of the big four and other lenders, it has the support of the Australian Bankers Association, and importantly, it was an initiative of the coalition. I commend the bill to the House.
I am not sure about the standing orders on repeating repetitious notes that you have been provided with but I think I have now heard the same speech on numerous occasions so I am very keen to hear what that member for Dunkley has to offer!
Madam Deputy Speaker, I take your wise counsel about not referring to the Financial Services Reform Act as 'beloved', but we do have a fondness for it and let me say that that fondness will not be reflected in the use of the term beloved.
Thank you!
We will save that for those that are beloved to us.
This is clearly an exciting day, as evidenced by the enthusiasm in the debate on the Banking Amendment (Covered Bonds) Bill 2011. It is interesting that we are standing here discussing yet another point in the coalition's nine-point banking plan. That nine-point banking plan is something that I know you, Madam Deputy Speaker Burke, are absolutely captivated by, and I am glad that the government members opposite are showing such a great interest in this nine-point plan. For those people in the gallery and those that are listening that have missed the description of the nine-point plan, it was announced in October 2010, dealing with what we on the coalition side thought were key points to address the ongoing strength and vitality of the banking industry.
That first item was one dear to my heart. That related to price signalling, and it was interesting that, notwithstanding that the opposition has very meagre resources available to it and the Commonwealth has all the horsepower, talents and expertise of the Commonwealth and Treasury, it was up to the coalition to actually draft a price-signalling amendment to the competition and consumer law, and subsequent to that leadership, the government then followed suit.
What we are doing today is dealing with the very important eighth point of the—
It's a laugh!
banking plan, and I am urged by those opposite to mention all the seven points in between! I will not go over all of them but I will come back to one of them in my later remarks. I will skip over those other compelling points, which show, I think, a really informed and insightful pathway to continue to ensure we have a strong, robust, viable and dependable banking sector.
I will jump down to point 8, and I do so drawing the parallel between what happened with the price-signalling bill, where it was up to the coalition to make the argument for that change, to show how it would be done by legislative drafting—very resourcefully done, given that the opposition has meagre resources—and to come up with a credible and effective legislative amendment that the government could then hook its wagon to. It presented something it claimed was better—only to find it did not understand it and had to make substantial changes to the government's bill when it came to this chamber.
We are here again. Back in October 2010, my friend and colleague the shadow Treasurer outlined the nine-point plan, and the eighth point was to commission a resolution to the debate about whether banks should be able to issue covered bonds in the same way other jurisdictions allow their banks to, which provides a more affordable line of credit. What that statement reflected was an opportunity that was not without a need to carefully weigh up and consider the various arguments surrounding covered bonds.
Covered bonds of themselves are not something that everyone, in uniform, cheers on as wonderful. That is because, as some colleagues have touched upon, they do in effect bring about a change in the hierarchy of people's ability to claim against an insolvent bank and basically put the covered bond holder above the depositor. That is a concept that challenges a number of people who have always approached the banking system where the depositor was at the pinnacle of opportunities to recover in the event of insolvency.
But this covered bonds idea did represent another way of bringing finance into our banking system, and that is why we felt it was important to have a resolution to the debate that had been washing around for some time. On 25 October 2010 the coalition said that was important, and my friend and colleague Joe Hockey explained why. Some months later, on 12 December, the Treasurer, Wayne Swan, in an echo of what the opposition had said, flagged the government's intention to allow the issuance of covered bonds in Australia.
This bill will amend the Banking Act to allow the issuance of covered bonds. This is necessary because the current Banking Act enshrines the notion of depositor preference at the pinnacle of the pecking order in the event of insolvency—that is, depositors are granted first priority on the entirety of an insolvent authorised deposit-taking institution's assets as secured creditors. The ADIs are authorised and regulated by the Australian Prudential Regulation Authority, APRA. This notion of depositor preference has, until quite recently, prevented the issuance of covered bonds for reasons that are apparent in the debate that we have just had.
So what are covered bonds? Covered bonds are a secured debt instrument with a dual recourse mechanism for bond holders. In the event that the ADI that had issued covered bonds actually became insolvent, the covered bond holder would have recourse to the covered pool—
Madam Deputy Speaker, I rise on a point of order. Standing order 75(a) warns against tedious and repetitious speech. Whilst I had some initial optimism after the member for Dunkley's introduction, this is now the sixth coalition explanation in the last hour of what a covered bond is.
Whilst I was trying to indicate to the member for Dunkley that repetition is getting away, the individual has the opportunity in this debate to make his points that are relevant to the bill. The member for Dunkley has the call.
That is very kind, Madam Deputy Speaker. For my colleague Mr Shorten, it might be quite instructive to know that this is based on some research I did back in April. If it is so sound that others have picked it up and carried it forward, I think that is a good sign. So I will go back to the work done in April, when we were doing what the government should have been doing—that is, canvassing opportunities to improve and enhance the banking system in Australia. If my comments have resonance with my colleagues, it might just show what clarity of thought has gone into the opposition's position.
I am sorry for those who were captured by the discussion prior to the interruption, but I was basically saying that, in the event that an ADI that had issued covered bonds becomes insolvent, the covered bond holder would have recourse to a cover pool of assets in the first instance and then to the remainder of the issuer's assets as an unsecured creditor. This would mean that depositors' claims under the Banking Act would effectively be usurped and, in front of those, would be claims of covered bond holders—therefore realigning that depositor preference that currently sits in the current law. That would explain why APRA and others have had some reservation in the past about the issuance of covered bonds. Essentially, it reprioritises access to those assets covered by the covered bond in the event of insolvency.
It would be fair to say that the incidents of insolvency of itself would represent a seismic shift in the banking system in Australia. So there would be much that would take place prior to such an event, which in many respects deals with some of the concerns that have been touched upon in terms of depositor interests in the broader assets of an approved deposit-taking institution. It is not as if an insolvency of a bank just happens and no-one notices; there is lots that goes on in the meantime. The guarantees implied or explicit provided by the Commonwealth, the proactive role of APRA, and the opportunity for other ADIs to become involved in working through any challenges that are faced are all natural actions that would take place prior to an ADI becoming insolvent.
So the concept of the insolvency of an ADI and the possibility of that occurring is something that we need to get our heads around and be quite realistic about. Given that there would be lots of supervision by APRA and lots of engagement by the Commonwealth and Treasury, the bond holders would be comforted not only that their investment is covered by a pool of assets but also that there is active prudential and supervisory effort on behalf of the regulators and the Commonwealth.
Some may ask why we would go down this path when there are other avenues available—residentially backed mortgage securities being one option and your more standard wholesale funding arrangement being another. But, as the explanatory memorandum points out, there are some advantages in having ADI access to covered bonds. It diversifies the source of funds that are available and may bring into the supply arrangements new investors that might otherwise not be attracted to investing in an ADI under wholesale funding RMBS or deposit arrangements. It gives a different structure to the way in which those deposits are paid. Usually covered bonds raise funds with a longer maturity and, throughout the life of that covered bond, the returns are paid and often the initial investment is paid at the end of that period rather than along the way, as happens in a number of other funding instruments.
It is also argued that it is one of the cheaper forms of wholesale funding, because the risk to investors is reduced as a result of the asset covered that accompanies the issuance. It is also a key opportunity for our ADIs to look at new avenues to secure finance. During the global financial crisis we saw that access to traditional funds for ADIs was constrained and also more costly. And I touched earlier on the repayment arrangements, where typically the principal is paid at the maturity date and a fixed-interest return is paid over the life of the instrument. This is quite different to other securitisation vehicles such as RMBSs, where typically there is a floating interest rate with the principal repaid in instalments over time. Some have cautioned about going down this pathway. For those who are gripped by the issue of covered bonds, there is a document of about 500 pages produced by the European Covered Bond Council.
Could you read it?
I had a look through it, but I needed much encouragement to persevere in reading all of it. It covers the experience of covered bonds both in Europe and in North America. It captures the value of that marketplace. It identifies the fact that covered bonds have been used to finance public sector investment in infrastructure. It has also been used as a way of providing mortgage finance in the shipping industry.
I thought it was about banking.
There are covered bonds that deal expressly with the shipping industry where banks are involved in financing shipping, if I could draw the connection for those who were interjecting. There are also covered bonds in areas of mixed assets. So there is quite a history of covered bonds in other countries and other jurisdictions, and success appears to have accompanied that experience. If you want to have a look at what has happened in Austria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Luxembourg, the Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, the Ukraine, the United Kingdom, the United States and—more recently—Canada, you can read that 500-page tome, which is absolutely gripping.
Elsewhere in the nine-point plan—and I am sure that the newly arrived Acting Deputy Speaker would like to hear about the nine-point plan—
No, I am not acting.
there is a part which relates to the importance of affordable and accessible funding. Covered bonds may play a role in the availability of finance to small business. You would be aware that, during the global financial crisis, when there were constraints on funding availability and then cost implications, small business experienced a very cruel period when often banks told them that they were being risk rated and that they should wind back the facilities available to them, pay a higher price and provide security to cover their financing arrangements. Small business had a very tough time during the global financial crisis.
We need to not lose sight of what happens with banking activity for crucial customers to the Australian economy such as small business. I am optimistic that covered bonds will facilitate a new and potentially more affordable avenue for finance. I am particularly interested in what the banks will do with those funding instruments, and I am very focused on what the implications may be for second-tier and non-bank lenders, for whom access to covered bonds might not be quite as straightforward as it is for the big four.
Part of our banking plan went to seeking to encourage APRA to investigate whether the major banks and the financial institutions more generally are properly risk-weighting business loans where there is security provided by residential properties and other private assets. I submit that the current arrangements are punitive and conspire against lending to small business. If any one of us went to seek a home loan and provided some security, and we were then assessed and granted a mortgage for a certain amount with a certain bank, the loan would be offered at a certain rate. If the very same person went to the same bank seeking the same amount of money and offering the same amount of security, but this time for the purpose of small business development and operations rather than a home, they would encounter a punishing prudential arrangement that conspired against the small business and the banks that lend to them.
The way that capital adequacy requirements are applied makes it a challenge for banking institutions to stay as engaged in small business lending as they should be. The spread—the price difference between the cash rate and the amounts that are demanded of small business for such lending—is expanding, and the new reality of secured lending, where private assets are needed to support small business lending, is not adequately reflected in the prudential arrangements. Small businesses are getting a dud deal out of the cost that they are expected to pay for that facility. We need much more information about small business lending to understand the impact of finance's oxygen for that crucial sector of our economy. I call on the banks to continue to work with me to make that useful and relevant information more available. (Time expired)
I am very pleased to rise to speak on the Banking Amendment (Covered Bonds) Bill 2011. In the brief time that I have available to me, I will make three points about this important legislation. First, I will talk about how the coalition's approach to the bill is that of a constructive opposition. Second, I will talk about the fact that covered bonds offer the potential to assist the Australian financial sector—and the banks in particular—to raise capital and about why that matters. Third, I will address the key issue of the impact of covered bonds on depositors and how concerns on that front are addressed in this bill.
I turn to my first point. On this bill, as on so many other bills, the opposition is playing a constructive, cooperative and value-adding role. The appearance of politics can sometimes differ from the reality, and I am sorry to say that there are some in this place who for their own purposes seek to create the impression that the coalition is obstructionist in its approach to opposition. This is unfortunate and not in accordance with the facts, Mr Deputy Speaker Sidebottom, and I know that your own commitment to a close analysis of the facts will be satisfied when we look at the statistical evidence.
The government likes to claim that, as of late September 2011, over 190 bills had been passed by this parliament. The reality is that approximately 170 of those were ultimately passed without a negative vote from the opposition. Indeed, in quite a number of cases, the opposition engaged very constructively by offering helpful suggestions and constructive amendments. In some cases our suggestions were accepted and our amendments included in the bill as it was passed into law. Only a relatively small percentage of bills, therefore, have been voted against by the coalition. I think it is important that we put that on the record so that there is no misunderstanding in the face of the unhelpful claims which are sometimes made by the government and which are not in accordance with the facts. This is an opposition which approaches the government's legislative agenda with an open mind. We are willing to work constructively with the government to improve legislation where that is appropriate. This bill we are debating today, the Banking Amendment (Covered Bonds) Bill, is one which the coalition welcomes and supports. That is not unrelated to the fact that the idea came from this side of the House. In October 2010 the shadow Treasurer, the member for North Sydney—my neighbour in the northern suburbs of Sydney—announced the coalition's nine-point banking plan. One of those nine points was:
Commission a resolution to the debate about whether banks should be able to issue "covered bonds", in the same way other jurisdictions allow their banks to, which provides a more affordable line of credit.
Imitation is the sincerest form of flattery, and two months later the government was eager to flatter the opposition when, in announcing its own banking plan, it included the following item:
Allow all banks, credit unions and building societies to issue covered bonds to broaden access to cheaper, more stable and longer-term funding …
The bill which is in front of the House this afternoon implements that measure.
It is perhaps not surprising that the Treasurer has found it necessary to draw on ideas from this side of the House because his own contribution to the performance of not only Australia's banking sector but Australia's wider economy has been a remarkably undistinguished one. Under the present Treasurer we have seen the merger of the Commonwealth Bank and Bankwest, and of Westpac and St George, leading to an unprecedented increase in concentration and a corresponding reduction in the intensity of competition. We have seen on the watch of the current Treasurer a panicked introduction of a $1 million guarantee for depositors, and this follows Australia having record for many, many years of not needing to have such a government guarantee. We now of course, with this guarantee in place, face the well-known problem of moral hazard—a problem in which bank managements are aware that should they take excessive risks—
Mr Deputy Speaker, on a point of order on relevance: I have waited for the first five minutes of the member's address and he has done everything but talk about the legislation at hand and has engaged in an attack on the Treasurer.
The member for Bradfield has been speaking for five minutes. I would ask the member, and all members who wish to contribute to this debate, to be highly relevant to the legislation before them, which is the Banking Amendment (Covered Bonds) Bill 2011. I ask the member for Bradfield to be very relevant.
Mr Deputy Speaker, I am being highly relevant. In fact, I have used the term 'covered bonds' on a number of occasions and I am explaining the policy context in which this bill comes before the House. A critical part of that policy context is the fact that the government was eager to take up the opposition's ideas because its own ideas had been either non-existent or very poor.
The member for Bradfield will now contain his information and comments to the legislation.
I continue to do that, Mr Deputy Speaker, as I have done consistently for the last five or six minutes.
I await that eagerly.
I now turn to the second point which I wish to address before the House this afternoon, which is the improved capacity which covered bonds offer to banks to raise capital. That is at the essence of the policy intention behind this bill. As I indicated, it is a much better approach to economic management than, for example, the approach of this government in introducing deficit after deficit. We have seen deficits of $26 billion, $56 billion, $49 billion and this year $23 billion. Of course, those deficits simply put upward pressure on interest rates and increase the desperate claims which the government is making on the financial markets. A much more prudent approach to banking policy and economic policy is the one which is contained in this particular bill, and that is the introduction of covered bonds.
It is an uncontentious proposition, which I am sure even the Assistant Treasurer will agree with, that banks play a critical role in our economy as providers of debt capital, and that is vital for home buyers, for business and for growth in our economy. Much of the money which banks lend out comes, in turn, from the money which is put on deposit with them. But, as we all know, Australian banks are not able to source all of their lending from the money which is on deposit with them. According to the Reserve Bank of Australia, as at June 2011 the gap between deposits held with authorised deposit institutions and loans made by those institutions—that is to say, the amount which needs to be secured from other sources—was $700 billion. It is that gap and the need to fill that gap which underpins the policy logic for allowing banks to issue covered bonds. The position is improving: domestic deposits now make up around half of the banks' sources of funds, up from 40 per cent in 2008. But by any measure there is still a significant amount of funding which must be obtained from sources other than deposits. A key means of filling that gap is the issue of bonds and other financial instruments by banks.
That is where covered bonds come in. They are designed to be another form of bond which a bank can issue to tap into the wholesale funding markets, with features which make them attractive to investors and in turn allow banks to raise funds on attractive terms. In that sense they are a form of securitisation, with some important variations which I will come to. Securitisation is a form of financing in which I have had some interest since my days as a banking and finance lawyer at Mallesons in the early nineties, when I had the opportunity to work on some of the earliest securitisation transactions in the Australian market, including the establishment of RAMS.
Securitisation has subsequently got something of a bad name following the global financial crisis, but at heart it is a sensible and useful financing technique under which a bank takes a pool of mortgages, for example, sells that pool of mortgages to a special purpose vehicle, in turn the special purpose vehicle issues bonds backed by the pool of mortgages and funds the purchase from the bank with the proceeds of the bond issuance, and in turn the bondholders are repaid out of the mortgage cashflows. As we all know, securitisation went off the rails because banks started paying less attention than they should have done to the credit quality of the underlying mortgages in part because, with the mortgages having been sold, they no longer had much of an incentive to have an ongoing interest in their credit quality.
I put to the House this afternoon the proposition that covered bonds can be thought of as a form of securitisation in which the holder of the bond issued by the special-purpose vehicle also has a right of recourse against the bank if the asset pool is inadequate to repay the bonds—that is to say, the bond holder also has the benefit of a guarantee given by the bank. I hasten to add that there are some important differences—in particular, a covered bond is issued not by the special-purpose vehicle but by a regulated credit institution. But there is an important similarity, which is that the bond holder continues to have security over the assets held by the special-purpose vehicle. The core idea remains the same: bond holders have their returns funded out of the pool of assets—very typically mortgages—and, in the case of covered bonds, this pool of assets is called the cover pool. There is a significant covered bond market in Europe and elsewhere in the world, but to date Australian banks have not been able by law to issue such bonds and hence tap into that market because, as we have heard, of the inconsistency between covered bonds and the absolute primacy of the claims of depositors in an insolvency.
The attraction of banks being able to issue covered bonds is that they typically allow banks to obtain funds more cheaply than they may be able to do using other forms of financing. Furthermore, covered bonds typically have longer terms than other kinds of wholesale financing and funding. As we saw in the 2008 crisis, where wholesale credit markets dried up, banks with a heavy reliance on short-term funding were very exposed. If they could not roll over their bonds or notes, they faced a liquidity crisis and, in turn, a solvency crisis. There are, accordingly, important systemic benefits in allowing banks to issue covered bonds as it will allow them to access a more stable form of funding and, in turn, that contributes to the stability of our financial system. This combination of longer terms and lower costs will provide an important advantage to Australian banks and, provided that competition is working effectively in the banking sector, those benefits will, in turn, be shared with the banks' customers.
Thirdly, I turn briefly to the question of the impact on depositors, because the point has been made that covered bonds do represent a change in the priority which banks' creditors enjoy. Historically, depositors have had first priority over all other unsecured creditors of banks. I highlight that the priority is only over other unsecured creditors, not over all creditors. That is an important distinction and one which means in practical terms that the value to deposit holders of the existing priority arrangements can be somewhat overstated. Even so, it is a priority which should not be lightly set aside. That is to say, the basis for giving the holders of covered bonds priority with deposit holders now to come second should be very tightly prescribed.
That is done through this legislation in several ways: firstly, through safeguards in relation to the cover pool—that is, the special-purpose vehicle. The cover pool is required to contain 103 per cent of the value of the loan and there must be a cover pool monitor. The second way in which the legislation limits the impact of this change in priorities is a cap on how much of its assets an ADI can contribute to the cover pool. That cap is set at eight per cent. In turn, this limits the amount of covered bonds that the institution can issue. Thirdly, these arrangements will be supervised by APRA, the Australian Prudential Regulation Authority, and it will set prudential standards covering the issue of covered bonds. These provisions, in turn, will lower the risk of the loan.
I conclude by making the observation that we are a constructive opposition and have brought to bear our constructive perspectives on this particular policy area, going so far as to, indeed, promote the concept of covered bonds. We are pleased to support this legislation because it gives effect to an idea that has considerable merit.
I rise to speak on the Banking Amendment (Covered Bonds) Bill 2011, in which there seems to be a new-found interest. The bill amends the Banking Act 1959. The coalition will support the bill primarily because the concept contained therein was our idea in the first place. It is not often that you get the opportunity to set policy from opposition, but this is one of those happy occasions. We originally proposed this initiative as part of our nine-point plan for banking reform in October 2010. A couple of months later the Treasurer followed suit and adopted it, as well as other elements of our plan, as part of his banking plan announced that December. This is a good thing because it demonstrates that the Treasurer, even if not capable of developing good policy of his own, is at least capable of recognising good policy when he sees it.
This piece of light-fingered policy development is a part of an ongoing trend. After all, it is far from being the first time the government has adopted one of the opposition's policies as its own. It did it with the PBO and it did it with labour force participation measures. It copied a large number of budget savings measures. Now it has done it with the covered bonds.
We did it with LPG as well.
Thank you; you did too. So what are covered bonds? Essentially, they are quite similar to asset backed securities. They are attractive to investors because they have a very low credit risk. The investors which operate in these larger markets often require additional security measures for clients' funds under management or superannuation contributions. Covered bonds are very low risk because they are covered by an asset worth at least 103 per cent of their value. In this sense, the bonds are oversecured. But, of course, that means that in the event of insolvency the holders of covered bonds have the first right to the pool of assets ahead of the shareholders and the other holders of the debt. However, covered bonds differ from asset backed securities in two ways. The first difference is that the asset backed securities are backed only by certain specific assets. If those assets go bad, as happened in the US with some of the mortgage backed securities, the cash flows and the value of those bonds go with it. Take, for example, the subprime market in the US. You had banks that had books which were secured by bricks and mortar—mums' and dads' homes. The value of those assets softened—and softened drastically in the subprime market, up to 70 per cent. The banks sold part of their book to hedge their risk, and the person who bought part of the book then carried the risk with the softening of the asset.
Unlike covered bonds, the bad asset can be swapped out with good ones and, in the event that they go bad, this means that the quality of the asset backing the bond is always of the highest quality. Unlike an asset backed security, the covered bond offers the opportunity for the asset—the bricks and mortar—to be swapped for a stronger asset, for example, commercial properties that might be linked to valuation rates on commercial rentals, which would offer far more security and which would be held, of course, at that 103 per cent.
The other difference is that the covered bond debt and the underlying asset pool remain on the issuer's balance sheet. In the event of default, investors have recourse to both the pool assets and the issuer of that bond. These differences mean that the issuing institution can access cheaper and potentially more stable funding in the wholesale capital markets. It will also allow the ADIs, the authorised deposit-taking institutions, to increase the amount of funding they get from domestic sources, which, in turn, will help reduce their reliance on offshore markets for funding.
For example, we can look at our banks at the moment, our four corner banks. Using an indicative figure of, say, 50 per cent of funding secured from domestic markets and 50 per cent offshore—some of those ratios are slightly different, bearing out to sixty-forty, but if we use fifty-fifty as an example—the benefit for the banks having access to a new market to raise capital raises a couple of opportunities for them in reducing their risks to the global market in the current conditions. While the chances are that it will mainly be the bigger institutions who will use these bonds, any increase in domestic sources of funding for the financial system as a whole is worth while.
There is an element of pragmatism here too. With economic conditions overseas in a parlous state, some European banks are now finding it tough to raise funding in the wholesale markets. There are also escalating concerns about sovereign risk, with countries like Greece, Portugal and Ireland and the like considered of serious concern. While Australian banks have not been directly impacted by this tightening in the global funding market due to their reliance on offshore markets, it goes without saying that any tightening in the market can, and probably will, impact on the cost of funding for Australian banks. For that reason it makes sense to broaden the funding opportunities for our banks, and that is what covered bonds will do. Again, with the international risk that exists for our banks with the amount of money that we are exposed, this gives the banks a funding opportunity to harvest some of those funds domestically. Currently our superannuation firms that look for those covered bonds investments are forced offshore. They will head into international markets to get that security, because under the Banking Act we are unable to provide that.
Covered bonds are not some newfangled financial instrument. If anything, Australia is late coming to the party. The reason for this delay in Australia is that they do have a couple of shortcomings. First, by their nature covered bondholders have first claim over the pool of assets, pushing normal deposit holders further back in the queue. Second, because the asset pool backing covered bonds is rotated to ensure only 'good' assets are in place, there is a risk that bad assets will be left to cover the claims of other depositors. However, I believe this legislation has sufficient protections in place to ensure depositors are not left in the lurch.
It does this in two ways. The first is by limiting the proportion of Australian assets which can be committed to the covered bond pool to eight per cent—quite a minimum amount of exposure. Secondly, and probably most importantly, the Financial Claims Scheme provides a government guarantee for small depositors. The funds of the depositors are protected no matter their priority under the Banking Act.
Earlier this afternoon there was an opposition speaker to the bill from the crossbenches and two points he raised went to those particular concerns—knocking the depositor from the first place of security, and having the government taxpayer carry the risk. I want to rebut those points. As an opposition we would not support this bill if the depositors were exposed. I believe that the bill does give sufficient protection for depositors when you evaluate the risk. The bond pool is only eight per cent of the evaluating risk, leaving 92 per cent not exposed. The Australian banks then have the opportunity to increase their domestic market growth by having additional product which was not available to them historically. They also have the capacity to reduce exposure in the volatile markets in the current global conditions, and they do this with an intention of improving their liquidity.
He also raised the issue of the taxpayers and the government carrying the risk. In the last GFC downturn, the government provided the bank guarantee, so we are no strangers to extending a hand and trying to keep our market and our banking system strong. And, from this side of the House, I suggest that our banking system is one of the world-renowned banking models.
In conclusion, I would like to say that, while we on this side of the House approve of this legislation, the Treasurer's preferred method of financial regulation reform has been routinely substandard. In this, as in almost everything else this government does, there appears to be no master plan, no vision and no real objective—that is where I would stick in the nine-point plan, but I think you have heard that one so I will run over the top of that—instead, one gets the distinct impression that they are making it up as they go along. The competitive environment of both the Australian and the international finance systems has gone through enormous change since the global financial crisis. That is why we believe there is a need for a thorough review of the Australian financial system to decide what kind of system we want to see and what changes, if any, are required to achieve it. The coalition will support this bill, primarily because the concepts contained within it were our idea in the first place.
The Banking Amendment (Covered Bonds) Bill 2011 seeks to enable authorised deposit-taking institutions, ADIs, which includes banks, credit unions and building societies, to issue covered bonds for the first time in Australia. As the member for Wright just said in his very high quality remarks, this proposal was put by the shadow Treasurer on 25 October as part of a comprehensive approach to banking regulation. The eighth point of the shadow Treasurer's nine-point banking plan talked about allowing covered bonds to be issued in our jurisdiction. Thankfully the Treasurer decided last December that this was another issue he should pick up of the shadow Treasurer's proposals.
We welcome the government accepting this proposal. It is good to see the government adopt a reasonable proposal from our side, even though they will not publicly admit it, and not try to play politics. They tend to like to claim that everything we say and do is negative, but they are the most negative group of people you are ever likely to come across. We saw a perfect example of that last week when the Treasurer tried to spike his own tax forum by beating up a nonstory in a desperate, negative attempt to change the tenor of the debate. But I do digress.
The shadow Treasurer's proposals were comprehensive in their nature. This is part of that comprehensive approach. This is an important area in which to get reform right. We do not want governments intervening and regulating the banking system too much. At the same time the Australian public—consumers and investors—want to ensure regulation is there in the event that there are problems. In recent years we have seen a higher focus on some of those problems, particularly out of the global financial crisis that developed in the United States in 2008 and infected the world. It is important that we get this balance right. Since that time there has been debate across the globe about getting the balance of regulation right, particularly in the banking industry. There is a lot of money at stake and if there are problems it can have a major effect on people's lives.
Very quickly following the global financial crisis really breaking and the Lehman Brothers issues in September 2008, we saw the then Leader of the Opposition, the member for Wentworth, announce that Australia should have a bank guarantee. The backing level he proposed was well thought through. The government finally came to the party but did so at too high a level and did so with problems that are still causing issues throughout the system. However, it was obviously change that needed to occur because people needed assurance that their money was protected against these sorts of meltdowns. We saw the government take some action out of much of what was proposed by the member for Wentworth at that stage.
As speakers prior to me have stated, covered bonds are well rated products. In fact, the explanatory memorandum states:
Issuers of covered bonds generally seek a AA or AAA credit rating for the covered bond issue. Further, the rating of the covered bond issues is typically higher than the credit rating of the issuing ADI reflecting the dual-recourse nature of covered bonds and the high quality of the asset pool securing the covered bonds. In addition, many covered bond markets (particularly in Europe) are heavily regulated which has the effect of protecting the interests of covered bondholders, and supporting a higher-than-otherwise credit rating of covered bond issues.
This is not a new product around the globe. As the previous member mentioned, this product is being introduced into Australia. It is new to Australia, but has been operating around the globe for some time.
This bill will give authorised deposit-taking institutions the ability to seek more domestic sources of funding rather than relying on offshore markets for funding. That is a good development. That is a good thing. That is what the shadow Treasurer was thinking in his comprehensive approach to this last October, 12 months ago now. Covered bonds will mainly be used by the big four banks, although the bill does provide for ADIs to enter into aggregating entities to issue covered bonds. It is unlikely that smaller ADIs will use this funding facility. Nevertheless, any increase in domestic sources of funding for the financial institutions in our country and for the financial system is worth while. Thus, we are supporting what in effect is a coalition proposal.
In the event of insolvency, the holder has recourse to the pool of assets underpinning the bonds. Covered bonds are issued by financial institutions and are covered by a secure pool of assets. The value of the assets in the covered bond must be at least 103 per cent of the value of the covered bond. The holders of the covered bond have first rights to the pool of assets covering them ahead of shareholders and other holders of debt. That is an important element of the security involved. The rights of other holders of the debt are protected in two ways: firstly, the proportion of Australian assets that can be committed to the covered bond pool is limited to eight per cent and, secondly, the Financial Claims Scheme provides a government guarantee for all small depositors, currently limited to $1 million, reducing to $250,000 from February 2012. These protections are crucial because the introduction of covered bonds is a major departure from one of the core elements of the banking system in Australia, which has been the primacy of claims of depositors under the Banking Act 1959.
This is a good proposal and we will be supporting the passage of this bill through parliament. This is an area where we are conscious of the need to have the right amount of regulation in place. We do not want to see the government overregulate our banking sector, but we do not want to see the government underregulate it either and expose people and their money because it is vitally important for consumers—particularly home owners and depositors—that we have confidence in our banking system. While overregulation is attractive to some in this area, as in many others, to think that the government can save people from themselves or from catastrophe, we know that it does not happen and causes more harm than good most often. It is important in this debate.
The nine-point plan speech given by the shadow Treasurer last October was about getting the balance right in ensuring that the government's intervention in the market was well placed. It was there to provide competition; it was there to provide assurance to consumers and to investors that the market was well run and well-regulated. One reason we survived the GFC relatively unscathed was not only the hard work fiscally that the former Treasurer Peter Costello and Prime Minister John Howard did in ensuring we had money at banks and that we had no net debt, but also the reforms they implemented during their time in government to ensure our banking system remained strong and well-regulated and was not exposed anywhere near the extent that the United States and other countries were during the GFC meltdown.
While we undoubtedly learnt lessons during that time about where else we can ensure that we have stronger protections, ultimately the danger of the current troubles in Europe is that we are part of a global financial system. We are exposed when there are problems like those we saw in September 2008 and are seeing now in Europe, so we need to ensure that we have the regulatory balance right. The nine-point plan outlined by the shadow Treasurer gets that regulatory balance right. It is good to see that the Treasurer has picked up one of the elements of that plan. He should work constructively with the opposition more often and have reasonable debates about important policy issues. We do not often see that from this Treasurer.
I remind the member for Mayo that I want him to deal with the amendment bill. You have ranged fairly widely, so I just want to bring you back to the bill.
I was talking about the banking industry's troubles during the global financial crisis and how we dealt with those. I thought that was dealing with the bill in hand.
In conclusion, this is a good proposal brought forward by the shadow Treasurer and which has been slowly but surely adopted by this Treasurer. We appreciate the fact that he has taken his time to get it right. The coalition will be supporting this proposal because it is a good proposal. The other eight points in the shadow Treasurer's plan were also good proposals and we hope that the Treasurer will continue to work through them and implement them because we think we have the right plan to get the right balance.
I am pleased to rise to speak on the Banking Amendment (Covered Bonds) Bill 2011. In particular, when we review this bill it is important to consider how we got here. Recently the Treasurer was given the international Euromoney magazine finance minister of the year award. Those on this side of the chamber scratched their heads more than a little at the notion that of all people Wayne Swan, the member for Lilley, received the award and yet Peter Costello, the former member for Higgins, did not receive the award. The current Treasurer took this country from a net surplus of $60 or $70 billion in assets and a budget surplus of around $22 billion to a country encumbered with $107 billion worth of debt and running a budget deficit of approximately $47 billion. The notion that the Treasurer who presided over that turnaround in Australia's fortunes was the international finance minister of the year while the Treasurer who brought about 10 surplus budgets, built up $70 billion in assets and built a budget surplus of $22 billion was not entitled to receive that award had many of us scratching our heads.
But there are other policy aspects that this Treasurer has looked at and reforms that this government has made which have led a number of us to query the policy focus and, indeed, the lack of savvy of the government. When it comes to banking policy, one of the most crucial reforms, which in my view was made in error, was the decision to initially provide an unlimited bank deposits guarantee. I am aware, Mr Deputy Speaker, that you have an itchy trigger finger when it comes to dealing with the substance of this matter.
Indeed.
But I would make the point, Mr Deputy Speaker Sidebottom, mindful of that, that this policy in terms of Labor's approach to depositors goes to the very core of the covered bond issue. The reason it goes to the core of the covered bond issue is that, at the height of market uncertainty about where depositors would find sanctuary, it was the Labor government's decision to introduce an unlimited guarantee that effectively completely denuded market linked investment funds, the third-party smaller tier lenders out there in the marketplace. As a direct consequence of Labor's completely botched policy in this regard, we saw the mass migration of depositors' funds from market linked investment funds to, predominantly, the four major banks. We saw ADIs and, in particular, the four major banks gorging themselves on depositors' funds as depositors sought sanctuary, racing from market linked investments to the four major banks.
As a direct result of that botched Labor Party policy, we saw competition in the banking sector effectively collapse. The four major banks now have the highest market share percentage when it comes to loans that Australia has seen for decades. We have seen massive blow-outs in the differential between the official cash rate and bank mortgage rates for, for example, a standard variable mortgage. These are the consequences of a failed approach to policy that the so-called finance minister of the year brought to the table. Now, in an attempt to try to deal with the issue of banking competition, the finance minister of the year has once again had to go to the opposition to look for policy initiatives—because it was in fact the shadow Treasurer, who is at the table, who first raised the issue of implementing a covered bond market in the Australian economy. It was the member for North Sydney who, two months prior to the announcement by this Labor government, raised the importance of introducing covered bonds. I do not want to sound bitter, so I want to throw a bouquet to the international finance minister of the year and highlight the fact that I welcome the Labor Party's decision to embrace coalition policy in this respect. I welcome the fact that they have taken this decision, because otherwise the Labor Party, short of adopting coalition policy, would continue their merry flirt with bad policy that would make a bad situation even worse.
So the covered bonds bill that is before the House today implements, in many respects, a central tenet of the nine-point plan that was introduced on 25 October last year by the shadow Treasurer. Covered bonds—
Why didn't you do it 12 years ago?
Mr Deputy Speaker Sidebottom, I am forced to take the interjection, because it highlights—
No, you are not forced to do anything except discuss the legislation before you.
I am dealing with the legislation—
I am asking you to deal with the legislation, so please do so.
I am very directly—
Mr Hockey interjecting—
No; the member for North Sydney has nothing to do with the debate at the moment. Please continue.
I am very directly dealing with the legislation, Mr Deputy Speaker, because the question that was put forward, almost comically, by the member for Bendigo was: why didn't we do it 12 years ago?
The member for Moncrieff will address his remarks to the bill and not to any other member in this House. Thank you. I am asking you again to be relevant to the bill—
And I will be directly relevant to the bill—
and I want to hear it now. Thank you.
Why this bill was not introduced 12 years ago is directly relevant. The reason why is that there was no need to implement a bill like this 12 years ago because, at that time, coalition policy drove competition in the banking sector. The core focus of this bill is to drive competition. That is the focus of this bill. Let me explain it in Economics 101 terms for the members of the government, who are apparently implementing this policy without any understanding of what it actually does. If you want proof, look at the market share of lending. It was the coalition that, for 12 years, increased the smaller players' share of the market when it came to credit, as opposed to the complete reversal of that situation under this Labor government. This Labor government has driven the single biggest increase in the concentration of market share in the four major banks that this country has seen for decades. So, Mr Deputy Speaker Sidebottom, that goes to the very core of why this bill, and indeed a covered bond market, was not previously needed in this country but is now required as a consequence of Labor's ill-informed policy changes.
Many speakers in this debate have outlined what covered bonds are and what they do. There are safeguards that have been put in place, including an eight per cent limit on the pool of assets and a requirement for there to be 103 per cent effective coverage on the bonds that have been issued—and of course we welcome both of those things. There could be arguments that it should be 10 per cent, 12 per cent or five per cent, but eight per cent seems reasonable, and I note that a large number of marketplace operators welcome that eight per cent figure. The need for there to be a 103 per cent overall level of coverage is also a prudent step.
I am very mindful, though, of the change as a direct consequence of this bill that will see deposit holders effectively relegated to a secondary position, if I can put it in lay terms. Naturally, to some extent this could increase the degree of angst in the community. But I think it is important to recognise that that degree of angst is largely unfounded because of where deposit makers currently already exist with respect to secured and unsecured creditors. The issuance of covered bonds does change that position somewhat, but not to such a significant extent that it warrants, I believe, any level of anxiety. Furthermore, the fact that it is limited to eight per cent of the asset base does provide a very high level of assurance that they need not be concerned.
I sum up by saying again that I welcome being able to throw a bouquet in the direction of the international finance minister of the year because I think it is good that he has adopted coalition policy. I note that the Assistant Treasurer, who has carriage of this particular piece of legislation, is at the table. I have no doubt that he is of the view that, if he had the opportunity to be Treasurer, which I doubt he is attempting to engineer, he would seek to introduce the same bill. I think it is good that the Assistant Treasurer has adopted coalition policy as well in that respect. There are many aspects of this bill that the coalition endorse, and we hope—certainly, I sincerely hope—that we see an increased competitive tempo in the marketplace as a direct result of the passage of this bill.
The Gillard government has a broad agenda to ensure the strength and sustainability of Australia's financial system for the future. Whilst I do not agree with everything the member for Moncrieff said, I do appreciate he made such a valiant effort to be in the House both yesterday and today.
Three years ago, when the global financial crisis hit, we acted decisively to secure the flow of credit to millions of families and small businesses. We are now focused on building Australia as a financial centre by ensuring our banking system has a diverse range of funding options. The Banking Amendment (Covered Bonds) Bill 2011 to allow covered bond issuance is at once both a natural step and a significant step forward towards our future economy. The government has been working on this important reform for some time. In January last year the Treasurer directed the Treasury to begin methodically consulting with industry and our regulators on a framework for covered bonds in Australia. This was 10 months before the shadow Treasurer had even heard of covered bonds when some of his industry mates advised him to include a reference to the concept in his speech to the Australian Industry Group in October last year. We have worked closely with industry to design this bill since early last year. It is a critical economic reform to strengthen and diversify the Australian financial system's access to cheaper, more stable and longer-term funding in domestic and offshore wholesale capital markets. Treasury estimates the government's framework will allow Australian institutions to issue some $130 billion of covered bonds in coming years.
This is just one part of our agenda to build Australia as a financial hub within Asia. Australia has a deep and sophisticated financial market sector. Australia is recognised as a regional leader in investment management, particularly given that we have the fourth-largest number of private funds under management in the world for our superannuation system. We are a regional leader in areas including infrastructure finance and structured products. The strength of Australia's financial services sector is underpinned by a highly-skilled, highly-educated, multilingual workforce and advanced business infrastructure. Finance and insurance is the fourth-largest sector in Australia's economy. It is also a major employer and a growing source of exports. Beyond these more immediate contributions to the economy and employment, a well-functioning financial system is vital for broader economic prosperity given its role in efficient capital allocation. It is also important in addressing future macroeconomic challenges, including the need to grow and manage our retirement savings as our population ages and to diversify our economic base. A deep and liquid covered bond market will help channel our pool of superannuation savings through the financial system into productive investment in all sectors of our economy.
Twenty years ago the Keating Labor government introduced one of the great economic reforms: nine per cent superannuation for every worker in Australia. This year sees the Gillard Labor government progressing the necessary steps by increasing the universal compulsory savings rate from nine to 12 per cent, getting rid of unfair fees and charges to leave more money in people's balances for retirement, finding lost superannuation, consolidating multiple accounts and improving the duties of trustees. By putting money into superannuation Australians steadily build up capacity to have lifetime income security. The goal of lifetime income security is a Labor vision and goal for the whole nation. It also improves the circumstances decades ahead for our children. The more private savings people have to retire on, the less the remaining workers need to pay in tax to help support these retirees. That is why lifting the superannuation guarantee from nine to 12 per cent is so important.
Delivering these latest reforms in covered bonds, financial services and superannuation helps establish Australia for the future. As the Treasurer has confirmed, our framework ensures the absolute security of depositors' savings and the protection of taxpayer funds. This is an important reform for all Australians. It is critical to ensuring our banking sector can keep providing reasonably priced credit to households and small businesses. For that reason it deserves the strongest support of the parliament. I commend this bill to the House.
Question agreed to.
Bill read a second time.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
I have received a message from the Senate acquainting the House that Senator Hanson-Young has been appointed a member of the Parliamentary Joint Committee on Corporations and Financial Services.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
The Gillard government has been able to work productively with the states and territories, employer and employee representatives to achieve historic reform in working towards a seamless national economy. The Work Health and Safety Bill 2011 and associated legislation that we are debating today ensures that the Commonwealth sticks to the agreement that it has made with the states and territories. A deal is a deal, and this bill honours that deal.
As a Labor government committed to reform that is in the interest of the entire nation, employee and employer representatives have been involved in the process throughout. I am excited that workers moving between the ACT Public Service and the Commonwealth Public Service or between the private sector and the Commonwealth public sector will now be able to expect the same standards of work health and safety in their workplaces.
I particularly support this bill because of the additional protections that it provides for workers who are performing work for the Commonwealth. Many of my constituents in the electorate of Fraser work for the Commonwealth, whether as an employee, a contractor or in another type of arrangement. This bill introduces rights for workers in the Commonwealth jurisdiction that have never existed as an entitlement under Commonwealth health and safety laws before. For example, union officials are now able to enter Commonwealth workplaces to speak with workers about health and safety matters.
The Work Health and Safety Bill significantly increases the penalties and the penalty regime for breaches of duty of care. The bill removes Crown immunity. It extends the requirement to consult with workers. It changes the person to whom a duty is owed from an 'employee' to a 'worker'—encompassing a broader type of working arrangement and type of person that might be in a workplace. All workers will have the right to cease unsafe work. It was a Labor government that first provided statutory health and safety protections for its own workers and it is a Labor government that continues this legacy. It continues the tradition of Labor being the party that cares for employees in the Commonwealth public sector.
I know that many would not consider the work of your typical public servant to be particularly risky. But there are many workers performing all sorts of different work for the Commonwealth in all sorts of different workplaces. Take, for example, the situation that workers at Centrelink or the Child Support Agency may find themselves in with an aggrieved or upset customer. Similarly, public servants working for the Department of Defence, for Customs, for immigration or for the Australian Federal Police might find themselves in high-risk situations.
The Commonwealth also has the unusual situation where many employees in this jurisdiction may be working outside of Australia. These workers may be in Australian territory, such as the Australian Antarctic Territory, or outside of it, such as a foreign embassy. The bill ensures that work health and safety duties continue to be owed to these workers. Just because they might be performing work in some other place, it does not follow that health and safety duties are no longer owed.
These reforms stand in stark contrast to the actions of opposition who seek to remove the protections and rights of workers at every turn. The opposition consistently talk about red tape and regulation, ignoring the records of countries with lax attitudes to health and safety and the dangers posed to workers with underregulated health and safety systems. It was the Liberal Party under John Howard who encouraged employers to move into the Comcare self-insurance scheme, placing pressure on the stretched resources of the hard-working people at Comcare and not properly resourcing areas for high-risk work. There were simply not enough inspectors to make sure that work was performed safely.
Order! It being 1:45 pm, the debate is interrupted in accordance with standing order 43. The debate may be resumed at a late hour, when the honourable member will have the opportunity to continue his remarks. Are there any statements by honourable members?
I am delighted in this 90-second statement to welcome news that I have just heard, that Gilad Shalit, the Israeli soldier who has been incarcerated by Hamas in the Gaza Strip since 2006 is to be released within days. This has been an horrific period for the Shalit family and for the state of Israel. I think it is a shame that in order to secure the release of Gilad Shalit, about whom I have commented before in this place, the Israeli government needed to negotiate with an organisation like Hamas and to release up to 1,000 convicted terrorists and criminals from their jails.
But I do fully understand and accept the importance of the decision that Prime Minister Netanyahu and his government have made. I think it is a very welcome development for Gilad Shalit's family: Aviv and Noam, his brother Yoel, sister Hadas and grandfather's Zvi and for the entire Israeli population. I look forward to watching the coverage of his release, which will be sooner rather than later. I hope that Hamas learns that the path of terror is an infamous path and that instead they should pursue a path of peace.
In my first speech in this place, I spoke of my previous employment in the disability sector and the importance of providing assistance and support and as much normality to life as possible for people with disabilities and their families. Today I would like to talk about a constituent of mine, a nine-year-old girl, Sophie McAuley.
Sophie has cerebral palsy and would like to join her school friends in catching the bus to school. She has taken the bus for the last four years, but the right to catch a bus has recently been taken away from her. Under New South Wales regulations Sophie has been denied a bus because her mum is not working anymore and has the ability to drive her to school. All the other able-bodied school students in New South Wales in the same situation as Sophie would be given a pass with no questions or special tests.
Sophie does not want preferential treatment. She wants to be treated like all other boys and girls of her age; she simply wants a school bus pass so she can travel to school with them. I recently wrote to the New South Wales education Minister, Mr Adrian Piccoli, asking him to reconsider the criteria that has denied Sophie a bus pass. Surely, given the nature of the request and the special circumstances surrounding the matter, the New South Wales government can work for an expedited resolution that is favourable to the McAuley family.
On Monday I spent a most enjoyable morning at the Kew Neighbourhood Learning Centre in my electorate of Kooyong. Celebrating Mental Health Week, I joined the centre's chairperson, Prue Brown, manager, Robyn Kenrick and their wonderful staff and local community for morning tea.
It was an opportunity to hear about a recent publication by the Centre, Choices from the Heart: a collection of stories. This chronicles the stories of seven members of our local community who live with mental health issues. The pages come alive with their bravery and insights and the beauty of their personal lives. Each person has a different life story, and to be able to retell their journey helps educate us all about the challenges posed by mental illness, so pervasive in our community with around one in five Australians affected by some form of mental ill health each year. At the same time, the publication plays an important role in reminding the storytellers themselves of their valuable and indispensable contribution to their family, friends and broader community. It is a terrific publication, and its principal author, Anne Carson, deserves to be commended, as does the centre and the Kew East community bank branch of the Bendigo Bank for the support of the project.
The Kew Neighbourhood Learning Centre is a significant contributor to the wellbeing of our local community, be it for the people who use the yoga, computer training, language lessons, childcare or the famous men's shed activities. With over 900 people using its services each week, its impact cannot be overstated, and I am very proud that its activities are at the heart of the Kooyong electorate.
When my late father wanted to say something was unworthy he would describe it as 'drek'. He would have described the ABC TV program At Home With Juliaas 'drek'. The role of the ABC is to raise the standards of broadcasting in this country, and I have to be positive about the ABC and note two programs that did it. Mr Stephen McDonell—the ABC's Beijing correspondent—in a program on Tibetans in Yunnan on Foreign Correspondentreally redeemed the nature of television with the extraordinary report that he produced. Similarly, I want to congratulate Tracey Spring and the people from Compass on the extraordinary program they did on the race riots that took place in Crown Heights. They interviewed Carmel Cato, the African-American man whose son, Gavin Cato, was killed in those riots and also interviewed my friend, Norman Rosenbaum, the barrister from Melbourne whose brother Yankel was killed. The reconciliation that they filmed of those two gentlemen was one of the most moving moments on television that I think you could see. I commend the ABC and Compass for that extraordinary program.
The Georges River was first explored by Bass and Flinders in 1795, and since the early 1800s European settlers have migrated to areas along the river.
Today, the catchment area of the river it is home to over one million people, placing impacts on the catchment's natural environment. This makes the protection of the few remaining natural habitats even more critical. One such area is the beautiful green space known as Cooper's Paddock. Although just one kilometre from the bustling Liverpool CBD, it is an isolated haven on the river and the habitat for no less than nine threatened species, including the powerful owl.
The peaceful woodlands of Cooper's Paddock provide quality breeding and feeding habitat for an extraordinary variety of birds, raptors and several nationally significant migratory species. Cooper's Paddock also contains endangered eucalypt forest protected by law and crucial to the wildlife corridors of Western Sydney.
Yet this irreplaceable site is being threatened by inappropriate industrial development. Along with local residents Brian and Cherie Saxby and Pers and Robin Christian, I call on Liverpool council to consider seriously any rezoning application for Cooper's Paddock so this green open space and its natural biodiversity will be preserved for present and future generations.
The theme of this year's Mental Health Week is 'no health without mental health', so today I would like to draw the attention of the House to some concerning statistics. One in five people experience a mental health illness each year in Australia and three out of 10 will suffer a serious episode of mental illness.
Australia also has alarming rates of suicide. More people die from suicide than motor vehicle accidents. Men are four times more likely to commit suicide than women, and Indigenous people are four times more likely to commit suicide than non-Indigenous people. With these statistics in mind, it is our responsibility to assist in reducing the stigma associated with a mental health illness and to encourage a positive approach to mental health. This includes supporting preventative measures.
This year many non-government organisations in the sector are promoting the concept of getting connected with community. The focus is on family, friends, neighbours and colleagues—at home, at work, at school and in our community. It embeds the outstanding work of Gavin Larkin of the R U OK Day organisation. I hope we can all contribute to building a positive mental health approach. We should be aware of mental health first aid for depression, suicidal tendencies, self-harm, panic, trauma, eating disorders, psychosis and substance abuse.
I especially record thanks to those who work tirelessly in this space, especially Lifeline, the Mental Health Foundation of the ACT, Carers ACT and the Mental Health Council of Australia. (Time expired)
Never before in the history of Australian parliament—not when it was sitting in Melbourne up to 1927, not in the former Parliament House up to 1988 and not in this place—has there been such a drastic change to our taxation system without it first going to the people of Australia. Never before in this parliament, nor in the 42 which preceded it, has there been such a necessity to ask the people what they thought. But this morning, on this ultimate day of betrayal, the misnamed clean energy bills passed, after which we witnessed the unedifying spectacle of rent-a-crowd, no doubt union hacks and Green lobbyists, making a din in the public gallery.
If this minority Labor-Greens-Independent government is so transfixed by a clean energy future, why did it post its What a Carbon Price Means to You in thick plastic? I had a publishing company for eight years before entering parliament and much of our work was putting together material, brochures and mail-outs. Not once did we see the need to issue a publication wrapped in plastic. Putting it in plastic is environmentally unfriendly, expensive and unnecessary.
Upon receiving my copy of Labor's 20-page clean energy future document, I was fascinated to read the disclaimer near the foot of page 4, which read:
The Commonwealth of Australia does not necessarily endorse the content of this publication.
If, as we have been hearing all last night, yesterday and for weeks and months since the Prime Minister went back on her word, it was so urgent to put a price on carbon, why would this publication carry such an odd disclaimer? Maybe it had not been proofread and signed off by the Leader of the Greens, the quasi-Prime Minister, Senator Bob Brown. (Time expired)
I will ignore the member's inappropriate use of a prop, but I would not expect that there would be a repetition in the future because I would have to deal with the situation.
I rise to welcome Senator Mark Arbib's launch today of a report titled What is the economic contribution of Surf Life Saving in Australia. There are 153,000 surf lifesavers around Australia. Most people in Australia are aware that Surf Life Saving is Australia's major water safety and rescue authority and is one of the largest volunteer groups in the country. There are 43,000 active volunteer patrolling lifesavers, and those members rescued 12,000 people last year and took an additional 6,000 preventative actions.
The report, which was released today, was prepared by PricewaterhouseCoopers and states that in 2009-10 volunteer lifesavers served 1.3 million hours and helped avoid an estimated 596 drowning deaths and an additional 55 additional permanent injuries. We were joined at the launch by young lifesavers from MacMasters Beach, Bermagui and Ocean Beach. These are heroes of our country.
The report also estimated that the economic value of surf lifesavers in preventing coastal drowning is $3.6 billion. We know that surf lifesavers and lifeguards prevent death and permanent injury. As we head into summer, this report is a timely reminder of the selfless work— (Time expired)
Greece and Australia share many bonds. I am very fortunate in my electorate of Higgins that I have a very large and vibrant Greek community which enriches the local cultural and social fabric of my electorate. During the previous non-sitting period I had the distinct honour of representing the opposition leader, Tony Abbott, at the 10th anniversary of the unveiling of the Australian Hellenic Memorial. Retired Brigadier Keith Rossis was the master of ceremonies at this very solemn occasion and was also a driving force behind the memorial.
The Australian Hellenic Memorial is located at the Domain Gardens and was erected in memory of the men and women who gave their lives in Greece in both world wars. At the service the names of those who are buried at Lemnos, Greece, were read out in a poignant reminder of the tragedy of war. In March and April 1941, the British sent over 58,000 servicemen and women to the defence of Greece, and of these 17,125 were Australian and of the 6th Division AIF. The force as a whole suffered over 2,500 dead and 3,400 wounded. Over 25,000 of those were taken prisoner. Australian losses were 594 dead, 1,001 wounded and 5,132 prisoners of war.
Memorials such as these serve to remind us of the horrors of war. I was very fortunate to be joined by the member for Calwell, representing the government, along with my state colleagues Andrea Coote, the Parliamentary Secretary for Families and Community Services, and Murray Thompson, who was representing the Premier of Victoria, along with distinguished members of the Greek community. (Time expired)
On 28 September I had the pleasure of farewelling the Australian Youth Ambassadors for Development on behalf of the Minister for Foreign Affairs. It was the second time I have done this, and it was an honour I greatly enjoyed. By coincidence, that morning I had opened the Thailand Update conference, the 21st conference of its kind, run by Peter Warr. It is a conference that aims to deepen academic relations between Australia and Thailand. Among the Australian Youth Ambassadors for Development were people going to Cambodia, Indonesia, Papua New Guinea and East Timor. I was there with the Cambodian ambassador and both of us were deeply struck by the high calibre of people going overseas. I spoke to the youth ambassadors about the late Herb Feith, Australia's first international volunteer, and the extraordinary role he played in taking the best of Australia to the developing countries that surround us.
Order! It being 2 pm, the time for members' statements has concluded.
My question is to the Prime Minister. I remind the Prime Minister of her promise during the election that 'What I say in this campaign is what I will do.' I ask the Prime Minister why the government is now imposing the world's biggest carbon tax on Australia's forgotten families when the Prime Minister also said during the election campaign, 'There will be no carbon tax under the government I lead.'
To the Leader of the Opposition I say you are being marooned by the tide of history. Your question could not make it clearer. As history has marched past you in this parliament today, there you are, standing on the sidelines, relentless negativity the order of the day. Let me remind the Leader of the Opposition that the plan that has passed this House of Representatives today to put a price on carbon means that we will cut taxes for Australian working people. We will cut taxes for Australians who earn less than $80,000 a year. We will increase the tax-free threshold from $6,000 to $18,200—tripling it. We will make sure that there are a million people who are not in the tax system. We will increase payments for family payments. We will increase pensions; 1.8 million pensioner households will on average come out $210 in front.
And who is the threat to all of this? Who is the threat to the living standards of Australians? Who seeks to impose upon them an additional cost? Who is the threat? It is the Leader of the Opposition with his reckless plan to impose a burden of $1,300 on Australians taxpayers. It is time for the Leader of the Opposition to accept that this House of Representatives today has chosen to put a price on carbon pollution, to make our biggest polluters pay the price of the carbon pollution they generate, to use that money to increase pensions and to cut taxes, to protect Australian jobs and to seize a clean-energy future. And there the Leader of the Opposition sits, marooned with his negativity, wanting to put an extra tax on taxpayers and give that money to the big polluters—too stubborn, too relentlessly negative to even come into this parliament and vote to support steelworkers' jobs, a remarkable choice embracing negativity after days and days of campaigning and trying to instil fear into those very workers.
This House of Representatives has decided today to seize the future. As we go out and grab that future with both hands, there will be the Leader of the Opposition on the sidelines, saying no with no policies to guide him, as always.
My supplementary question is to the Prime Minister. Instead of blustering about being on the right side of history, will the Prime Minister now apologise for misleading the Australian people? Is she capable of that one simple word: 'sorry'?
To the Leader of the Opposition: doesn't it strike you—doesn't it strike everyone in this parliament—as somewhat strange that, on a day where we have passed through this House of Representatives a major economic reform; on a day in which we have been focused on a clean-energy future, on jobs for Australians in the future, on a better environment for jobs for Australians in the future; the only thing the Leader of the Opposition can focus on is me? Actually, it is about the future of Australia. Have you got anything to say—one thing, one word, one sentence, half a sentence—about Australian jobs? No, you do not. Do you have one plan that stacks up for a clean-energy future? No, the Leader of the Opposition does not. Does he have one plan to protect Australian jobs? No, he has voted against it recklessly in this parliament. Does he have a plan to protect our environment for the future? No, he does not.
Here we have today voted, motivated to make sure Australians in the future have clean-energy jobs and a better environment, and there the Leader of the Opposition sits, playing his politics—all about me, as usual. That is not the issue. The issue is: will this nation have a clean-energy future? We have said yes. You have said no.
My question is to the Prime Minister. How is cutting pollution, investing in low-emissions technology and renewable energy and providing assistance to industry and households vital for creating a clean-energy nation?
I thank the member for Greenway for her question. To the member for Greenway and to all of my colleagues I say the following. To the people of Australia I say the following. We have debated climate change in this parliament and beyond for more than 10 years. There have been reports. There have been inquiries. There have been debates. There have been votes over a long period of time. When you look at all of those inquiries and all of those reports, when you look at what the scientists have had to say, when you look at what the economists and experts have had to say, some things become blindingly clear.
I believe after all of that debate the vast majority of Australians belie ve that climate change is real. The vast majority of Australians believe it is caused by carbon pollution made by human beings. The majority of Australians want to see that carbon pollution reduced. The majority of Australians want to see action on climate change. Across all of those reports and inquiries, what has also become clear is that the cheapest way to seize a clean energy future is to put a price on carbon pollution, to make sure that the biggest polluters pay. That is the cheapest way to change our economy so it is a cleaner economy with clean energy. After all of those words, after all of those committee reports, after all of those inquiries, today this House of Representatives moved from words to deeds. It has moved from what has sometimes been a rancorous debate to action. This House of Representatives today, this parliament today, has seized the future. This parliament today has grabbed the future with both hands. That future will be one about clean energy jobs, it will be about a better environment, it will be about cutting taxes and increasing pensions and it will be about making sure our country is not left behind as the world moves to a clean energy future.
To my Labor colleagues I say I am proud of their courage and fortitude in this debate, and they too in turn can be proud that this is a reform with Labor values right at its heart. This is a reform in the Labor tradition of Medicare and superannuation. This is a reform hotly contested at the time, but like Labor reforms of the past—like the Labor reforms of Medicare and superannuation—they are the reforms that have built the nation we are proud to live in today. History will record that a clean energy future started today with this vote. I thank members of parliament who have had the courage to seize this future for their fortitude. They have made an important decision for the nation, an important decision that will see us cut carbon pollution, that will see us cut taxes, that will see us increase pensions, that will see us protect Australian jobs and that will see us lock in a growth of 1.6 million jobs by 2020 and strong economic growth. This is a reform to shape the future. It has taken determination, and today we have got this done.
Order! Before calling the member for Dunkley, I inform the House that we have present in the gallery this afternoon the Hon. Ano Pala, Minister for Foreign Affairs and Immigration, of Papua New Guinea. On behalf of the House I extend to him a very warm welcome.
Honourable members: Hear, hear!
My question is to the Prime Minister. Prime Minister, why is there not one dollar of compensation for small business in these 19 carbon tax bills?
Opposition members interjecting—
Order! The member for Calare is warned.
I say to the member who has raised this question that he should look to measures that the government has and is providing, like the instant tax write-off for new assets for small businesses, an important measure increased to $6,500, an important measure for small businesses. I also say to the member who has engaged in the stunt today of walking to the dispatch box: what does he say to those small businesses about the opposition's plan to impose a cost—whether it was imposed on families or small business we are still waiting for clarification—
Mr Speaker, on a point of order: the Prime Minister was asked a very straightforward question about the compensation in the carbon tax package. She has been talking about every other small business measure except what is in the carbon tax package and I ask you to direct her back to the question she was asked.
Order! The Prime Minister has the call. The Prime Minister knows the requirements of the standing orders.
On the carbon-pricing legislation which has passed the parliament today: first, and despite the continued misrepresentations of the opposition, the people who will pay the price on carbon are the biggest polluters in this country. I refer the opposition to the legislation that in their relentless negativity they have voted against. I refer the opposition to the fact that the money paid—
Opposition members interjecting—
Order! The Prime Minister will resume her seat. The chamber will continue when we have quiet. The Prime Minister has the call.
I refer the opposition to the fact that the money raised by putting a price on carbon, paid by those biggest polluters, will be used to put more money in the hands of Australian taxpayers, those who need it the most, more money in the hands of Australian pensioners—indeed, pensioner households, 1.8 million of them, will on average come out in front—and more money in the hands of those who have family payments.
The member for Dunkley may as well sit down.
They are the people that go and use the services of small businesses. The member for Dunkley might want to think about that. They are the people who go and buy things from small businesses. Yes, we have been upfront all along in saying that there will be a price impact—0.7 per cent, less than a cent in a dollar—and that is why we have provided extra money to families and to pensioners as they continue to consume the services from those small business people.
I do invite a contrast with a plan which would enable the alternative government, if it were ever elected, to pick winners and drag money out of families and small businesses to pay for it. I also say the following about the government's plan and, in saying it, I refer the House to the following words, because they are very wise words and the House should be reminded of them. My attention has been drawn to a statement which says the following:
It was actually the coalition that instigated work on the emissions trading scheme. In fact, I have in my hand a report that I helped author back in 1998 which talks about regulatory arrangements for trading in greenhouse gas emissions—1998!
… … …
The coalition’s commitment to an ETS is demonstrable.
Words from the member for Dunkley. It is a pity—
The Prime Minister will bring her answer to a conclusion.
It is a very great pity that, fuelled by hypocrisy, he did not vote consistently with those words today.
My question is to the Treasurer. Will the Treasurer update the House on how the government is delivering the big economic reforms for the nation's future?
I thank the member for La Trobe for that very important question. She is a very enthusiastic supporter of clean energy, as is everybody on this side of the House because we know that a price on carbon will drive that investment particularly in renewable energy—in the wind, in the solar, in the geothermal. Of course, there were those on the other side of the House who once believed in tackling climate change, like the member for Dunkley—
Mr Pyne interjecting—
The member for Sturt is warned!
or like the member for North Sydney. History will judge those harshest who have changed their mind for rank political opportunism. We on this side of the House are passionate believers in a clean energy future. History will judge those harshly on that side of the House who profess to believe in climate change but have voted against it in this House. What we have seen is empty political opportunism from those opposite because saying no is not a solution to dealing with climate change. What we must do is put in place the significant long-term reforms to drive investment in renewable energy and have the political courage to face up to the future and put in place the long-term reforms that will guarantee our prosperity into the future. Putting a price on carbon pollution is one such long-term reform.
What we have seen from the IMF and many other bodies is that the Australian economy is resilient today because in the past politicians in this House had the courage to face up to the long-term reforms. Politicians particularly in this House had the courage to face up to the challenge of the global financial crisis. We on this side of the House voted for jobs in the face of the global financial crisis; those on that side of the House voted against jobs. What motivates everybody on this side of the House is that our No. 1 priority is to support jobs and to support jobs in a clean energy future; to support the green jobs of the future and to support our workers, particularly in the steel industry, which is opposed as well by those opposite.
As a consequence of our actions we avoided recession in this country. Tens of thousands of people kept their jobs because we on this side of the House had the political courage to vote for what was right, not for what was politically opportunistic at the time. The consequence is our economy today is almost six per cent larger than prior to the global financial crisis and we have one of the lowest rates of unemployment in the developed world. If those people opposite had had their way, tens of thousands of people would have lost their jobs.
We on this side of the House will do what is right for the future of the country. We on this side of the House will support clean energy. We, with others in this House, understand the importance of putting in place long-term policies for the future. And of course, when judgment is ultimately made, those opposite will be judged as wreckers, as being on the wrong side of history.
My question is to the Prime Minister. I refer the Prime Minister to the millions of Australian families who will be worse off under the carbon tax, such as a child-care worker and a part-time retail assistant who will be worse off by $137 a year, a police officer and a marketing assistant with two children who will be worse off by $506 a year, a paramedic and a stay-home mum who will be worse off by $102 a year. Where are these families expected to find the money to pay for the government's carbon tax?
Thank you, Mr Speaker—
An incident having occurred in the gallery—
Order! The House will come to order!
Order! I would hope that the member for Riverina was satisfied with the way in which the gallery was dealt with on that occasion. It is a privilege to be in the gallery—a privilege. And I think that I have been fairly lenient. But I congratulate those, on behalf of us, who dealt with a demonstration. They have my full support. They do not have to be directed. They know what is appropriate. I call the Prime Minister.
Thank you very much, Mr Speaker. I say to the member's question—and as I do so I look at those in the gallery who are properly exercising the privilege of being there, and I can see in the gallery children who are here today with their parents—that what I would say to those families is this is a reform the Australian nation needs for the children we see seated in the gallery today. This is a reform for those children. An incident having occurred in the gallery—
Order! The House will come to order. I place on the record so that we get it clear, like recent speakers I am concerned that members of the public continue to have ready access to the galleries of the House. In saying that, I would presume that all visitors want to observe and listen to proceedings of the House. I understand that often the matters that are discussed would be matters about which visitors and others may have strong feelings, and I understand that, but I would hope that all visitors will understand they are not permitted to intervene from the galleries and that the security staff will be directed to remove any individuals who persist in intervening or disrupting proceedings. It would be unfortunate indeed if the House were to be forced to impose further restrictions on access because of the actions of a minority. I think that that is what we should really keep in mind.
Honourable members interjecting—
Order! I think members should be very careful. The Prime Minister.
Thank you very much, Mr Speaker. I was referring to the future of some of the children I see in the gallery and the children who are beyond the gallery today. The member asked me why someone should support putting a price on carbon, and in answer to her I would say that people would support putting a price on carbon because they care about the Australia that those children will become adults in.
An incident having occurred in the gallery—
The attendants will take action to remove people from the galleries. Order! The Prime Minister.
Thank you very much, Mr Speaker. As I was saying, I was referring to this nation's future and to the future that the children of this nation will have in the nation that they will grow up in.
An incident having occurred in the gallery—
Order!
A government member: Press gallery?
Order! Those on the floor of the chamber do not need to encourage the only gallery I cannot see!
I assume that most of the serious people are still there and those who think this is a joke will be down taking interviews of the protestors.
But we have got to a stage where I am actually getting messages about whether I am considering clearing the galleries. What I will tell you is that I am not. But, if there is anybody else in the gallery who wants to get something off their chest, do it now and then leave by themselves, because the rest of the people are here to view proceedings. The only alternative that I do have is to clear the galleries, and I will not be doing that. But I am not endangering those who are employed by the parliament to keep order in the galleries. I hope that some people might think of that and that anybody who can do anything to assist the orderly behaviour of the galleries would do so. The Prime Minister.
For that Australia of the future, I believe that Australians do want to see us tackle climate change, that they want this generation and the generations that lie beyond to grow up in an Australia where our economic growth is no longer dependent on carbon pollution growing. I believe they want to see children grow up in an Australia that has a better environment, where we are walking more lightly on our planet than we do today. I believe they want to see an Australia where young people, middle-aged people and older people have the opportunity to get clean energy jobs. They do not want to see this nation lose the global race for a clean energy future. They want us to have our share of those opportunities here.
Mr Speaker, I raise a point of order. It is on relevance. My question was: where are these families expected to find the money to pay for the government's carbon tax?
The member for McPherson will resume her seat. The Prime Minister has the call.
I believe they would want to see an Australia where we direct our resources to those who need those resources the most, which is why with putting a price on carbon we have deliberately designed the assistance that goes to households so it assists those Australians who need that assistance the most—like pensioners, like people who earn less than $80,000 a year, like families raising children.
I would say to the member that when she contemplates the circumstances of those families she may want to contemplate the alternative that the opposition says it believes in, where more money will need to come from those families to give to the biggest polluters, whilst of course the scheme that this House of Representatives has passed today is a scheme where we get the money from the biggest polluters, creating an incentive for them to reduce their carbon pollution, and use that revenue to assist Australians who need that assistance the most.
I would say more generally to those on the floor of this parliament that the obligation which comes with sitting in this parliament, and it is a heavy obligation, is not to agree with everyone who raises their voice; it is to do the right thing for the nation's future. That is what this House of Representatives has done today.
My question is to the Prime Minister. Now that the House of Representatives, this very alive home of democracy in Australia—
Opposition members interjecting—
You bring in the crowds. Now that the House of Representatives has expressed the collective will of the majority of MPs—
Opposition members interjecting—
Order! There is only one member who has the call and that is the member for Lyne.
Now that the House of Representatives has expressed the collective will of the majority of MPs and chosen the conservative path of low-cost, low-risk policy, finally choosing certainty in economic policy via an emissions trading scheme, can the Prime Minister confirm that the grants programs, particularly the food-processing program and the Biodiversity Fund, will be released as quickly as possible?
I thank the member for Lyne for his question and I thank him for supporting our opportunity today to seize a clean energy future. I thank him for his support. All through this debate and discussion in the House of Representatives and beyond, people have been concerned at our ability to work with Australian employers and ensure that we protect Australian jobs. The package of legislation that the House of Representatives has passed today does protect Australian jobs. There are some important programs directed towards helping Australian businesses seize a clean energy future. They are directed in part to businesses in the food sector and to businesses like foundries; but they are also directed beyond—assistance as Australian businesses seize a clean energy future.
I have been asked specifically about the commencement date of the clean technology programs. This is an important suite of programs: $1.2 billion to directly help improve energy efficiency and reduce carbon pollution in manufacturing industries. We have particularly recognised the circumstances of food processors and set aside $150 million for them to move to cleaner technology. Last month the government released a discussion paper on the operation of this $1.2 billion suite of clean technology programs. The department that is relevant to this, the Department of Innovation, Industry, Science and Research, is consulting with stakeholders to make sure that the very specific design of this program works well to meet their needs. It is anticipated that the first funding from this program will be awarded in May 2012 and a call for applications will be launched in the first half of 2012.
The member also asked me about the Biodiversity Fund. This is also a very important part of the measures we are taking to ensure our nation seizes a clean energy future. These are complementary to the foundation stone of a carbon price. The government will establish an ongoing biodiversity fund with funding of $946 million over its first six years to support landholders that undertake projects to establish, restore, protect or manage biodiverse carbon stores. This is about our unique Australian environment and keeping it for the future. Mr Speaker, I can advise the House in answer to the member's question that the government expects to appoint an interim board shortly to further the delivery of these land sector measures under the Biodiversity Fund. The government is committed to ensuring the delivery of the funding under the Biodiversity Fund begins this year, and to that end we expect draft guidelines to be released over summer, with the initial allocation of funding likely to be announced in the first quarter of 2012.
These are important measures, but they stand on the foundation stone of putting a price on carbon, the cheapest way of ensuring that we seize a clean energy future.
I inform the House we have present in the gallery this afternoon members of a parliamentary delegation from the Japanese House of Councillors led by His Excellency Mr Hidehisa Otsuji, Vice-President of the House of Councillors. On behalf of the House, I extend a very warm welcome to our visitors. Konnichiwa. I say to Otsuji-san that he has missed the excitement and I did not have to expel anybody from the floor of the chamber. I am sure that Mr Abe, the interpreter, will explain to him later what happened.
Honourable members: Hear, hear!
My question is to the Minister for Climate Change and Energy Efficiency. Will the minister update the House on the government's clean energy future legislation? Why was this morning's vote crucial and how does it build on nearly two decades of inquiries, discussions and debates?
I thank the member for Reid for his question. He has had a very long-term interest in the legislation that has been passed by the House this morning. It is legislation that will of course in the years to come be seen as a very important economic and environmental reform. The bills that the House passed this morning build on over two decades worth of consultation, work with industry, work with environment groups, negotiation, inquiry and many years of scientific work, and I am pleased to say, as the Prime Minister said earlier, that the House of Representatives has passed on this occasion from words to deeds. We are tackling climate change.
Subject to the consideration of the Senate, upon passage of the legislation, from 1 July next year Australia will have a price on carbon pollution. That will mean that the largest emitters of greenhouse gases in our economy will be obliged to acquire a permit or a carbon unit for each tonne of pollution that they produce and it will generate a very strong incentive to cut pollution and to invest in cleaner energy sources. It is a reform that is economically efficient, is environmentally effective and will be socially equitable. The fact of the matter is that by applying a market mechanism, an emissions trading scheme, the government's carbon price mechanism is the most cost-effective way to cut our greenhouse gas emissions. Business will have certainty about carbon pricing, and investment in long-lived assets, in particular in the energy sector, will be unlocked, with this uncertainty over carbon pricing resolved. Australia will begin to build a clean energy future. Billions of dollars of investment in renewable energy is anticipated. The government's plan will be environmentally effective because we will be setting caps on carbon each year when we move to emissions trading, and the caps will mean that by 2020 at least 160 million tonnes of emissions will be cut in that year. The new Climate Change Authority will be advising governments in years to come on the pollution caps necessary to make long-term emissions reductions.
Very importantly, the plan that the government has put forward that has been carried by the House this morning is socially equitable because nine out of 10 households will receive assistance to meet very modest price impacts. In fact, over four million low-income households will receive assistance that is at least 20 per cent more than their expected price impact. The tax-free threshold will be trebled. A million people will be released from the lodgement of a taxation return. Significant benefits will be delivered for low- and middle-income earners, including for many women, casual and part-time workers.
This is a Labor reform through and through. In this parliament this legislation was formulated by government members and members on the multiparty climate change committee. Finally, I would like to thank the crossbenchers who participated so constructively and with such courtesy in the proceedings of that committee. I am very confident that, once this legislation has finally passed the parliament, those who supported it will be seen as having acted in the best interests of future generations and those who opposed it will be exposed through the hollow fear campaign that they have conducted. (Time expired)
I inform the House that we have present in the gallery this afternoon a delegation of Australian and Chinese youth who are visiting as part of the Australia-China Youth Dialogue, which I am reliably informed is an ANU sponsored initiative in partnership with the Lowy Institute. On behalf of the House I extend a very warm welcome to the delegates.
Honourable members: Hear, hear!
My question is to the Prime Minister. I refer the Prime Minister to her statement:
The question of truth in government is not a game—and it is not my game; it is about … what a government should … say to the Australian people when it is seeking their trust and their mandate at an election. Anybody in the Australian community … would say … that what they want to know before the election is just the simple truth.
Does the Prime Minister still believe that the question of truth in government is not a game? If so, why is the Prime Minister refusing to give the Australian people the final say on the world's biggest carbon tax?
Certainly I do believe that truth in politics is very important and I refer the Deputy Leader of the Opposition to her statement in September 2008:
The Liberal Party has a policy of both protecting the planet and protecting Australia. We support, in principle, an Emissions Trading Scheme ….
Was she telling the truth then or did she tell the truth by the way she voted today because both cannot possibly be the truth, can they?
Mr Speaker, I seek leave to move a motion of censure in the government.
Leave not granted.
Mr Speaker, I move:
That so much of standing and sessional orders be suspended as would enable the Leader of the Opposition to move forthwith:
That this House censure the Prime Minister for betraying the Australian people with the introduction of the world’s biggest carbon tax when she said, five days before the last election, in a phrase that will haunt her to her political grave, “there will be no carbon tax under the government I lead” and:
(1) the 72 Labor members of parliament that betrayed their electorates by voting for a carbon tax today stand condemned; and
(2) all members supporting this toxic tax are duly warned that the Coalition will pursue every vote in every seat to give the Australian people their say on this carbon tax at the next election which has been denied to them today by a Prime Minister who has deceived them, and a Labor Party that has forgotten about families, abandoned workers and become a risk to our future prosperity.
Standing orders do need to be suspended because today this parliament has witnessed the unseemly spectacle of a government cheering itself for breaking its own election promise. We have witnessed the unseemly spectacle of government ministers celebrating a betrayal. They celebrated their betrayal with a kiss. This will be remembered as the day the Gillard government broke faith with the Australian people and gave itself a round of applause for doing so. Shame on this government!
We know because we talk to people, we know because we listen to people and we know because we hear people in this very parliament that people are angry because they have not been treated with respect by this government. The people of Australia were lied to by this government before the election and they have not been listened to by this government since the election. This Prime Minister should not just say sorry; she should resign. That is what this Prime Minister should do.
We have heard a lot from the government today about their being on the right side of history. What an incredibly arrogant presumption from a Prime Minister and a government who are on the wrong side of truth. That is the problem with this government. If the Prime Minister had any integrity and conception of what happens in the real world, she would know that you cannot build a decent future based on lies, that you cannot build a political system that is respected and has integrity by deceiving the Australian people. That is exactly what the government have done today.
We heard from the Deputy Prime Minister and from the Treasurer that this was a great reform in the Labor tradition. I do not know about the great tradition of Bob Hawke and Paul Keating whose reforms involved lower taxes and less regulation. This is a reform in the tradition of the Rudd-Gillard government; a reform in the tradition of pink batts which catch fire in people's roofs; a reform in the tradition of overpriced school halls; digging up people's streets; the National Broadband Network, the greatest white elephant of all time; and Medicare Gold, the one great monument to the policy thinking of the current Prime Minister. The Minister for Sustainability, Environment, Water, Population and Communities has said that this is a Labor reform through and through. That was the phrase he used. The Australian people fully understand what this is. They understand that this is socialism dressed up. It is socialism dressed up as environmentalism.
Standing orders must be suspended because this is the only appropriate way to mark the significance of this day. It is betrayal day because this is the day when the Prime Minister has consummated her broken promise, the broken promise that will haunt her to the grave. We all remember what it is and let it echo around this chamber again and again: 'There will be no carbon tax under the government I lead.' That is what she said and that is precisely the opposite of what she has done. When this Prime Minister made that statement she did not just say it for herself; she said it for every single Labor member of this parliament.
We see them all up there, hanging their heads in shame. The member for Braddon is hanging his head in shame and the member for Reid is hanging his head in shame, as well they should. The member for Moreton, that man of principle yesterday, who yesterday was so determined not to betray his electorate, marched into this parliament and betrayed his electorate today. He was not prepared to betray his electorate to protect the Prime Minister's job, but he did betray his electorate today and he did betray the job hopes of all his constituents.
This is a bad tax. It is a bad tax based on a lie. It is very interesting that today we put some questions to the Prime Minister and she could not answer two important points. There is no compensation for small business. The 1½ million small businesses in this country are going to be left in the lurch by this bad tax based on a lie. She also had no answer for the forgotten families of Australia, some of whom were referred to by the member for McPherson in her question today. These are the families who will be out of pocket under her carbon tax and they will be out of pocket even on the government's own figures. Even on the government's own figures, some three million Australian households will be worse off. And we know just how untrustworthy this government is with figures. We know these figures cannot be believed. We know that, when the government says power prices will go up by 10 per cent, that is just the start. They will go up by 10 per cent with a carbon tax of $23 a tonne; just how much will they go up by when a carbon tax reaches $131 a tonne, as it will under the government's own figures?
Mr Albanese interjecting—
The minister at the table says 'bunkum'. Read your own documents, mate! There it is in black and white in your own papers, a carbon tax of $131 a tonne. And you know, Mr Speaker, it is not going to reduce emissions. That is the critical point that this minister never actually owns up to: the fact that this whole scheme is a con. It will not actually reduce emissions. Look at the government's own figures: far from reducing emissions by five per cent by 2020, they actually increase by eight per cent—
Mr Dreyfus interjecting—
The parliamentary secretary, the man learned in the law—at last he speaks! I say to the parliamentary secretary learned in the law: tell us what your own papers say. Your own papers say—
They're in our papers. That's what you're quoting from!
that emissions will go up from 578 million tonnes to 621 million tonnes—an eight per cent increase in our emissions, on your own figures. If you go down the same page, Parliamentary Secretary Dreyfus, you see that, by 2050, we will not cut emissions by 80 per cent; we will cut them by six per cent. The $131-a-tonne carbon tax reduces our emissions by—wait for it!—six per cent. We will achieve the 80 per cent emission reduction that he boasts about only because we will spend $57 billion, 1½ per cent of GDP, on foreign carbon credits from foreign carbon traders.
This is a black day for Australian democracy. This carbon tax is a sign of the Prime Minister's willingness to betray people for power. It is a sign of her unwillingness to listen to people and her unwillingness to admit to making mistakes. I say to this parliament that we on this side will work every hour of every day to repeal this bad tax based on a lie. We will oppose it with every breath in our bodies in opposition and we will rescind it in government. I seek leave to table 30,000 signatures. This petition by 30,000 Australians— (Time expired)
Is the motion seconded?
I second the motion. It is essential that this parliament suspend standing orders to debate this censure motion today so that we can begin the repairs to the fabric of our democracy that has been so damaged by the vote in the parliament this morning. It is a shameful episode in Australia's democracy that the government of the day has ignored the will of the people, ignored its own promises to the Australian people and imposed on the people of this country a burden that will make their lives so much more difficult. Members of this place represent families, businesses, manufacturers, miners, farmers and other workers, but today 72 members of the Labor Party, with a few colleagues on the crossbenches, voted to make the lives of their constituents just that little bit more difficult, that little bit harder, by putting up the price of their food, the price of their transport, the price of their education and the price of their health—and some of them will pay the price with their jobs.
And this is a tax the government said it would not introduce. The government is simply bereft of legitimacy. It was cobbled together out of expediency and self-interest. It does not have a mandate. It certainly does not have a soul, it certainly has no honesty and it has subjected the whole of Australia to the will of a very small minority. The gloating of Senator Bob Brown and the member for Lyne a little earlier, the self-congratulation of the members opposite and the members for New England and Denison, and the celebrations of the Prime Minister and her cohorts only serve to inflame the sense of betrayal that the people of Australia have today. Australians across the country feel ashamed of their government; they are embarrassed that in a democracy like ours their will, their views, should be of such little significance that they were ignored by this government, a government that has simply forgotten its obligations to the Australian people.
The carbon tax will go down in history as a hatchet job on our democracy, and we need to suspend standing orders today so that we can demonstrate to the Australian people that the parliament do care about these things. We do respect the role that we play as members of parliament—our obligation to the Australian people to be honest with them, to tell them the truth, and then to deliver what we promised at election time.
Lies have paved the path to the Lodge for this Prime Minister: 'There will be no carbon tax under the government I lead.'
Opposition members interjecting—
Well, I think she still leads the government. I know that she is still living in the Lodge, even if it has got a bit leaky! Occasionally, she gets to sit in the Prime Minister's chair, although she has run away from it now. The reality is that we know that Bob Brown runs the government but she is still the Prime Minister. She leads the government. She has broken her promise. The reality is that this Prime Minister has betrayed the trust of the Australian people. She is not fit to fill the office. She deserves to be censured and she needs to be censured today so that the Australian people know that there are some people of decency and goodwill in this parliament who really respect the fundamental traits of our democracy: government of the people by the people for the people. The public have made their views on what they think about this carbon tax absolutely clear. This is the only consensus this Prime Minister has achieved. Remember her promise to develop a consensus before we had a carbon tax? She has the consensus: the people of Australia say no to the carbon tax. If the government want to govern for the people in the interests of the people they will say no and will not impose this tax upon them. What we have here are the Australian people being shut out. They are being ignored. They are being treated with disdain by this Australian government. Many of them are going to have to meet the higher costs of living, all of them associated with this tax. Some of them will lose their jobs.
International competitors will be delighted. They are looking forward to the feast from picking up our markets around the world or extending their exports of cheap products to this country. The reality is this government has let us down. If tyranny is an abuse of power by a few over the will of the people then sadly tyranny has come to Australia this day. We expect that kind of thing in Libya. We expect a lot better here. (Time expired)
The performance of the Leader of the Opposition today has shown yet again why he is simply—
Opposition members interjecting—
Order! The Leader of the Opposition and the Leader of the Nationals were heard in silence. The Leader of the House will be heard in silence.
Consistency is not their strong point. The performance of the Leader of the Opposition today has shown yet again why he is simply unfit for high office. The performance of the Leader of the National Party has shown why he is unfit to be in this place at all. It was an extraordinary performance. We went back to reds under the beds. We were likened to Libya, to tyranny, and yet what we have had through this process is the most democratic process that has been conducted for a serious piece of legislation since I came to this place.
This is a historic day after two decades of debate, 35 parliamentary inquiries, the Shergold report, the Garnaut review, the joint parliamentary committee and the 2007 election with both political parties going to that election asking for an emissions trading scheme. Today we stopped talking and started acting. Today we move forward to a clean energy future. They say that it was undemocratic just like the other 217 bills that have been passed by this chamber compared with the 108 that were carried under the Howard government. This morning alone, prior to question time, we carried 22 bills—one-fifth or 20 per cent of the workload of the Howard government in its first year. This is a government that is getting on with governing. This is a parliament that is functioning and is functioning well.
Mr John Cobb interjecting—
The member for Calare is warned.
We see hysteria from those opposite that yesterday moved for the suspension of standing and sessional orders and then gagged the right of the government to respond to their two speakers. Today they were heard in silence, but we hear the interjections throughout my contribution. It is a fact that we ensured that every single MP who was on the speaking list got to make a contribution to this debate. Some 126 members of this House participated, including 68 members of the coalition. Of all of their front bench—and you have to be pretty bad not to make their front bench—there was only one, the member for Wentworth, who did not speak and he chose not to make a contribution.
We had 40 hours of debate over 30 calendar days. How does that compare? For Work Choices, 22 hours over eight days and we went to war in Iraq on the basis of under 30 hours of debate. The fact is that we took this seriously. We put in a process from which to reach certainty and in spite of the hysterical actions of those opposite it went through. Their actions included denying pairs to a person with a child on the way until they were embarrassed into changing their minds and bringing back people from the United Nations and NATO in order not to make a difference. The only member who did not get the right to participate fully was the member for Indi and that was her own responsibility due to her outrageous behaviour last night, which was consistent with her behaviour both in the House and outside the House. It was consistent with the sort of behaviour that comes from gathering with the sorts of people we saw in the gallery today. They were outside my electorate office engaging in the sort of debate that does no credit to the democratic process.
Churchill said that Russia was 'a riddle, wrapped in a mystery, inside an enigma'. Tony Abbott's climate change negativity is hysteria wrapped in an overstatement inside an exaggeration.
The minister will use parliamentary titles.
He has gone from policies that are dead, buried and cremated to government bills that are suicide notes and now to a promise to repeal the tax cuts and pension increases which is, to quote him, 'written in blood'. This is the sort of language used by the Leader of the Opposition, the whipping up of people in the gallery day after day. The opposition have gone from not only acting hysterically in the chamber, they have now gone to stacking the galleries, including people who were in the Speaker's gallery and therefore signed in by members of parliament in order to be in that gallery today. We know last time that they took some of these demonstrators to lunch in the members and guests dining room prior to their disruption and today we saw their complete lack of respect for our democratic processes, their complete lack of respect for our parliamentary processes.
This is a man who is not a conservative; he is a reactionary. We know that half of the people on that side of the House also support putting a price on carbon. We know that that is the case because they had a vote on it when they all signed up to the CPRS, including the support that was given by the Leader of the Opposition, the weathervane on climate change at that time. We see this constant hysteria. Have a look at the facts with regard to acting on climate change. It is one thing to be a climate sceptic. It is another thing to be a market sceptic and to call yourself a liberal, but this is a market sceptic opposite. Peter Costello has got it right—he does not know about economics, he does not care about economics, this is the old DLP when it comes to economic policy. That is why we see climate scepticism and market scepticism.
To think that the business community do not want the certainty that they have gained this morning through the legislation is simply to show how out of touch the Leader of the Opposition is. He says that he will claw it all back but will he really? He knows that the business community will respond really well to the idea that industry assistance is going to be cut back. He knows that the pensioners of Australia are going to say, 'Thank you for taking back my pension increases.' He knows that there are a million Australians who this morning were taken out of the tax system and, what he would have you believe is, that he is going to put them back in the system because he is going to lower the income tax-free threshold from $18,000 to $6,000. This is someone who would have you believe that he is going to go to an election saying that income taxes will be increased for low- and middle-income earners earning under $90,000. This is an absolute fraud when it comes to climate change, when it comes to economic policy and when it comes to common decency with regard to how debate is conducted in this place. That is why he is the only living Liberal leader who is opposed to a price on carbon. He is isolated from the mainstream of opinion—
Opposition members interjecting—
Order! Those on my left.
The scientists say we should act on the science, so he dismisses them; the economists say we should use market based mechanisms, so he dismisses the economists; the environmentalists say that we need to act to protect our environment; and, most importantly of all, the parents and grandkids say that we have a responsibility to leave the world a better place than the one that we inherited. That is the most important task that we have as members of the House of Representatives. It is one which we on this side of the House take seriously. It is one which we honoured this morning through our vote to put a price on carbon in the interests of our economic future, in the interests of our environment and in the interests of the change that is necessary if we are going to compete in the modern carbon constrained world which is coming.
The time for the debate has concluded. Order! Order!
Question put.
The House divided. [15:16]
(The Speaker—Mr Harry Jenkins)
Question negatived.
Mr Speaker, I ask that further questions be placed on the Notice Paper.
Mr Speaker, in light of the comments by the Leader of the House in responding to the suspension motion and his remarks that the government ought to listen to the mainstream, I have 34,000 signatures on this petition and I again seek leave to table this petition on behalf of 34,000 decent Australians against the carbon tax.
I have no problem at all with the petition being tabled, but there is a proper process to do so and the Leader of the Opposition should do it under the proper processes.
Leave not granted.
I just rise to celebrate Craig Alexander's victory at the recent World Ironman championships in Kona, Hawaii, where he smashed the 15-year-old course record after a gruelling swim and 180 kilometres on a bike, topped off by a 42-kilometre run. Craig has become the first Australian and only the fourth man to win the race three times. At 38 he is also the oldest man to take out the title. After fighting off cramps, Craig crossed the line in just eight hours, three minutes and 56 seconds, a new record and arguably the greatest performance in Australian triathlon history. Craig is a lifetime member of the Cronulla Triathlon Club and has lived in the shire for more than 15 years. On Sunday his wife and manager, Nerida, and his kids, Lucy and Austin, were there to share his victory. In 2008, when he crossed the finishing line, Craig was literally bowled over by his four-year-old daughter.
Once asked about the secret to his motivation and success, Craig answered, 'I just try to become better at swimming, biking and running every year.' Friends and rivals agree Craig's work ethic is unparalleled and he is as humble, modest and down-to-earth as they come. Six-time world champion Dave Scott called him 'the first true men's champion the sport has seen in years'. It is only fitting that we recognise his perseverance, achievements, character and great sportsmanship in this place. Congratulations, Craig. You are a great Australian and a credit to the shire.
Order! I say to the member for Cook that he stretched the briefness a bit far but for a worthwhile cause. Even as a Melbournite, I know sometimes that the shire rules!
Thank you, Mr Speaker. You do not know how controversial that last statement was!
I suspect I do, actually!
On behalf of the government, I join with the member for Cook in congratulating Craig Alexander on this great achievement by a great Australian sportsman. I also have a connection with the shire by in-laws and I join with the member for Cook in congratulating Mr Alexander.
I present the Selection Committee’s report No. 34 relating to the consideration of committee and delegation business and private members' business on Monday, 31 October 2011. The report will be printed in today’s Hansard and the committee’s determinations will appear on tomorrow’s Notice Paper. Copies of the report have been placed on the table.
The report read as follows—
Report relating to the consideration of committee and delegation business and of private m embers' business
1. The committee met in private session on Tuesday, 11 October 2011.
2. The committee determined the order of precedence and times to be allotted for consideration of committee and delegation business and private Members' business on Monday, 31 October 2011, as follows:
Items for House of Representatives Chamber (10.10 am to 12 noon)
COMMITTEE AND DELEGATION BUSINESS
Presentation and statements
1 Australian Parliamentary Delegation to Denmark, Sweden and Greece
Report on the Australian Parliamentary Delegation to Denmark, Sweden and Greece April 2011.
The Committee determined that statements on the report may be made—all statements to conclude by 10.20 am.
Speech time limits —
Mr L. D. T. Ferguson—5 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 5 mins]
PRIVATE MEMBERS' BUSINESS
Notices
1 MR WILKIE: To present a Bill for an Act to regulate the export of live animals for slaughter, and for related purposes (Livestock Export (Animal Welfare Conditions) Bill 2011). (Notice given 11 October 2011.)
Presenter may speak for a period not exceeding 10 minutes—pursuant to standing order 41.
Orders of the day
1 Air Services (Aircraft Noise) Amendment Bill 2011 (Mrs Moylan): Second reading (from 12 September 2011).
Time allotted—60 minutes.
Speech time limits —
Mrs Moylan— 10 minutes.
Next 3 Members—10 minutes each.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 4 x 10 + 4 x5 mins]
The Committee determined that consideration of this matter should continue on a future day.
Notices—continued
2 DR LEIGH: To move:
That this House:
(1) recognises that:
(a) the Australian incarceration rate has risen from 117 prisoners per 100 000 adults in 1991 to 172 prisoners per 100 000 adults in 2010;
(b) since the Indigenous Deaths in Custody Report was released in 1991, the Indigenous incarceration rate has risen from 1739 prisoners per 100 000 adults to 2303 prisoners per 100 000 adults; and
(c) an increasing number of Australian children have a parent behind bars; and
(2) encourages governments at all levels to pursue innovative policies to reduce crime and incarceration rates, including:
(a) investing in early intervention programs to deter young people from crime;
(b) where appropriate, considering alternatives to incarceration such as weekend detention, periodic detention, restorative justice and drug courts;
(c) employing smart policing strategies, such as using real-time crime statistics to identify and target crime hotspots;
(d) establishing in-prison education, training and rehabilitation programs aimed at reducing recidivism and improving family relationships for prisoners with children; and
(e) implementing randomised policy trials (akin to the 1999 NSW Drug Court randomised trial) to rigorously evaluate the impact of criminal justice interventions. (Notice given 20 September 2011.)
Time allotted—remaining private Members' business time prior to 12 noon.
Speech time limits —
Dr Leigh— 5 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue at a later hour this day. Referred to the Main Committee.
Items for House of Representatives Chamber (8 to 9.30 pm)
PRIVATE MEMBERS' BUSINESS—continued
Notices—continued
3 MRS GRIGGS: To move:
That this House:
(1) acknowledges 19 February 1942 as the day Darwin was bombed and marks the first time Australia was militarily attacked by enemy forces;
(2) reflects upon the significant loss of life of Australian Defence personnel and civilians during the attacks and casualties of the bombings;
(3) recognises that the attack remained a secret for many years and that even today, many Australians are unaware of the bombing of Darwin and the significant damage and loss of life which resulted; and
(4) calls for 19 February of each year to be Gazetted as 'Bombing of Darwin Day' and be named a Day of National Significance by the Governor-General. (Notice given 20 September 2011.)
Time allotted—60 mins.
Speech time limits —
Mrs Griggs— 15 minutes.
Next 1 Members—15 minutes.
Next 2 Members—10 minutes each.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 15 mins + 2 x 10 mins + 2 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
4 MR OAKESHOTT: To move:
That this House:
(1) recognises the need for comprehensive tax reform to maximise the standard of living for Australia for the next fifty years; and
(2) instructs the Treasurer to release a 10 year space road-map for comprehensive tax reform as a stand-alone budget paper as part of the 2012-2013 Federal Budget. (Notice given 11 October 2011.)
Time allotted—remaining private Members' business time prior to 9.30 pm.
Speech time limits —
Mr Oakeshott— 5 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
Items for Main Committee (approx 11 am to approx 1.30 pm)
PRIVATE MEMBERS' BUSINESS
Notices
1 MR CHAMPION: To move:
That this House notes that:
(1) the industrial system under the Fair Work Act 2009 is working well with low unemployment and low levels of industrial disputation;
(2) under the Fair Work Act 2009, 10 800 agreements have been made covering almost 1.5 million employees;
(3) since the introduction of the Fair Work Act 2009, the number of days lost to industrial action has continued its historical downwards trend; and
(4) the Fair Work Act 2009 is meeting its objective to balance the needs of employees and employers without taking away basic rights and guaranteed minimum standards. (Notice given 15 September 2011.)
Time allotted—60 minutes.
Speech time limits —
Mr Champion— 10 minutes.
Next 3 Members—10 minutes each.
Other Members —5 minutes each.
[Minimum number of proposed Members speaking = 4 x 10 mins + 4 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
2 MS J. BISHOP: To move:
That this House:
(1) condemns the:
(a) Boycotts, Divestment and Sanctions campaign against Israel; and
(b) targeting of Max Brenner chocolate cafes as part of this campaign;
(2) rejects this tactic as counterproductive to the promotion of the rights of Palestinians;
(3) reiterates Australia's support for the two-state solution and the right of the Israeli and Palestinian people to live peacefully within internationally recognised borders; and
(4) urges the leaders of the Israeli and Palestinian people to resume direct negotiations. (Notice given 22 September 2011.)
Time allotted—60 minutes.
Speech time limits —
Ms J. Bishop— 15 minutes.
Next 1 Member—15 minutes.
Next 2 Members—10 minutes each.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 15 mins + 2 x 10 mins + 2 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
3 MS SMYTH: To move:
That this House:
(1) recognises the value of the Victorian Certificate of Applied Learning (VCAL) in providing young Australians with work experience and literacy and numeracy skills which in turn prepare them for further training and employment; and
(2) considers that the decision of the Victorian Government to cut VCAL funding will particularly harm disadvantaged and disengaged students who are encouraged by VCAL to remain in education and to benefit from practical education and training. (Notice given 24 August 2011.)
Time allotted—remaining private Members' business time prior to 1.30 pm (approximately).
Speech time limits —
Ms Smyth— 5 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
Items for Main Committee (approx 6.30 to 9 pm)
PRIVATE MEMBERS' BUSINESS—continued
Notices—continued
4 MR BROADBENT: To move:
That this House notes the importance of the dairy industry to the health and well being of Australia. (Notice given 12 September 2011.)
Time allotted—40 minutes.
Speech time limits —
Mr Broadbent— 10 minutes.
Next Member—10 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 10 mins + 4 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
Orders of the day
1 Reducing crime and incarceration rates: Resumption of debate on the motion of Dr Leigh.
Time allotted—30 minutes.
Speech time limits —
All Members—5 minutes each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
Notices—continued
5 MS LEY: To move:
That this House:
(1) notes that:
(a) in the 2010-11 Budget, the Gillard Government has not considered the implications of removing Commonwealth funding for Occasional Care Child Care; and
(b) the consequence of ceasing this funding has caused Australian families real hardship as they struggle to find alternative sources of child care;
(2) acknowledges that:
(a) there are no other Commonwealth funded forms of child care to fill this void; and
(b) withdrawal of this funding has resulted in job losses in the industry; and
(3) calls on the Government to reinstate Commonwealth funding for Occasional Care Child Care. (Notice given 20 September 2011.)
Time allotted—40 minutes.
Speech time limits —
Ms Ley— 10 minutes.
Next Member—10 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 10 mins + 4 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
6 MR L. D. T. FERGUSON: To move:
That this House:
(1) notes the tenth anniversary of the Harkin-Engel Protocol signed in September 2001, designed to encourage voluntary standards for the certification of cocoa production that prohibits and eliminates engagement in the worst forms of child labour, as defined by the International Labour Organization (ILO) Convention 182 which has been ratified by Australia; and
(2) calls upon the Australian Government to:
(a) be proactive in measures to counter people trafficking or slavery;
(b) actively engage in international fora to ensure greater priority for consideration of measures against child slavery and trafficking;
(c) work co-operatively to improve traceability of products through the monitoring of their derivation where practical with reference to people trafficking or slavery; and
(d) co-operate closely with organisations and entities against people trafficking. (Notice given 12 September 2011.)
Time allotted—remaining private Members' business time prior to 9 pm
Speech time limits —
Mr L. D. T. Ferguson— 10 minutes.
Next Member—10 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 10 mins + 4 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
Mr Speaker, under standing order 105(b), I draw your attention to the fact that questions in writing Nos 395 and 374 have been on the Notice Paper for over 60 days and humbly request that you write to the Treasurer and the Assistant Treasurer respectively.
Under standing order 105(b), I will take the appropriate action.
Mr Speaker, I would normally ask this of you privately but, given that there was a fairly public event from the gallery this afternoon, could you ascertain whether any of those people who were removed from the gallery were signed in to this chamber by members of the House of Representatives and report back?
Honourable members interjecting—
Order! Everybody will sit down. I was not going to respond to the Leader of the House's question but, encouraged by everybody who has to have a comment, if you want me to investigate this morning, I will investigate this morning—but have the decency to get up and put your name to that question. And remember that the gallery where that occurred this morning is the public gallery. The difference is that the gallery where it occurred this afternoon is a gallery where people get allocated tickets that have been asked for by members. I would hope that some people would adopt some care about raising these issues without understanding what has happened both today, possibly, and previously. There is a responsibility on members who sign guests into this place, and from time to time members are reminded of those responsibilities. Quite correctly, not much public attention is given to that, so please tread carefully. All I am saying is that there is a responsibility on those who sign people in for their behaviour.
Mr Speaker, under standing order 105(b), I draw your attention to the fact that question in writing No. 452 has been on the Notice Paper for over 60 days and request that you write to the Minister for Broadband, Communications and the Digital Economy. He has not given me the courtesy of a response even though he has made public comments about the matter.
Order! The member for Grey will not debate. Under standing order 105(b), I will take the appropriate action.
Mr Speaker, under standing order 105(b), I draw your attention to the fact that questions in writing Nos 458 and 459 have been on the Notice Paper for over 60 days and humbly request that you write to the Minister Representing the Minister for Tertiary Education, Skills, Jobs and Workplace Relations and the Minister for Foreign Affairs respectively.
Under standing order 105(b), I will take the appropriate action.
I present the Auditor-General's performance audit report No. 8 of 2011-2012 entitled The National Blood Authority's management of the national blood supply.
Ordered that the report be made a parliamentary paper.
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 documents.
Debate adjourned.
I have received advice from the Chief Government Whip and the Chief Opposition Whip that they have nominated members to be members of certain committees.
by leave—I move:
That:
(1) Mr Husic be discharged from the Joint Select Committee on Cyber-Safety and that, in his place, Mr Danby be appointed a member of the committee; and
(2) Mr Billson and Mr Cobb be appointed supplementary members of the Standing Committee on Agriculture, Resources, Fisheries and Forestry for the purpose of the committee’s inquiries into the Constitutional Corporations (Farm Gate to Plate) Bill 2011 and the Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011.
Question agreed to.
We saw this morning the spectacle of a government and its Labor members applauding what they have done to diminish democracy in Australia and to damage the viability of small businesses right across our continent. Rather than be circumspect about having told the Australian electorate one thing only to act in a completely contradictory way, rather than be reflective on what that would mean for the millions of people employed in small business across Australia, they cheered themselves. They cheered themselves while they took the wind out of the optimism and opportunities that small business provides right across the Australian continent. And we heard today during question time that there is not one dollar of compensation for small business in these 19 carbon tax bills. We heard the Prime Minister try to justify that by saying: 'We're spraying around compensation and carve-outs everywhere else; small business will just have to get by. They'll have to suck it up or pass it on to their consumers.' This reflects the ongoing neglect and disinterest of this Labor government in the impact of their policies and actions on the engine room of the Australian economy.
You could be forgiven for thinking that this Gillard government tries to take a cylinder out of that engine room every time it gets to a cabinet position, every time a decision needs to be made, every time a choice about policy settings needs to be determined. And you do not have to take my word for it. All you have to do is travel to any business community around Australia, and the one thing that small businesses and family enterprises know is this government is not on their side. They know this, and you get an example of why that is the case just from the discussion that we had earlier here just after question time.
You heard the Leader of the House boasting that 20 per cent of all the legislation passed by the Howard government was transacted before lunchtime today by this Gillard government. What an odd boast to make. At a time when red tape and regulation is gumming up enterprise and opportunity in the small business community, you have this out-of-touch government and Leader of the House, who probably would not know a small business unless he fell over one, boasting about the regulatory impost of this government as if that is somehow a good thing.
He went on to quote Churchill as if that were some guiding light in his thinking. I will give the government and Leader of the House another quote from Churchill. It was Churchill who said 'that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.' That is what we are facing. That is what this government is doing. It comes in here and says these carbon tax bills will be good for prosperity in Australia. It will be good for job generation. If that is the case, why don't you amp it up even more? If it is such a positive influence on all of those things, why not double the carbon tax from its $23 starting point? Why not go berserk and triple it? If it is such a tonic for prosperity and job opportunities as this government seeks to claim, why not amp it up even more? They will not do that, because they know a couple of things. No-one will buy it, because the Australian public has been stooged already and are bitter and will not forgive this government for that deception. But they also have no case to make about a positive economic impact, particularly for the small business and family enterprise community.
We see this time and time again. It was reinforced again yesterday by independent research conducted on behalf of ACCI by the respected Castalia Strategic Advisors. They have done what the government refuses to do: actually analyse the impact of its carbon tax on small businesses and family enterprises in the real economy, in different sectors where small enterprises predominate. They have done the work the government refused to do, because the government has not done any in-depth analysis and has released no research on the impact of its carbon tax on business viability, on the cost structures that they need to contend with, on employment and economic prospects for the future or, importantly, on the competitiveness impact of this carbon tax on our small businesses that are facing a globalised economy. But Castalia have done that on behalf of ACCI. This is another condemnation of this government.
Remember how just prior to the announcement there was that ring-around between all the Labor backbenchers to tell them what Bob Brown and Prime Minister had agreed upon, and the backbenchers, who had gone to the election promising there would not be a carbon tax were being told what kind of carbon tax was now going to be foisted on this nation? Remember that occasion? Shortly after that, every Labor backbencher was given cameos—little breakdowns of the actual impact of the carbon tax on particular households—so they could go out and talk to people about how this impost and the harm and hardship that everyone else could see would somehow be washed over by these lolly words from the government on the basis of compensation and carve-out. You saw a government conduct research on individual households' impacts to advantage its own political interests. But did the government bother to do any analytical work on the impact of its carbon tax on small business and family enterprises right throughout the electorate? Of course not. They would not do that work, because they know that to carry out that work would bell the cat on all the misrepresentations about the impact of the carbon tax that have been so much a part of the Gillard government's advocacy of this carbon tax.
But Castalia have done it. They have done this work on behalf of ACCI. You know what ACCI was urging all members in the parliament yesterday? They said, 'Armed with this research, all parliamentarians should think again before burdening small business with the carbon tax'. They went on to talk about the impact of a 10 to 20 per cent reduction in profitability for energy-intensive SMEs over the first three years and had an enormous caution on the impact after that time. They made the point that the government makes much of the supposed certainty that its carbon tax will introduce, but then the government does not talk about how the price actually floats around after three years. Castalia have made that analysis. They have said:
Any rational investor in the SME sector considering business expansion will immediately factor in the expected prices under the flexible price trading. Very few investments have guaranteed pay-back times of less than 3 years …
because it is only with three years that there could be any suggestion of certainty—only three years over which time a small business could factor in the impact and the harm and hardship of this carbon tax in making a decision about whether or not to expand. They have gone on to say that beyond those three years there is no certainty whatsoever, that there is no capacity to organise your assessments of the impact of this carbon price and therefore you will be in no position to make any investment decision that stretches beyond five years. They then talk about this carbon tax, the world's biggest carbon tax, that will raise $9.3 billion in its first year. The government says, 'Well, it's just like Europe.' The European carbon tax raises $500 million a year. We have a carbon tax that is 18 times the size of the European system spread across 1/22nd of the population. So similar are they that each European pays a buck. We are at $400 a head in Australia, and this is supposed to be just like what is going on in Europe.
The assessment went on to point out that there are some other fundamental differences. It says that these countries—these are competitors with Australian SMEs—are where 80 per cent of our imports come from and that these are countries that do not have any direct price signal on carbon. They are the ones our small businesses are competing with. They make the point that in those countries—this is the 20 per cent of countries that we trade with—that might have something that looks like a policy on carbon 'those costs tend to be distributed across all sectors of their economy through government sponsored direct action initiatives, rather than concentrated on the SME sector as will be the case in Australia'.
They are making the powerful point that, no matter what this government and its ministers say, small and medium enterprises will be the ones paying for this carbon tax. They will be the ones that look through these 19 bills and know there is not a dollar in it for them in direct compensation. They will be the ones that will be burdened with cascading cost impacts wherever energy is used or any input that happens to have an energy component that will build at each stage of the production process, at every step in the service system in those longer supply chains that are very much a part of small business. They know at every stage along the way there will be a carbon tax clip on every transaction, compounding through to the end point where they then have to face their customers and say: 'Look, all these costs have gone through the roof. This carbon tax is hitting us at every stage of the way we organise our work and provide our goods and services. I'm afraid you're supposed to pay for that because you've been compensated on the basis of a 0.7 per cent increase in the CPI.' Time and time again, sector after sector is proving that that analysis is fiction, because it fails to take into account the compounding impact all the way through.
There was the absurdity of the Minister for Climate Change and Energy Efficiency standing up at the Press Club citing COSBOA evidence, as if it proved its point, misrepresenting the fact that COSBOA have gone back to this government time and time again asking, 'Will you do the analysis of the impact of the carbon tax on our membership?' They even sent material to Minister Combet saying 'Here are all the broad-brush costs that we face; can you please do the analysis?' Rather than do the analysis, do you know what the minister did? They took that input and said, 'Well, there's the answer.' COSBOA said, 'This is the input for you to do the calculation.' He stood up at the Press Club and said, 'There's the answer: no big impact, because you've told us so,' completely missing the point that the government had not done this analysis to work out the harm and the hardship of the carbon tax on small business.
It gets worse. The minister stood up and said that small business was overstating its concerns. This is the form of this Gillard government and its ministers: you have a spray at anybody who disagrees with you; you deride them because you do not happen to fall in line with the chorus of government nonsense. They had a go at small businesses raising legitimate concerns about the impact of the carbon tax on their costs, on their competitiveness, on their viability and on their opportunity to employ Australians. Do you know what the answer was from Minister Combet? I quote: 'A drycleaner is not competing against drycleaners in China.' He also said that drivers cannot get their cars serviced in India. What a nonsense. Does he not know the whole point of his carbon tax is to send a price signal—which is a nicer word than a cost increase—to reduce demand? The whole point of the government's plan is to make people want to buy less of the stuff, and they are already doing this. They are postponing their visits to the drycleaners. Talk to any mechanic around Australia and they will tell you that people are not getting their routine servicing done on their vehicles. They are putting that off, knowing that they have got to be able to balance their household budgets at a time of rocketing cost-of-living increases, yet there is more to come with a carbon tax that they are being told is only going to cost them beer money.
That kind of offence really upsets the small business community. It really says to them that this Gillard Labor government does not care, is not interested in their concerns and does not even value their contribution to the Australian economy. On top of that, they do not actually know what the impact is because the government has failed to get off its backside to do the work that any responsible and thoughtful government would actually do.
But it gets worse. This all compounds at a time when Australian consumers and businesses see confidence plummeting. Households know that the government cannot be trusted on this, because it has form. It has form on the basis of the statement, 'There will be no carbon tax under the government I lead.' Here is one delivered by the Prime Minister in strict contradiction of the assurances she gave. What else can you believe? Can you believe these modest price imposts when the reality is staring you in the face and when all the analysis of people who know their businesses and their cost structures is that the carbon tax will compound. Do you believe them or do you believe the government?
Most people who listen to the government think, 'You can't really believe them on some of this stuff, because they have got form.' When people come out and point to actual facts, they are derided by this government. This is eroding business confidence at this time, making difficult trading conditions even worse. We have seen profitability fall because of a lack of confidence in the Gillard government. We have seen, at a time of sustained mismanagement by Labor, business confidence continuing to erode to points we have not seen other than during the GFC. Time and time again, people are saying it is because of things like the carbon tax. Eighty per cent of Australian small businesses took the Prime Minister at her word and have not factored a carbon tax into their business plans. They are now having to recover, to reshape, to recalibrate their work at a time when the government is completely disinterested in their contribution to the economy. There is also the impact of the carbon tax on their work.
But it gets worse. Look at modelling such as that which Deloitte did for the Victorian government. I will not go through the figures, but I am already hearing government ministers having a crack at Deloitte because they are not on the hymn book of Labor's nonsense about the carbon tax. Deloitte have done an analysis that is different from the Commonwealth government's. Labor's modelling assumes there is no impact on employment. The whole thing is based on the premise that 'the parameters used in the Commonwealth Treasury modelling assumes zero employment impacts with all labour adjustments occurring through wages'. That is code that Labor believe that if you are out of a job they will just drive down their wages and you will get another one. But we know that will not work. We know that the mobility that is needed is not available. We know that people cannot seamlessly be put out of work because of a poorly conceived, flawed and dishonest carbon tax and then pick up a job tomorrow. These are the facts, government ministers. These are the facts, government members. As you travel around your electorates and people see that you have benefited from an assurance about the carbon tax that proved not to be credible they will look at you and say: 'You stooged us once, sunshine. We're not going to let you do that again!' (Time expired)
Who said it was the coalition parties that first introduced the concept of an emissions trading scheme? And he speaketh the truth. Of course, it was the member for Dunkley, the speaker who has just finished his contribution. He proudly linked the coalition to an emissions trading scheme. That was when the coalition believed in markets. But now they believe in central planning—a so-called direct action plan that would impose a tax on households that was originally estimated at $720 per household. But in one of the Leader of the Opposition's more Hansonist moments, he said there would be no international linking of the direct action plan—those dirty rascally foreigners! And that, of course, increased the impost per household from $720 to $1,300. We heard nothing about that impost during that contribution. Of course, many small businesses are householders; many people, in fact, run their small businesses from households. But we heard not one word of sympathy for small businesses from the member for Dunkley. They would have been whacked by a $1,300 impost per small business household. There are so many of them—around 2.4 million households—and we hear no sympathy whatsoever.
Who said it was actually the coalition that instigated work on the emissions trading scheme? In fact, I have in my hand a report I helped author back in 1988 which talks about the regulatory arrangements for trading in greenhouse gas emissions. So proudly said the member for Dunkley. But, of course, under the instructions of the Leader of the Opposition we are back to central planning. This is an opposition leader who said of Bob Santamaria: 'I worship the very water he walks on.' That is where we are at: the coalition supports direct action, central planning; and Labor supports markets and an emissions trading scheme.
The whole contribution from the member for Dunkley was based on the false premise that there is nothing in these bills that has any benefit for small business whatsoever. But this is completely untrue. The Clean Technology Innovation Program will help small businesses move to a clean energy future. It will provide competitive grants of between $50,000 and $5 million on a dollar-for-dollar co-investment basis to support innovative activity such as research and development and commercialisation of clean technology products, processes and services.
But it does not end there. Labor actually believes in providing tax relief to small businesses, and this is what we did during the global financial crisis, against the resistance of the coalition. When we were seeking to save this economy from recession, they did not like the idea of providing tax relief to small business. They said small businesses would not take advantage of it. Of course, they did in droves. It was one of the most welcome and popular measures that this government implemented to save this economy from recession and to keep the doors of small businesses open. And we are doing it again. Under these arrangements, from 1 July next year small businesses will be able to write off instantly the value of any new assets each worth up to $6,500.
But I heard not a word from the member for Dunkley about this great initiative. The reason he failed to mention it is because the coalition would rescind it. The coalition has committed to reversing the instant write-off of small business assets valued at up to $6,500 each. I will explain why and how they propose to go about rescinding that very small business tax relief, which would be worth more than $1 billion to small businesses in 2013-14 alone. So here we have the coalition saying there is not a zack in it for small business, but in fact there is $1 billion in 2013-14 alone. Indeed, in the budget that has recently been passed, we announced that small businesses will also be able to write off instantly the first $5,000 of a motor vehicle from 1 July next year.
So when you look around the political landscape for a party that is interested in providing tax relief for small business it is not the coalition, it is the Australian Labor Party. We have done it time and time again, against the opposition of the coalition. This was a very important reform that passed the House of Representatives today. You will see that, in the sweep of history, it is only Labor governments that have implemented the fundamentally important economic reforms for this country. It was a Labor government that created an open, competitive economy through the reforms of the Hawke-Keating period which the coalition government never got around to doing. We had high tariff walls. Treasury officials got up every morning—they got their Weeties and their tomato juice or orange juice, depending on their taste—and set the exchange rate. They used to set the exchange rate every morning!
So who believes in markets? Labor actually moved to a market based mechanism called a floating dollar, which the coalition was about to do; they were 'gunna' do it. And then, of course, there was the other great reform, superannuation. I was sitting here in the advisers box when the government sought to introduce superannuation for working Australians. And what did the coalition do? They opposed it root and branch. They said: 'No, no, no, no and no. This will tear the heart out of small business, this will rip the guts out of Australia, and we'll rescind it.' Of course, they never did get around to rescinding it.
But there is a promise from the coalition to rescind the increase in superannuation for working people from nine per cent to 12 per cent. I will explain the mechanism in a moment because it is related to another important reform, the mining tax. Today we have seen another major economic reform which the coalition was 'gunna' do. Prime Minister John Howard thought: 'I could have been the champion of the world. I could have introduced an ETS. I got all this work done by Professor Shergold. We were just about to do it and then—damn—the election came along and we didn't get around to doing it.' What a pity. And now we have the shadow minister for small business saying: 'I was responsible for developing an emissions trading scheme in 1998. I had the document, I helped, I was there. We were gunna do it.' But they never got around to doing it. Once again it is the Labor government that is doing the reforms that are necessary to lock in Australia's economic future in this region—the Asian region—in the Asian century. Why is that important? It is important because all Australians—working Australians, small businesses, hard-working people—are getting the benefits flowing through from Australia's economic engagement with Asia. We are making sure, by putting a price on carbon, that we are not left behind—not left at the end of the queue—such that in five or 10 years time everyone else has moved in this direction but Australia is still saying, 'We're gunna do it.' We have gone ahead. We are doing it because it is an important reform for working people in this country. It is an important reform for the Australian community, for working people and for small businesses.
I said that I would come to the mining tax. This is directly relevant to the fortunes of small business. The Leader of the Opposition has said, in relation to the mining tax and the carbon price, that he will rescind both. What does that mean for small business? The mining tax is being used to spread the benefits of the mining boom to small businesses to fund the very $5,000 instant write-off, which has now been increased to a $6,500 instant write-off. What has the Leader of the Opposition said about the mining tax? He said, 'We'll rescind it because mining companies are already paying too much tax.'
That is the position of the coalition: that mining companies are paying too much tax and the small businesses are paying too little. The coalition has pledged to rescind both the mining tax and the carbon price. That would clearly be to the detriment of Australia's small businesses. Can you believe the Leader of the Opposition? He is a Rhodes scholar. He has an economics degree from Sydney University. So do I. I am ashamed that I am, with Mr Abbott, a graduate of economics at the University of Sydney, because the Leader of the Opposition—I am going to let you in on a little secret—has said:
See, one of the things that people haven’t quite twigged to is that carbon dioxide is invisible, it’s weightless and it’s odourless ….
It is weightless! The science is in: according to the opposition leader carbon dioxide is weightless and they are going to reduce its incidence in the atmosphere by 140 million tonnes! That is 140 million tonnes of weightless gas—go figure!
This guy has an economics degree at Sydney University and he is a Rhodes scholar and the coalition say that under their direct action central-planning scheme they will reduce the incidence of a weightless gas by 140 million tonnes. Even Senator Barnaby Joyce has said, 'I can't stand the stupidity any longer.' He put out a press release yesterday describing carbon dioxide as a 'colourless, odourless gas'. He has removed 'weightless'. Barnaby is on to it. Barnaby has worked out that a tonne of carbon dioxide weighs a tonne. Barnaby has broken ranks. There is already a rift in the coalition because Senator Barnaby Joyce has worked out that a tonne of carbon dioxide weighs one tonne. So, no longer is the National Party going to continue and persist with the pretence that a tonne of carbon dioxide weighs nothing.
We have come to this point—a vitally important point for the future of this country. The opposition leader has said: 'This time I'm telling the gospel truth. I will rescind the whole carbon pricing mechanism.' Who believes him? Who would believe the Leader of the Opposition when he says he is going to rescind this? If he were to rescind this it would mean increased taxes for the Australian people. He would reduce the age pension and all pension entitlements. What would he be saying to the Australian people? He would be saying, 'Trust me. The reason I'm doing this is because when I take the carbon price out electricity prices will fall.' That is his proposition. Who in the Australian community would believe an opposition leader who says, 'Trust me. I'm going to take the carbon price out. Yes, I'm going to cut the age pension; I'm going to increase your taxes; I'm going to take the tax free threshold from $18,000 back to $6,000, but you'll all be better off because the price of electricity will fall, under me.' That is what he is saying; that is his proposition.
The Australian people know that the Leader of the Opposition will never remove the carbon price. He has already foreshadowed that. In an opinion piece he wrote this:
Opposition, by contrast, tends to be a permanent debating society because even the most final decisions can sometimes be revisited in office.
You betcha! If the Leader of the Opposition were ever to become Prime Minister he would say, 'Look, I did tell the Australian people in this opinion piece that even the most final decisions can sometimes be revisited in office.' He would be saying that he would not rescind the carbon price. He would not do that.
There was an example, in recent political history, that did not work. That was the GST roll-back. I am being quite frank about this. The commitment that Labor made, in the lead-up to the 2001 election, to reduce the GST—or remove it from some items—was never believed by the Australian people. We lost that election and I remember the then Treasurer—the then member for Higgins—saying that Labor is committed to 'rrroll back' the GST. I tell you that roll-back did not work for Labor in opposition and it will not work for the coalition, because the public will just not believe it.
What the opposition is now saying is that it will not only roll back the carbon price; it will rescind the mining tax. That means that small businesses will be belted. It means that small businesses will pay higher taxes. Why should we be surprised? The highest taxing government in Australia's history is the coalition government. Year after year they had the gold medal hanging around their necks because they kept increasing taxes as a share of the economy. Taxes are now much lower as a share of the economy under the Labor government. That was typical of the reform commitment of the Hawke and Keating governments, when we reduced taxes on small businesses and made sure that small businesses could be competitive in an open, competitive economy.
Now you have their rank hypocrisy. The fact is that the coalition would not roll back the carbon price, because they have no interest in small business. Their only interest is in the opposition leader making the sneaky, easy transition to the Lodge. It will not happen. It will not happen, because today Labor has put in place a vitally important economic reform that will help lock in jobs for working Australians and profitability for small business, because—this is the truth—only Labor governments have the guts, the vision and the commitment to undertake economic reform in this country.
I have great pleasure in joining in this discussion on the matter of great public importance—that is, the impact of the carbon tax on small business. I thought I would restate what the matter of public importance was just for the interest of those opposite, because the previous speaker hardly mentioned small business in his address. Really, I am not surprised at all by his reluctance to mention it, because we have the Prime Minister, who the gentleman opposite supports, and just after the Prime Minister's treacherous disposal of the member for Griffith she fronted the Australian public and said, 'There will be some days that I delight you and some days that I may disappoint you.'
I actually have a tremendous view of the backbench from where I sit and I do not see a lot of smiling faces. I have to report that I do not see a lot of love for the Prime Minister. In fact, all I see every day is disappointment. There are some days—and this might alarm the frontbench—when the noddies forget how to nod. They sit there very stony faced. They get out of sync. They think, 'Should I have the concerned look now or should I have the knowing smile or will I use the discerning raise of the eyebrow or should I just give the enthusiastic nod?'
For the Prime Minister, today was clearly a day of absolute delight. Earlier today we had members opposite clapping, cheering and backslapping each other as the carbon tax legislation was passed, but I can assure the House that no-one in small business throughout Australia was joining in the orgy of self-congratulation we saw among those opposite today. The excitement was everywhere. I almost expected the member for Charlton to lead a conga line around the House, with the Independents and the Greens hanging off the end, a bit like dags at the end of a sheep.
Spare a thought for the poor member for Griffith. He was at the very back of the chamber and he did not know what to do. Should he head for the nearest exit or should he come down and join in the festivities? To his credit, the member for Griffith came down, summoned up his courage and puckered up for a prime ministerial kiss.
It was a nanna kiss.
You say it was a nanna kiss, but I do not want to sound too judgmental. It was not much of a kiss. It looked a bit contrived. It looked like the member for Griffith was acting. I am not sure. It looked like he was playing the dutiful senior minister role or something else was going on in his mind. It was as if he had something else to do. It made me think about some of the great Hollywood romances—the great kissing moments. I researched a website which I think the member for Griffith would be happy to hear about. It is titled The Best and Most Memorable Film Kisses of All Time in Cinematic History. The question would be: how—
Mr Deputy Speaker, I rise on a point of order. I was admonished for not mentioning small business. I suggest that, given the subject of the MPI is small business, maybe just in passing the member might—
The minister will resume his seat. He was not admonished by the chair. The member for Gippsland is aware, as we all are, that this is a wide-ranging debate, but he will, to some extent, focus on the topic of the matter of public importance.
I do not expect the minister to kiss and tell.
I won't be kissing you!
That is at last a point that the minister and I can agree on. How would we describe the member for Griffith coming down to congratulate his colleagues? He was shaking hands in the spirit of the occasion, but suddenly the Prime Minister was cast before him and he did not know whether to run and hide or give the howdy-salute he tried with presidents around the world. For a would-be comeback Prime Minister in these situations it is hard to know which act will get his run on the evening news. So he puckered up and planted a peck on the prime ministerial cheek—
Order! The member for Gippsland will resume his seat. There are two people seeking to take a point of order, but I will call the Minister for Trade.
Mr Deputy Speaker, I rise on a point of order. I can hardly wait for the member to do the hokey-pokey and the Time Warpdance. Let's get slightly relevant.
I would ask the member for Gippsland to return to the substance of the MPI.
This kiss is memorable. It is memorable because it is the kiss of death to many small businesses throughout Australia.
Mr Deputy Speaker, I rise on a point of order. I just point out that you gave an instruction to the member which he completely ignored.
I am aware of that. The member for Gippsland will return to the subject of this matter of public importance debate. It does not seem to be much about kissing.
I will get back to it, Mr Deputy Speaker. The point I made is that that kiss is memorable because it is going to be the kiss of death to small businesses throughout regional Australia. We now know that the member for Griffith will be no different to the member for Lalor when he is reinstalled in the Lodge. When he returns as Prime Minister, the member for Griffith will treat small business in exactly the same manner.
It is often said that in politics timing is everything, but it is never the right time for a bad tax. Now is the time when we have volatile world markets and there is great economic uncertainty. This is not the time for a new tax and those opposite know it. They know it because they are getting that feedback from their electorates on a daily basis. They just have not had the courage to come into this place and stand up for their communities. It is certainly not the right time to introduce a tax that our international competitors will not be paying, when the Australian small business sector is doing it hard.
If there is a first rule in Australian politics, surely it should be to do no harm. When it comes to the small-business sector right now, confidence is down and certainly the retail sector in regional communities is down—and I presume it is the same in metropolitan areas, but I tend to spend more time in regional communities—and confidence is taking a battering. And the worst thing a government could be doing right now is introducing a new tax which will diminish community confidence further and force people to keep their hands in their pockets and not spend, particularly when their international competitors will not face the same impost.
That is the crucial point. We are making Australian businesses less competitive compared to their international counterparts. This tax will erode small business confidence. It will encourage businesses which have the option to relocate offshore to do just that, to take jobs offshore, and it will also make it more difficult for small businesses right across our nation.
One area of small business which has often been missed in this debate is the agricultural sector. The government has continued to make claims that the agricultural sector is out of the carbon tax. The feedback from constituents of mine involved in the dairy sector dispute that. The President of the United Dairy Farmers Victoria, Chris Griffin, put out a statement earlier this year highlighting their concerns that the introduction of a carbon price of just $20 would cost the dairy industry over $45 million per annum. This would work out to a $5,000 charge for every Australian dairy farmer per year. Mr Griffin stated:
These additional costs will disproportionately affect the ability of Victorian dairy producers to compete in international markets. Our competitors will not have to deal with the burden of a price on carbon, making it impossible to pass on the added cost of the tax to consumers.
Dairy farmers hit with a $5,000 increase in their cost of production will survive. But what it will mean is they will have to reduce their expenditure in their local communities. The small country towns that rely on a profitable dairy sector will suffer as a direct result of that, and the people who will suffer most are the small businesses, like the local sports shop. Instead of mum and dad going in and buying the brand product from the local sport shop, they will go to a large warehouse or department store and buy the cheaper variety. That is what happens in small country towns when you undermine the profitability of the dairy sector—the small business community suffers as a result.
That highlights the greatest Labor Party myth about this carbon tax—that the so-called 500 biggest polluters are the only ones who will pay the carbon tax. Regional Australians are smarter than that, and small business owners in particular understand that that is a myth. They realise that they are at the absolute pointy end of this debate. They know that this tax will cascade through the Australian economy like a toxic waterfall. This tax will cascade through the economy and add costs to everyday Australian families. It will hurt small businesses, it will make Australian exporters less competitive and it will cost jobs.
If it was so good, why didn't the Prime Minister go the Australian people before the election and say, 'I will introduce a carbon tax'? If it was so good, why wasn't she honest with the Australian people in the first place? This really comes down to a matter of trust. The Australian people simply do not trust a government when it has a Prime Minister who cannot even arrange for the installation of home insulation batts without tragically killing four young men. This is a complex reform of the Australian economy and the Australian people simply do not trust this government to be able to deliver it.
Mr Deputy Speaker, I ask the member to withdraw the implication on the Prime Minister that she was responsible for the death of four people.
I am not aware from my listening to what the honourable member said that he made that imputation.
What a weak contribution that was from the member for Gippsland. Of all of the contributions we have seen made over the last couple of weeks in this debate, very few would be able to compete with that contribution when it comes to how puerile it was. I do not wish to waste any more of my time other than to make that observation in relation to those remarks, but frankly I think the country deserves a much higher standard of debate than what we have just been treated to from the member for Gippsland.
We heard from the member for Dunkley a little bit earlier in this debate, and the member for Dunkley, as the Minister for Trade alluded to, is someone who has an interesting track record when it comes to the question of pricing carbon. Apart from being someone who just happens to support the pricing of carbon—or has done so in the past; he has perhaps changed his position now that it does not suit his short-term political interests—not only has the member for Dunkley sought to espouse support for the pricing of carbon but also he has sought to claim credit for being amongst the first to subscribe to that view. In fact, less than two years ago, the Hansard shows the member for Dunkley saying:
It was actually the coalition that instigated work on the emissions trading scheme. … in … a report that I helped author back in 1998 which talks about regulatory arrangements for trading in greenhouse gas emissions—1998!
… … …
The coalition’s commitment to an ETS is demonstrable.
Less than two years ago, the member for Dunkley, in this very place, said 'The coalition’s commitment to an ETS is demonstrable.' Today, they have failed to demonstrate that support.
It is not just the member for Dunkley who has in the past expressed his support for pricing carbon. We know that those opposite even went to an election back in 2007 with the then Prime Minister, John Howard, making it absolutely clear that he supported pricing carbon—although, as the Minister for Trade has indicated, he did not quite get around to doing it while he was in office. He made the point, on 3AW, on 27 May 2007 that 'you can't reduce greenhouse gas emissions unless you have a price on carbon'.
What we have from the opposition is one of the most fraudulent policy positions that I have seen in the time I have been following public policy in this country. On the one hand they purport to subscribe to the commitment to reduce greenhouse gas emissions by five per cent on 2000 levels by 2020, yet they do not have a plan or a policy that can feasibly do that. They say that they are going to reduce greenhouse gas emissions, yet in recent times we have them holding on to this failed view of direct action as being able to get them there. We all know, on direct action, that even Prime Minister Howard, as he then was, said, 'You can't reduce greenhouse gas emissions in a meaningful way without pricing carbon.' Even under their earlier position, where they were prepared to go ahead with direct action but leave open the option of trading permits internationally, they at least would have been able to deliver their program, at considerable cost, at about $700 per family, per household, per year. Now, as a result of their failure to embrace the notion of being able to trade in credits internationally when it comes to carbon emission reductions, they are prepared to increase the cost to the Australian household by more than twice. The Sydney Morning Herald recently reported on a group called the Australian Industry Greenhouse Network. This group is not some sort of Labor think tank or some sort of group of apologists for the Labor Party. This is a group which represents mining and manufacturing industries. This group is reported as saying that it agreed with the Treasury modelling showing that Mr Abbott's plan to achieve the five per cent emission reductions domestically would at least double the cost.
The thing to remember is that under the Abbott plan, at more than twice the cost, there is no household assistance. The member for Dunkley has said, 'That does not help small business because the household assistance only goes to households.' The idea is to provide assistance to households as modest increases in prices are passed on to consumers by businesses—such as small businesses. And they are modest price increases. Treasury modelling indicates that, across the board, those increases would be around 0.7 per cent. That 0.7 per cent compares with the 2.5 per cent increase in the cost of living that was experienced when the GST was introduced.
For all of the concern that we now hear from those opposite about the impact of carbon pricing on small business, I must say that there was not a lot of concern shown for the impact on small business of their policies when they introduced the GST. Let us not forget that the introduction of the GST, unlike the pricing of carbon, required every single small business in the country to become a tax collector for government—to put in paperwork every month or every quarter through the BAS. They became de facto tax collectors for the government. I do not recall there being significant household assistance or industry assistance to small business throughout that period. In fact, all I recall was the old MYOB allowance, which did not even pay for the cost of installing MYOB software. So when it comes to loading up small business with all this extra cost and extra regulatory compliance, those opposite have form. But when it comes to delivering real measures—
Mr Ian Macfarlane interjecting—
I hear the member for Groom interjecting. I always welcome an interjection from the member for Groom, particularly when it comes to this topic, because he of course was that very brave soul on the other side who said back on 29 September 2009:
…. we did take that policy to the last election and it was clearly enunciated as an emissions trading scheme that would be introduced perhaps in 2011 but most likely 2012.
The member for Groom better get a wriggle on because, apart from supporting the implementation of an emissions trading scheme in this country, he, along with his colleagues, is standing in the way of the attainment of that aim.
I make the point that, when it comes to small business, this government has delivered many important and significant initiatives for small business, most of which have been blocked by those on the other side. The Minister for Trade spoke about the mining tax and how those on the other side must be the only people in this country, except for a handful of the biggest miners, who are still opposed to the introduction of a mining tax. We had a tax forum last week and, even though it was not on the agenda, I can tell you that there was not a person in the place who said that we should not introduce a mining tax.
The patchwork economy and the multispeed nature of what is occurring throughout the our economy mean that, if you are serious about delivering assistance to small business, you will get on board and support our cut to the company tax rate—cutting the company tax rate by one per cent down to 29 per cent. Those on the other side say, 'Not all small businesses are incorporated, so they don't get the benefit of it.' What about the $6½ thousand instant asset write-off? Member for Brisbane, you want to sit there and deny the small businesses in your electorate and in all electorates across this country the opportunity to write off assets up to a value of $6½ thousand instantly. You should put that in your next newsletter so that all of the small businesses in your electorate know how anti small business you are.
The Parliamentary Secretary to the Treasurer will direct his remarks through the chair.
This is part of the pattern of what occurs on the big policy debates in this country. This is a big reform—a reform that will drive investment in clean energy technology. People will look back one day in the future and they will say, 'We appreciate the fact that the Gillard government took these steps to set our country on the path towards a clean energy future,' in the same way as we look back and we talk about how great the benefits of Medicare are—even though back in 1987 John Howard said:
… the Government should have taken a knife to the expensive, failed Medicare system. Medicare has added between $3 billion and $4 billion to the Federal Budget. Medicare is one of the great failures of the Hawke Government.
We will look back on the decision to price carbon in the same way as we look back on the Hawke and Keating decisions in relation to superannuation. But we recall that in 1995 the now Leader of the Opposition said:
Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people.
Those opposite will always say no, no, no. They will never say yes when it comes to taking the hard decisions to implement the big reforms—but they are the reforms that make the big difference to Australians all around this country. (Time expired)
Today is a very, very sad day for Australia, Australian business, thousands of households and the Australian economy. This is the day when legislation for a carbon tax was passed, and it will live on in infamy for Australian households and the economy. Australians took this Prime Minister at her word five days before the last election when she said: 'There will be no carbon tax under a government that I lead.' And today the House sees the consequence of that fundamental breach of trust. Not only did ordinary mums and dads go out and vote believing her but also hundreds of thousands of small businesses all over Australia took her at her word.
Every day businesses make decisions about the future of their companies and, in order for them to do that effectively, they require consistent and effective public policy from the government of the day. With a Labor government that has a track record of announcing new taxes without proper consideration, they are not receiving this consistency. Almost 80 per cent of small businesses took Labor at its word and did not factor a carbon tax into either their business plans or their business operations. These businesses are already suffering from a global financial crisis, and they have also been burdened by the effects of a huge slump in consumer spending. I am told whenever I go around my electorate that there is a huge lack of consumer confidence out there which is affecting small business and plaguing the Australian economy.
But what has this government done while businesses are hurting? It has introduced a carbon tax. Since Labor was elected in 2007, Australia has lost 300,000 jobs in the small business sector and small business profitability is at an 18-year low. This legislation will only inflict further pain and suffering on many hundreds and thousands of households and the many small businesses in this country.
I have to mention the member for Lindsay's contribution. He said I knew nothing about small business, but I need to correct him on that. I have been involved in small business for 40 years—in very small companies from grocery stores to supermarkets to retail enterprises—so he does not know what he is talking about. What he and the government are doing at the moment is hurting every business in Australia. Until about a year ago I managed a small family retail business. In that one year I saw our electricity prices almost double from $4,800 to $8,000. Every business in Australia will be looking at this carbon tax and those operating costs and wondering how they are going to survive.
Australians constantly hear from the Prime Minister that only the polluters—not individuals or small business—will pay for this tax, and in the same breath the Prime Minister mentions that some Australians will be compensated for the costs that they incur as a result of the tax. We know that the Prime Minister was being untruthful and she said that small businesses will not pay, and we have found out today that small businesses are not going to receive one dollar of compensation. That is extremely frightening.
The member for Lindsay said earlier that the tax is only going to impact on grocery prices by 0.7 per cent. That is not true; the tax will have a multiplier effect. Groceries will go up substantially more. I have just given you the example of a small business facing an electricity hike in the normal circumstances, but the effect of a carbon tax on electricity prices will be phenomenal.
Recently, a survey by the Institute of Public Accountants said that 70 per cent of accountants—these are the people who manage and advise small business—believed that small businesses would be negatively affected by the carbon tax. Of these accountants, 63 per cent also believed that small businesses would not be adequately compensated. They are not being compensated. In contrast to large firms, small businesses have limited market power to control the prices of their inputs. Small businesses will have higher energy costs and longer supply chains, but, in contrast to large firms, small businesses will not be able to pass on the costs to their customers and will instead have to absorb them. There is only one way to do that: cutting jobs, which is a further threat to the economy. Worry about the situation comes through in my visits to the many businesses in my electorate. This is part of my job, and I always enjoy visiting small businesses. As a former small business owner-operator, I like talking to small and medium sized business operators about their operations. Constantly they are saying to me, 'Why is this Prime Minister pushing this legislation now when she said to us most clearly that there would be no carbon tax under a government she led?'
Yesterday I received an email from Morgan's Seafood, which is not in my current electorate of Brisbane but in my former electorate of Petrie. During the 2010 election campaign the member for Petrie promised her electorate wholeheartedly that there would be no carbon tax under a Gillard government—and the electorate believed her, as many others did. Many of those voters should now be given the opportunity to be heard. They really do deserve a say in whether they support this tax. Seventy-two Labor MPs broke their promise to the electorate today. Morgan's wrote to me in that email:
I am writing to you to express my very deep concern for the future of my business and the jobs of the 140 members of my staff that I employ. The basis of my concerns is the soon to be introduced 'Carbon Tax' and its repercussions. I have recently been informed by my electricity broker of the projected 17% increase to my 'post tax' electricity bill (the calculation is based on the government provided formula). This increase on its own would threaten the profitability of my business, in what is an already very difficult economic retail environment. Combined with significant other recent cost increases, the 'Carbon Tax' would seriously endanger the continued operation of my company. In the current economic environment how can the imposition of these large scale cost increases be justified?
Recently I toured Essilor, a local optical lens manufacturer which has over 500 employees in Australia, 51 of whom are in Brisbane. Essilor have already cut employment as a result of the general business environment, and they have told me that they cannot see how they can continue to manufacture in Australia with a carbon tax in force. I visited the Brisbane markets, and many of the wholesalers there said that they would have to reduce staff as they would be unable to pass on the cost of the carbon tax. I receive many emails from small professional services businesses in Latrobe Terrace in Paddington, and they are all concerned about the impact of the tax on their electricity bills.
It is important to remind the House that, while a lot of attention is being paid at the moment to manufacturing and industry, there are also a lot of small offices and a lot of office employees—people such as real estate agents and health professionals—and that this tax will impact on them by increasing their operating costs. Importantly, this government has not considered the unseen consequences of this tax: many small businesses that would have been started will now not be started because of this tax. As a former small business owner-operator, I know firsthand that it is already very hard to work through the complexity of the regulatory and legal framework that Australian small business has to contend with. These people are putting their money on the line. They have to work very long and hard hours just to break even. This carbon tax has a huge implication for the future entrepreneurs of this country, making it even harder for new ideas to enter the small business world.
When the GST was introduced I was a member of the Howard government. We spent the entire election campaign selling the virtues of the GST. We were honest about it; we went to the people before the election. It was tough and I nearly lost my seat. But I went to the electorate with all the members on this side of the House who were members at the time ensuring that small business knew what the future direction was of our country. We held forums, we discussed this quite openly and we funded a number of industry groups.
This tax is a small-business destroying tax. I call on the Prime Minister to give the members opposite the chance to sell the carbon tax to their electorates. This tax should have been held off until an election. I do not support the carbon tax, as it will be a soul-destroying tax for the hundreds of thousands of small businesses across Australia. It will impede their operations, it will do nothing for their profitability, it will reduce their ability to employ people and we will see massive job losses. (Time expired)
I do feel I am in a bit of a time warp. Be assured I am not going to do a jig in front of you, Mr Deputy Speaker—I think the red in the other place does interfere with people's brain cells at times—but we are in an amazing situation where we on this side of the House, the Labor government, are mandating and putting forward a market based mechanism and those on the other side are objecting to it. I really do feel like I have been sucked into some vortex where this is just weird and people have not really got their heads around it.
This is a market based mechanism, something that businesses across Australia are really good at dealing with. They are dealing with adapting to change and adapting to things that are not certain. Every day in business there is uncertainty. Interest rates go up and down. The biggest uncertainty for most businesses at the moment—small, large, but particularly trade exposed businesses—is the current cost of the Australian dollar. I do not hear any talking on the other side about the current price of the Australian dollar having an impact upon businesses, but our businesses have adapted to that and changed. Indeed, the other side of the House today voted down a bill that would help those businesses currently exposed to the cost impacts and fluctuations of the Australian dollar. They voted down the steel plan, a plan that we are putting in place at this moment, drawing forward money because we have realised that businesses—and these are very large businesses; I will get to small businesses in a moment—are being exposed to very big changes and uncertainties.
The joy for businesses today is certainty: they now know what is coming. They now know what is in the bills and they can plan for the future. The thing for small business is that they really do not have a worry because it will not impact them—unlike when the GST came along and every small business had to become a tax collector, had to understand a BAS form and when it had to go in and out, had to go out and find an accountant because the bookkeepers they were using were no longer eligible to provide the services to them. They had to go out and discover that, to get computer programs and do MYOB, and they are still doing that today. The greatest impost on time and management of small business is complying with the BAS statement for GST.
There will be no paperwork for small businesses under a carbon price. There will be no accounting requirements. They will not have to ascertain what their electricity prices are. They will have to do nothing. If they choose to go and seek compensation or be part of the packages that are out there, they will have to do things.
An incident having occurred in the gallery—
There's Tony's team!
Yes, there's Tony's team! What has really astounded me today is that we are not hearing the voices from the people who are saying, 'Yes, I want action on climate change'—and there are hundreds of thousands of them across this country who are saying yes. I have received lots and lots of emails in the last day saying, 'Congratulations, well done, for standing firm in the face of this hysteria.' Thousands of people are saying: 'Yes, we want a clean future for our children. We want you to take action. We applaud you for taking action.' I have had recommendations from small businesses in my electorate saying, 'Thank you for doing this.'
I do not deny there are concerns; that would be stupid. But I say yes because it is our responsibility for future generations. I want a healthy future for me and for future generations. It is up to us to give future generations a liveable planet. The science is clear. We must act urgently to slow climate change. I am no climate change expert but I respect those who are. Climate change is a great but still avoidable threat to our and our children's health and survival.
This is the smartest way to secure our children's futures. Where are the voices saying, 'We need to act, and we need to act now'? If we do not act now we have gone past the tipping point, past the point where we can actually make an impact. How can you have businesses in an environment you cannot operate in? If the climate is so bad, those businesses will not be able to work. That is what is being missed from this debate: why we are actually doing it; why we are taking these steps not just now but into the future. When a constituent wrote to me the other day saying, 'It's all just about your super,' I said, 'Well, mate, if it was all about my super I would probably be voting against the thing, wouldn't I, because electorally it would probably be the soundest thing to do'—as we keep being reminded. However, it is the right thing to be doing. Occasionally you actually stand up for principle, for policy, for fact, not hysteria. It would be great if we could return to debate about that.
The Prime Minister recently addressed the Chifley Research Centre. It was a far-reaching, reflective speech, but in that speech she said:
For a long period of time our great movement—
the Labor movement—
believed that the highest aspiration of working people was for a decent job.
Now we understand it can be to run a decent small business.
We are a party who adapts and changes. We are a party who recognises that many of those who vote for us run their own small businesses. The majority of small businesses are one person. A lot of them will get compensation because they are in a household running their small business. You can go on and on about it but, as the Treasury modelling has quite clearly stated, the impacts on business are projected to be minimal. Indeed, the Treasury noted:
Pricing carbon will have much less of an impact on production patterns than we are currently experiencing from the mining boom, and much less than we'd expect from technological advancement and demographic change.
Many businesses will be able to pass their costs on to customers. We recognise that and that is why we are compensating households. While there will be an impact on some businesses who cannot pass on these costs, the impacts will be offset by the numerous measures to protect jobs, to fund research to create clean technologies and ensure Australia's long-term economic growth. Across Australia, the carbon price is expected to increase retail electricity prices by 10 per cent on average in 2012-13 or by $3.30 per week. The sky is going to fall in for everybody at $3.30 per week, which has been factored into the level of household assistance! We recognise there is going to be a cost impost; it is going to be borne by those small businesses. They will pass those costs on to consumers and the consumers will be compensated. The sky is obviously going to fall in and we have not thought about the impact on small business!
The opposition have not thought about the growth in small business that comes from the green clean technologies. In my seat, I have the largest CSIRO campus at Clayton. They are working with small businesses now to create the environment of the future, to create the products of the future. One thing they are working on is packaging pallets. Every time you move goods overseas on a pallet, that pallet must be then thrown away—it is not biodegradable. They are trying to create a biodegradable pallet. It is an amazing achievement. It is a small business that is based in South Australia and has come to Clayton CSIRO to create technology in conjunction with Monash University. There we go—they are waiting for this carbon tax package because they know they will be able to get assistance and support for something that will be a great boom for our planet. Isn't that great?
Interestingly enough, Capricornia Enterprise centre gave evidence to the inquiry of the Joint Select Committee on Australia's Clean Energy Future Legislation. The chair of the centre said that she had put out in her recent publication to the membership that clean small businesses will not have to directly pay a carbon price. She said:
They will not be required to undertake any compliance activity or fill out any forms due to the carbon price. When it comes to indirect impacts, most small businesses will not be materially affected. Nevertheless, many small businesses may wish to make a contribution towards the move to a clean energy future. The Government will support these businesses.
Yes, that was taken from our clean energy fact sheet, but that is also what a local business enterprise in Capricornia—a group that was brought along by the Liberal members of the committee—presented to us. The group said in evidence:
… businesses constantly tell me that they are drowning in red tape, their fees and charges are going up, with local government and state government taxes and ultimately this federal tax. The general viewpoint of businesses right across the board is that they are being forced to deal with consistent increases in red tape and they feel that increased charges are being constantly put upon them.
We recognise that. That is why there is not going to be any red tape on small business. Five hundred large businesses, all of them who know and report their emissions, will have to pay. Again, there is not going to be a huge compliance cost. We heard evidence that there will not be a downturn in jobs. There will be impacts in certain industries, but this will onflow to other businesses where jobs will be created. If we do not act now to clean up our environment and to cut the pollution from our atmosphere, no business will survive anyway.
Order! The discussion is now concluded.
by leave—On behalf of the government, I table the government's response to the report of the Joint Select Committee on the Christmas Island Tragedy. As someone who arrived immediately after the disaster, I know that no-one who was on Christmas Island on that terrible day last December will ever forget the scenes of heartbreak and of lives needlessly cut short. As many as 50 people perished, including children and infants. Forty two survivors were rescued by the courageous men and women aboard ACV Triton and HMAS Pirie and were assisted wherever possible by brave local AFP and Customs personnel and, indeed, by local Christmas Islanders. The weather was about the worst ever experienced by locals. The sight of the boat breaking up and of men, women and children being tossed against rocks, and the grief of families ripped apart, will stay with witnesses forever.
In the immediate aftermath of this tragedy, the Prime Minister invited all sides of the parliament to assist the parliament and the Australian public to understand the facts and to consider whether anything would or could be done differently should a comparable incident arise in the future. On 2 March 2011 the government established the Joint Select Committee on the Christmas Island Tragedy to examine the management of the incident by Commonwealth agencies, including the operational response and the adequacy of subsequent support provided to survivors and others. The work of the joint select committee supplements the review undertaken in the immediate aftermath by the Australian Customs and Border Protection Service and the further recommendations of the Christmas Island Emergency Management Committee.
The report of the select committee, which was tabled in the House on 4 July, found that the crew of ACV Triton and HMAS Pirie were professional and courageous and did all they could in the terrible conditions to save as many lives as possible. The committee also acknowledged the heroic actions of the Christmas Islanders who tried to throw lifejackets and other buoyancy devices to survivors. Their sense of helplessness is understandable; however, they should feel proud of their courage. More than that, I am aware of the benefit of their support and the support they rendered, including a woman who thanked a local Islander who had successfully thrown her a life jacket as she was in the sea.
The committee report contained three key and unanimous recommendations to provide ongoing support to the survivors, to provide ongoing support to those involved in the search and rescue and to build a permanent memorial on Christmas Island to those who lost their lives. The government has accepted and acted on the key recommendations and continues to support the survivors and their rescuers. Work on a permanent memorial is well advanced. This tragedy has strengthened the government's resolve to do all we can to deter vulnerable people from taking perilous sea journeys and risking their lives in future. This is why we remain so committed to implementing the best advice provided by experts from our operational law enforcement agencies.
The members of the joint select committee showed great professionalism and diligence in developing a unanimous position on most recommendations and I thank them for that. I thank in particular the chair of that committee, Senator Marshall, the deputy chair, the member for Stirling, all of those who were involved in this very important process and all of those who made submissions to the inquiry.
by leave—I welcome the government's response to the parliamentary report on the Christmas Island boat tragedy. The events of that December day last year when SIEV221 crashed into the rocks at Christmas Island are of course well-documented and well-known to all Australians. The parliamentary committee, which had representation from both chambers and from all sides of the House—and I appreciate the minister's comments—did work diligently together. I congratulate the chair, Gavin Marshall, who did a good job in his responsibilities in chairing that committee.
The committee found what were reasonably uncontroversial recommendations—namely, that a permanent memorial be established at Christmas Island to commemorate that tragedy, and also that DIAC and relevant contractors employed by DIAC, such as Serco, continue to monitor the wellbeing of the survivors and make sure that they have access to appropriate counselling services.
Finally, the third recommendation was that the Commonwealth agencies continue to monitor the wellbeing of their personnel who were involved in the rescue on the day. They did that rescue in terrible conditions in the most heroic way possible. The third recommendation that the minister has said that the government would agree to is to make sure that those personnel are monitored and given appropriate support to cope with what were obviously very difficult circumstances in the aftermath of those tragic events.
We heard evidence from people who were involved on that day about the terrible effects that it had on them and others on Christmas Island in the wake of that tragedy—not least, in terms of the aftermath, of course, concerned the survivors who were on the boat. Those survivors really do owe their lives to the courage of Australian Navy and Customs personnel and the Australian Federal Police on that day.
There were dreadful conditions on Christmas Island on that day in December, the worst conditions that long-resident locals had seen. It really was what could be considered a 'perfect storm', and the timing of the arrival on the island of that particular vessel could not have been worse. There was certainly no way that any vessels could have been put to sea safely to try to assist those survivors. The people on land, sadly, were rendered very helpless by those conditions even though the boat came very close to landfall. It was really left to both the crew of the Triton and the other naval vessel there to put the RIBs, the small inflatable craft they have, to sea and to do everything they could in what were really incredibly bad conditions to rescue as many people as possible. If they had not taken those actions, if they had not risked their lives—and it is a miracle that nobody was killed or more seriously injured from those vessels—there is no question that every single person, with one exception, would have perished.
So we do congratulate them, and I certainly believe that it is appropriate that they be honoured. I know that those involved in that rescue have been honoured for their service. I would certainly deem it appropriate—and I think the government shares in this view—that every avenue for recognising what they did on that day is looked at. I think that all in the parliament would support that, as is appropriate.
These events are a reminder to everyone in the House that we need to do everything we can to stop people taking that voyage. There is no question that if those weather conditions were repeated there is nothing that any government could do to take remedial action to make sure that those events and this tragedy did not occur again. The committee looked at what was done and of course what could be done in the future, and the truth is that if people continue to make that voyage then the possibility exists that a tragedy like this will re-occur. There is nothing that Christmas Islanders or any government authority can do to make sure that that does not happen. When the weather is that bad, if people are coming down, there is no lifesaving equipment that could be deployed to ensure that this tragedy does not re-occur. It is very important for all members of the House to reflect upon that and, whilst we will do everything we can to make sure that there is not a repeat of these events, there is nothing that the government can do to ensure that that is the case whilst people continue to take this very dangerous voyage.
by leave—Three years ago to the day the government moved decisively to secure our financial sector with guarantees of bank deposits and wholesale funding. This ensured the continued flow of credit right throughout our economy. Two days later we moved to put in place the first of three rounds of fiscal stimulus.
Together, these actions ensured Australia avoided being dragged into the worst global recession in 75 years. In doing so we avoided the massive capital and skill destruction that we saw in many other developed economies, and we avoided the tragic loss of dignity that has hit working families all around the world and in particular in major advanced economies. Over the past 3½ years I have periodically updated the parliament on developments in the global economy and their impacts at home. Given renewed financial market turmoil and the forthcoming G20 meetings, it is appropriate that I do so again today.
Dangerous new phase
Going into the crisis we said that it would be a long and difficult road out. In both the United States and Europe, economic growth remains weak, unemployment is unacceptably high and sovereign debt levels are very concerning. In recent months, we have seen increased volatility in global capital markets in response to concerns about the implications of a debt default in Greece and possible broader implications. European bank stocks have plunged and a number of European banks and sovereigns have had their credit ratings cut. The ongoing weakness in the US economy is also depressing markets. As the Chairman of the US Federal Reserve, Ben Bernanke, noted in September, the US economy faces 'significant downside risks'.
The uncertainty in the global economy, particularly in Europe, dominated the IMF-World Bank and G20 finance ministers' meetings which I attended in Washington two weeks ago. At these meetings I joined other ministers in impressing on our European colleagues that Europe needed to lift its game in dealing with what is fundamentally a European sovereign debt and financial crisis, but which has the capacity to affect us all. The depth of international concern was clearly recorded and Europe recognised that more needs to be done.
In response, European leaders have moved to implement swiftly its 21 July agreement to scale up the European Financial Stability Facility. And over the weekend the leaders of Germany and France have signalled they will outline a comprehensive plan to recapitalise banks and find a 'durable' solution for Greece's debt load. It is critical that European leaders now deliver at their 23 October meeting.
Need for global action
This is primarily a European crisis that requires a European led solution. The challenges facing the United States will similarly require US solutions. But, as we saw three years ago, developments in the global economy can impact on our own economic performance.
I remember very vividly those historic days with my G20 colleagues in Washington in 2008 when we resolved to take the action required to avert a global economic meltdown. If the worst fears for Europe are realised this time, the impacts on our own economy could be just as severe as those in 2008. That is why international engagement is just as important now as it was at the height of the global financial crisis.
I was encouraged by the success of our efforts at the G20 in Washington just a few weeks ago in highlighting the seriousness of the threats we face and in propelling more action from our European colleagues. But much more needs to be done. In the coming days, I will meet with my G20 colleagues as we prepare for the G20 leaders summit, to be held in Cannes in a month's time. My clear message will be that both individual and collective action is needed to address global financial market volatility and put the global economic recovery back on track.
Developed countries—in particular in Europe—need to put their budgets on a sustainable footing, while supporting growth where possible. Europe needs to regain the confidence of markets in its capacity to meet its debt obligations. Progress on the EFSF is encouraging, but more will be needed to convince markets. Collectively they need to demonstrate that the current sovereign debt crisis will be resolved in an orderly way, with arrangements put in place to avoid contagion throughout Europe and beyond. This includes the need for a credible plan to recapitalise the European banking system.
On the US front, more is needed to support the faltering recovery, while putting its budget on a sustainable path in the medium term. Tough decisions must be made on both spending and tax measures. The US congress needs to end its partisan politics and support President Obama's American Jobs Act, which would support growth and help bring down the unemployment rate from its unacceptably high levels—still over nine per cent.
More broadly, all countries need to undertake reforms that will both lift and rebalance global growth. With hundreds of millions unemployed globally, it is vital that this work has at its centre the creation of jobs. Developing countries need to lift domestically generated growth and move to more flexible exchange rates. I argued this case directly to Chinese leaders on my recent visit to Southern China, as well as at the IMF and G20 meetings in Washington, and I will continue to do so at this week's G20 meetings in Paris. We also need to ensure the IMF has the resources to support adjustment, in particular in Europe, and meet all possible contingencies. This was a message I clearly conveyed to my colleagues at the IMF annual meetings and have continued to stress as we head toward next week's meetings.
Global markets have been rightly concerned about the lack of political will shown in both the United States and Europe to deal with this crisis. The level of commitment necessary to address current problems is no less than what was needed to defend economies from the global financial crisis in 2008. Recent progress in Europe is encouraging. But we must continue to build on this through the G20 as we head towards the Cannes leaders summit.
The global financial crisis was a crisis that virtually no-one saw coming. Now we have a crisis that virtually everyone has seen coming. It is our responsibility to provide the political leadership to avert this. The G20 can provide the support for countries to take the individual actions necessary while bringing together the world's most systemically important countries to work collectively to avoid another crisis like we saw in 2008.
Australia's fundamental strengths
While Australia is not immune from global developments, our strong fundamentals mean we are better placed than just about any other country to deal with the current global instability. We took action to avoid recession, keep unemployment low and keep the doors of business open through the global recession. And we are in the right place at the right time, with Asia continuing to grow strongly. Around two-thirds of all our exports go to Asia. While some of the goods we export to China go into their exports to the US and Europe, around 80 per cent are predominantly for China's own domestic use.
By contrast, Australia's direct trade and financial exposures to the euro area are low. Around 10 per cent of our total trade is with the euro area and Australian banks continue to be among the world's highest rated and have negligible direct exposure to peripheral European sovereigns, including zero exposure to Greek government debt. This underscores the importance of political leaders in this country not talking down our economy and undermining confidence—this is simply too important to ever play politics with. We have a growing economy, low unemployment, strong trade linkages to rapidly growing Asian economies, a strong pipeline of business investment, a healthy financial system and very low government debt.
The IMF shone a spotlight on these strengths last week, confirming that our strong fundamentals and our successful response to the global financial crisis mean that we are much better placed to deal with global instability. And it was just last week that we saw another solid rise in retail sales, very healthy export growth and signs of strength in apartment approvals.
You cannot read too much into these monthly figures, but they do point to a domestic economy that is more resilient than a lot of the commentary has been suggesting. And we are getting on with the big reforms to strengthen our economy and position it for the future—investing in skills and infrastructure, reforming our tax system and beginning the transition to a clean energy future.
Despite our fundamental strengths, we know that the Australian economy and our budget will not remain untouched from global instability. The domestic fallout from these global events is most evident in our share market, with Australian shares falling to 2½ year lows recently, though recovering somewhat last week. Not surprisingly, global uncertainty and financial market turbulence have unsettled businesses and consumers—and reduced confidence will have consequences for our own economy.
In the midst of this uncertainty, some commodity prices have fallen, with base metal prices dropping close to 20 per cent over September. But coal and iron ore prices—the commodity prices most important to the Australian economy—are holding up relatively well to date, but remain vulnerable to any sharp slump in global demand. These developments have added to some of the existing stresses on some parts of the economy that are already being affected by factors such as the high exchange rate and cautious consumer.
Conclusion
The challenges facing the world economy are the most severe since the global financial crisis. There is a crisis of confidence in the capacity of political institutions in the United States and Europe to deliver the policy responses required. That is why I will be making clear to my G20 colleagues that urgent action is needed if we are to avoid a return to the global economic dark age of 2008.
Even with action in Europe and the United States, it is inevitable that this global volatility will impact upon us here and that we will continue to see periodic bouts of instability. But we can face this crisis with confidence, built on our strong fundamentals, our position in the world, and with the knowledge that we stared down the worst global recession in 75 years. I present a copy of my ministerial statement, The global financial crisis three years on.
I ask leave of the House to move that the member for North Sydney speak for 11 minutes.
Leave granted.
I move:
That so much of the standing and sessional orders be suspended as would prevent Mr Hockey speaking for a period not exceeding 11 minutes.
Question agreed to.
The Treasurer has informed the House of Representatives of his concerns about recent developments in the European economy in particular and financial markets and the uncertainty surrounding the outlook. I say to the Treasurer that I share his concerns. I am not overly alarmed, nor am I unduly pessimistic, but I think we need to be realistic about the challenge that lies before us. Whilst the Treasurer says in his ministerial statement that the sovereign debt crisis is a European challenge at the moment, I fear that the Treasurer—as he walks out of the chamber—does not actually understand the ramifications that can flow through to the rest of the financial markets and financial institutions.
Even though the Americans, quite rightly, after the financial crisis had a very comprehensive health check of their financial institutions and put in place the appropriate amount of money to ensure that a bailout of financial institutions was properly funded, the Europeans failed to do so. In many ways the Europeans denied that their financial institutions were as severely affected as those of the Americans. Moreover, the Europeans were very slow to allocate funds that would be necessary to recapitalise their financial institutions. We are now seeing the Europeans pay a very significant price for this act of denial.
What is of more concern to me is that, even though the primary sovereign debt is being held by European banks, and even though in those situations they are not being fully transparent about the risk on their balance sheets of their exposure, particularly to Greek but also in other ways to Italian and Spanish debt, I do not think enough is being done by the G20 and others to properly identify the derivative risk that is flowing through to other financial institutions around the world. Of course, that was the unidentified, poorly explained and rather dramatic impact of the original financial crisis in the United States and Europe in 2008. It is the secondary flowthrough of laid-off risk by those banks on other institutions. Should the tens, perhaps hundreds, of billions of dollars of sovereign debt exposure of European banks be held by those banks only, then obviously the risk can be quarantined and the Europeans will be able to deal with it. But it is when some of that risk is being laid off through derivative products that the real impact becomes a contagion and flows through to other financial institutions, particularly large American financial institutions. In many respects, that is one of the reasons why the wholesale funding markets are now dramatically increasing the cost of funds—and it is not just in Europe; it seems to be the case in the United States as well.
As I said in my covered bonds speech today, that will have an impact in Australia, as the Treasurer identified. It will have an impact because Australia is an importer of capital, and Australian financial institutions do rely on fundraising in international markets to be able to offer competitive rates to Australians. But the fact of the matter is that, if the G20 as well as financial regulators do not properly identify the second-round impacts of a default, and urgently, then the contagion impact will potentially be as severe as the original financial crisis back in late 2007—because that is when it actually started; you can see the significant growth in spreads late in 2007, really October 2007, and see that it started to have an impact. Now we are seeing occurring a not totally dissimilar impact on the cost of funds.
I was a little disappointed that the Treasurer, in his review of government action three years ago, failed to give proper recognition to the member for Griffith—who is at the table—who as Prime Minister at the time was obviously the person most responsible for the government's actions in response to the global financial crisis. If you believe the Treasurer, it was all his own good work! But, quite frankly, I have not changed my view that the government's actions were but one of a number of factors that got us through that financial crisis, as the IMF properly identified in a very recent report. It describes Australia's 'enviable' performance over the last four years as being attributable to, among other things, 'its strong position at the onset of the crisis' and 'a healthy banking system, a flexible exchange rate, and robust demand for commodities from Asia'. It is also the case that we did not have a housing crisis equivalent to that of the United Kingdom, Spain or the United States, primarily because the demand for housing in Australia, even today, far exceeds supply. That is why we did not have a complete collapse in the housing market, especially not in comparison to the United States. So there were a number of factors at play.
The government's capacity to provide fiscal stimulus at that time was only because it inherited an unbelievably generous fiscal position from the previous government: $45 billion in net assets. We now have $110 billion in net debt. The government received our bipartisan support on the first stimulus package, which included an increase in pensions—that was about $10 billion—but we argued at the time that the second stimulus package of over $40 billion was too much, it was wasteful, and that ultimately the Australian people would not thank the government for engaging in that sort of activity. And, because the government was so expansive in its fiscal stimulus, it meant that the Reserve Bank cash rate never dropped below three per cent. As we know in Australia, we have what the RBA has termed a 'high transmission rate': because most Australians have variable home loans, the dramatic movements in the cash rate from the Reserve Bank flow through almost immediately to households—even though, in that case, many Australian households chose to increase the repayment of principal on their mortgages rather than spend the benefit associated with the dramatic drop in interest rates. The fact of the matter is that, had the government not engaged in such an over-the-top fiscal stimulus, the Reserve Bank would have further reduced interest rates. But at the time, as is now rapidly coming to the fore, there was a debate led by Professor Warwick McKibbin—who is quite rightly on the board of the Reserve Bank—that there was a danger in going too far, and he was right to say so. That fiscal stimulus had tremendous waste, with $900 cheques going to dead people and people living overseas; pink batts that people did not want going into homes, destroying the pink batt industry; and overpriced school halls.
The fact is that we were still enjoying extraordinary demand out of China for our commodities and we did not have a housing crisis. Whilst our financial markets did need government guarantees, the government had so many different positions in such a short period of time that it created confusion among depositors and left cash management trusts in the lurch, where they still are today. So there were a range of different things.
The government must get back to surplus. This is what the Treasurer is urging the Europeans to do—to get their own fiscal settings right. Yet this is a government that has just passed a carbon tax which blows a $4½ billion hole in the budget and that is about to introduce, and may well pass, a mining tax that adds to the structural deficit. What can they possibly be thinking? They are not listening to their own rhetoric. It became patently clear at the end of the Treasurer's ministerial statement why he was making this further statement today: he is now trying to prepare the ground for failing to deliver a surplus next year. That is what this is about. That is what his ministerial statement was about. 'We're not affected but we are affected. Everything's okay in Australia, but we might not be able to make a surplus because of the challenges in Europe.' The time for excuses has come to an end.
by leave—It gives me great pleasure as the Minister Assisting the Prime Minister on the Centenary of Anzac to announce today the members of the Anzac Centenary Advisory Board. As the House would recall, I announced Air Chief Marshal Angus Houston as the Chair of the Board in July. From 2014 to 2018, Australia will commemorate the Anzac Centenary. During this time—and Mr Deputy Speaker Scott, I know this is an issue that is close to your heart—we will remember and honour 100 years of service and sacrifice. The Anzac Centenary will mark one of the most important anniversaries in our nation's history. In March this year, the National Commission on the Commemoration of the Anzac Centenary presented its report to the Prime Minister.
The advisory board will provide high-level strategic advice to government on a program of commemorative activities in the years leading into the commemorative period and throughout the Anzac Centenary program from 2014 to 2018. The Anzac Centenary commemorative program will encompass all wars, conflicts and peacekeeping operations in which Australians have been involved.
The board will develop a program of commemorative activities in the years leading into the commemorative period and throughout the Anzac Centenary program from 2014 to 2018. It will engage with the community and other sectors to canvass a wide range of views in formulating its advice to government. The board will also build on the earlier work undertaken by the national commission and the public submission process.
I am delighted to announce today that 16 highly capable and professional Australians, along with four ex-officio members, have been selected to join Air Chief Marshal Houston on the board. The appointments are: Mrs Kathryn Greiner, Mr James Strong, Professor Christine Charles, Mr Sandy Hollway, Professor Margaret Gardiner, Mr Peter FitzSimons, Ms Liz Ellis, His Honour Judge Rauf Soulio, Dr Jackie Huggins, Professor David Horner, Mr Luke Bowen, Rear Admiral Davyd Thomas, Major-General Brian Howard, Brigadier Bill Rolfe, the Hon. Con Sciacca and the Hon. Sandy Macdonald. The four ex-officio appointments are: Mr Ian Campbell, Secretary, Department of Veterans' Affairs; Air Marshal Mark Binskin, Vice Chief of the Defence Force; Rear Admiral Ken Doolan, National President of the Returned and Services League of Australia; and His Excellency Major-General Martyn Dunne, New Zealand High Commissioner to Australia. I table a list of the members together with a brief description of their current or previous roles.
Finding the right mix of people has been an important consideration. The board members I have announced today have a great deal of experience in their relevant fields and will bring an outstanding diversity of views to the Centenary of Anzac preparations. Of particular note, our longstanding and special Anzac relationship with New Zealand is represented on the board by the New Zealand High Commissioner to Australia, His Excellency Major-General Martyn Dunne, one of four ex-officio members.
It is vital that the centenary creates an enduring legacy to educate future generations about the Anzac legend and how our nation's involvement in military operations has shaped us not only in terms of the service and sacrifice of those who have so proudly worn the nation's uniform but also in what it meant for those at home.
The board will be supported by six advisory groups which will focus on the areas of:
Ex-service organisations will also have the opportunity to actively contribute to the development of the Anzac Centenary program.
The is a truly bipartisan activity and I welcome the commitment from the coalition to the process. The advisory board's inaugural meeting will occur later this week, and I look forward to working with the board on this very significant occasion in Australia's history.
I ask leave of the House to move a motion to enable the member for Fadden to speak for a period of 5½ minutes.
Leave granted.
I move:
That so much of standing and sessional orders be suspended as would prevent Mr Robert speaking for a period not exceeding 5½ minutes.
Question agreed to.
The coalition welcomes the long overdue appointment of the Anzac Centenary Advisory Board. Earlier this year, the Leader of the Opposition joined the shadow minister with responsibility in this area, Senator the Hon. Michael Ronaldson, to welcome the appointment of the former Chief of the Defence Force, Air Chief Marshal Angus Houston AC, AFC (Rtd) as the inaugural Chairman of the Board. It is a little disappointing that it has taken the Minister for Veterans' Affairs more than three months to announce Air Chief Marshal Houston's 20 fellow board members, including the four ex-officio members: notably, the Secretary of the Department of Veterans' Affairs, the Vice Chief of the Defence Force, the President of the Returned and Services League of Australia and the High Commissioner of New Zealand.
The remaining 16 members of the board represent a broad cross-section of the Australian business and intellectual community. Of the 20 board members, not including Air Chief Marshal Houston, there are five members with experience in the Australian Defence Force or who are representatives of ex-service organisations. Some, may suggest that the board is too large and potentially unwieldy, but time will determine whether this criticism is fair.
The coalition is disappointed, however, that the Australian War Memorial has not been given a formal role on the ANZAC Centenary Advisory Board, even in an ex-officio capacity. The Australian War Memorial, the ceremonial and indeed spiritual home of commemoration in this nation, will play a significant role in the centenary commemorations and their exclusion is regrettable. The Australian community will expect that the nation's home of commemoration will be fully included in all plans to commemorate the Centenary of ANZAC. After all, it was on the battlefields of Gallipoli where Charles Bean began to dream of what would become that great institution, the Australian War Memorial.
In February this year, the Prime Minister and the Minister Assisting the Prime Minister on the Centenary of ANZAC accepted a report from the National Commission for the Commemoration of the Centenary of the ANZAC Landing, an initiative of former, perhaps soon to be again, Prime Minister, the Hon. Kevin Rudd MP. The commission comprised former prime ministers Bob Hawke and Malcolm Fraser; the President of the RSL, Rear Admiral Ken Doolan retired; cartoonist Warren Brown; recently-retired Major Matina Jewell; and war widow Kylie Russell. The commission received more than 1,000 ideas for consideration from more than 600 individual submissions. The commission's report was presented to government in February but, sadly, it has been collecting dust in someone's office ever since.
There has been no action on any recommendations, save for the six-month period taken to appoint the ANZAC Centenary Advisory Board to advance the planning of the project. To date, no budget has been set or funding guidelines determined for the centenary, a matter which concerns the veteran and ex-service community. The minister's earlier statement that funding would be determined in the third quarter of this year has come and gone without a result.
Without funding, Minister Snowdon, important projects with time critical deadlines may be jeopardised. The first such project which instantly comes to mind is the proposed ANZAC Interpretive Centre in Albany. Despite the minister travelling to Albany in late July apparently to buy himself and the government a headline with a $250,000 grant for a scoping study for the centre, no money has actually been delivered to the organisations which will be responsible for the scoping study and the preparation of a more substantial funding brief to government. Minister, time is ticking for this project. Albany, as all honourable members of the House will only be too aware, was the point of departure for Australian and New Zealand troops heading to the Middle East pending their deployment to Gallipoli. Albany is also the home of the first ANZAC Day dawn service, conducted by Padre White on the slopes of Mount Clarence in 1916.
The proposed ANZAC Interpretive Centre and wider enhancement works of the Albany commemorative precinct are time critical. The City of Albany Council has indicated that, without the government's $250,000 funding being delivered by the end of this month, 18 days time, scoping works to enable the delivery of the project by the end of the 2014 centenary may be jeopardised. On the other side of the country in Melbourne, the Shrine of Remembrance requires a major redevelopment and safety enhancement works. These works will cost millions and advice is needed by the end of the year about any federal funding support for this work. I know the shadow minister for veterans' affairs, in his extensive travels around Australia, has been regularly briefed by veterans in small communities about the need for funding certainty to enable community based commemoration to be at the forefront of the centenary commemorations between 2014 and 2018.
The coalition welcomes the appointment of the ANZAC Centenary Advisory Board. We wish them the best in their deliberations to deliver an appropriate commemorative agenda to remember the service and sacrifice of the hundreds of thousands of Australians who have served in the Australian Defence Force. I thank the minister for the opportunity to make some comments.
by leave—on behalf of the Joint Committee of Public Accounts and Audit I am pleased to present the committee's Report 425: Annual report 2010-11. The JCPAA is one of the oldest parliamentary committees. The committee plays an important role within a parliamentary democracy with responsibility for providing oversight and scrutiny of public moneys. This report showcases the activities undertaken by the committee since the commencement of the 43rd parliament and the multipartisan approach that the committee has taken in its work. Two of the most significant reports tabled by the committee this year were reports on the powers and role of the Auditor-General—Report 421: Role of the auditor general in scrutinising government advertising and Report 419: Inquiry into the Auditor-General Act 1997.
The previous committee recognised the Auditor-General had been performing additional functions and considered it timely to review the adequacy of the Auditor-General's powers in the current public sector environment. As a result of this review the committee put forward 13 recommendations directed at enhancing the power of the Auditor-General. These powers included to follow the dollar or follow the money giving the Auditor-General greater authority to audit non-Commonwealth bodies receiving billions of dollars of Commonwealth funding. In line with the committee's recommendations, a bill amending the Auditor-General's powers was introduced to the parliament shortly after the report's tabling. Once passed into law—and I understand from another place that is potentially tomorrow—this will ensure that Commonwealth funding is better accounted for and that taxpayers are receiving full value for money. This shows the committee's ability to use the parliament to influence important changes to the nation's laws.
Throughout 2010-11 the committee continued its scrutiny of the financial affairs of Commonwealth authorities. This was achieved through the committee's regular activities which are, firstly, to conduct major policy inquiries such as its inquiry into the Auditor-General Act I have just discussed; secondly, to examine all of the Auditor-General's reports including annual reviews of the major projects report compiled by the Defence Materiel Organisation and the ANAO; and, thirdly, to conduct biannual hearings with the Commissioner of Taxation. This work enables the committee to publicly report on matters of interest to the parliament and the public while empowering the committee to recommend to agencies where improvements and changes need to be made. This committee sees the importance of actively following up on its and the ANAO's recommendations to ensure that the intended impact is being realised. To this end the committee will often request evidence from agencies to show that they are making the recommended adjustments. With the completion of the inquiry into the Auditor-General Act the committee commenced a new major policy inquiry into national funding agreements. Under the new federal financial framework, $45 billion from the Commonwealth flows to the states and territories every year. In light of these new arrangements this inquiry is topical and important, reviewing the operation of funding agreements which are major determinants of how vital services in areas such as health care and education are delivered throughout the country.
The annual report also details the findings of the committee's ongoing reviews of ANAO reports. The committee conducted reviews across a broad range of activities and topics. Notably, the committee conducted inquiries into audit reports on controversial programs such as the Green Loans and Home Insulation Programs. The committee also reviewed the ANAO's cross-portfolio audit into direct source procurement. The selection of this report for further examination shows how the committee is using its mandate to broaden the scope of its scrutiny across the public sector in hope of more systemic and cultural improvements.
The committee was particularly concerned with the ANAO's findings of high levels of direct source procurement instead of more competitive procurement options and put forward three recommendations in this area. In total the committee made eight recommendations across the 14 ANAO reports chosen for detailed review this year. These recommendations will support continued enhancements in the administration of government programs and funds.
Other substantive work by the committee was its review of the 2009-10 major projects report. The committee received four submissions for its detailed examination of this report and also held a private briefing and public hearing with the Defence Materiel Organisation and the ANAO. The committee tabled a report completing this inquiry in April 2011. The report demonstrates the JCPAA's commitment to enhance the parliament's scrutiny of major Defence projects with recommendations aimed to further develop the major projects report work program, to enhance the presentation of project-level data and to provide the committee with additional analysis to inform future improvements.
As highlighted in the annual report, the committee geared up its scrutiny of tax administration issues in 2010-11, positioning itself to become a central monitoring and scrutiny body of the Australian Taxation Office. In support of this the committee presented a report based on its eighth biennial hearing with the Commissioner of Taxation. This report is the first in a series of future reports in this area, and included nine recommendations to the Australian Taxation Office. Recommendations were made across four main areas, being service standards, compliance, policy development and external scrutiny.
Over the year the committee has been actively involved in broader engagements within the public accounts and audits space and, as a member of the Australasian Council of Public Accounts Committees, has taken the opportunity to attend the council's biennial conferences. This platform has allowed members to engage with and to share the experiences of the committee with other like committees in Australia and its international counterparts. In April this year, for example, representations were made by the committee deputy chair and the committee secretary at the council's 11th biennial conference in Perth.
The activities performed by the committee over the last financial year show that from the onset this newly formed committee has been actively exercising its oversight powers to scrutinise the use of public monies on the parliament's behalf and to increase parliamentary and public awareness of government's operations. In particular, the annual report displays the committee's ongoing commitment to hold to account Commonwealth agencies' expenditure of public funds and, ultimately, the committee's influence on agencies to implement cultural change to support and drive improvements and efficiencies across the public service.
Looking forward, the committee is taking steps to strengthen its visibility, reach and impact across the public sector. An example of this is the committee recently calling upon external scrutiny bodies such as the ANAO, the Ombudsman, the Inspector-General of Taxation and other peak industry and consumer bodies to participate in the biennial hearings with the Commissioner of Taxation. The committee has also identified the need to work more closely with and support the work of other scrutiny bodies.
The committee is already readying itself for the additional duties it may perform next year with the proposed establishment of a Parliamentary Budget Office. This office will be a major addition to both the parliament's and the public's toolbox for building better policy and in pulling apart sometimes opaque budget and election costings. The JCPAA recognises the significance of such an office and is looking forward to performing its future oversight functions. As chair of the committee, I will be working to ensure that the JCPAA supports the long-term credibility of the Parliamentary Budget Office and its speedy establishment. This includes the appointment of a Parliamentary Budget Officer with the necessary expertise and gravitas to embed the office in its rightful place as a central mechanism of this parliament.
With these achievements on record, I sincerely thank each committee member for the spirit in which this valuable work has been completed. In particular I would like to emphasise the bipartisan recommendations reached by committee members who have acted as true parliamentarians rather than just politicians in scrutinising the government's performance. I would also like to thank the secretariat for their ongoing work, often going without notice but certainly appreciated by all committee members. I commend the report to the House.
The laws that had previously developed for the Commonwealth jurisdiction were simply not equipped to cover high-risk industries. This meant that the Liberal Party put pressure not only on the workers who were forced into a new health and safety scheme but also on the public sector employees forced to cope with the additional pressure placed on an ill-equipped system.
The Liberal Party's expansion of the Comcare system also made things more confusing and less streamlined for employers and employees alike. The push to get employers to opt out of state and territory laws led to confusing situations with workers in the same workplace working side-by-side under different health and safety systems. It was a thinly disguised attempt to get more and more employers away from the state and territory systems and their well-developed involvement of unions in health and safety. All of this was because of their ideological opposition to worker representatives playing an active role in the development and enforcement of health and safety arrangements and their ideological opposition to union members being able to have an advocate to help them with a safety concern on short notice.
The Liberal Party cannot even stand by their claim to be operating in the interests of employers when it comes to health and safety. Their reforms increased confusion and made compliance more difficult, particularly in those high-risk industries that they had fought so hard to get away from state and territory schemes. Their industrial relations record also reduced the health and safety protections for workers. Meetings with unions to discuss genuine health and safety concerns became banned in agreements under Work Choices. The relationship with the Work Choices regime also meant that workers feared for their ongoing employment if they dared stop unsafe work. These reforms were all part of the extreme, ideologically-driven workplace agenda of the coalition.
We have seen evidence that the opposition continues in their ideologically-driven campaign against cooperation in the Australian workplace. The member for Bennelong recently said:
We have many examples in our region of coffee shops and the like not trading on weekends because of penalty rates.
It is something that must be addressed and it must be addressed without the position of the worker is king and must be given these rights.
The member for Bennelong is only concerned with the rights of businesses and employers. He has absolutely no regard for workers and no regard for the careful balancing act that is health and safety—that is, good industrial relations. The Leader of the Opposition has done absolutely nothing to silence those extreme voices in his own party demanding a return to the Work Choices era. Some of the main champions of Work Choices sit inside his own shadow cabinet. It demonstrates the Leader of the Opposition's commitment to continued ideologically-driven extremism within the Liberal Party, a tendency we see on every issue in modern politics from the mining tax to climate change.
The Labor Party has long known the confusion that arises when workers and employers need to get across 10 separate pieces of legislation. It is a confusion that it is all too evident in a place like the ACT, where a move from working in Queanbeyan or a switch between the private and the public systems might mean an entirely different health and safety system. A business operating out of the ACT but also servicing Queanbeyan has to be aware of compliance with two separate pieces of occupational health and safety legislation. These complexities add to the paperwork and costs for thousands of Australian businesses that operate across state and territory boundaries. This legislation is a historic change, supported by unions and employer organisations and which has had their input the whole way through the process. It has delivered a reform that the coalition was desperate to achieve but unable to do because of their extreme attempt to shut down unions and keep them away from members.
The Prime Minister has said time and time again that the Labor Party is the party of work and the party of workers. We have the interests of those workers in the forefront of our minds in everything we do. Whether it is protecting jobs, introducing paid parental leave, reinstating workplace rights or, in this case, guaranteeing safety in the workplace, the Gillard government has time and time again demonstrated its commitment to workers.
In closing, I would like to thank Louise Crossman, who deeply understands the issues of workers' health and safety and whose work in the union sector, in the public service and now as chief of staff in my office demonstrates her lifelong commitment to ensuring quality living standards and a quality workplace for Australian workers.
I rise tonight to speak on this bill and I must say that I am a little bit confused because, if you believe what our Prime Minister has had to say, this bill has already been signed, sealed and delivered and has already been enacted. As a matter of fact, it is ironic that I am standing in the parliament tonight talking about this bill because it reminds me of something else which was said before the last election, which we dealt with today, in the most shameful and deceitful manner. Something was ruled out directly before an election and then, only 14 months later, we have legislation in this place which is completely contrary to what the Prime Minister said.
I would like to place on the record for all to be able to see what the Prime Minister did say before the last election about these OH&S laws:
Businesses have been complaining for 30 years that they have different obligations in different states and at the same time not every individual worker had the same safety standards. Now, I have delivered that.
Thirty years—on the day we delivered it there were some public servants that had tears in their eyes because they spent all their working life waiting for someone to deliver that reform. Wasn't easy, but I got it done.
Yet here we are in October 2011 and we are still debating this bill. So sadly it seems as if the Prime Minister saying that she got it all done—signed, sealed and delivered—will go down in history along the lines of 'there will be no carbon tax under a government I lead'. Anyway, enough of people saying one thing before an election and another afterwards. I think ultimately the Australian people will have their say on whether they think that is the way political parties should go about governing or not at the next election, and we can leave it up to them.
The harmonisation of the nation's numerous OH&S laws was started by the Howard government in October 2006. I would like to place on the record the very constructive way the coalition has dealt with the harmonisation of OH&S laws. Sadly, when we went to nationalise OH&S laws in 2006 and in 2007 those opposite were not as supportive of our efforts as they were once they got into government, which is very disappointing. It was the coalition who very much started this process in 2006, and it has been recognised on our side as an important regulatory reform. I think we would all agree that nationalising OH&S laws between states and taking a national approach can cut down the regulatory burden on businesses, especially those businesses who have operations between states like those who might have businesses which are operating in Victoria and New South Wales. You could get the very silly situation, especially if you looked at a place like Albury-Wodonga, where you had a business on one side of the Murray River operating on OH&S laws completely different from those operating on the other. So this model bill is intended to be mirrored in all jurisdictions, and I think that is something that is welcomed by all sides of this parliament. There are separate bills that will be introduced into each jurisdiction's parliament to give effect to that model bill.
The coalition does have some concerns about this legislation. Those concerns lie with the removal of the control test and the removal of the right to remain silent along with the regulations. We recognise that it is important that this bill be viewed in the context of the harmonisation of occupational health and safety laws being conducted under the auspices of the Council of Australian Governments. The IGA also expresses the commitment of each jurisdiction to enact or otherwise give effect to their own laws that mirror the model laws as far as possible by the end of 2011. That is something else which I think we need to address, because it is now October and we are still debating this bill. It is something which, as I said previously, the Prime Minister told the Australian public should have been enacted before the last election. The laws will come into place on 1 January 2012. Without us having seen the regulations, this is going to provide a lot of difficulties for business, particularly small businesses, because they need the necessary time to read the regulations in great detail to make sure they can comply with them. Sadly, under this government there is a real concern amongst business as to how strictly those compliance costs will be enforced as a potential way for unions to get onto work sites. That is something the regulations, hopefully, will deal with.
The model work health and safety act which underpins the Commonwealth Work Health and Safety Bill was informed by the national OHS review. The review was conducted over the period of April 2008 to January 2009. The review conducted extensive consultations with a broad range of stakeholders, including regulators, unions, employer organisations, industry representatives, legal professionals, academics and health and safety professionals. It received 243 submissions in response to an issue paper released in May 2008. The review panel completed its work with the submission of its second report in January 2009. The review panel made 232 recommendations, and those were responded to in May 2009. The responses to recommendations made by the review panel formed the basis for the model act. The model act itself was the subject of extensive consultation and was developed by Safe Work Australia with the involvement of all Safe Work Australia members. In September 2009, Safe Work Australia released an exposure draft of the model act for public comment and 480 submissions were received. In December 2009, after incorporating a number of amendments proposed as a result of consideration by Safe Work Australia, input from the parliamentary council's committee and the public consultation process, the approach was endorsed and the amended model act became the agreed model act.
I would like to express in a little bit more detail some of the coalition's concerns, especially when it comes to what may or may not be in the regulations. Training in occupational health and safety is always an important issue and something that on this side of the House we have always stressed. At this time of transition to new arrangements the availability of courses is vital. Unfortunately, the availability of accredited courses has been reduced by 26 per cent since restrictive changes were introduced by the Safety, Rehabilitation and Compensation Commission in 2010 in order to facilitate transition and ensure the availability of training courses.
I am reasonably confident that the coalition will be putting forward amendments to the transitional and consequential bill enabling the continuation of courses accredited under the 2006 and 2007 arrangements, and I would hope that the government would see this as a very constructive option being put forward and something the government could move to support, because I think this will be an incredibly important amendment. I do not think anyone on the other side could say that training is not vital, in particular when it comes to OHS training, given the consequences that we can see on the workplace floor if proper training has not been put in place.
So that issue of training is one thing we in the coalition would like to see addressed. We would also like to see the removal of the language regarding the right to silence and protection from self-incrimination. Prosecution under OHS laws are criminal matters. Under normal criminal law everyone has the right to silence and protection from self-incrimination. That is, you cannot be forced to say something to an investigator, the police, unless the investigator first obtains a court order and so on. This protection is a right we all have and is essential to community confidence in our criminal justice system and the rule of law. It stops abuse of power. I think that all of us in this place would recognise that that is a very important element that we estop this abuse of power. Protection against self-incrimination is currently available under OH&S laws in New South Wales, Queensland, South Australia and Victoria. The majority of the states already have that protection against self-incrimination; therefore, the model OH&S laws take away the right to silence and protection from self-incrimination. These provisions were already embedded in the existing legislation in New South Wales, Queensland, South Australia and Victoria. The amendment which the coalition is putting forward will be consistent with the law in those four jurisdictions, and I hope it is an amendment which the government will see fit to pass.
There is also the failure to include the term 'control' in identification of duties of care. The modern principles of OH&S safety were first created in the UK in 1972 under the Robbins Review. The principle holding the responsibility for safety is allocated according to what is reasonable and practicable to control—and that is an incredibly crucial element. These are the internationally accepted benchmarks embedded in International Labour Organisation conventions, to which Australia became a signatory in 2004. ILO Convention 155, article 16 states: 'Employers shall be required to ensure that, so far as is reasonably practicable, the workplace's machinery, equipment and process under their control are safe and without risk to health.' The national review into OH&S laws report of 1 October 2008 stated that there was much dissent in submissions over the inclusion of the word 'control' in duties of care.
Recommendation 8 called for the removal of the word 'control' from the definition of reasonable and practicable. This is implemented in the national model OH&S laws. The model laws also introduce a new and untested legal concept of connecting duties of care to a person conducting a business or undertaking. The removal of the word 'control' not only creates confusion over who is responsible for what in work safety but also is a major shift away from known OH&S principles in all Australian jurisdictions, except New South Wales. Sadly, what we will see here if this is not rectified is New South Wales Labor coming to Canberra and basically exporting its model across the country. I think we would all agree that that is an incredibly dangerous precedent, because most things that New South Wales Labor ultimately touched became an unmitigated disaster. Further, it removes a key element of the ILO OH&S conventions to which Australia is a signatory and creates a legal vacuum due to unknown application and interpretation of duties of care under a new concept.
I will not go into the amendment of the Greens in too much detail, but the coalition agrees with the Master Builders Association which strongly rejects union right of prosecution. I think we could all agree that all the reasons for this Greens amendment being opposed have been stated pretty clearly.
In conclusion, there are serious issues with the time frame of this bill. It also needs some serious amendments, but otherwise the coalition agrees with the principle. (Time expired)
I rise to support the Work Health and Safety Bill 2011 and in doing so I have to say that I think the member for Wannon was supporting the legislation. I am not too sure—there was a lot of ambivalence about what he was saying. It was very difficult to follow the train of his contribution to this debate. It is not hard to see that he is a member of the party that supports Work Choices and would have it back in force in Australia at the drop of a hanky. It was also interesting to hear him misrepresenting the Prime Minister's statements made at a time when there was an agreement with all the state governments through COAG to introduce model legislation. The Prime Minister was not saying that this legislation had passed through parliament. The fact that the member for Wannon comes down here to this place and misrepresents the Prime Minister's statements simply shows how genuine he is in supporting this legislation.
This is very important legislation that will make a difference to employers, to workers and to those bodies that represent both employers and workers. The bill will implement the model Work, Health and Safety Bill, the model bill, within the Commonwealth jurisdiction, forming part of a system of nationally harmonised work, health and safety laws as agreed to by COAG in 2008 and the Workplace Relations Ministers Council in 2009 when, I might add, the Prime Minister was the Minister for Employment and Workplace Relations. This bill will apply to businesses and undertakings conducted by the Commonwealth, a public authority or, for a transitional period, a non-Commonwealth licensee. Once again, I have to refer to comments made by the member for Wannon. When he says he supports the Master Builders, I do not think anyone in this parliament would be surprised that the member for Wannon supports the Master Builders Association. When I listened to this contribution to this debate, all I heard was a person arguing for businesses, not a person who was trying to give a rounded view of what this legislation is about. Even when he was talking about training and the reduction in the number of accredited training courses, he did not say why those courses had lost their accreditation. This government is committed to quality training that actually delivers to workers and workplaces. What the member for Wannon did not say is that there are a lot of providers of training courses that are of a lesser standard than is needed. The government is making sure that the training courses that are delivered are accredited courses.
Access Economics estimated that harmonising work health and safety laws will save 40,000 businesses that operate across the country around $179 million per annum. It said the model law will also enhance safety protection for workers and do it in a way that is simple and easily understood, and the same rights and protections will be afforded to workers regardless of where they work or where their work is carried out. Labour mobility will also be increased by providing recognition of licences and training across jurisdictions. That is really important because, as we all know, the way the labour market works is that a person can be employed in one state, work in another state this week and in a different state again in the following week. The duties contained in the model legislation will also ensure that all workers are provided with protection while at work, whether they are employees, contractors or labour hire workers—and we know there is an increase in contractors and labour hire workers in the workforce—outworkers, apprentices, trainees, work experience students or volunteers, through the expanded definition of workers supported by a new compliance regime. So there are three really important facts: first, it is better for business; second, it provides more protection for workers across jurisdictions; and, third, it extends the definition so that people who previously missed out on being covered by occupational health and safety legislation will be covered.
I will share with the House experiences I had in my previous working life when I worked with people who were injured in the workplace. Often they would be people injured in a different jurisdiction to where I worked. In one case that particularly stands out in my mind, I was working in New South Wales and an injured worker came to see me who had been injured in Western Australia and had come back to New South Wales. So I had to follow it through a system that existed in Western Australia as opposed to the system in New South Wales, looking at occupational health and safety issues and workers compensation issues and how they varied in the New South Wales and Western Australian systems, and then there was a different system operating at that time for the Commonwealth.
This legislation will bring all the different systems together. The occupational health and safety system will cover the Commonwealth, and the model legislation will then be introduced in all the states. I think this is not only good for business and workers but good for the whole of our country. The model legislation was agreed to by the WRMC and, as I said, will be implemented in the Commonwealth jurisdiction and mirror laws will be introduced in the states. This has only happened after widespread and lengthy consultation. The member for Wannon was very critical of the fact that this had taken so long. Sometimes it is better to spend a little bit more time getting things right, consulting widely, rather than pushing legislation through the parliament.
Hear, hear!
Thank you; I have support from the member for Riverina.
It comes with a hook, though.
Yes, I am sure it does. There has been widespread consultation. Employers covered by this legislation have commented, as have the ACTU and members of the Safety, Rehabilitation Compensation Commission. There have been 29 submissions received and comments were taken into account when this bill was finally put together. The reforms will repeal and replace the current Commonwealth Occupational Health and Safety Act. The coverage of this bill remains similar to the OH&S Act insofar as it will apply only to Commonwealth public authorities and for a transitional period, as I said at the beginning of my contribution, to non-Commonwealth licensees.
This has been a long time coming. For the majority of Australia's history, when it comes to occupational health and safety and many other issues the states and the Commonwealth have in effect operated as separate nations through operating separate jurisdictions. By implementing this agreed model there will be some very important changes to occupational health and safety regulations in the Commonwealth and they will be mirrored in the states. That will advantage all the parties I have already identified—businesses, employers, workers, unions; all those involved in occupational health and safety. The bill will also ensure that occupational health and safety committees operate in the same way in the Commonwealth and in the states and that both employers and workers have rights and know their rights. When the changes in the bill are brought in, they will provide for a wider range of contemporary work relationships: contractors, employees, contractors, subcontractors, labour hire workers, apprentices and volunteers.
Labour hire workers, contractors and subcontractors have fallen through the cracks on many occasions when they have been injured or when they have needed to undertake training in proper safety. Because of their status in the workforce—they do not really fit into any particular pigeonhole—they often have not been provided with the same sort of training, compensation, coverage and access to occupational health and workplace safety as other workers have. This legislation addresses this, and that is a very important aspect of the legislation.
There is a new statutory right for workers to cease unsafe work in certain circumstances. I know that most members of this parliament will have been approached by workers who have been forced to work in unsafe conditions. One case that was brought to my attention was of a person who was welding in the rain and was ordered to continue doing that. That person ended up having a serious accident, and the employer refused to call an ambulance because they did not want to have the accident reported to New South Wales WorkCover. But now, under this legislation, when it is mirrored in New South Wales and enacted in the Commonwealth, workers will be able to say, 'I'm not going to do that,' and they will be backed up by their right to say that.
Under the legislation there will be tougher penalties for failing to meet the duty of care as well as a removal of the Commonwealth immunity from criminal prosecution and a wider range of enforcement options, including infringement notices, remedial orders, adverse publicity orders, training orders and orders for restoration. These are all very important changes which will make our workplaces safer and have a positive impact for both employers and workers.
The bill also includes provisions to deal with issues that are specific to the Commonwealth. It will extend the application of work health and safety laws to members of the defence forces and other persons currently deemed to be employees for the purposes of the current OHS Act. It will also enable the Chief of the Defence Force and the Director-General of Security to disapply specific provisions of the act and establish Comcare as the sole regulator of OH&S in the Commonwealth. This is good, important, groundbreaking legislation that will change the way OH&S operates not only in the Commonwealth but also throughout Australia.
I find myself in furious agreement with the member for Shortland when she says that the government should take more time on some of its legislation. Indeed the government should. It is a shame that the government did not take more time and put the clean energy bills to an election rather than put them through this parliament now—although it was not their idea to do so but the Greens', to whom the government is beholden.
Unions, to whom this government is also beholden, have warned that the lives of miners are being put at risk by this government, and the states are rushing through thousands of pages of new safety regulations without adequate consultation. The General Secretary of the Construction, Forestry, Mining and Energy Union's mining division, Andrew Vickers, said:
… national standards had been due for completion in February and were then to be open for public comment for six months before a start date of January next year.
He is quite concerned. He went on to say:
… incomplete and previously unseen codes were not released for public comment until—
July—
with the consultation period cut to eight weeks to meet the January deadline.
He continued:
… the union was concerned about a number of the proposals, including reductions in air and methane monitoring, inadequate provisions for escape routes, the banning of breathing apparatus, and a lack of provision for ventilation officers.
In Mr Vickers's own words:
"Mine safety laws have evolved over 100 years in this country, more often than not based on the hard and tragic lessons learned from mining disasters, and we currently have some of the best safety regulations in the world,"
That comes from the union, and I recommend to Labor that on this occasion they listen to the union and to the member for Wannon, who in his contribution questioned why the government was rushing this legislation through.
It is imperative that there be harmonised occupational health and safety laws. This has long been recognised as an essential area of regulatory reform, and this process was started by the Howard government. In February 2008, the Workplace Relations Ministers Council agreed that the use of model legislation is the most effective way to achieve harmonisation of OHS laws. The Commonwealth and each of the states and territories subsequently signed the Intergovernmental Agreement for Regulatory and Operational Reform in OHS, which dedicates jurisdictions to implement the model laws by December this year. The model bill is intended to be replicated in all jurisdictions, and separate bills will be introduced into the parliament of each jurisdiction to bring about the model bill.
The coalition holds some justified concerns about this legislation. There is genuine concern about the removal of the control test and the removal of the right to remain silent along with the regulations. This side recognises that it is important that this bill be viewed in the context of the harmonisation of occupational health and safety laws being conducted under the auspices of the Council of Australian Governments. The intergovernmental agreement expresses the agreement of each jurisdiction to enact, or otherwise give effect to, their own laws which mirror the model laws as far as possible by the end of 2011. This is a worthwhile objective; however, now there is considerable concern about the time frame.
The model Work Health and Safety Act which underpins the Commonwealth Work Health and Safety Bill was brought about by the National OHS Review conducted over the period April 2008 to January 2009. The review involved consultations with a broad range of stakeholders, including academics, employer organisations, health and safety professionals, industry representatives, legal professionals, regulators and unions. A total of 243 submissions were received in response to an issues paper released in May 2008. The review panel completed its work with the submission of its second report to the Workplace Relations Ministers Council in January 2009. The review panel made 232 recommendations to which the council responded in May 2009. The council's responses to recommendations made by the review panel formed the basis for the model act.
The model act itself is the subject of wide consultation. The model act was developed by Safe Work Australia in conjunction with all Safe Work Australia members. Safe Work Australia released an exposure draft of the model act for public comment in September 2009, and 480 submissions were received. After incorporating many amendments put forward after consideration by Safe Work Australia, input from the Parliamentary Counsel's Committee and the public consultation process, the Workplace Relations Ministers Council in December 2009 endorsed the amended model act which became the agreed model act.
But, if you go along with what the Prime Minister says, this piece of legislation has already been introduced and passed. In the leaders' debate in the 2010 election, when asked what her biggest achievement was, the Prime Minister said:
Perhaps less transparent to the Australian people: getting new occupational health and safety laws. Laws around the country. Businesses have been complaining for 30 years that they have different obligations in different states and at the same time not every individual worker had the same safety standards. Now, I have delivered that.
She continued:
Thirty years—on the day we delivered it there were some public servants that had tears in their eyes because they spent all their working life waiting for someone to deliver that reform. Wasn't easy, but I got it done. And what I think that shows is if you believe in something passionately, then you will work through.
So the Prime Minister did it all—signed, sealed and delivered.
We also know, however, that this great, mighty feat that the Prime Minister achieved, for which she was so quick to take credit, was in fact started by the coalition. The harmonisation of the nation's numerous occupational health and safety regulations was started by the Howard-Vaile Liberal-National coalition government in October 2006. The coalition said at the time:
The lack of consistency between the safety laws in each state has led to significant compliance costs on employers who engage people in more than one jurisdiction. The arguments for harmonisation appear compelling to many.
It is disappointing that the government has sought to bring on this legislation for debate when the regulations are yet to be finalised. The coalition believes that in fairness to all sides of the chamber the government should have provided a copy of the final regulations and final regulatory impact statements much earlier.
There are many issues of concern with the Work Health Safety Bill 2011. Training in occupational health and safety is paramount. At this time of transition to new arrangements, the availability of courses is critical. Unfortunately, the availability of accredited courses has been reduced by 26 per cent since restrictive changes were introduced by the Safety Rehabilitation and Compensation Commission in 2010. In order to smooth the way for transition and ensure the availability of training courses, the coalition will put forward an amendment to the transitional and consequential bill, enabling the continuance of courses accredited in 2006-07. The change made supports union training at the expense of a private provider, with no beneficial outcomes.
The removal of the right to silence and protection from self-incrimination is a concern. Under normal criminal law, everyone has the right to silence and protection from self-incrimination. In other words, you cannot be forced to say something to an investigator, the police, unless the investigator first obtains a court order, and so on. This protection is a right we all have and is essential to community confidence in our criminal justice system and the rule of the law. It stops an abuse of power. Protection against self-incrimination is currently available under OHS laws in New South Wales, Queensland, South Australia and Victoria. The model OHS laws rip away the right to silence and protection from self-incrimination. This will apply not only to employers but also to all managers and workers in workplaces. It will give powers to OHS inspectors not available to the police. An amendment to the Work Health and Safety Bill will remove this provision.
There is a failure to include the term 'control' in identification of duties of care. The modern principles of occupational health and safety had their genesis in the United Kingdom in 1972 under the Robens review. In 1972 a British government committee of inquiry into health and safety at work, chaired by Lord Alfred Robens, released a groundbreaking report calling for a fresh approach to the regulation of occupational health and safety. The principles hold that responsibility for safety is allocated according to what is reasonable and practicable to control. These are the internationally acceptable benchmarks embedded in International Labour Organisation conventions to which Australia became a signatory in 2004. ILO convention 155, article 16, states:
Employers shall be required to ensure that, so far as is reasonably practicable, the workplaces, machinery, equipment and processes under their control are safe and without risk to health.
The National Review into Model OHS Laws report of 1 October 2008 stated that there was much dissent in submissions over the inclusion of the word 'control' in duties of care. Recommendation 8 called for the deletion of the word 'control' from the definition of reasonable and practicable. This is implemented in the national model OHS laws.
The model laws also introduce a new and untested legal provision of attaching duties of care to a person conducting a business or undertaking. Taking out the word 'control' not only creates confusion over just who is responsible for what in work safety, but is also a massive shift away from known OHS principles in all Australian jurisdictions except New South Wales. Also it removes a key element of the ILO OHS conventions to which Australia is a signatory and creates a legal vacuum due to unknown application in the interpretation of duties of care under a new concept.
It is reasonable to expect that by removing the word 'control' legal uncertainty will occur and will require many years of judicial testing before clarity is accomplished. OHS legislation must not just operate with legal clarity; the wording of the act must give unambiguous signals in clear, everyday, easy-to-understand language to every person involved in workplaces. People understand in a practical sense that if they control something, or even insomuch as they have joint control, they are responsible. With the word 'control' removed, clarity and focus on personal responsibility for safety is reduced and becomes confused. This works against the aim of producing safe workplaces.
The Greens intend to put forward some amendments similar to what we have seen in New South Wales in relation to unions' right to prosecute. The coalition agrees with the Master Builders Association which 'strongly rejects union right of prosecution. The authority to prosecute and begin criminal proceedings should rest solely with the state'. The Master Builders Association rightly pointed out in its submission to the Senate committee:
A prosecutor represents all members of the community and cannot, therefore, act as if representing private or factional interests. Unions, by their very nature, represent the interests of employees and therefore cannot represent the entire community. To empower them with the ability to prosecute is akin to empowering employers with the ability to prosecute employees for a breach of health and safety, an issue that would be viewed as inappropriate by the community.
In addition, the expert review panel considered and made recommendations in this area. The review panel identified three major concerns with private prosecutions: one, there are serious practical difficulties, such as a lack of resources, which may undermine the evidence base; two, private prosecutions are not subject to the same safeguards as prosecutions brought by the state, such as application of prosecution policies, review of decisions and other public sector accountability measures; and, three, private prosecutions can disrupt other enforcement activities, such as enforceable undertakings or other measures that the regulator considers as more appropriate or proportionate in the circumstances of a particular case.
That begs the question: were the same public servants with tears in their eyes, to whom the Prime Minister referred, equally as upset to see John Robertson's Labor Party vote with the Greens to change the model legislation in New South Wales? Further, it was New South Wales Labor which helped the Greens to stop the Prime Minister's nationally harmonised laws. Thanks to New South Wales Labor, the laws will not be harmonised amongst states which are signed up. New South Wales Labor was rightly jettisoned at the 26 March state election after 16 years of the worst government this country has been forced to endure—fast being matched by Gillard federal Labor, which governs at the behest of the Greens and the whim of three Independents.
The coalition is deeply concerned about the January deadline. With people around Australia needing to learn about the new laws and regulations before they come into effect, it is outrageous to implement these laws from 1 January not having had the regulations signed off as yet in October. The government needs to ensure that employees and employers around Australia have a reasonable amount of time to get accustomed and to transition—that word we hear so often used by those opposite—to the new laws. What we do not want to see is the final regulations and codes of practice being released in November with small business, the engine room of the economy, being expected to know every intricacy before 1 January. We so often hear the government talking about evidence based policy, but the reality is that the Access Economics regulatory impact statement that those opposite are referring to is now so far out of date it is not funny. The consultation regulatory impact statement does not take into account the final regulations.
The coalition will put forward some common-sense amendments. The regulations will be determinative of the benefit of this change. Model regulations were circulated and are exceptionally restrictive. The final regulations have not yet been released and nor has the regulatory impact statement. The decision regulatory impact statement which is currently doing the rounds offers some very real areas of concern. I note that in answers from Senate estimates to the shadow minister for employment and workplace relations, Senator Eric Abetz, the department could not clearly say that the harmonisation will be achieving the clear goals laid out from the outset.
I take a different view on the issue of the use of prosecutions in OH&S matters, which I am happy to discuss later in my contribution. I will pick up, in argument, points that would oppose some of the matters that have been raised by the honourable member for Riverina. With respect, I just disagree with them. It is important to note at the outset that I certainly speak in support of the Work Health and Safety Bill 2011 and related bill now being considered, primarily because OH&S is one of the critical protections offered to employees in any workplace. Regardless of the industry that they work in and regardless of the jurisdiction they are in, there should be a degree of comfort that there is a safety net of laws protecting them in the way that they work, both now from an immediate threat and in the future from longer term disabling injuries or conditions that are brought about by systems of work that are inherently unsafe and have not been attended to.
Surprisingly, in this day and age 290 Australians are killed each year at work, which is simply an unacceptable number. Many more will die as a result of work related disease. Each year about 135,000 Australians are seriously injured at work. It has been estimated that work related injury and illness cost our economy about six per cent of gross domestic product, and the cost is far greater because you simply cannot put a dollar figure on the injury, suffering and pain that people have to experience because there are not safe systems of work and they are poorer for it.
It has been a long ambition of successive Labor governments to achieve harmonisation of these laws across all jurisdictions. Nationally harmonised laws were first raised in 1974 by the Whitlam government and remained a priority through the intervening years. As long ago as the 1970s it was clear that having different laws across states and territories created a regulatory maze and was a burden on businesses operating across jurisdictions. Almost 30 years on, here we are in a day and age where businesses are much more global and the workforce is a lot more portable. Our laws that are intended to provide protections to the safety and wellbeing of workers have to reflect the present operating climate.
These bills implement a 2007 election commitment to establish nationally harmonised OH&S laws. The reforms that they bring forward have come about because of agreements that have been reached through the Council of Australian Governments and the Workplace Relations Ministers Council. For those who doubt the ability of the federation of work on a range of different areas, it has been demonstrated that federal and state governments, regardless of political hue, can, particularly in terms of the national interest, find a way to work through issues that have bedevilled their predecessors in trying to come up with good law, harmonised law, that reduces regulatory burden and provides uniform protections across the country. The government worked in partnership over the past three years with the states and territories, the ACTU, the union movement and business groups to achieve a new legislative framework. The framework seeks to replace nine separate OH&S acts and more than 400 pieces of related regulations which in the past have created unnecessary confusion, complexity and higher costs for many businesses. I refer to the process of reaching these reforms started 30 years ago through successive governments. We have been trying to work out how to get these reforms done and we have been able to achieve them. The opposition made some comment—particularly the member for Wannon—which the member for Riverina reflected on. With all due respect, the member for Riverina was wrong in the way he characterised the contribution of the member for Wannon because the member for Wannon was criticising us on two counts. He criticised us for not supporting their reforms back in 2006 when they tried to change OH&S laws. Frankly, there were a lot of us. I had the honour of being able to represent working Australians in a trade union where we would not have been comfortable in any shape or form with the reforms put forward by the Howard government. Bear in mind that they ripped away workplace protections for people and brought in a system of O&HS that was dictated a lot by employer preference rather than by what a lot of people would say is important—that is, that employers and employees build not just systems and not just processes but a safety culture where people work together. I recall designated workgroups where employers were able to choose key OH&S reps if employees were unable to select them. It was a great concern that employers had a great deal of influence in the way that workplace safety was rolled out in workplaces when, as I said before, it is much more successful to build consensus in workplaces and build a commitment to workplace safety.
So we were criticised for not supporting their reforms and now we are criticised because we are getting this matter debated. It was not the case, as the member for Riverina said, that the member for Wannon was claiming we were rushing this through. That is not the case at all. He actually wanted us to move quicker on it. We are here getting the job done in terms of OH&S and we have had a difficult process getting that achieved. New South Wales, the state that I come from, under the Carr government reformed industrial relations laws and turned back the 1992 IR reforms brought in by the Greiner-Fahey governments which saw people lose workplace rights and over the course of those years made improvements to OH&S laws. One of those improvements was that, when push came to shove, if an employer was not taking seriously their safety responsibilities there could be recourse to prosecution.
We have heard the member for Riverina today claim that this is not right. In fact, he quoted the Master Builders Association, claiming that prosecutions initiated by unions may conflict with prosecutions being done by other bodies. It is very hard to get other bodies to undertake those prosecutions. I remember trying to get Comcare to deal with serious workplace safety issues where they do not act and where if a union is prepared to put forward its views on behalf of members in trying to represent issues of workplace health and safety—and they are willing to take the stand—they do it because they are sufficiently concerned about the health and wellbeing of the people that they represent. So prosecutions would not cut across other jurisdictions or other bodies, because more often than not that would not be the case. There were celebrated cases in New South Wales where the financial sector union had to take on banks that were not taking seriously the issue of armed hold-ups and a range of safety concerns. I will not name the bank that they took on, but they were able to see improvements.
The New South Wales Labor government decided that it would not defend this provision early on, but suddenly it backflipped. The COAG process, if you can get things agreed to across states and across the Commonwealth, works. New South Wales did not really push hard for that protection—that is, for prosecutions to be enabled—but in the end a deal was done. If there is agreement and certainty reached, you have to honour the deal. As much as I am supportive of New South Wales—and I thought it would be a good feature at the national level—it did not come to pass. There was uniform agreement through COAG and the Workplace Relations Ministerial Council about how to do this. The deal was done. I was surprised through the course of the year to see a backflip by New South Wales Labor leading into the election and it undid the certainty that was reached where we had been able to get unified laws. The fact is that this has been satisfied. I do not think it is good enough to just backflip in the way that it was done. It was good enough to defend in the first place. It was not defended. We had a deal done and then they went back on it. National laws are important. I think it is critical for people, regardless of jurisdiction, to have uniform securities in place and I commend that to the House.
The reforms that stem from this new framework will repeal and replace the Commonwealth Occupational Health and Safety Act 1991. There will be no change to the coverage of the bill compared with the current act in respect of its application being only to the Commonwealth, Commonwealth public authorities and, for a transitional period, non-Commonwealth licensees. The definition of worker will be extended to include persons who are currently deemed to be employees of the Commonwealth, such as members of the ADF and holders of Commonwealth statutory office. The bills no longer rely on employer duties but, rather, assign primary duty of care to the 'person conducting a business or undertaking'. The Work Health and Safety Bill takes into account the changing nature of modern work and does not rely on the traditional employer-employee relationship, expanding the definition of 'worker' to include contractors, employees of contractors, subcontractors, labour hire workers, apprentices and volunteers. It places a positive duty on officers to exercise due diligence to ensure compliance by that organisation.
For the sake of greater accountability and responsibility for safety outcomes, the Commonwealth will no longer enjoy immunity from criminal liability resulting from offences under this legislation, which I think is an enormously positive move. The bills establish Comcare as the single regulator on these matters in the Commonwealth jurisdiction, with Comcare operating under the oversight of the Safety, Rehabilitation and Compensation Commission, which will continue to provide consultative and advisory functions. There will be a wider range of enforcement mechanisms under these bills, including infringement notices, remedial orders, adverse publicity orders, training orders and orders for restoration. In a measure that will be significant for workers, these bills will include stronger protections from discrimination, victimisation and coercion over work health and safety matters which go beyond what is currently available through these and other laws.
However, in the case of GBEs, government business enterprises, that have transitioned from being wholly publicly owned as agencies to having independent boards set up to oversight their operations, I am concerned that a historical anomaly allows some of them to sit outside OH&S laws. For example, Australia Post still operate by what I call principal determinations. Those allow them to make decisions about employment matters within the GBE. They are an anachronism from the Public Service days of years past. The principal determination system allowed Australia Post to introduce, for example, a system of referring injured employees to a group of company doctors, I would call them. If they had an injury, these employees could not go to a GP of their preference—that is, a family doctor—but would be referred to 'company doctors', who were set up through tender processes. Basically, nine out of every 10 workers who went to see them would be sent back to the job, with a huge risk of misdiagnosis. There were cases where injured employees of Australia Post were sent back to work with broken ankles simply because the KPIs and management bonuses tied to those KPIs required improving workplace attendance, and, if that meant sending people who were injured back to work, then so be it. The principal determinations could never be investigated by Comcare because Australia Post did not come under the Occupational Health and Safety Act in the Commonwealth's jurisdiction. I think it is completely unacceptable for a GBE to be entitled to operate by those means.
Now Australia Post, under Ahmed Fahour, has moved to bring in improved workplace health and safety laws and address this issue. But it is still unacceptable because the principal determinations, as they guide employee conditions in that organisation, still provide for a system of workplace health and safety that sits outside the act. That certainly needs to be addressed. It is an area for future reform that needs to be tackled by this government or any subsequent government, because it is not right to have Commonwealth legislation and harmonised workplace laws in operation yet have a government business enterprise that can operate outside of that process due to an anachronism, a loophole, that exists. I would certainly urge further reform there. These bills are important, and I commend them to the House.
It is good to have the opportunity this afternoon to speak on the Work Health and Safety Bill 2011 and the cognate bill. I take this opportunity because bills such as these greatly affect the employees and the businesses of Cowan. Within the electorate, the outer northern metro area of Perth, there are a number of suburbs that house the businesses of Cowan and, of course, many of those employees are my constituents. Malaga, Landsdale, Wangara and Gnangara are areas where there is much light industry being undertaken. We have a Volgren bus factory in Malaga and we have galvanising works in Landsdale; we have a number of those sorts of businesses where workplace processes can be risky for the employees. There is no doubt that we would welcome any harmonisation of occupational health and safety rules.
Sadly, it is not uncommon in this country for accidents and, unfortunately, even deaths to occur in work situations. It was not too long ago that a constituent family of mine from Wanneroo suffered the loss of their husband and father after he fell from a cherry picker in Kalgoorlie, where he was working. Those sorts of events really bring home to us as representatives of our electorates the realities of getting things right. When deaths and injuries occur in the workplace, they are absolute tragedies, and it is my view that these can always be avoided. There can always be more thought and more common sense put into these processes that would make these accidents avoidable.
The fact remains that workplace health and safety is a matter that is everyone's responsibility. It is not just the responsibility of the owner of a building, it is not just the responsibility of the manager of a business and it is not just the responsibility of an employee, not in any of these cases. The reality is that all levels of a business or any organisation need to be responsible and they need to accept their responsibility for occupational health and safety through these processes. As has often been said, common sense is not very common and risk is not foreseen by all. Therefore sometimes safety must be strongly engineered into both the physical facility of an organisation or business and into the processes that form part of any workplace.
At times there seems to be quite a bit of paranoia on the other side. When you look at the websites of organisations such as the Victorian Trades Hall Council there seems to be a bit of paranoia about people being out to get them. There is suspicion about motives all over the place with regard to occupational health and safety when the reality is, whether you are a business owner or manager or an employee, everybody wants a safe workplace. We do not want productivity undermined by having to deal with an accident. We do not want to have the problems following an injury or death inflicted on a worker's family. It is in no-one's best interest. No-one can conceive of that as a desirable outcome for anyone. It is wrong on every level and it is against everyone's intrinsic view of what is right and what is best. What we need to consider in all these matters to do with occupational health and safety is that we should assume there is goodwill on all sides. We should not be too worried about or too intent upon looking for misplaced motivations in the businesses of this country. As I said, it is in no-one's best interest that we undermine or do not take occupational health and safety seriously.
What we know about the model laws for occupational health and safety that this legislation goes to is that a review was conducted in 2008 into 2009. The review examined inconsistencies in occupational health and safety laws across the country. It has been said not only people by in this place but also by other commentators that one of the great motivations for this review was the stark problems in what was being done in New South Wales. The previous speaker, the member for Chifley, spoke of what was good and right in the New South Wales laws. According to these commentators, New South Wales had a set of laws with a default position of automatic guilt for employers regardless of the consideration of the control they had over the workplace processes. Because that was so different from the International Labour Organisation's accepted conventions, it highlighted the need for this sort of review to examine those inconsistencies across the country.
The process of harmonisation and trying to achieve uniformity in the occupational health and safety laws of this country did not just emerge in the last three years. This was acknowledged by the Howard government back in 2006. In this place, those on the other side give the impression that they are the only ones who care about the health and safety of workers in this country. It seems to be one of the great fallacies that there is only one side that cares for workers. There are often statements about 12 long years of neglect, a common phrase that has possibly not been used so much in the last year or so, but one of the great catchcries of the last parliament was how we allegedly never did anything. Of course, that always proves to be false. There is no doubt that the Labor Party have a strong interest in workplace safety laws. If you look at this legislation, it seems one of the things they are very keen on is making sure that union organisers get the opportunity to enter workplaces. Of course, that requires more jobs in the unions which means there are more jobs to be handed out. That is another reason they are keen on these sorts of laws.
Under the Howard government a number of occupational health and safety laws were introduced. I did a quick search and found the Occupational Health and Safety (Commonwealth Employment) Amendment Bill 2000, the Occupational Health and Safety (Commonwealth Employment) Amendment (Employee Involvement and Compliance) Bill 2002, the OHS and SRC Legislation Amendment Bill 2005, the Australian Workplace Safety Standards Bill 2005, National Occupational Health and Safety Commission (Repeal, Consequential and Transitional Provisions) Bill 2005, to name a few. There were plenty of occupational health and safety laws before parliament in recent history. I would describe that as a long and dedicated commitment by the coalition to occupational health and safety. As I said, we are most definitely keen to progress the interests of employees and businesses in this country to make sure that people remain as safe at work as possible. We should always pursue this specific objective. As I said before it is in no-one's best interest to take shortcuts that can result in great tragedies. What we do see in these laws is that both sides apparently are committed to making occupational health and safety laws the best they can be. I do not think there is any doubt about that. Amendments have been foreshadowed by the shadow minister and I certainly support those. This is a time when we must look to the experiences of the past and then examine what the government has brought here on this occasion and see what can be done to improve it. There are other things that, as we all know, are not able to be saved as far as this government's legislation goes, but on this occasion there are things that can be improved.
I am running out of time but I wanted to cover the aspect of control. Again, this has been mentioned by previous speakers and it has to do with the great principles of workplace safety. Coming out of the 1972 Robens review in Great Britain the principle I want to speak to is that dealing with what is reasonable and practicable to control. That benchmark was taken up under the International Labour Organisation conventions to which Australia became a signatory in 2004. Of course, we know who was in government in 2004—a further clear and present commitment by the Howard government. Article 16 of convention 155 from the ILO states:
Employers shall be required to ensure that, so far as is reasonably practicable the workplaces, machinery, equipment and process under their control are safe and without risk to health.
The aspect of control is a very important matter.
I know that there were various submissions put to the OH&S review that railed against the aspect of control but control is a very important point. It is a requirement for people to accept a bit of personal responsibility in these matters. An employer or even an employee has a lot of dangerous functions within their control. Within this legislation unfortunately the term 'control' has been removed, so in a lot of respects that makes it a lot harder and a lot less clear in the ownership and establishment of a person's responsibility for safety. I think this could have a tendency to create a legal vacuum that may require case law in the future to try and fathom. The opposition's amendment to do with replacing the term 'control' is an important element that should be put back into the legislation and it will make it a better piece of legislation. I commend the amendment to the House. (Time expired)
I appreciate the opportunity to participate in the debate in relation to the Work Health and Safety Bill 2011 and related legislation. In the short amount of time available to me this evening I would like to speak more generally on some of the issues that have been raised by speakers on both sides of the House most recently by my good friend and colleague the member for Cowan, who I think adopted a very common-sense approach to his presentation to the House this evening particularly in his recognition that issues of occupational health and safety matters are of great concern for members on both sides of the chamber. The member for Chifley also approached this debate in a very bipartisan way and made some points that I think reflected very well on the House that really no party and no member in particular owns this issue. It is an area where the former Whitlam government, as I understand from the contributions of members opposite, and also the former Howard government started the process of harmonisation of occupational health and safety laws.
I would like to make the point from the outset that while legislation and regulations are extremely important when it comes to occupational health and safety it must be stressed that workplace safety is everyone's responsibility. I think there is a broad recognition now in the community and I do give credit where it is due. The union movement is not always a topic of great enjoyment for me and I am not a great supporter of some of their tactics but I think the union movement has played a very important role in raising safety issues.
Hear, hear!
I take the support I have been given from the honourable member opposite but there is always a question of making sure that we get the balance right. We need to make sure, in any regulations we impose on business and industry, that there is a recognition that there has to be a common-sense balance. I think business owners in the modern era very much recognise their important responsibility for their workers in the workplace.
My electorate of Gippsland is one of those which is probably very much a microcosm of some of the hazards that workers may face in the workplace. The regional industries that exist in Gippsland are probably some of the most potentially hazardous that you will face anywhere in Australia. We have the timber industry, we have the fishing industry, oil and gas, defence operations at East Sale, open-cut coal mines and the power generation sector, heavy vehicle operators, a significant construction sector and, of course, the agriculture sector, which has been one of those areas where it has been very difficult to drive improvements in occupational health and safety.
I think the sad part about this debate tonight is the fact which many members have already raised that 290 Australians are killed in the workplace every year and around 135,000 Australians are injured at work. It is one area where I do not think we can ever relax our guard. It is an area where we need eternal vigilance. It is a huge economic cost, obviously, but also the social impact of workplace injuries and deaths is something that is immeasurable. In making my brief contribution to the House this evening I recognise that the members on both sides have a very strong interest in occupational health and safety and that the harmonisation of these laws is something that there is broad support for across the chamber. Having said that, I will foreshadow that the coalition does intend to move some amendments at a later stage in the debate. We have some significant concerns that bear further consideration by the government.
Debate interrupted.
On behalf of the Speaker I present the report of the Selection Committee's report No. 35 relating to the consideration of committee and delegation business and private members' business on Monday, 31 October 2011. The report will be printed in today's Hansard and the determination of the committee will appear on the Notice Paper tomorrow. Copies of the report have been placed on the table.
The report read as follows—
Report relating to the consideration of committee and delegation business and of private Members' business
1. The committee met in private session on Wednesday, 12 October 2011.
2. The committee determined to amend the order of precedence and times to be allotted for consideration of committee and delegation business and private Members' business on Monday, 31 October 2011, as follows, amended entries are marked with *:
Items for House of Representatives Chamber (10.10 am to 12 noon)
COMMITTEE AND DELEGATION BUSINESS
Presentation and statements
1 Australian Parliamentary Delegation to Denmark, Sweden and Greece
Report on the Australian Parliamentary Delegation to Denmark, Sweden and Greece April 2011.
The Committee determined that statements on the report may be made—all statements to conclude by 10.20 am.
Speech time limits —
Mr L. D. T. Ferguson—5 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 5 mins]
PRIVATE MEMBERS' BUSINESS
Notices
1 MR WILKIE: To present a Bill for an Act to regulate the export of live animals for slaughter, and for related purposes (Livestock Export (Animal Welfare Conditions) Bill 2011). (Notice given 11 October 2011.)
Presenter may speak for a period not exceeding 10 minutes—pursuant to standing order 41.
Orders of the day
1 Air Services (Aircraft Noise) Amendment Bill 2011 (Mrs Moylan): Second reading (from 12 September 2011).
Time allotted—60 minutes.
Speech time limits —
Mrs Moylan— 10 minutes.
Next 3 Members—10 minutes each.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 4 x 10 + 4 x5 mins]
The Committee determined that consideration of this matter should continue on a future day.
Notices—continued
* 2 MS SMYTH: To move:
That this House:
(1) recognises the value of the Victorian Certificate of Applied Learning (VCAL) in providing young Australians with work experience and literacy and numeracy skills which in turn prepare them for further training and employment; and
(2) considers that the decision of the Victorian Government to cut VCAL funding will particularly harm disadvantaged and disengaged students who are encouraged by VCAL to remain in education and to benefit from practical education and training. (Notice given 24 August 2011.)
Time allotted—remaining private Members' business time prior to 12 noon.
Speech time limits —
Ms Smyth— 5 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
Items for House of Representatives Chamber (8 to 9.30 pm)
PRIVATE MEMBERS' BUSINESS—continued
Notices—continued
3 MRS GRIGGS: To move:
That this House:
(1) acknowledges 19 February 1942 as the day Darwin was bombed and marks the first time Australia was militarily attacked by enemy forces;
(2) reflects upon the significant loss of life of Australian Defence personnel and civilians during the attacks and casualties of the bombings;
(3) recognises that the attack remained a secret for many years and that even today, many Australians are unaware of the bombing of Darwin and the significant damage and loss of life which resulted; and
(4) calls for 19 February of each year to be Gazetted as 'Bombing of Darwin Day' and be named a Day of National Significance by the Governor-General. (Notice given 20 September 2011.)
Time allotted—60 mins.
Speech time limits —
Mrs Griggs— 15 minutes.
Next Member—15 minutes.
Further 2 Members—10 minutes each.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 15 mins + 2 x 10 mins + 2 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
4 MR OAKESHOTT: To move:
That this House:
(1) recognises the need for comprehensive tax reform to maximise the standard of living for Australia for the next fifty years; and
(2) instructs the Treasurer to release a 10 year space road-map for comprehensive tax reform as a stand-alone budget paper as part of the 2012-2013 Federal Budget. (Notice given 11 October 2011.)
Time allotted—remaining private Members' business time prior to 9.30 pm.
Speech time limits —
Mr Oakeshott— 5 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
Items for Main Committee (approx 11 am to approx 1.30 pm)
PRIVATE MEMBERS' BUSINESS
Notices
1 MR CHAMPION: To move:
That this House notes that:
(1) the industrial system under the Fair Work Act 2009 is working well with low unemployment and low levels of industrial disputation;
(2) under the Fair Work Act 2009, 10 800 agreements have been made covering almost 1.5 million employees;
(3) since the introduction of the Fair Work Act 2009, the number of days lost to industrial action has continued its historical downwards trend; and
(4) the Fair Work Act 2009 is meeting its objective to balance the needs of employees and employers without taking away basic rights and guaranteed minimum standards. (Notice given 15 September 2011.)
Time allotted—60 minutes.
Speech time limits —
Mr Champion— 10 minutes.
Next 3 Members—10 minutes each.
Other Members —5 minutes each.
[Minimum number of proposed Members speaking = 4 x 10 mins + 4 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
2 MS J. BISHOP: To move:
That this House:
(1) condemns the:
(a) Boycotts, Divestment and Sanctions campaign against Israel; and
(b) targeting of Max Brenner chocolate cafes as part of this campaign;
(2) rejects this tactic as counterproductive to the promotion of the rights of Palestinians;
(3) reiterates Australia's support for the two-state solution and the right of the Israeli and Palestinian people to live peacefully within internationally recognised borders; and
(4) urges the leaders of the Israeli and Palestinian people to resume direct negotiations. (Notice given 22 September 2011.)
Time allotted—60 minutes.
Speech time limits —
Ms J. Bishop— 15 minutes.
Next Member—15 minutes.
Further 2 Members—10 minutes each.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 15 mins + 2 x 10 mins + 2 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
Orders of the day
* 1 Safety, Rehabilitation and Compensation Amendment (Fair Protection for Firefighters) Bill 2011 (Mr Bandt): Second reading—Resumption of debate (from 19 September 2011).
Time allotted—remaining private Members' business time prior to 1.30 pm (approximately).
Speech time limits —
Each Member—5 minutes each.
[As per standing order 1, minimum number of speaking periods = 6 x 5 mins]
The Committee determined that consideration of this matter should continue at a later hour.
Items for Main Committee (approx 6.30 to 9 pm)
PRIVATE MEMBERS' BUSINESS—continued
Orders of the day
* 1 Safety, Rehabilitation and Compensation Amendment (Fair Protection for Firefighters) Bill 2011 (Mr Bandt): Second reading—Resumption of debate (from 19 September 2011).
Time allotted—30 minutes.
Speech time limits —
Each Member—5 minutes each.
[As per standing order 1, minimum number of speaking periods = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
Notices—continued
* 3 Mr Broadbent: To move:
That this House notes the importance of the dairy industry to the health and well being of Australia. (Notice given 12 September 2011.)
Time allotted—40 minutes.
Speech time limits —
Mr Broadbent— 10 minutes.
Next Member—10 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 10 mins + 4 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
4 MS LEY: To move:
That this House:
(1) notes that:
(a) in the 2010-11 Budget, the Gillard Government has not considered the implications of removing Commonwealth funding for Occasional Care Child Care; and
(b) the consequence of ceasing this funding has caused Australian families real hardship as they struggle to find alternative sources of child care;
(2) acknowledges that:
(a) there are no other Commonwealth funded forms of child care to fill this void; and
(b) withdrawal of this funding has resulted in job losses in the industry; and
(3) calls on the Government to reinstate Commonwealth funding for Occasional Care Child Care. (Notice given 20 September 2011.)
Time allotted—40 minutes.
Speech time limits —
Ms Ley— 10 minutes.
Next Member—10 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 10 mins + 4 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
5 Mr L. D. T. FERGUSON: To move:
hat this House:
(1) notes the tenth anniversary of the Harkin-Engel Protocol signed in September 2001, designed to encourage voluntary standards for the certification of cocoa production that prohibits and eliminates engagement in the worst forms of child labour, as defined by the International Labour Organization (ILO) Convention 182 which has been ratified by Australia; and
(2) calls upon the Australian Government to:
(a) be proactive in measures to counter people trafficking or slavery;
(b) actively engage in international fora to ensure greater priority for consideration of measures against child slavery and trafficking;
(c) work co-operatively to improve traceability of products through the monitoring of their derivation where practical with reference to people trafficking or slavery; and
(d) co-operate closely with organisations and entities against people trafficking. (Notice given 12 September 2011.)
Time allotted—remaining private Members' business time prior to 9 pm
Speech time limits —
Mr L. D. T. Ferguson— 10 minutes.
Next Member—10 minutes.
Other Members—5 minutes each.
[Minimum number of proposed Members speaking = 2 x 10 mins + 4 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
I am personally grateful to have been given the opportunity to sit on the panel of the Joint Select Committee on Australia's Clean Energy Future Legislation because it revealed to me some unsavoury things that I suspected could happen. I do recognise the chair in the chamber, Ms Anna Burke, the member for Chisholm, and I have to say that she was extremely fair in that inquiry.
The most obvious was the farce that was the inquiry itself, where simply not enough time was given for responsible and diligent scrutiny of all the submissions. Just over 4½ thousand people took the time to send in a submission in the five days from opening to closing, and yet only a minority were chosen—mostly, of course, in favour. No visits were made to regional areas where it would have been applicable to do so.
One of the more interesting revelations that was made clear throughout the hearings was what seems to be the wide disconnect between the trade union executive and its grassroots membership. Since the spectre of having a carbon tax imposed on us without any prior consultation, and in a clear breach of a pre-election commitment not to do so, the risk to jobs has been sharply drawn into focus. What has prompted me to comment was an exchange during the committee hearing between myself and Mr Timothy McCauley, the national project officer of the Australian Manufacturing Workers Union.
The actual exchange is recorded in the Hansard, but what struck me was the disparity between Mr McCauley's reality and that of the trade union grassroots at Port Kembla. The announcement that 800 direct jobs had just been cut from the workforce at BlueScope Steel with another several hundred indirect jobs to follow did not seem to resonate with Mr McCauley. I must clarify this by saying that it is not Mr McCauley per se that I am speaking about, but who he represents: the union executive.
He said his membership had not raised any issues of concern as to the impact of this tax on jobs. Let me quote from an Illawarra Mercury report on 18 April this year, which predates the inquiry exchange by some five months or more:
Illawarra union boss Andy Gillespie has backed a call by Australian Workers Union chief Paul Howes for the steel industry to be exempted from the carbon tax.
Mr Gillespie, who is the AWU's Port Kembla branch secretary, agreed the steel sector was "under stress".
… … …
"We haven't changed our stance … I think the AWU has come out quite clear on this issue and that's that we're not prepared to back a tax that costs jobs," he said.
… … …
Mr Howes' plea came a week after he was jeered by steelworkers during a visit to Port Kembla with federal Climate Change Minister Greg Combet.
Mr Howes was more reserved in his comments at that visit, telling workers a carbon price was "inevitable" but his union would not support it if it cost even a single job.
So how can it be that Mr McCauley can say, and I quote his exact words:
Members from the Illawarra have not complained to me and that is the only information I can provide to you today.
The exchange between Mr McCauley and my colleague, the member for Casey, is even more revealing:
Mr TONY SMITH: I know we are short of time. One last question. You mention that you are out there talking to members all the time. Could you just, for the benefit of the committee, each tell us the last time you were at a manufacturing plant.
Mr McCauley: Personally?
Mr TONY SMITH: Yes.
Mr McCauley: I am a lawyer; I am not an organiser. We are an organising union. I am not the organiser for the union.
So while the concerns of Paul Howes and Andy Gillespie are all over the national news, the trade union hierarchy is apparently oblivious to anything happening outside its office. Either they are genuinely ignorant of the concerns of the members they purport to represent—in which case there is no point in their existence—or they do know and simply do not care for the welfare of their members, in which case they can only be there under false pretences.
But the disconnect is not limited to the Australian Manufacturing Workers Union. Tony Maher of the Construction, Forestry, Mining and Energy Union told the inquiry, 'Mining and construction workers support a carbon tax because they aren't fools and recognise it won't hurt the industry'. It beggars the question: do the likes of Tony Maher and Timothy McCauley speak to Paul Howes? In fact, does anyone in the union movement speak to each other about matters of such grave importance?
It is becoming apparent that the trade union executive has a primary agenda, and the preservation of jobs is not it. It has more to do with power play and preserving the power of the union elite. How else can these disparities of fact be explained? In April Paul Howes said he was going to back the tax, which involved some verbal contortions on his part to rationalise his earlier statement that he would not back any tax that cost one job. Of course, the loss of 800 jobs in a major steel town in September challenged the spin that the unions were advocating. So, in a way, we should be grateful to the Prime Minister for introducing a tax that has inadvertently revealed the sham of the trade unions.
In closing, I just want to say that I hope that those in the firing line of this tax will have the courage to open their minds to the evidence laid out before them—which today, of course, did not happen. But in condemning this inquiry I hasten to say thank you to the secretariat, who under these circumstances did a most professional job. I certainly want to pick out Stephen Boyd and his team and to say thank you to them for the work that they did do.
Today I want to thank Sandra Hough and the many others who have written to me through the Voices for Justice program. Sandra writes:
Keep the Promise—Global Day for the Eradication of Poverty
I am writing to you as a member of your electorate.
As you may know, 17 October is the Global Day for the Eradication of Poverty. I am writing to ask you to help Australia "Keep the Promise" to the world's poor.
In 2000, Australia, along with all countries in the world, signed on to the Millennium Development Goals (MDGs)—a global promise to halve extreme poverty by 2015. This critical date is now just over 3 years away.
Much progress has been made towards the MDGs, such as a significant improvement in child mortality rates.
However, each day 21,000 children still die from preventable causes.
While Australia has increased its Official Development Assistance (ODA) significantly since 2000, it is still only around half of the global promise of 0.7% of GNI.
I urge you to help ensure Australia continues its bipartisan commitment of scaling up ODA to 0.5% of GNI by 2015, and puts forward a timetable for reaching the global goal of 0.7%. This is vital to us playing our part in achieving the Millennium Development Goals.
As UN Secretary General Ban Ki Moon states in the 2011 MDG Report, "Between now and 2015, we must make sure that promises made become promises kept". Please help ensure Australia keeps our promise.
I am standing up for the Voices for Justice to ensure we do keep our promise.
The Micah Challenge is very relevant in my electorate. Many participants are involved in the Millennium Development Goals, and I commend them for keeping this issue alive. So many people campaign and come and see you and advocate about an issue and once they have done it, it is gone. But this is a group that has kept going since 2000. They have kept up the pressure. So many times people come to see you in your office and they tell you all about their issue and you say, 'What do you want me to do as your member of parliament?' They look at you, stunned, as if they are thinking, 'Oh, we can actually ask what we want you to do.'
The people with the Micah Challenge know exactly what they want. They want to see the eradication of poverty. They want to see countries commit to achieving 0.07 per cent of GDP across the board so that we can ensure that the almost 1.4 billion people living in extreme poverty—and that means on less than US$1.25 a day—get more than that and that they have their basic needs met and are not going hungry. We are in an incredibly wealthy world and we should be able to do more. As the Micah Challenge briefing note says:
In the year 2000, the world's leaders including Australia's, came together at the Millennium Summit in New York and declared that they 'will spare no effort to free [their] fellow men, women and children from the abject and dehumanising conditions of extreme poverty'.
We need to keep that promise. We need to keep working towards it.
I want to commend all of those people who came up to see me recently when we all stood outside near the giant toilet. There were so many people waiting outside without a loo. I see the Parliamentary Secretary for Pacific Island Affairs at the table. He was very gracious on that day but, like I did, he decided not to sit on the giant loo! We were happy to stand behind it and recognise that there are millions around the world literally waiting for sanitation. We can joke about it but this is tragic. So many children die needlessly from disease that can be eradicated if they have access to clean water and sanitation.
The Voices for Justice participants who came to see individually were Piers Hartley, Margaret Hartley, Leanne Palmer, Anushka Wijesooriya and Simon Moyle. Many of these people are from my electorate. They are very involved in their local church groups through the Syndal Baptist, through Crossways and through many of the uniting churches in my area. World Vision's headquarters also falls in my new redistribution area. This is a very active group, and I really want to thank them for not just thinking about themselves. So many people nowadays just look inwardly and do not think about others.
This is a group who may never meet these poor people. Some of them have, remarkably, gone and been involved in aid programs overseas. These people are keeping alive this promise and making sure we as wealthy nations keep our promises. We are reaching many of the aid development targets but many we are not. We are falling behind, particularly in the area of sanitation. More needs to be done. We are doing well in the area of water, but in that area of wash we need to be doing more. Perhaps we just do not want to talk about having plumbing in your backyard.
One of the other areas of interest to the Millennium Development Goals is the impact of climate change on the poorest of the poor, and I think that one of the things that we have done today, passing the clean energy bills, will have a global impact upon those people who are the most vulnerable in our community.
In the last seconds I have remaining I want to recognise Professor Ezio Rizzardo, who is a winner tonight of one of the Prime Minister's Prizes for Science. He works in my electorate at the CSIRO at Clayton and he is an amazing part of a scientific endeavour. (Time expired)
I rise this evening to raise serious concerns about a decision that was made on 21 September this year by the Congress Community Development and Education Unit along with the Department of Health and Ageing to register an appeal against the Cook Shire Council's decision in the Planning and Environment Court with regard to an application to establish the Cape Residential Drug and Alcohol Rehabilitation Centre at Lot 7, Flaggy Road, in Cooktown.
The community had serious concerns about this application. In the first instance, it was non-compliant in relation to the town plan. The site is some 25 kilometres outside of Cooktown and is at the end of a 10-kilometre gravel road which is regularly isolated for weeks, sometimes months, in any given year due to flooding. I visited the site personally. It is a grey, sandy, swamplike area. It is very boggy in the area and it would be a major problem living in that area during the wet season. There is certainly no access to town water or anything like that at the site. The other concern that the community had was that Cooktown Hospital is in an appalling state and for the issues that were going to have to be addressed there and the imposts on that hospital there needed to be a significant investment in the hospital to be able to meet the needs of the clientele.
The community that objected had no real issue in relation to the establishment of a centre of this nature. They had raised the fact that there had been two other regional rehabilitation centres—one in Cairns, Douglas House, and another one in Mareeba, the Rose Collis Haven—with a combined capacity of some 44 beds plus an additional 20 aged-care beds. Both of them were defunded and closed down by this government. The 20 aged-care beds have never even been slept in. They were paid for, built and shut down, and the community are asking the question: why couldn't these facilities be used?
Local Indigenous populations also expressed concern, like the broader community, at the total lack of consultation. There are a number of sites that would have been far more appropriate for this use, but unfortunately the CCDEU, the Congress Community Development and Education Unit, continued to pursue this particular site. On four separate occasions at different meetings the CCDEU gave an undertaking to the community that if the decision was made that the site was unsuitable and was not approved by council they would not appeal. The fact that they have now gone back on their word is extremely disappointing and is outraging the local community. The overwhelming majority of the councillors supported the decision to not approve it, and DoHA and the CCDEU are going against the face of the community. The problem we have now, of course, is our local community are trying to fight this. You have people like Steve Weise and Kate Dagge. They are the concerned citizens opposed to the location. They have been vilified in some ways by these organisations who have suggested that it is based on a racist objection. This is not the case at all. It is purely a site location problem, and I will be calling on DoHA and the CCDEU to show some commitment to the community, honour the original agreement that they had in disposing of the appeal and working with the community to find a far more appropriate site so this facility can be established while at the same time giving a commitment to rebuild and upgrade the services of the Cooktown Hospital so that they will be in a position to offer the appropriate level of service to any of the clients that are brought into this area. I certainly support the Cook Shire Council's decision and I support Kate, Steve and the community in their endeavours to have common sense prevail on this issue. (Time expired)
There is a piece of historic legislation that has come into the House, and that is what is called the mandatory code of conduct. It is nothing very complicated. All it says is, firstly, that farmers get a sales docket so they can prove something has been sold and they cannot be taken to the cleaners as they have been for the last 30 or 40 years; and, secondly, that the money be paid into a trust fund, the same as with a lawyer, real estate broker or insurance agent. There are a whole range of areas where there is a trust fund kept. There is no trust fund kept in this case, and in Far North Queensland alone in the last two or three years we have lost $3 million.
So we want to publicly thank the great fighters—and they have been truly great fighters. If ever there were a group throughout Australia that was a team of really great fighters, it was the Emerald Creek mob: the Rural Action Council of Far North Queensland. I think it is important that their names be put on the public record. Johnny Gambino has given us very great leadership as chairman. One of the greatest fighters I have seen in my lifetime, Bernie O'Shea, on numerous occasions has taken the battle up for us. Maxie Srhoj is the reason that I sit as an Independent in this place. It was Maxie who said, 'Whilst, Bob, you do all the right things and say all the right things, at the end of the day you earn your $200,000 and we're bleeding to death.' The way Maxie said that and what he said convinced me that I could not do that anymore. I simply could not walk down the street and say I was on the side of the farmers when I knew that every day I sat in this place supporting the then government I was against the farmers. What we were doing was stamping with approval actions which must lead to their demise.
Joe Moro has been the President of the Mareeba District Fruit and Vegetable Growers Association in the Atherton Tablelands and the Mareeba area. He has been a great leader of them but has also been a part of the Emerald Creek mob as well. Scottie Dixon came in late in the picture, but there is no better fighter in this country for Australians and Australians getting a fair go in the area of farming. Ned Brischetto is an absolute tower of strength. Vince Mete is always there, along with Emedio Nicolosi and Peter Henderson. Eddie Bernabei, who died recently, most certainly always had his say. Other people from time to time have come along: Johnny Myrteza, John Sephora and all of Joe Moro's crew from Mareeba farmers as well. But whilst there has been no other group that I know of in Queensland that has taken the fight up, these people have taken the fight up all of the time. Please, God, if the Liberals can come to the party then they will see a great achievement for all of the farmers of Australia.
Switching subjects completely, there was a decision made by the Xstrata mining company, which was an Australian company allowed by the government to be sold out to foreign interests. Those foreign interests—namely, a boardroom in Zurich in Switzerland—have made the decision that they will not buy power from the national grid. They will have their own little outfit, and the rest of us can go jump in the ocean. That leaves the greatest mineral province on earth—North-West Queensland's mineral province, which produces $12 thousand million a year in base metals—now as an island without power. It is like an island in the Pacific that has no water. No-one can live on it if it has no water. No mines or economic development can take place if you have no electricity. It is exactly the same argument.
We have had the economic future of inland North Queensland completely destroyed by this decision. The decision has to be reversed by government. The idea is that the market will look after us. Well, here is a case where the market is destroying us. There are 5,000 jobs in the 12 new mines proposed in North-West Queensland; I doubt we will get two of them off the ground now. That is 12 mines, 5,000 jobs and the great Pentland project, the biggest solar biofuels project in the world and the second-biggest wind farm in the world, in which tens of millions of dollars have already been spent, particularly in the wind labs at Hughenden. This great project for the future has been destroyed. It must be restored. (Time expired)
I wish to further update the House with respect to wind turbine development in the Hume electorate. The New South Wales Minister for Planning and Infrastructure, the Hon. Brad Hazzard, recently announced the timetable for the much anticipated planning system review arranged to document community concerns related to the state planning process. I am here to announce this review is a gigantic fraud on my constituents. On the face of it, this initiative appeared to be a positive step towards meeting the commitment made by the O'Farrell government to consult communities before making changes to the planning process. Currently, the balance of the approvals process is tipped too greatly in favour of the wind energy developers at the expense of local communities and local shire councils.
A classic illustration of this imbalance is the sidelining of local government from the approvals process. This year I met with the mayors of the Yass, Boorowa and the Upper Lachlan shire councils to discuss the impacts of wind turbine developments on local governments. All three shires expressed their indignation at having industrial wind turbine developments classed as A1 agricultural land, consequently attracting only agricultural production rates instead of industrial rates, despite the industrial nature of turbine energy production. This is an appalling manipulation of the planning laws to favour wind developers and short-change local communities.
In fighting to restore property rights of individual landholders and communities against the many cowboys in the wind turbine development industry, I have no fear exposing this planning system review for what it is—a politically biased exercise not aimed at fixing the fundamental problems in the planning system but instead a soothsaying talkfest aimed at silencing community dissent over wind turbine development.
I take issue with the appointment of the Hon. Tim Moore, a former Greiner government minister and commissioner of the Land and Environment Court. It is his period of service in the latter of these roles that causes disquiet among community stakeholders in favour of greater regulation of wind turbine developments. This is a commissioner who thought the impact of wind turbines was more important to a small country airport at Crookwell than it was to the property rights and health of 13 families dramatically affected by the same group of turbines. Interestingly, if that development had been refused to protect both the Crookwell airport and the 13 families, it would have reduced the project from 84 to approximately 12 turbines, making it financially unviable. Disturbingly, at the hearing one of the two commissioners made the point that the 13 families were 'collateral damage' in the drive towards achieving the 'greater good' of a clean energy future.
After 16 years of incompetency under a Labor government, the local communities are wary of processes that do not have the appearance of complete impartiality. For the public to accept the new planning review process, there needs to be an appearance of objectivity and impartiality, which is important to the credibility of the review. I have publicly called on the Minister for Planning and Infrastructure to ensure that no politically deceptive exercise drives this review, considering the serious issues involving wind turbine construction and the pathetic planning laws that were put in place by the previous Labor government. He was warned. Sadly, it would appear he has not only ignored the warning but also embraced the deception. Outrageously, the New South Wales government has scheduled the planning system review in Goulburn within 90 kilometres of where nearly 700 turbines are planned for construction. From 3 pm to 5 pm on Tuesday, 1 November, the time and day of the Melbourne Cup, who on earth will be at the Goulburn Soldiers Club talking about planning laws when the race that stops the nation is running?
They say, 'Never attribute to malice that which is adequately explained by stupidity.' Having been so intimately involved with this issue and having seen firsthand the deplorable tactics used by bureaucrats in the New South Wales planning and environment departments, I am loath to adhere to this idiom. Again, local communities are being dudded.
Finally, the Clean Energy Council, developers and government departments claim that thousands of jobs are created in rural communities by wind turbine developments. Claims such as these are a classic example of the deceitful way in which developers and pro-wind lobbyists, private and government, operate. The majority of these thousands of jobs are temporary at best, lasting only for the construction phase of the projects with only a handful of jobs being established post construction. The lies and deception must cease. Landholders and local landholders within the electorate of Hume expect this new O'Farrell-Stoner government and its responsible minister to fix the problem of abuse of property rights and not succumb to the political manipulation of unsympathetic bureaucrats in government departments. (Time expired)
As members of parliament, one of our roles is to promote positive community outcomes and each of us does it in very different ways. One of the things I like to do within the Shortland electorate is to promote positive and productive health outcomes. Last month I had a prostate cancer forum that I ran down at and in conjunction with the Swansea Men's Shed. We had about 80 men come along. We had a barbecue and we looked at the issue. Professor Jim Denham came along and talked to members of the community about prostate cancer, about looking after themselves and about good prostate health.
On 26 October I will be holding a breast cancer morning tea at Redhead Bowling Club. This is an annual event. During Breast Cancer Week every year I hold a morning tea and invite members of the community to come along. These morning teas have been very successful over a number of years. Professor John Forbes usually speaks at these morning teas, but unfortunately this year he will be away. I am working with the McGrath Foundation and Hunter BreastScreening to make sure we have lots of good information at the breast cancer forum.
On 12 and 17 November I will be holding disability forums. At these forums we will be discussing the National Disability Insurance Scheme. I will be inviting people along from the community. I will be inviting carers and people with disabilities. I will work with other community groups and those people engaged in delivering services to people with disabilities and get feedback from them and to find out their thoughts on the proposed NDIS. I am very supportive of the NDIS and the community that I represent have already told me in no uncertain terms that they expect me to support it. So 12 and 17 November are two important dates. On 18 November I will be having a seniors forum at the Kahibah Bowling Club. Seniors from throughout the electorate will be coming along and getting information from Centrelink, the police, the Heart Foundation and a number of other organisations. These sorts of forums and events are very important for members of parliament to undertake. They provide information to the communities we represent that they would have difficulty obtaining if they did not have access through community forums and morning teas.
Finally, I would like to spend a little time talking about the Windale Community Day that will take place on 25 October. Windale is a community that over the years has had high unemployment and a high number of people in receipt of some form of Centrelink benefit. It has had a high number of single parents and a high number of people with disabilities. What we are doing with a group of state and Commonwealth agencies and WICA, which is a community group that operates within Windale and will play the controlling role, is putting on this community day event to provide information to the community. There will be information on licences and on state debt recovery and we will have people there from Births, Deaths and Marriages and a number of job network providers. The event is being supported by DEEWR, the local high schools, a number of New South Wales government departments, JobQuest and the local land council. It will involve the whole of the community coming together to get a positive outcome for an area that has had problems obtaining employment. It will look at addressing those problems and giving the people in that community opportunity and hope for the future.
The Australian Competition and Consumer Commission this week launched its latest assault on—guess what? Australian airports is their next target. The ACCC said it is 'stepping up pressure to smash the monopolistic powers of the country's leading airports'. My reaction to this statement? A bloodcurdling scream that had my staff half scared to death. Last week it was time to talk tax; this week, airports. But why do we refuse to address, let alone discuss, the toxic duopoly that is choking our grocery market?
Woolworth and Coles between them now account for more than 80 per cent of grocery sales. Australia has the most concentrated grocery market in the world. The ACCC's terrible track record as a regulator aside, are airports really the most pressing competition problem Australia is facing? In 2007 the Senate Standing Committee on Community Affairs released its report A decent quality of life. The committee investigated the impact cost-of-living pressures are having on older Australians. Its findings should make us all question why the government refuses to act on this issue.
The committee was inundated with research from various interest groups. However, most telling was data from the Australian Bureau of Statistics showing that fresh foods such as vegetables, fruit and meat have seen significantly higher rates of price increase compared with either the consumer price index or food in general. The ABS data also saw analysis by PricewaterhouseCoopers, with findings showing that the rate of price increase in food as a whole, and in fresh food in particular, can be traced to an increasing concentration of the retail grocery market in the vertical integration of fresh food supplies. Buried in the PwC report was one of the most insidious findings you will find in a report of this nature:
… it appears that food price inflation has potentially boosted supermarket and grocery store turnover as a proportion of total retail turnover.
There are also suggestions that the measured level of food price inflation may underestimate the true rise in the cost of grocery goods.
That is, the MGRs maybe running "loss leaders", or providing lower prices, on high-volume food staples included in the CPI food basket, thereby hiding the rise in prices of other grocery goods which are growing at a greater rate.
Even if the ACCC can find some justification to ignore the 80 per cent market concentration of Coles and Woolworths, how does it explain away the deliberate manipulation of the CPI index and obvious price collusion by these two multinationals? Further, how exactly does the ACCC conclude that a supposed airport monopoly is having a wider impact on all Australians compared with that of the grocery market?
Recently we have seen 'Occupy Wall Street' protests highlight the control America's financial sector has over the nation's leaders, its economy and the average worker. In this case I would not begrudge GetUp! or the like picketing Rod Sims and the ACCC in an attempt to get them to move on the grocery monopoly as swiftly as they are moving on airports. The ACCC must take action to dismantle the largest grocery duopoly in the world.
The coalition must be willing to take this fight to the government, or into government. If we are to be the party who believes in a free market and small business, we must enforce this central tenet of our charter. With an issue that affects so many Australians, we cannot afford to be gun-shy. The coalition should be prepared to draft policy breaking up Coles and Woolworths if the ACCC refuses to act on these clear breaches of competition and consumer law. The ACCC, under governments of both persuasions, has not stopped the slide into hyperconcentration. If that is because of deficiencies in legislation or deficiencies in regulatory activity, the matter must be considered by federal and state governments. The ability of every Australian to live comfortably is at stake and must be addressed before another fringe issue gets right of way. (Time expired)
Last week, the Minister for Home Affairs and Justice Brendan O'Connor visited my electorate of Melbourne Ports and a well known institution the Kilbride Centre in Beaconsfield Parade to announce $350,000 of funding over the next three years for Australian Catholic Religious Against Trafficking in Humans, ACRATH, to support their anti human-trafficking efforts. As the media reported, some of the funding is being provided from criminal assets confiscated under the Proceeds of Crime Act. The member for Gorton joined me on a visit to the head office of ACRATH in Albert Park to make one of the three announcements of government assistance to people involved in the noble effort to fight slavery and human trafficking. I must make the point that the minister's efforts and the announcements were made before the Age and Four Corners caught up with what the government is already doing in fighting this nefarious activity.
ACRATH assists victims of human trafficking and slavery with housing, financial compensation, access to English classes and vocational education. It provides education and community awareness campaigns, with a focus on young people from diverse communities. The significant initiatives by ACRATH to build links with organisations in our region are particularly important—as is their work in assisting migrant groups that are vulnerable to exploitation, such as people from the Philippines, Taiwan or China—and essential in the fight against the this new phenomena of human trafficking.
I want to congratulate the ACRATH team on the tremendously important and sensitive work they do in assisting those who are victims of slavery and human trafficking. I would especially to thank Sister Louise Cleary, chairperson; Carol Hogan, national secretary; Christine Carolan, program coordinator; Shane Wood, volunteer; Brother Shane Maloney; Therese Power; Jeffrey Dalton; and Denise Mulcahy, who hosted us and who runs the Kilbride Centre. I commend them on their support and on the services they provide.
Slavery and human trafficking are a blight on humanity's soul. Those who are subject to such crimes deserve the equality of freedom the rest of us enjoy and they should have our support. Through partnership with community organisations such as ACRATH, the government is making a determined effort to end this unnecessary suffering of our fellow human beings. The Catholic religious workers seeking to eliminate people-trafficking to Australia, the Pacific and internationally are, in my view, doing work of the highest order.
This grant announced by the minister will help ACRATH to raise community awareness, and to build networks nationally and globally. Some of the information we had from the Solomons was very interesting. Through religious networks, ACRATH is able to do very valuable work that sometimes even more official organisations such as governments cannot do. NGOs such as ACRATH are invaluable resources for trafficked people, providing outreach support services and advocacy.
In 2008, the United Nations estimated 2.5 million people from 127 different countries had been trafficked to another 137 countries around the world. Almost 20 per cent of these trafficking victims were children. In some parts of Africa and the Mekong region, children are the majority of victims. In West Africa they accounted for up to 100 per cent of victims. In November last year, the Gillard government announced $1.4 million to support four non-government organisations to deliver important anti people-trafficking activities, including community education and victim support. The government also announced $200,000 to support projects that target labour exploitation. Since 2003, the Australian government, under both Liberal and Labor leaderships, has provided $50 million to support anti-trafficking initiatives, including specialist investigative teams within the Australian Federal police—and, boy, do they have work to do, as the media revelations have uncovered, particularly in the Solomons, Taiwan and China.
Enough cannot be said of the significant worth of organisations like ACRATH to help pick up those who have been left in the dark and to assist them to achieve their hopes and talents. To the countless men and women who show compassion and care for those who are subject to this kind of crime, we thank you.
The Australian government is doing its part to combat the crimes of slavery and human trafficking. I thank the member for Gorton for his efforts and I salute the selfless quiet work of our Catholic religious folk in my electorate working to minimise the effects of this nefarious trade. (Time expired)
The member's time has expired, well and truly.
It was a very good contribution.
I was not reflecting, Minister, on the contribution. I was reflecting on the fact that he used his five minutes fully, and more.
What a shameful day we have had here in this parliament, a day that will go down in our nation's history as the greatest betrayal by a government of the public's trust since Federation. We have had the sickening spectacle of this government's self-congratulation by wilfully damaging our economy and wilfully dishing out more pain to Australian working families. I am sure tonight, as many struggling small business people arrive from home from work from a 12-hour-plus day, turn on their TV and see the events here earlier in this chamber, they will feel physically sick. What we saw in this chamber today was the Prime Minister pulling the pin on the suicide vest she strapped on when she decided to doublecross the Australian public on this carbon tax. Not only is she going to blow herself up; in doing so, she is going to take many members who sit on the other side of this chamber—the same members that clapped like trained seals today—with her. She has also done irreconcilable damage to the Labor brand that will last for a generation.
In the remaining time of my speech tonight, I would like to address the issue of housing affordability. Housing affordability is a major contributor to the cost of living and also a contributor to our standard of living because the cost of housing represents the largest single item in most household budgets. I draw the House's attention tonight to the 7th annual demographia international housing affordability survey for 2011. This makes very sobering reading. Its introduction by Joel Kotkin of the Chapman University in Orange County, California—and I congratulate him for his work—notes the following:
The most remarkable shift in housing affordability has been in Australia. Once the exemplar of modestly priced, high-quality middle-class housing, it is now the most unaffordable housing market in the English-speaking world.
That is right. We now have the most unaffordable housing in the English-speaking world. And for Sydney, the survey shows that Sydney is the city that has unaffordable housing second only to Hong Kong. We need to think carefully about the dangers to our economy, our society and our nation in having the most unaffordable housing in the English-speaking world.
Firstly, there is the risk with this unaffordable housing of the bubble valuations bursting, bringing down with it the entire economy. Secondly, there is the damage that it does to the rest of the economy, as severely unaffordable housing leaves families simply with less money to spend on many other goods and services. And thirdly, and I think most importantly, is what having the most unaffordable housing in the English-speaking world does to our next generation. It destroys the Australian dream of home ownership. It essentially promotes a form of neo-feudalism which reverses the great social and economic achievements of dispersing property ownership that we have seen over the last 200 years.
While we have this problem of severe unaffordable housing in our nation, what is this government doing about it? Firstly, it is slugging the economy with a carbon tax which will simply make the cost of housing more unaffordable, making the problem worse. Secondly, the report also discusses the underlying causes of housing affordability including zoning and land release issues, and it concludes with a dire warning, which says:
The housing and mortgage stress that is experienced in the severely unaffordable markets could worsen materially, if today's mortgage interest rates should return to the higher averages of the past 30 years or even to the peak rates, which were double or triple current rates.
What is this government doing to keep a check on the nation's interest rates? Absolutely nothing. We are seeing more borrowing, more waste, more excessive big government putting pressure on the nation's interest rates. Effectively, this government is doing everything in its power to bring new and unheralded levels of pain to Australian families and they stand condemned for their actions in this House here today.
Today was a fantastic day. It was Ride to Work Day and Australians were encouraged to ride to work, and not just to ride but to walk or use any other form of transport that requires them to be active. What is important about Ride to Work Day is that it encourages Australians to take responsibility for some activity and get out there and ride or walk, take the bus or other public transport—just get out of their car, which is the main thing.
Last year over 105,000 Australians participated in Ride to Work Day and this year it is anticipated that that number will be over 150,000. I want to congratulate many from this parliament—clerks that are sitting here in parliament who rode this morning, congratulations. There are staff and other officials from this parliament, members from the lower house, senators, and a whole range of other people and community people as well. Ride to Work is an excellent initiative to get Australians who would not normally do so to get back on the bike or walk or take some form of transport to work other than the car.
The best thing about Ride to Work Day is that it is an initiative that works. That is the key thing—it just works. Of the 105,000 people who participated last year, when contacted five months later more than 43 per cent of them—almost half—said that they were regularly riding to work.
Happy to take part in today's activity, I along with other people did ride to work. We shared a wonderful breakfast this morning with other participants—in, I have to say, what was bleakly cold Canberra weather, as is usually the case. But it was lovely to be there with like-minded individuals.
The benefits of cycling are many, while the costs of continuing the status quo are great. We need to change and we need to take positive action to do that. The pressures of population growth and traffic congestion are well known. I have spoken in this place many times about that. The Intergenerational report predicts that by 2050 Australia's population will rise to about 36 million. Already our capital cities are congested. Already we are finding all of those problems associated with having too many people—not as a total number, but in regional centres or in capital cities. We need to do things about how we move people around and one of the easiest ways that works for the economy, for cities, for liveability and also for people's health, is to get them to be active in their transport.
I am not prescribing that everybody should wear lycra and go on a really fast bike or anything like that. I am saying: just get active. Walk to the bus station and catch the bus, or walk to the train station, if you can. Get on your bike and do whatever it takes to be a little bit more active. All of us can do something about congestion in our cities. It involves not getting in the car. That is the first step, and I think that there would be broad agreement in this place on that.
Just last week a large group of members and senators from both sides, from the government and from the opposition, gathered together to hear four international speakers talking about the key issues in London, Beijing, Melbourne and in other parts of the world and what makes those cities thrive. The fact is that when you invest in cycling and walking, you actually lift property values. You actually do those things that are necessary to make people's lives better and make cities better as well. It is a win-win for everybody. Nobody loses. When you invest money, regardless of the cost, it is just an investment that returns.
The avoidable cost of congestion, for example, in capital cities alone is estimated to be around $20 billion by 2020 in Australia. This is an outrageous figure. We ought to do something about that. It is good for the environment. It is good for a whole range of things. It is good for the economy. It is good for people. There is no doubt that we must all address the need to build more sustainable cities and we can help do that by the way we manage population growth. It is not about setting a limit and it is not about excluding people; it is about management and thinking about how we live. Cycling and active travel are critical components of that and any responsible government's plan for the future transport needs of our major cities should include these parts. All of us are having a win, collectively. At local and state government level now we are seeing the sorts of investments we need.
Copenhagen is regarded as the best active transport cycling city in the world, one of the most liveable cities in the world. Thirty years ago it looked much like our cities do today. They decided that all future infrastructure development, all future growth in cities, would be managed around the basis of providing for active transport—walking and cycling. Let us return our cities to people rather than giving our cities over to cars. How do we do this? We invest money and we think about it. We talk about it. We get people together and we get agreement. The dinner that we recently hosted involved Philip Darnton, Chairman of Cycling England; Pan Haixao, Professor of Urban Planning in China; Tim Blumenthal, President of the Bikes Coalition and Foundation in the United States; and Mark Cridland, Associate Director General of the Department of Transport and Main Roads in Queensland. The message is that everyone can win if everyone contributes. (Time expired)
One of the most significant public debates occurring in Australia at present does not relate to the carbon tax, the mining tax or, indeed, offshore protection. It is around improving the lives of the more than 750,000 Australians who live with a disability and their family and friends who often fill the critical role of being carers and principal points of support.
Driven by the advocacy of many in the disabilities sector, including one of my constituents and friends, Bruce Bonyhady, Chairman of Yooralla, and aided by a comprehensive review by the Productivity Commission, we are moving towards a national disability insurance scheme to ensure better resourcing for those in need and better coordination and application of services across state boundaries. This is a most welcome reform for what is a broken system. I am delighted the NDIS has bipartisan support, which we in this place must all work hard to ensure continues.
Another area affecting those with disabilities that is often raised with me relates to the funding and quality of education services available to children with a disability, be it a profound physical and intellectual disability or children with high-functioning autism and Asperger's syndrome. At a Kooyong community forum I recently held at Our Holy Redeemer Parish Hall in Surrey Hills, a constituent raised the case of his 10-year-old grandson who has a primary diagnosis of Asperger's syndrome and comorbidities of a chronic tic disorder and motor dyspraxia. The child's schooling experience has been varied, with his original local primary school having a negative impact on him while his current primary school is far better suited. What concerns the parents is that when the child is ready to move on to secondary school there are limited options available in Victoria where a modified social and academic model of education can be provided.
This does not seem to be the case in other states such as New South Wales, Western Australia, South Australia and the ACT where I am advised access to disability support funding at both primary and secondary levels is more attainable for children diagnosed with high-functioning autism or Asperger's syndrome. Having such disparities in opportunities for children with disabilities not only is fundamentally inequitable and unfair but goes against the recommendations of a key body like the Australian Advisory Board on Autism Spectrum Disorders, which has its first principle:
Every child and adolescent with an ASD has access to an educational service appropriate to his/her needs.
The board's position paper, released in April of last year, suggested there is an estimated 10,625 children aged between six and 12 years with autism spectrum disorder. It said:
Levels of funding support and educational service provision vary greatly from state to state.
It went on to say:
Currently, many students with an ASD in Australia are not receiving the appropriate educational support and services they require to meet their diverse learning needs.
There are positive initiatives being undertaken, like the $190 million four-year Helping Children with Autism initiative which increases access to early intervention for children up to six years old through professional development for teachers and staff to build greater understanding and expertise in working with children with ASD.
In this respect, I am very pleased that the coalition took to the last election a comprehensive policy to provide students and their families with portable funding through an education card for children with disabilities worth up to $20,000 per year and indexed to inflation. To be used at an educational institution of choice, this was a $314 million commitment designed to help up to 6,000 students with a disability. In implementing the card it will be critical to work at ministerial council level to reach a national agreement on the definition of 'disability'. This will provide for greater consistency and certainty for parents, students, teachers and other relevant stakeholders. It is expected that, initially, use of the card would be provided to those with more profound disabilities, but, as the federal budgetary position improves, it could be rolled out to all students with a disability, including those with autism and Asperger's syndrome. We have also announced positive initiatives around the education tax rebate to include education costs for children with disabilities.
I finish where I started. The bipartisan commitment to a national disability insurance scheme is a significant positive development for those with disabilities, but more needs to be done around the provision of educational services for children with autism and Asperger's syndrome. The current situation varies too greatly between states. The coalition has made some very positive announcements and I hope they become bipartisan in the not too distant future. (Time expired)
In the time that I have, I rise tonight to talk about an excellent educational institution that is doing great things in my electorate and the region, providing opportunities for many. In particular, it is at the forefront of sustainable water management training in Victoria.
The Chisholm Institute of TAFE has a proud history in the south-east of Melbourne, in and around my electorate. The then technical colleges were established in both Dandenong and Frankston in the early 1900s. Through the fifties and sixties other technical colleges were set up in the region. The Chisholm institute, in its present form, was established in 2002. It was named in honour of Caroline Chisholm, the early Australian reformer and humanitarian. Her motto, 'I promise to know neither country nor creed, but to serve all justly and impartially', fits perfectly with the present-day philosophy of the Chisholm institute.
Today there are approximately 40,000 people studying and training at Chisholm, including over 1,000 a year who come from overseas to earn Australian qualifications. Chisholm has grown to now have six campuses, including Cranbourne in my electorate and Berwick just out of my electorate, so there is an educational hub around Berwick, Cranbourne and Dandenong.
I often drive down Narre Warren-Cranbourne Road. In recent months, as I have driven past the Chisholm institute's Cranbourne campus, I have witnessed the construction and development of the impressive Centre for Sustainable Water Management, including a horticulture centre and multilevel training facilities. It is an impressive structure helping to symbolise how Cranbourne is getting the essential infrastructure it needs. I recently had the pleasure of opening the Centre for Sustainable Water Management, built with $8.2 million of Australian government funding. This centre offers unique training facilities. It can accommodate heavy machinery, allowing staff to get hands-on experience with earthmoving plant equipment and be taught civil construction skills such as pipe laying, trenching and shoring. This new multipurpose facility includes a pioneering water treatment plant, a water quality testing lab, an industry research and development area, recycling programs and a controlled environment horticulture facility.
The institute has already delivered successful workforce development programs to leading water authorities, including South East Water, City West Water and Yarra Valley Water. The facility will also benefit several vocational disciplines, including water management and sustainability, plumbing, building and horticulture. This facility is the first of its kind in the region and the size of the environmental horticulture training centre is unparalleled in Australia. (Time expired)
House adjourned at 20:00
It gives me great pleasure to congratulate Nick Percat on winning last weekend's Bathurst 1000 as a rookie with experienced co-driver Garth Tander. The Bathurst 1000 is a gruelling 1,000-kilometre endurance race around the Mount Panorama circuit. It started back in 1963 to determine which car had the best combination of speed, performance and reliability. Nick is originally from South Australia, from my electorate of Boothby, but has recently relocated to Victoria to advance his racing. He went to school at Sacred Heart College. He grew up in Flagstaff Hill within my electorate.
Nick has been racing for the last 14 years, starting in sprint kart racing before moving to Formula Ford in 2005. Only 23 years old, Nick is the first driver since 1977 to win the race on debut at Bathurst. After 161 laps and 6½ hour's worth of driving, it came down to less than three-tenths of a second, with Nick being chased by Bathurst stalwart Craig Lowndes. Nick is only the second rookie in the history of the race to hold aloft the winner's Peter Brock Trophy at the end. The trophy was named in dedication to the late Peter Brock, the most successful driver in the history of the race, with nine wins. Nick enters a select group of people who have been crowned king of the hill, a group that includes Craig Lowndes, Mark Skaife, Peter Brock, Jim Richards, Larry Perkins and Allan Moffat. I would like to again congratulate Nick on a fantastic drive and a well-deserved race win. He has certainly achieved something at 23 that most racers will spend a lifetime striving for. He will definitely be one to watch in the future.
I was recently privileged to attend the Telstra Business Women's Awards, which recognise outstanding women and their contribution to the business community. Past winners include some of Australia's most talented business leaders, whose career paths and individual achievements continue to inspire businesspeople around the country. It is often tough being a woman in business or in other leadership roles. In her book Delusions of Gender, Cordelia Fine tells the story of botanist Jeanne Baret and mathematician Sophie Germain, who around the turn of the 19th century were forced to pretend to be men in order to excel in the world of science. Thankfully, those kinds of games are no longer necessary. But it is still true that it is tougher to be a woman in business than it is to be a man.
I want to acknowledge the Telstra ACT Business Woman of the Year, Robyn Walker, from the Department of Defence. The Commonwealth Bank Business Owner Award went to Karen Nicholas from Learning Options in Manuka. The Hudson Private and Corporate Sector Award went to Janine Yokom from Westpac in Belconnen. Janine has an extraordinary life story. A back injury forced her to close her nail technician business. That opened a new opportunity for her to become leader of a team that is now recognised as one of the best performing among its peers. Joining Westpac as a bank teller in 1997, she was appointed local bank branch manager for the Belconnen area in 2006.
I also want to acknowledge White Pages Community and Government Award winner Robyn Walker; Nokia Business Innovation Award winner Barbara Reid from the ACT government Health Directorate in Woden; and Marie Claire Young Business Women’s Award winner Julie McKay from UN Women Australia. Julie's work with UN Women reminds us that so many of the challenges that talented women face around the world are bigger still than they are in Australia: the 'missing girls' that have been documented in so many developing countries; the awful discrimination that many women suffer and violence that women face in war zones from the Congo to Afghanistan. Of course, one of the main reasons that Australia is in Afghanistan is to ensure that young women in Afghanistan have the opportunities that are rightfully theirs.
In closing, let me pay tribute to the government's decision to remove discrimination in our armed forces and to acknowledge that, in deciding who goes into combat operations, ability rather than gender will be the sole requirement.
I rise to table a petition from almost 600 constituents of mine.
The petition read as follows—
To the Honourable The Speaker and Members of the House of Representatives
This petition of residents of the Central Coast, the Hills and Northern Districts as well as surrounding suburbs, draws to the attention of the House that:
We therefore ask the House to:
Demand that the Labor Federal Government restore funding in this financial year for the F3 to Sydney Orbital design works to at least allow a start to be made on resolving the serious congestion problems on Pennant Hills Road.
from 708 citizens
Petition received.
I raise this matter again because my constituents continue to be concerned about this. As I have said in the parliament before, it is easy to understand why this is a very considerable impediment to economic activity in the state of New South Wales. It is a missing link. It is the one road that links Melbourne to Brisbane, and there is no alternative. It has a lot of suburban traffic mixed with heavy trucks that occasion very considerable risk to the community in my constituency. If you look at Sydney, with four major highways across Western Sydney, when you come to the north-west, there is only one link. It is a considerable trail, which will mean that no effective funding will be provided by the bodies that advise on infrastructure funding because the preliminary work will not be done. Stripping away the funding was a considerable act of betrayal by this government, and it certainly demonstrates a lack of commitment to substantial infrastructure pending, which is of fundamental importance to the increased productivity that you might expect in Sydney. It is with a great deal of pleasure that I table the petitions, because they draw attention to this very important issue.
On 19 September this year I introduced a private member's motion welcoming the Productivity Commission's final report into disability care and support released on 10 August 2011. I noted the assessment of the Productivity Commission that the current system of disability care and support is unsustainable, unfair and underfunded and does not deliver the appropriate levels of care and support to Australians with a disability. I commended the government's initiatives in starting the fundamental reform of disability services and recognised that we are putting more funding into disability services than ever before. I welcome the Council of Australian Governments' immediate action to deliver foundational reforms necessary for a National Disability Insurance Scheme. This week I had the privilege of hosting a community forum in Ipswich to discuss the proposed National Disability Insurance Scheme. Guest speakers were Parliamentary Secretary for Disabilities and Carers, Senator Jan McLucas; Fiona Anderson, Queensland Campaign Coordinator for Every Australian Counts; and Carmel James, Assistant Principal at St Edmund's and local disability advocate.
As Fiona said at the forum, both she and Carmel have 'skin in the game,' as both are parents of children with a disability. The forum was attended by parents, carers and disability service providers and advocacy groups, including: Brian McKeown and Deirdre Lowe, from Focal Extended; Karri Browne and Brooke de Jong from Ipswich City Council; Maria McCaffrey and Helen Webster from Queensland Parents for People with Disability; Geoff Trappett, Sonia Bowman-King and Deanne Whitley from Cerebral Palsy League; Neal Vickers from the Department of Communities, Disability and Community Care Services; Mark Berkovich and Sue Gorton from The Advocacy and Support Centre; Lyndall Forsyth from the Ipswich Multiple Sclerosis Group; Steve Leese, a schoolteacher in Ipswich Special Education and Queensland Teachers' Union delegate; Judy Dickson from ALARA Association; and numerous parents and carers.
Disability services and support are major issues in the electorate of Blair. As recently as last year, Carers Queensland said that the electorate of Blair had the highest number of carers of any federal electorate in Queensland. Every Australian deserves to have the confidence that if they acquire a disability or if their children are born with a disability they will receive the care and support they need.
A National Disability Insurance Scheme will provide a lifetime approach to support people with a disability and will provide better support for families and carers. The strong attendance at the forum is testament to the local community's support for reform of disability services. The strong support there shows that people in Ipswich and Somerset regions are keen to see a National Disability Insurance Scheme.
On 2 December this year I will hold a Blair Disability Links, an expo for local disability support services, to be held outside my office in the Brassall Shopping Centre. Last year we, along with the Parliamentary Secretary for Disabilities and Carers, held the inaugural event.
I urge all people in the Ipswich and Somerset regions to approach this campaign with enthusiasm and vigour and to attend Disability Links on 2 December.
Colin Yearby is a local Nowra resident. He has been nominated to be a World Smile Day ambassador by the Personal Helper and Mentors—PHaMs—program. This came after PHaMs recognised Mr Yearby's personal commitment to encourage others to smile. His philosophy is simple and he has dedicated his time to making people in the community smile.
The Smile Project is run by a non-profit organisation dedicated to encouraging as many people as possible to share their smile with others. World Smile Day's theme is 'Do an act of kindness.' Admittedly, it is not a unique concept but it is an effective one.
Last week my office got involved by hosting a sausage sizzle in Junction Court, in Nowra. It was done in conjunction with some local identities. I would like to thank Bakers Delight, Pacific Smiles Dental and Centre Butchery for their donations to World Smile Day; Clive Brooks from Great Southern Motorcycles for providing the BBQ; and Adam Straney, from 2ST, for spruiking.
The team from PHaMs helped with all the cooking, all contributing to making it a very successful promotion. What struck me most of all is how readily people can smile, just given the opportunity and the right circumstances. PHaMs is a new program, funded by the Commonwealth government, which supports people whose lives are severely affected by a mental illness.
It is a key part of the Australian government's mental health package, which was announced in the 2006 budget, and is part of the Council of Australian Governments' National Action Plan on Mental Health. This package was released by the former coalition government a year or two after we introduced the Medical Chronic Disease Dental Program, an equally successful program that has helped many older Australians get desperately needed help for their teeth.
But the Labor government want to cut the program. This will be their third attempt and in the face of all the evidence that points to the success of and need for such a program. The Medical Chronic Disease Dental Program, introduced by the Howard government more than seven years ago, provided up to $4,250 for patients whose dental problems were compounding an existing illness. This scheme allowed those with dental issues needing immediate attention to bypass waiting lists, which can sometimes take years to provide a service.
I question Labor's commitment to dental services after they announced that a new government scheme would replace the MCDDP. Even afterproclaiming they were killing a good scheme, it turns out that their latest brainwave is just another thought bubble—yet again another example of making up things as you go along. Labor have cut an acute dental scheme that has helped many thousands of ordinary Australians, only to replace it with nothing. The end of the MCDDP has potentially left thousands of Australians needing immediate dental care on a waiting list that can take years to provide service.
I am calling on the government to immediately reinstate the MCDDP until it can at least introduce an alternative scheme that will provide for acute dental needs in the electorate of Gilmore. Perhaps if common sense took hold and Labor had the courage to accept what the coalition did was a good thing, the likes of Colin Yearby may not have to go around trying to get people to smile. After all, when you have rotting teeth, why would you smile?
I take this opportunity to highlight the dire situation facing many of my constituents, and indeed all Tasmanians who rely on the public health system and who no longer have faith in their state government. The Labor-Greens government in Tasmania has recently announced it will cut the budget for elective surgery, reportedly to the tune of $21.6 million. Moreover, the federal Minister for Health and Ageing, Nicola Roxon, has added that the state could lose millions in federal funding if it does not meet elective surgery targets.
The waiting list for elective surgery in Tasmania is some 7,700 people and rising. With this list including operations such as hip and knee replacements, would-be patients are often rendered immobile and left in chronic pain, sometimes to wait years for assistance. Now they will have to wait longer. It is no wonder many people give up work or develop an addiction to prescription pain medication, a sorry side-effect of waiting lists which stretch beyond hope and an indictment of a state government which has virtually abandoned its fundamental responsibility for public health care. All this against the backdrop of other unacceptable waiting lists which are literally killing people waiting for surgery.
No Australian government should default to cutting front-line health services just because their budget is in a hole. To do so demonstrates financial mismanagement, public health policy incompetence and a complete misunderstanding of the public interest. Moreover, it shows no concern for the hundreds of health and admin professionals set to lose their jobs or being in fear of doing so.
I am proud to have secured $340 million towards the rebuilding of the Royal Hobart Hospital. It is now beyond belief that, in light of the imminent improvement to infrastructure, the Tasmanian Labor-Greens government is so quick to dodge intelligent budgetary restructuring and instead to go straight to cutting services. The Tasmanian government's approach to managing its self-inflicted budget black hole is cause for us to consider alternatives to the current arrangement. It is more evidence that eventually the federal government must take an even greater role in public health care and, inevitably, take over the national public hospital system entirely.
Despite the Tasmanian government's efforts there is simply no way to make the situation in my home state look pretty. Years of financial mismanagement and policy incompetence, Premier after Premier, Treasurer after Treasurer, health minister after health minister, have let us down—and now the sick and the most disadvantaged members of the community are set to pay the price. This was avoidable and now is unforgivable. I condemn the lot of them on this matter. Thank you.
This morning the Petitions Committee will consider petitions signed by 766 residents of the Wide Bay and Hinkler electorates protesting the introduction of the carbon tax. Notwithstanding the vote in the House of Representatives in the last hour, my petitioners still have the right to be heard on a matter they consider very important. The petitioners state they are concerned about the impact of the tax on the economy, jobs and the cost of living, and they ask the House to reject the carbon tax legislation.
Given the abysmally short time frame between the introduction of the carbon tax legislation and the proposed vote on the bills, residents of Hinkler and Wide Bay had less than two weeks to register their objection by way of this petition. The fact that it garnered 766 signatures—409 From Hinkler and 357 from Wide Bay—in such a short time shows just how strongly residents feel about the tax and the damage it will do to our local communities. Right now the unemployment rate in the Wide Bay-Burnett area is 12.3 per cent, the highest in Australia. The unemployment rate reflects the government's failure to recognise and foster the potential of regional Australia and the carbon tax only serves to reinforce this fact. Like many regional communities, people living in the Hinkler and Wide Bay electorates rely on small business, agriculture and tourism for their livelihoods. These sectors will be hardest hit by a carbon tax. The carbon tax inquiry established by the government itself was a whitewash. Earlier this week a constituent contacted my office to protest that her submission to the inquiry had been treated as correspondence rather than as a submission. Carol Edge is quite rightly outraged that her opinion and those of thousands of other Australians do not seem to matter to this government, which is hell-bent on creating another tax for its own sake. To quote Ms Edge:
As I am not a scientist, an economist or a politician I wrote and emailed a simple submission against the carbon tax and it was received in the allotted timeframe. It is not a scientific or economic protest, but as a citizen of Australia I feel that if I went to the trouble of submitting my protest it should be counted. Once again I feel that my opinion is of 'no consequence' and I am truly angry.
This sort of arrogance is just one reason why so many of my constituents, as well as those of the Wide Bay electorate, have gone to the trouble to sign our petition. They are angry about the carbon tax, they are angry about the Prime Minister misleading the Australian public, and they are angry that once again their opinions do not seem to count.
At about 9.30 this morning, a group of workers attended a rally in the Illawarra in my electorate of Throsby. The rally was outside the office of Senator Concetta Fierravanti-Wells. The purpose of the rally was to draw attention to the fact that this morning the parliament was to be considering the Steel Transformation Plan Bill 2011, which will provide $300 million of assistance to the steel producers of this country, most notably OneSteel and BlueScope, both of whom have plants in my electorate in Throsby. The residents and the workers are concerned that this legislation should enjoy the support of all sides of parliament, because if we are to have a viable, secure steel industry in this country it needs to have the support of governments at all levels and it needs to have certainty. The $300 million of assistance contained in the bill will provide the much-needed funds to assist those companies engaged in the transformation, re-engineering and reinvestment in plant and equipment to ensure that they are viable over the long term.
The rally comes a week after unions and management of BlueScope concluded very difficult negotiations around the company's proposal to restructure and, as a consequence, shed several hundred workers from its workforce. I congratulate the unions, principally the AWU, together with management for reaching an agreement which looks very different to that which both parties took into the negotiating room. It is an agreement which will enable those workers who will be exiting the plant to leave with dignity and will enable the business to get on with its restructuring and ensure that it has a viable enterprise.
The cooperation that was seen between management and unions in nutting out that agreement and the assistance provided by the Commonwealth government stand in stark contrast to what we have seen from the opposition. They have given us great expectations over the last nine months that they would do something concrete to support the manufacturing industry. A lot of great speeches have been made, but when they had the opportunity this morning to put those speeches into action they were missing. They opposed the Steel Transformation Plan. When I rose in the House last week to move a motion which would have called upon the government and the House to support a range of measures to support manufacturing, we saw speaker after speaker from the coalition parties oppose that proposition. The word 'arrogance' has been used in this debate on a number of occasions. I think it is very arrogant to on the one hand say that you support manufacturing workers but on the other hand do nothing in aid of that support.
I rise to speak about the Creek to Creek Chamber of Commerce 2011 business awards, which were recently held within my electorate of McPherson. At a time when many businesses have been doing it tough, it is encouraging to see opportunities for business owners and their employees to get the recognition that they deserve. The Creek to Creek Chamber of Commerce is based on the southern Gold Coast, and the awards are designed to celebrate local businesses in the Palm Beach, Tugun, Elanora, Currumbin and Tallebudgera areas. A gala dinner was held at the Currumbin RSL on Thursday, 6 October and this year's winners were announced. The Currumbin RSL does an excellent job supporting the veterans in our community and is also a significant and great supporter of the local community in general. To nominate a business for these awards a detailed submission had to be completed which included 10 questions, such as: 'Has the nominated business monitored client satisfaction?' and 'Have they contributed to the broader community?' Any business, from retail through to manufacturing, could be nominated for these awards.
I would like to take the opportunity today to congratulate the award winners: Jake Nolan, who won the Under 25 Business Achiever; Fifth Avenue Florist for the Business Achievement Award: 5 or less employees; BIS Cosgrove Accountants for the Business Achievement Award: 6-30 employees; Elanora State High School for the Business Achievement Award: 30 plus employees; Second Nature Asia Pacific for the small business award; the Palm Beach Youth Music Venture for the non-profit/community organisation award; Healthy Inspirations for the product or service innovation award; and Pilates Elements for the Special Achievement Award: Business or individual. I would also like to acknowledge the businesses who sponsored these awards, including Tursa Employment and Training; Red Heeler Business Essentials; Villotti Photography; Inology; Tugun Bendigo Community Bank; Simply Smiles; and The Pines Shopping Centre.
I would also like to thank the executive committee from the Creek to Creek Chamber of Commerce for putting this recognition program in place for our local businesses. The executive committee is certainly doing a wonderful job connecting our local businesses through regular meetings, breakfasts and events such as the business awards. I commend the efforts of the President, Darren Mackintosh; the Vice President, Michael Tree; and the Secretary, Gordon Watson. I would also like to acknowledge the efforts of John Mitchell, Chris Ward and Joan Farmer from the committee for their continued support of the organisation's operations. Local businesses benefit from the networking opportunities within the Creek to Creek Chamber of Commerce and I encourage their continued support, especially where recognition is given to businesses that are working hard to provide the best service to the local community.
This morning I would like to pay tribute to a stalwart of the Australian Labor Party in my neck of the woods and a valued member of one of our local branches, the Marayong South branch, who recently passed away. Bill Henry was not just devoted to the ALP; he was a devoted family man and a devoted community member. His family recall that during his long working life he would work two and sometimes more jobs to help provide for his family. Bill was the product of Scottish stock, something he was very proud of, and he was born at the onset of the Great Depression, both of which help explain his strong work ethic. Bill spent a great many hours giving of his time to various committees, to the union movement, to the ALP and to first aid courses.
Despite his extraordinary contribution to the community, his family were never robbed of his time. He was a devoted husband to his wife, Patricia, and they had never had a night apart for nearly 61 years. He was always available for family christenings and confirmations and attending school plays and football games. Sport was also a big part of Bill's life. In his younger days he was a fine Rugby League player and, growing up in the eastern suburbs of Sydney, was unsurprisingly a passionate supporter of the Roosters. He was a surf lifesaver at Bronte Beach and spent many hours as he was growing up in and around the water. He excelled at cricket and tennis and he managed and coached his kids' football teams.
His children recall a father who was brave and kept them safe. When they were out swimming with him they did so knowing that they were safe if they ever got into any difficulty. Although he was never one to boast and was humble, Bill put aside his own safety a number of times to save the lives of others. In 1961, for example, he saved his neighbours from a house fire in Paddington and in the late sixties his family recall him showing great courage and suffering severe burns helping evacuate others from a devastating fire at his workplace. Another time he helped save a woman trapped beneath a train on his way home from work. Unfortunately, I was unable to get to Bill's funeral, as parliament was sitting on that day. But I did think of him. Bill and I knew each other for years. He was, I remember, always there with a smile and an ear. He never spoke ill of others, as was reflected on the day of his funeral. He was generous with his time and with his support, and I will miss him. It has also been a difficult time for the Marayong South Branch, with the news in the last 24 hours of another long-term member, Don Yali. I pass my condolences on to his wife, Myrna. His funeral will be held this weekend.
Order! In accordance with standing order 193 the time for constituency statements has concluded.
This morning, I am speaking on the Maritime Legislation Amendment Bill 2011, which seeks to amend the Navigation Act 1912 and the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 by creating an offence for negligent navigation in a manner that causes pollution or damage to the marine environment, by creating an offence for failure to report in a mandatory reporting area and by increasing penalties for the reckless or negligent discharge of oil or oil residues by ships.
The lasting impact of damage to our unique marine environment should not be underestimated. While significant environmental incidents are relatively uncommon, the number of reported oil spills in Australian waters has averaged over 250 per year for the past 10 years. That sounds like a very large number, but many of these spills are quite small and go unreported in the media and in other circles. Nonetheless, it demonstrates that there are issues and that we need to ensure that we have appropriate laws and regulations to protect our marine environment.
Oil spills at sea have the potential to cause lasting damage to our marine ecosystems as well as have an ongoing impact on the maritime, fishing and tourism industries. While sometimes the damage is limited to a very small area—and the marine environment, like the rest of our environment, is surprisingly resilient—the reality is that some of this damage can be long lasting and can have a significant impact on particular species, especially at a local level. In Australia's recent history, two specific maritime incidents stand out: the grounding of the Shen Neng 1 and the Pacific Adventurer oil spill.
The changes proposed in this bill implement some of the recommendations from a report conducted by the Australian Maritime Safety Authority in the wake of the Shen Neng 1 incident. The Shen Neng 1 ran aground 38 nautical miles east of Great Keppel Island, causing damage to a three-kilometre stretch of the Great Barrier Reef. The fuel tanks ruptured and four tonnes of fuel oil leaked into the surrounding waters. Thankfully, the vessel was successful salvaged by Svitzer, preventing the spillage of the coal and heavy fuel oil that were on board that vessel.
The Pacific Adventurer oil spill in March 2009 saw more than 270 tonnes of heavy fuel oil leak into the sea over seven nautical miles east of Cape Moreton. The ship lost 31 containers of ammonium nitrate overboard, which caused the leak. The clean-up operation on shore lasted two months, involved 2,500 people and removed 3,000 tonnes of contaminated sand from Moreton Island. Most of the containers have never been recovered, and so there has been lasting damage from that particular incident. As the member for part of the area—and I am sure that you, Mr Deputy Speaker, were well aware of this as it was also partly in your electorate—I can report that this oil spill caused grave community concern in the tourist areas of the Sunshine Coast that such an incident could occur in the first place and also to some extent about the way in which the clean-up operation was handled by the state authorities. In New Zealand last week the Liberian flagged vessel Rena ran aground on a reef off the North Island in the Bay of Plenty. So far, up to 350 tonnes of heavy fuel oil has leaked into the Bay of Plenty and authorities have been unable to prevent the leak or successfully salvage the vessel due to large swells. Indeed, the last report I saw was that the salvage operators had left the vessel because it was too dangerous to operate and there are now really serious concerns about the potential damage arising from this grounding. The Rena had 1,700 tonnes of heavy fuel oil on board so, should the ship be unable to be salvaged and the weather deteriorate further, the spill could potentially become significantly larger. While the lasting impact will not be known for some time, dead seabirds and fish are already being washed up on local beaches and penguins are being treated in wildlife rescue centres. This is already regarded as New Zealand's worst maritime pollution disaster and highlights the need for vigilance in this area. I am pleased that AMSA has offered its support and expertise in dealing with the disaster across the Tasman. I understand that 30 AMSA officers have been deployed to assist. We wish them well with this important task being undertaken in very difficult circumstances at the present time.
Returning to the measures specifically contained within the bill, the bill implements a number of new proposals. Firstly, proposed subsection 267ZZ(i) requires the master of any ship in Australian waters not to operate the ship in a manner that causes pollution or damage to the marine environment. Additionally, the bill requires that the master of any ship in Australian waters must ensure the ship is operated in a manner that does not cause pollution or damage to the marine environment. Similarly, in relation to an Australian flagged vessel operating on the high seas it is the responsibility of the master not to operate the ship in a manner that causes pollution or damage to their marine environment—that is proposed subsection 267ZZ(l)—and to ensure that the ship is operated in a manner that does not cause pollution or damage to the marine environment. That is proposed subsection 267ZZ(m).
The bill also creates civil and criminal penalties for contravention of these provisions and procedural requirements through which compliance with the bill may be enforced. Criminal and civil penalties are provided for and a higher civil penalty may apply in the case of serious damage. The high penalties are intended to deter non-compliance and take into account the levels of cost saving that shipping operators may achieve through non-compliance and the perceived likelihood that a breach will be identified and a shipping operator prosecuted. The bill also creates an offence where the master of the ship fails to report in a mandatory reporting area such as the Great Barrier Reef. That is proposed section 269E. A strict liability offence is created, so no intention is necessary for an offence to be committed. This makes it clear that the prosecution does not have to establish that the master knew or was reckless to the fact that the ship was in a mandatory reporting area. This is appropriate, as the defendant, the ship's master, is best placed to provide evidence as to whether the section was contravened.
Nonetheless, as a matter of principle I do have some concerns about the creation of these strict liability offences. In many cases it is difficult for a master or somebody in a position of responsibility to be able to account for all of these issues that he is responsible for at any given time. In particular, I recall debates in the Main Committee and in the main chamber about proposals to introduce strict liability offences for aircraft captains in circumstances where they could not possibly have been expected to be able to take responsibility for what had happened. Fortunately, those proposals were defeated. But this is a different circumstance. This is only in relation to an offence where a vessel is in a mandatory reporting area. Frankly, a vessel that is in a mandatory reporting area like the Great Barrier Reef is usually there for quite some time, and it would seem to be incomprehensible that a master could have any excuse for not knowing that he was there and not undertaking the required mandatory reporting processes. So, while as a matter of principle I have concerns about strict liability offences, it seems to me that, in this instance, it is probably a reasonable way to go.
Finally, the bill increases the penalties in the PPS Act for reckless or negligent discharge of oil or oil residues by ships. Australia, as a signatory to the International Convention for the Prevention of Pollution from Ships, is required to ensure that the penalties specified under the law are adequate to discourage violations. Presently the PPS Act imposes a maximum penalty of $220,000 for an individual and $1.1 million for a corporation for reckless or negligent discharge or oil or oil residues into the sea. However, this is significantly less than that imposed by state governments, with spills in New South Wales or Queensland having a maximum penalty of up to $10 million for a corporation.
This bill will increase the fine for a corporation from $1.1 million to a maximum of $11 million—a tenfold increase. The amendment will mean that the severity of the penalty will be based on the seriousness of the offence and not the location of the offence. In view of the enormous damage and high cost associated with recovery from an incident, severe and more substantial penalties are clearly justified.
In increasing the penalty, the bill puts the burden on the polluter to pay the clean-up bill. In the wake of the Pacific Adventurer oil spill, the protection of the sea levy was increased by 3c per registered tonne in order to recover the clean-up costs of the spill. This meant that the industry paid for the mistake of a particular shipping company, as their legal liability was inadequate to cover the cost of the clean-up. It should be noted that the owner of the Pacific Adventurer, Swire Shipping, agreed to pay $25 million in compensation, in excess of their legal obligations arising from the oil spill. But this was still below the total clean-up cost, which was estimated to be $31 million.
It is obvious that there are other people operating ships around our coast and indeed around the world who perhaps do not have the same principles of wanting to do the right thing as Swire has. So it is important that there be a significant deterrent in place to prevent inappropriate behaviour and so that masters are aware of their responsibilities and companies make every effort to ensure that their vessels operate in a safe way.
The coalition is happy to support the bill and will continue to support all sensible measures designed to protect our unique marine environment. The ongoing situation in New Zealand shows that, while major incidents in Australia are rare, they can happen and we need to take steps to deter dangerous and reckless actions at sea and to appropriately deal with incidents should they arise.
The maritime industry is obviously very significant to our economy. In fact, well in excess of 95 per cent of Australia's international trade comes to our shores by ships. Our ports manage, as I understand it, in the vicinity of 10 per cent of the entire world's sea trade. We are a large island and it is probably not all that surprising that, as a consequence, the only viable way of accessing and transporting commodities to and from Australia is through shipping. As a result, we need to ensure that legislation that we propose, particularly the bill before us today, the Maritime Legislation Amendment Bill 2011, does not weaken this industry that is so vital to our economy. The Maritime Legislation Amendment Bill brings together a number of initiatives to ensure that fewer risks are taken by the masters of ships in Australian waters. The bill will also ensure protection of our environment and our maritime industries. The bill amends the Navigation Act and the Protection of the Seas Act and will with strict liability require the master of a ship in Australian waters not to operate a ship in a manner that causes pollution or damages the marine environment. It creates criminal and civil penalties for breaches of these requirements. It also creates an offence where the master of a ship fails to report, in accordance with the regulations, an incident, and it increases the level of penalties in the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 for reckless or negligent discharge of oil or oil residues by ships.
Last year the Shen Neng 1 ran aground close to Great Keppel Island, causing damage to the coral reef on the Douglas Shoal. The ship was carrying 950 tonnes of heavy fuel and the Chinese owned vessel was in a restricted part of the reef. I do understand that it is not all that uncommon for vessels to take the shortcut through the reef but on other occasions I understand issues of safety have been paramount in the minds of masters. In this instance I am unaware of what actually caused the master of this vessel to take that shortcut and he found his vessel in restricted waters and in an area which was obviously dangerous, where he struck the reef and caused considerable damage. In fact, the resulting oil spill had potentially catastrophic effects on the marine environment, with a very high economic cost associated with it.
The incident resulted in an Australian Maritime Safety Authority report, Improving safe navigation in the Great Barrier Reef. The report recommended strengthening regulations including toughening penalties for breaches of action at sea, increasing penalties for discharge of oil residue, which would make it consistent with the state legislation as well as Australia's international obligations under the International Convention for the Prevention of Pollution from Ships. It also recommended that there be an increase in the penalties associated with such instances, in line with the economic capacity of modern shipping companies.
Other recommendations in the report include extending the coverage of the reef vessels traffic service to a large part of the Great Barrier Reef and developing a whole-of-government management plan to enhance navigation aids in the Great Barrier Reef. In light of the recommendations, the North Reef Lighthouse, north of Gladstone, has already been refurbished with new vessel-tracking equipment. This technology will assist ships in determining not only the best times but also the safest speed for their vessels to move through those waters.
All of these recommendations and the implementation of these new technology aids encompassed in the bill have the very clear aim of deterring shipping companies from participating in unsafe and irresponsible action. Protecting our marine base, particularly the environmentally sensitive ecosystems, and fisheries is at the core of the proposed bill. The bill will ensure that there is a minimum risk of shipping incidents that have far-reaching economic as well as environmental consequences. The Australian coast came very close to experiencing one such catastrophe in 2009, when the Pacific Adventurer lost 31 containers of ammonium nitrate overboard east of Moreton Bay. The damage that the ship caused could easily have been catastrophic. As I understand it, the ship lost 270 tonnes of heavy fuel oil. The incident occurred on the Queensland south-east coast, which is an area of significant tourist interest and economic consequence for the state. We saw on our television screens the efforts taken by the Queensland government to clean up that spill. Somewhere in the vicinity of 2,500 workers drawn from all across Australia were deployed over two months to rectify what was caused by the Pacific Adventurer.
We cannot speak about these issues without recalling what is probably still the world's worst oil spill, the Exxon Valdez spill in Alaska some 21 years ago. As I understand it, 11 million tonnes of crude oil was leaked from that ship. It was directly responsible for killing in the vicinity of one-quarter of a million birds and close to 3,000 sea otters as well as another 3,000 seals. It decimated the coastal communities in the Alaska basin. It collapsed the local fishing industry, which struggled to recover. The catastrophic impact of this event is still being felt with many social and psychological effects on the surrounding communities. In other words, these communities did not fully recover. And that was 21 years ago.
At present, our close neighbour, New Zealand, apart from preparing to meet Australia on the rugby field, is cleaning up oil that has been leaking from the ship Rena, which became caught on the Astrolabe reef last Wednesday. It has been leaking oil for some time, and on Monday that oil reached the New Zealand coastline. The ship is carrying 2,000 containers, of which 70 have fallen overboard. An estimated 300 tonnes of oil has already been spilt, and the rate of leakage is apparently increasing. I understand that for our New Zealand colleagues it is a challenging clean-up that will take many, many weeks. The ship's captain has been arrested and charged under New Zealand maritime law.
Although large incidents such as these, with their far-reaching environmental and economic consequences, are relatively rare, the truth is that in Australia smaller scale oil spills are very common. On average, surprisingly, 250 oil spills occur in Australia each year, with our maritime industry and the environment, including the tourism and fishing industries and the broader community, subject to major impacts. Our side of politics has considered the potentially catastrophic impact that oil spills can have on our communities, particularly our maritime environment. It is undoubtedly clear that these simple amendments, which I have already outlined, must be passed to ensure not only the safety of the industry and the fact that the industry is discouraged by law from taking unnecessary risks but also moves to protect our maritime environment. I commend the bill to the House.
I would like to make a contribution to the debate on the Maritime Legislation Amendment Bill 2011 today. It is all about amendments to the Navigation Act 1912 and the Protection of the Sea (Prevention of Pollution from Ships) Act 1983. In short, these amendments set out to achieve three ends: to introduce an offence for negligent navigation in a manner that causes pollution or damage to the marine environment; to create an offence for failure to report in a mandatory reporting area—for example, the Great Barrier Reef; and to increase penalties for reckless or negligent discharge of oil or oil residue products by ships in Australian waters.
Why do I take an interest in this particular matter? I do so for four reasons. Like my colleague here, the member for Dawson, I am one of the Central Queensland members. To us, especially in ports like Gladstone, Mackay, Abbott Point and so on, navigation is a very important part of our lives and our economies. So, as a Central Queenslander, having represented Gladstone for 14 years, also now representing the entire water mass of Hervey Bay, a pristine environment, and having previously represented the southern end of the Great Barrier Reef, these matters are important to me. That is the first reason.
The second reason is that I was associated with some of the dramas around the Shen Neng 1 when it went aground back in April 2010.
The third reason is that I am one of the angels who stands before the throne of God on your committee, Madam Deputy Speaker Bird, the House of Representatives Standing Committee on Infrastructure and Communications. That committee has had many manifestations over the 18½ years I have been here, but largely it is the transport committee of the parliament. It has a proud record of intervening in matters of navigation. My mentor on that committee when I first came into the parliament was the Hon. Peter Morris, a former minister and a very distinguished chairman of that committee, whose reports on maritime matters are part of the international lexicon on matters of the sea. So that is a third reason.
A fourth reason is that I have a big fishing industry in my electorate, based on Bundaberg and Hervey Bay. There are 30, 32 or 33 trawlers in each centre, and of course there are the associated fishing industries of Tin Can Bay to the south and Gladstone to the north, which intertwine in that area. Anything that affects one of those shipping or trawling environments affects all four fishing industries.
In New Zealand last week, the Liberian flagged Rena ran aground on a reef off the North Island in the Bay of Plenty, a beautiful area of New Zealand. So far, 350 tonnes of heavy fuel oil have leaked into the Bay of Plenty, and authorities have been unable to successfully prevent the leak because of the inability to salvage the vessel due to large swells. The Rena had 1,700 tonnes of heavy fuel oil on board. So should the ship be unable to be salvaged and should the weather deteriorate further, a major spill of significant proportions could occur. While the lasting impact and total clean-up costs will not be known for some time, dead seabirds and fish are already being washed up on local beaches and penguins are being treated in wildlife rescue centres. It is New Zealand's worst maritime pollution disaster and highlights the need for vigilance in this area.
By way of an aside, I congratulate the minister for making 30 AMSA officers available to the New Zealanders. I think that is international cooperation of the best sort. It is yet another reflection of the sort of work that we did with the New Zealanders during the Canterbury earthquake. Having said that, I note that while this is not in Australian waters it illustrates the sort of danger that can occur. I was associated with the Shen Neng 1, not that it actually went aground anywhere near my electorate as it was 38 nautical miles east of Great Keppel Island. As the member for Fowler said, it was taking a shortcut through the southern Great Barrier Reef. What was interesting about that was that fortunately it was able to be refloated and fortunately it lost only about four tonnes of fuel oil, which created a two-nautical-mile slick. In terms of the potential spillage that could have occurred, we were fairly lucky. It became a worry to me when the vessel was shifted into the main area of Hervey Bay to do the transfer—and this is also illustrated at present by what is going on in New Zealand. If you are going to transfer fuel oil from one vessel to another, you need somewhere fairly quiet. So they took it into Hervey Bay, and I must say I was absolutely nervous because a spill in the bay would have been disastrous. I remember flying over the vessel while that was going on. I could see the delicacy of the operation. Anyway, thank heavens it was done successfully. But we should not have been put in that position by the Shen Neng 1and its crew and its parent company. Australia should not have been put at risk.
I also had a bit to do with the Pacific Adventurer. It lost 31 containers of ammonium nitrate about seven nautical miles off Cape Moreton. As if losing ammonium nitrate was not bad enough, the containers damaged the vessel and it lost a lot more oil—270 tonnes of it. You would all remember the photos of the oil being washed up on Moreton Island, on Bribie Island and on the beaches of the Sunshine Coast. I remember one particularly ugly photo—and I was critical of this because I did not think we got the booms out quickly enough—of fuel oil going up pristine creeks on the Sunshine Coast. Once oil gets up those creeks it takes years to get the stuff out again. As other speakers have said, the clean-up was quite massive. There were 2½ thousand people, including a lot of volunteers, and they had to remove 3,000 tonnes of contaminated sand.
As the shadow minister has said, we have 250 spills on average a year. Most of them, thank heavens, are minor. But I think the things we have talked about today—these three vessels plus these minor spills—illustrate the fragility of the marine environment.
This bill implements a number of measures. It requires the master of a ship in Australian waters not to operate the ship in a manner that causes pollution or damage to the marine environment. It requires the master of any ship in Australian waters to ensure the ship is operated in a manner that does not cause pollution or damage to the marine environment. It requires the master of an Australian ship anywhere on the high seas not to operate a ship in a manner that causes pollution or damage to the marine environment. It requires the master of an Australian ship anywhere on the high seas to ensure that the ship is operated in a manner that does not cause pollution or damage to the marine environment. It creates criminal and civil penalties for contraventions of these requirements. It significantly increases the penalty, in the case of a corporation, for example, from $1.1 million to $11 million. That is quite significant.
With respect to the cowboys who operate on the high seas, I congratulate the current Minister for Infrastructure and Transport and predecessors from both sides of politics. We have tried to keep the cowboys out of Australian waters, although not always successfully. I think we need to send out a signal with this legislation to these people that we do not want that sort of thing to happen in Australian waters.
The coalition supports this legislation. As I said, because of the fishing industry and the work that this parliament has done through your committee, Madam Deputy Speaker Bird, and its predecessors, because of the pristine nature of Hervey Bay and the southern Barrier Reef, with which I am associated, and because of our experience with the Pacific Adventurer and Shen Neng 1 , we have good reason to be careful and we have good reason to take these sorts of matters seriously. I personally and my colleagues in the coalition support these measures.
I rise to sum up the Maritime Legislation Amendment Bill 2011. I particularly thank the member for Hinkler, whose contribution to this debate I have had the opportunity of hearing. He is someone who takes maritime issues very seriously. As the Deputy Chair of both the House of Representatives Standing Committee on Infrastructure and Communication and the former House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government, he played an important role in delivering a unanimous report on coastal shipping, which I have used to announce a revitalisation of Australian shipping in terms of policy development.
Quite clearly, the overall framework where we have gone from 55 Australian flag vessels, in 1996, to 22 today is unacceptable. It will reach a tipping point. To revitalise Australian shipping we need to have a comprehensive plan across the sector that deals with taxation issues, competition issues and workforce issues, including training and skills. I believe in the government's shipping policy announcements, and we have done just that.
Certainly the role that that committee played in the former parliament was important and certainly the member for Hinkler's approach to issues has also been one of cooperation when specific issues have occurred in his electorate. I was pleased to have the opportunity to listen to his contribution to the debate on this important legislation that is receiving support from across the parliament. I would encourage him to talk with his colleagues to ensure that the shipping policy legislation, which will be coming before the parliament later this year, also receives support from across the parliament. It is clearly in Australia's national interest to deal with these issues. One of the issues that is common to both the incidents off the Australian coast and the current incident off the New Zealand coast is that the vessels have not had Australian or New Zealand flags on them. We need to acknowledge that there are real issues here. Those people who argue the flat earth position that it does not matter whether you have a domestic shipping industry in countries which are island continents such as Australia and New Zealand make, I think, a very grave error indeed. On 3 April 2010 the grounding of the Shen Neng 1 just east of Great Keppel Island was a disaster but one that could have been a lot worse in terms of its consequences. The impact caused the ship's fuel tanks to rupture and release approximately four tonnes of fuel oil into surrounding waters. I visited the site with AMSA. We flew over on a Dornier aircraft and saw from the air the channel where the ship should have been travelling. It is beyond comprehension that such an incident could occur.
The potential cost of such an incident to the Australian economy in terms of damage to the southern part of the Great Barrier Reef could go into the many hundreds of millions of dollars. So the economic consequence of complacency when it comes to these issues is, I think, one that the parliament should resist. A year earlier, on 11 March 2009, a Hong Kong, China registered general cargo ship, the Pacific Adventurer, lost 31 containers overboard. The fallen containers caused damage to the ship, resulting in the loss of more than 270 tonnes of heavy fuel oil.
One week ago, the fully laden container ship, Rena, ran aground at speed onto a charted reef off New Zealand's North Island. I spoke to the New Zealand transport minister, Steven Joyce, yesterday. There is a very good relationship between the Australian government and the New Zealand government. The member for Hinkler is right to point out that our people, through the Australian Maritime Safety Authority, are regarded as the world's best. We have senior officials in New Zealand right now. My colleague Minister Joyce and Prime Minister Key have thanked Australia directly for the contribution we are making. We do have expertise in containing oil spills—although, unfortunately, it has been learnt in part through the incidents surrounding the Pacific Adventurer and the Shen Neng 1and we have acted in a way that has built on that experience, which our New Zealand colleagues are benefiting from.
This oil spill, however, will be New Zealand's most significant maritime environmental disaster ever. The Rena has been leaking oil and, overnight, 70 containers have been lost overboard, resulting in the rerouting of shipping in the area. This is very serious indeed. All of these incidents highlight the potential significant impacts on Australia's coastline and coastal waters as a result of pollution from ships and other ocean-going vessels.
I spoke about the direct costs of hundreds of millions of dollars that could have resulted from an incident such as the Shen Neng 1 if it had not been contained. But the cost of such an incident to the Australian economy could be literally in the billions if it were to disrupt or stop industry in ports which are important to the economy, particularly ports on the Queensland coast such as Gladstone and also those on the coastal regions of the west. So we need to be vigilant about this. Our industry and exports are important, but people will not support activity if it is seen to be threatening the natural environment, such as the Great Barrier Reef. So the consequences of this are very serious indeed. We know that large incidents are relatively rare; however, the number of reported oil spills in Australian waters has averaged over 250 per year over the last 10 years. The potential impacts of these spills on the maritime industry, the environment and the tourism and fishing industries are significant. There is a widely held view that the Commonwealth penalties are too low to discourage violations, and that is why we are acting. Currently, Commonwealth penalties for incidents are inconsequential when you take into account the economic capacity of modern shipping companies. This bill will amend Commonwealth legislation to ensure that our regulatory regime is strong enough to provide sufficient deterrent to shipping companies and their crews from engaging in unsafe and irresponsible actions at sea, particularly near environmentally sensitive marine ecosystems. The purpose of these legislative changes is to require the master of any ship in Australian waters not to operate or allow the operation of the ship in a manner that causes pollution or damage to the marine environment; to require the master of an Australian ship anywhere on the high seas not to operate or allow the operation of a ship in a manner that causes pollution or damage to the marine environment; to create criminal and civil penalties for contraventions of these requirements; to create an offence where the master of a ship fails to report in accordance with the regulations—for example, in relation to an incident in a mandatory reporting area such as the Great Barrier Reef Marine Park; and to increase the level of penalties in the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 for reckless or negligent discharge of oil or oil residues by ships. And the bill will increase the penalties by 10 times. This is a significant increase but one that is entirely justifiable and indeed necessary.
Australia is a signatory to the International Convention for the Prevention of Pollution from Ships, known as the MARPOL convention. This convention places an obligation on all parties to ensure that the penalties prescribed under domestic legislation are adequate in severity to discourage violations and are also 'equally severe irrespective of where violations occur'. The high penalties are intended to be appropriate to discourage noncompliance and take into consideration the levels of cost saving that shipping operators may achieve through noncompliance and any perceived likelihood of non-compliant ships being identified and prosecuted. I thank all members who participated in the debate, and I thank the House for the support of this important legislation, which I commend to the House.
Question agreed to.
Bill read a second time.
Ordered that this bill be reported to the House without amendment.
What a distinct pleasure. The coalition supports the Veterans' Affairs Legislation Amendment (Participants in British Nuclear Tests) Bill 2011. The bill builds on earlier initiatives of the previous coalition government to ensure that both defence and civilian personnel associated with nuclear testing by the British government in the Australian outback in the 1950s and 1960s receive Commonwealth funded treatment for cancer through the passage of the Australian Participants in British Nuclear Tests (Treatment) Act 2006. The 2006 act, by way of history, provided non-liability white card treatment to all ex-service personnel and civilians associated with the testing. It was a great foundation. This bill seeks to build on that, to its credit.
In the intervening years, of course, in 2010, parliament passed new laws providing equivalent hazardous non-warlike or operational service to ex-defence personnel associated with those very tests. These amendments to the Veterans' Entitlements Act ensured that disability pensions and war widows pensions were available to ex-service personnel who were associated with those specific tests. By way of a note, where eligible, the ex-service person can receive a disability pension and may also be entitled to a gold card. Where the ex-service person's death is attributed to an accepted war-caused injury or disability, the widowed spouse may receive a war widow's pension.
In broad terms, the purpose of this legislation, which is uncontentious and widely supported, is to give additional powers to the Repatriation Commission to enable it, via a disallowable instrument, to broaden the definition of an eligible class of persons under the Veterans' Entitlements Act 1986 for the purposes of the British nuclear test defence service, as well as the eligible class of persons under the Australian Participants in British Nuclear Tests (Treatment) Act 2006. This bill reaches back to 2006 to pull them together. The Repatriation Commission's new powers will enable it to extend the eligible class of persons to include, for example, RAAF personnel who were not stationed at the nuclear testing site but whose work may have involved them in nuclear testing. These changes are anticipated to immediately affect about 10 people. It will give them the opportunity to apply for compensation and/or coverage under the act, and that is entirely fair and entirely reasonable. These changes are fully supported by the coalition.
What is interesting, though, is that, during the Senate debate on the Veterans' Entitlements Amendment Bill 2011, Senator Xenophon moved an amendment, supported by the Greens, to automatically grant a gold card to those ex-service personnel involved in nuclear testing, regardless of the acceptance or rejection of their claim for compensation by the Repatriation Commission. Senator Xenophon argued that there are around 2,000 ex-service personnel still alive who may benefit from these changes and that the number is rapidly declining. The government opposed Senator Xenophon's amendment, a position supported by the coalition. The likely cost of extending gold cards to this group of ex-service personnel would be something like $100 million over the forward estimates. Further, the automatic grant of a gold card is presently made to only those veterans who have qualifying service—that is, who have fought against an enemy in a war zone in warlike circumstances, are aged 70 and over, or are former prisoners of war. What is interesting about that move by Senator Xenophon and the Greens to seek to attach a gold card to all of the veterans involved in the Maralinga tests is that there were no cost offsets. The government has, to its credit, put forward a sensible, considered and thoughtful bill. Senator Xenophon and the Greens put a rider on a previous bill and certainly sought to do the same thing again. My understanding is that it is highly likely that they will seek to do the same thing with this bill. They sought to put a rider to grant a gold card to 2,000 veterans from the Maralinga testing, without any cost offsets.
What is particularly galling about the rider that Senator Xenophon and the Greens sought to include in the Veterans' Entitlements Amendment Bill, and that they may seek to do again, was the demand that there be no cost consideration. Yet I remember months and months of negotiating with these two parties, Senator Xenophon and the Greens, on the DFRDB indexation, and they demanded cost offsets for what had a $98 million price tag over the forward estimates—the same price that giving the gold card to 2,000 veterans would cost. I delivered a 33 per cent reduction in the forward hiring of public servants for the Department of Defence, saving $260-odd million, which, incidentally, was picked up by the minister six months later and then became government policy—full credit to the minister. Copying is one of those great accolades in life, of course, with imitation the sincerest form of flattery.
Even after all this work for Senator Xenophon and the Greens, to demonstrate to them that cost savings could be made—even though they had both campaigned in 2010 to index defence pensions—they still voted against the coalition's bill in the Senate. And then they have the blatant hypocrisy to say there should be no cost offsets in attaching a rider about gold cards for those in the Maralinga tests. I say very clearly to the Greens and to Senator Xenophon: you must be consistent in your application of legislation. If you are looking for cost offsets to pay for a widening of indexation and benefits for the veteran community, you cannot demand from the coalition or the government that they produce these offsets and then stamp your foot petulantly and say, 'We won't give them when we want our own way.' There is a very clear message to the Greens and Senator Xenophon: be consistent. The veterans community is not a football you kick around for your own political ends. You had an opportunity with DFRDB indexation bill to stand up. Indeed, it was the Greens stated election policy. They went to an election stating they would index defence pensions, but when given the opportunity with the private member's bill they decided against it. It is rank hypocrisy in the extreme.
The opposition will stand with the government on this bill. The bill is sensible, it is considered and it is thoughtful. Some would argue that it only immediately affects 10 people, and that is correct. But they are 10 people of value and worth who served their country. If it were one person, the coalition would stand with the government to ensure a degree of justice were afforded to them. But only 10 people are immediately affected by this bill. The beauty of the bill is the power granted to the Repatriation Commission will enable them to extend the eligible class of people as they may arrive from time to time, with a disallowable instrument being the power needed to broaden the definition of the eligible class of persons. Knowing the Repatriation Commission's good work, I fully expect they will use the powers appropriately, sensibly and justly, as is the intent of the bill before the parliament.
I would seriously ask the Greens and Senator Xenophon to have a good hard look at this bill and not to seek to use it as another opportunity for populism by reattaching the rider they tried to attach, through their amendment, to the Veterans' Entitlements Amendment Bill. I caution them not to try to put that amendment back on this bill, to incur $100 million extra across the forward estimates without any degree of offset. They demanded it from the coalition and I am sure they demanded it from the government. They somehow seem to think they are above and beyond their own demands.
With that note of caution to the Greens and to Senator Xenophon I commend the government for its bill and for what it is doing. It certainly enjoys the wide support of the coalition.
I always enjoy following an opposition speaker when they support legislation the government is putting before the parliament. It is a rare and refreshing turn of events. I thank the shadow minister for his support and at the same time I would like to commend the Veterans’ Affairs Legislation Amendment (Participants in British Nuclear Tests) Bill 2011 to the House.
I have a long corporate memory when it comes to nuclear and atomic veterans. When I first came to this parliament it was very difficult for any nuclear or atomic veteran to receive any recognition or any compensation for illnesses that they received as a result of the time they were in areas where they were exposed to atomic waste. I had one constituent in particular who was in the RAAF and was at Maralinga. At the time he was there he worked in trucks. When the atomic testing was on he would go out and then come back covered in dust. He would just walk in and throw his clothes in the washing machine. There was no testing or monitoring to see whether or not he suffered any illnesses or side-effects from his exposure. He actually developed acute myeloid leukaemia. An interesting aside to this is that his wife has developed breast cancer and their first child was still-born. I find it very difficult not to join the dots there and in some way attribute it to the time that he spent at Maralinga.
He has had a long battle over the time to get recognition. When I first met him he received no recognition at all. I pay tribute to the fact that, in 2006, legislation was passed through the parliament that changed the situation slightly. But still he has many battles to face in relation to acceptance of his illness and for the fact that although he may be in remission at the moment there is the psychological impact of his illness and the impact it has on his life, and the fact that his wife is very sick. I do not think it is treated in the same way as other conditions. The bar is just that little bit higher, and I think that is inappropriate.
The legislation before us today amends the Veterans' Entitlements Act 1986 and the Australian Participants in British Nuclear Testing (Treatment) Act 2006 to enable the Repatriation Commission to determine by legislative instrument additional eligibility criteria for British nuclear defence service under the VEA and nuclear test participation under the APBNT(T)A. This will ensure that there is equitable access to benefits for Australian participants, be they service personnel or not, in the British nuclear tests that took place. It will involve maintenance and decontamination or transport of aircraft which were contaminated as a result of the British nuclear tests.
The constituent I spoke about was actually lucky, if you can say that anyone who was involved in that situation was lucky, in that he was a member of the RAAF. He has been able to get assistance earlier than he otherwise would have. But many people worked out there in different capacities and were not part of the services. The legislation before us will give some equity to those people who were doing their work and suffered as a result of the British nuclear tests.
The APBNT(T)A provides government funded, non-liability healthcare treatment for cancer in the form of a white card for those people who were involved in the British nuclear test program in Australia. Also, disability pensions, healthcare treatment and a range of other benefits are provided for former Defence Force personnel. I reiterate that that was not the case for a very long period of time. It is the case now and I think it is really important for that assistance to be extended, and this legislation does that. I do not see how any member of this parliament could object to the legislation. The amendment to the VEA allows newly-found eligible assistance participants to have their claim treated in the same way as they would have had they been eligible in the first instance. Once again, that is the correct way to handle it, and it shows a little compassion for those people who have suffered for such a very long time. As I previously mentioned, they have suffered not only physically but psychologically. People do not know when they may exhibit side-effects from their exposure to the British nuclear test program. Governments should be very mindful of the fact that many people suffer as a consequence of decisions made in the past, and this bill recognises this.
To run through a few facts and figures, 3,235 Navy personnel, 1,658 Army personnel, 3,223 RAAF personnel and 8,907 civilians, including 10 Indigenous people, were involved in the British nuclear test program. Many of those 8,907 civilians are still surviving, and the bill will give them access to similar treatment and benefits as those personnel in the defence forces. I commend the legislation to the House and congratulate the minister on having the foresight to extend the eligibility to this program in the way that he has.
Along with my colleagues, I support the Veterans' Affairs Legislation Amendment (Participants in British Nuclear Tests) Bill 2011 before us today, which will enable further support for our veterans by legislating more eligibility criteria for British nuclear test defence servicemen under the Veterans' Entitlements Act 1986 and nuclear test participation under the Australian Participants in British Nuclear Tests (Treatment) Act 2006. I am proud to be a member of the Liberal-National side of politics, which has a strong record for standing up for and protecting our veterans, and has done so since our party's creation in 1944. It has always been, and will continue to be, the Liberal way to hold veterans and their families in the highest regard, and support them for the service, sacrifice and contribution they have made to our nation.
During the 1950s and 1960s, Australian defence personnel were involved in the testing of nuclear weapons by the British government in the outback of South Australia and off the coast of Western Australia. Since their service there have been a number of claims by veterans that their involvement in these tests as part of their service has left them incapacitated. These claims must be taken seriously, and in 2006 the parliament passed legislation to provide these ex-service personnel, and indeed other civilians, including members of the Australian Federal Police, who worked at these nuclear testing sites, with assistance for treatment of all cancers through a white card issued by the Department of Veterans' Affairs. Support for veterans who were involved in these nuclear testing situations was increased again in 2010 with the establishment of a new classification of service under the Veterans' Entitlements Act 1986 known as 'British nuclear test defence service'. This provides a classification equivalent to hazardous non-warlike operational service to ex-service personnel involved in nuclear testing. To be eligible for compensation under this classification, an ex-service member must be able to prove a link between any incapacity and their defence service. The repatriation committee then determines a claim based on the relevant links between the cause and effects of an ex-service member's disease with their service. Once this process has occurred, eligible ex-service personnel will receive a disability pension and gold card. If their death is related to their service, an ex-service personnel's widow may also receive a war widows pension and gold card. These changes were supported by both sides of the House in 2010.
The legislation before us today makes minor amendments to the class of persons eligible under the Veterans' Entitlements Act and the Australian Participants in British Nuclear Tests (Treatment) Act 2006 to allow the repatriation committee to broaden the definition of 'eligible persons' to incorporate not only personnel immediately involved on the nuclear test sites but also those such as RAAF pilots and ground crews involved in the testing but based outside the immediate testing area. The Department of Veterans' Affairs has found that approximately 10 people have been identified as potential beneficiaries of the amendments before us today.
Whilst I am pleased to support the amendment today, which provides further support for our veterans, it remains hugely disappointing that this Labor government will not introduce fair indexation for DFRDB payments, and earlier this year once again voted this proposal down when it was moved by the coalition in the Senate. I would like to take this opportunity whilst we are discussing support for veterans to put on the record yet again that the coalition is committed to addressing the needs of DFRDB superannuants. Despite the amendments today, affecting approximately 10 veterans, this Labor government continues to deny a problem in the area of DFRDB superannuation, and I believe that it is this stance that truly epitomises the value that the Labor government places on our veterans.
My electorate of Ryan takes in the Gallipoli Barracks at Enoggera and like most electorates around the nation is home to many active returned and services leagues who continue to support and advocate for our returned and currently serving defence personnel. I know these service men and women, I know these veterans, and I know the issue of fair indexation for DFRDB payments is of vital importance to them. I also believe that all members of this House would be in a similar position: they would also know service men and women in their electorates and veterans in their electorates. That is why it shocks me that this Labor government continues to approach this issue with such a closed mind and continues to neglect the men and women who have served their country and deserve to be treated fairly.
Our veterans deserve fair indexation of DFRDB superannuation. Our veterans are a vital part of the fabric of our nation, a nation built on the legend of Gallipoli and the bravery of our Anzacs. Our veterans deserve our support. The bill before us today is one step in providing some of that support, but I take this opportunity to call on the government to take the more important step of the fair indexation of DFRDB.
The Veterans' Affairs Legislation Amendment (Participants in British Nuclear Tests) Bill 2011 seeks to extend access to compensation and health care for those Australians who participated in the British nuclear tests through amendments to the Veterans' Entitlements Act 1986 and the Australian Participants in British Nuclear Tests (Treatment) Act 2006. Those affected are people who were involved in the maintenance, transport and decontamination of aircraft used in British nuclear tests in the 1950s and 1960s.
The Australian Participants in British Nuclear Tests (Treatment) Act 2006 has been amended on two occasions to extend coverage to previously ineligible personnel. These amendments were made as new information came to light. The Minister for Veterans' Affairs made the point in his second reading speech that, given the secret nature of the operation, it is not out of the question that further new information about groups of people affected may come to light. On that basis, the legislation will enable the Repatriation Commission to determine, through legislative instrument, additional eligibility criteria relating to participation in the British nuclear test program.
The government announced these changes in the 2010-11 budget. Currently, the nominal roll of Australian participants in the British atomic test program—this is information I obtained from the Parliamentary Library—is as follows: Navy, 3,268; Army, 1,657; RAAF, 3,201; and civilians, 8,590, including 10 Indigenous people. Of the total participants, 48.6 per cent were military personnel; therefore it is not impossible that further participants may come to light.
The original changes were made under the Howard government in 2006 as a result of the Clarke review. Within the terms of reference of the Clarke review was an examination of the claims by nuclear test participants for government assistance. The recommendation was the accreditation of participation in non-warlike hazardous service. The British nuclear test program was conducted in the Montebello Islands in 1952 and 1956 and at Emu Field in 1953—two tests—and there were seven tests at Maralinga in 1956 and 1957. There were tests at Christmas Island and Malden Island, but Australians were not involved. There were also 600 minor trials between 1953 and 1963, including the testing of bomb components.
The history of claims about adverse health reactions and deaths suffered by nuclear test participants goes back many years, far longer than the first studies and reports undertaken in Australia, which commenced in the early 1980s. There were two key issues underpinning this. Firstly, many of the participants themselves considered that they were exposed to hazardous radiation during the tests, especially given what is now known about the dangers of radiation. Secondly, the participants continuously reported incidences of illness and death that they considered to be abnormal and therefore associated with the tests.
The bill before the House today seeks to ensure that the interests of those who have been affected will be looked after. It also ensures that any who may be further identified will also have their health needs acted on. That is the way it should be, and what also should happen is what is happening: bipartisan support for this. For too long officialdom were in denial. For too long it was too difficult for people to be properly compensated in relation to the health effects that they suffered as a result of these tests. There is no doubt in my mind that people looked the other way. It was all about the dollar; it was all about minimising compensation, minimising payouts. That also happened in relation to asbestos. But we are more enlightened now in relation to asbestos and also these tests. It is appropriate that there be an expansion of those who have been adversely affected and are eligible to be considered. I think it is something that the parliament and the minister should continue to watch, and we should be a little bit more generous just as with those who went to Vietnam and came back having been affected by Agent Orange—again denial for a very long time as to the impacts. Gulf War syndrome: denial for a very long time as to the impacts.
I have a large veterans community in my electorate. For the 21 years I have served in the parliament an area that my office has specialised in has been the assistance of those veterans with their claims, in many cases successfully and in other cases not successfully. But I have seen a change of attitude over time, and it changed because the government mindset changed. So I am quite pleased to support the bill before the parliament today and am pleased that it is receiving bipartisan support, because we have got to stop the denial. In my opinion, if you have a situation where people are affected as a result of these actions, then you should be facilitating looking after them, not creating barrier after barrier while hoping that people will die or go away before they get their due compensation.
It is worth while again having a look at what is in the explanatory memorandum because that explains it in plain English, so I think it is better to add into my speech for the record what the explanatory memorandum says. I have already covered some of this in my speech but it is worth repeating. It says:
The Australian Participants in British Nuclear Tests (Treatment) Act provides that Australian participants in the British nuclear tests (defined as a `nuclear test participant') are able to receive treatment and testing for malignant neoplasia (cancer) through the Repatriation Commission and the Department of Veterans' Affairs.
Amendments were made to the Australian Participants in British Nuclear Tests (Treatment) Act in 2008 and 2010 to provide extended coverage for members of the Commonwealth Police (now known as the Australian Federal Police) and Protective Service Officers who were responsible for patrolling the exclusion zone at Maralinga throughout the testing period and up to 30 June 1988.
They were previously excluded. Further on it says:
It has become evident following the receipt of a small number of claims from Defence Force members claiming British nuclear test defence service, that some personnel undertaking the specific tasks of maintaining, transporting or decontaminating aircraft (other than Royal Air Force Canberra aircraft) used in the British nuclear test program should be, but are not currently, eligible under the Veterans' Entitlements Act or the Australian Participants in British Nuclear Tests (Treatment) Act … The proposed amendments will allow the Repatriation Commission to determine, by legislative instrument, additional eligibility criteria for `British nuclear test defence service' under the Veterans' Entitlements Act and for `nuclear test participant' under the Australian Participants in British Nuclear Tests (Treatment) Act. The amendments will facilitate eligibility under the Veterans' Entitlements Act and the Australian Participants in British Nuclear Tests (Treatment) Act, through enabling the making of a legislative instrument, in respect of these claims and will enable future claims of a similar nature to be dealt with more expediently. This will ensure that any newly found eligible personnel will receive benefits and treatment provided under the respective Acts with the minimum of delay.
This is as it should be.
A lot of these changes have been achieved by people in the field agitating for them, producing evidence, arguing their case, rearguing their case and convincing the authorities that they were taking too narrow a view of the world as it then was and that that was affecting their eligibility. So I think we are debating a very good thing this afternoon. A lot of people deserve a lot of credit for taking up the fight over the years. These things are not easily proved. To have authorities change their attitudes is not easily achieved, but attitudes have changed; attitudes have improved. It is good, as I said, that both sides of the House support this legislation. It is good legislation. I commend it to the House.
I am happy to support the Veterans’ Affairs Legislation Amendment (Participants in British Nuclear Tests) Bill 2011. As other speakers, including the member for Banks, have said, back in the 1950s and 1960s Australian defence personnel were involved in British testing of nuclear weapons in South Australia, particularly at Maralinga, and also off the coast of Western Australia. They did their jobs bravely and many have paid a very high price in the form of serious health problems. Quite rightly, they deserve compensation for the harm they suffered.
In 2006, the former coalition government introduced legislation to give these ex-service personnel and other civilians, including Federal Police, who worked at the nuclear-testing sites non-liability treatment for all forms of cancer. Those found to be eligible were provided with a Department of Veterans' Affairs white card. We all remember those pictures of the young airmen and soldiers washing down aircraft in nothing more than their boots and shorts—no protective clothing whatsoever. I imagine it was the same for the Federal Police and other civilian officers who carried out associated services around the nuclear sites. As I said, if they were found to be eligible, the Department of Veterans' Affairs provided them with a white card.
This support was further enhanced last year with a new classification of service called the British Nuclear Test Defence Service. This was brought in to provide further compensation to these veterans after they proved a link between any incapacity or illness and their defence service. If such a link is proven, the Repatriation Commission will provide a compensation pension, and if the recipient is already receiving a disability pension at or above 100 per cent of the general rate, they will also be eligible for a gold card. Along with this, if their death can be linked to their defence service, their widow may be eligible to receive a war widows pension and a gold card. These changes were made through amendments to the Veterans' Entitlements Act 1986.
The bill before us today provides further changes to that act and to the Australian Participants in British Nuclear Tests (Treatment) Act 2006. The changes will broaden the eligibility criteria for these benefits. I am a passionate advocate for our veterans and believe that we owe them the very best possible health care and social support in recognition of their service to our nation, and even more so when they carried out that service in hazardous conditions. This bill goes some way towards that goal by giving the Repatriation Commission greater discretion in determining the eligibility for support of former Australian defence personnel who played a role in the British testing of nuclear weapons in the 1950s and 1960s. This bill is specifically inclusive of those who were involved in the maintenance, transporting or decontamination of aircraft used in the British nuclear test program. This included RAAF pilots and ground crew who were involved in the testing but who were based outside the immediate testing area.
It is thought that these changes will bring 10 individuals under the umbrella of the two acts, giving them access to health services, benefits and compensation that they previously could not access. Although the number of beneficiaries may be small, this is an important piece of legislation. It signifies more than a mere extension of benefits to a handful of veterans. It is a matter of important recognition. It has taken many years to get to this point of recognising our responsibilities to the men whose health has suffered because of their service to the nation. I feel there are more out there who deserve consideration for extra assistance from the Australian government.
By way of an aside, I would like to show a parallel construction. It is much like the F111 deseal-reseal workers who may be eligible for counselling services, ex gratia payments, compensation and health coverage following a parliamentary inquiry. I feel that former service personnel who worked as petroleum operators deserve consideration for similar assistance. Their cases are in parallel with those who worked under the British nuclear program and those who worked on the F111s. Their activities may not have been exactly analogous, but the principles upon which their compensation should be paid are much the same.
I want to draw the attention of the Main Committee to Mr Bob Ney, a constituent of mine from Hervey Bay, who previously served as both a warrant officer and a commissioned officer in the Army, working as a petroleum operator. His duties included supervising the storage and supply of fuel, the cleaning of storage containers and the maintenance of these devices. In recent years, Mr Ney has carried out extensive personal studies involving numerous former colleagues and service personnel to ascertain what, if any, health problems they experienced working in that petroleum field. He has documented many quite frightening cases. I have actually seen his research. He has case folios on individuals who served in that fuel area, along with photographs of the particular activities that they carried out. Back in the 1960s and 1970s, Mr Ney reported that it was quite common for petroleum operators to access storage tanks with little or no protective equipment. They would wear their standard leather boots, cotton uniforms and quite rudimentary breathing masks. You can see the parallel between the nuclear people, the F111 deseal-reseal people and the people in the petroleum field. In hindsight, there was very little knowledge of occupational health and safety and an apparent lack of adequate training in the handling of petroleum products, according to Mr Ney's research. The associated illnesses and conditions he reportedly found amongst former petroleum operators who were exposed to petroleum during the course of their duties included the following conditions: skin conditions, blood abnormalities, chronic medical conditions and even instances of cancer.
I have met with the minister to see whether a study similar to that conducted with respect to the F111 deseal-reseal program can be carried out. I must say that all of Minister Snowdon's communications with me have been courteous and helpful, and he has said that once the F111 study is completed he expects to look into other fuel related matters. While I do not doubt his sincerity for one moment, I think it is important that the work of people like Bob Ney be front and centre of the government's priorities. It is only right that people who have served our nation in the armed forces and who then require special medical treatment and compensation because of the specific duties they performed receive it in a fair, timely and appropriate manner. If they have been exposed to toxic environments as part of their professional work duties, they cannot be treated in later life as some form of military flotsam and jetsam to be put conveniently to one side. I thank the member for Banks for saying that. He said that people cannot just be put to one side and that we cannot turn a blind eye to some just because we hope to avoid a bit of compensation. These people should not have to fight to have their cases heard and nor should they have to claw their way back into the arena of public opinion to get a hearing.
Whether it is these 10 people to whom we extend the Commonwealth benefits dealt with in this bill today, whether it is the people in the F111 deseal-reseal activities, or whether it is the people who carried out fuel duties for the RAAF and the Army, who have not yet been recognised, there is a continuum there, and that continuum carries with it a responsibility that we do something about it.
I thought that it would be wise in this debate today to put Bob Ney and his colleagues on the agenda.
I think it is important to adopt the principle that a wartime Labor Prime Minister enunciated—and these are my words, not his—that a grateful nation really ought to make sure that it pays debts to those people to whom we owe so much.
The reality is that because the conditions under which people served in conjunction with the British nuclear tests were so varied, and there were so many people and so many different categories, it is impossible when legislation is first enacted to cover the situations of all persons who deserve the protection of Australian law and indeed who deserve the protection of the veterans legislation. That is why I want to commend successive governments for being prepared to say that circumstances have changed, that new information has come to light, and that consequently the eligibility criteria ought to be widened. I believe that this bipartisan approach is something that all Australians would support.
We all know that between 1952 and 1963 nuclear weapons tests were conducted in Australia off the coast of Western Australia in the Montebello Islands and at Emu Field and Maralinga in South Australia. I would imagine that in 2011 no government would tolerate nuclear tests taking place in Australia, and nor would the Australian people. In principle we do not support nuclear tests taking place anywhere. But these tests did occur with the full agreement of the then government of Australia and they would have enjoyed broad support from the Australian people. Various amendments to acts of parliament have extended over a period the eligibility criteria for access to benefits, and as more medical and other knowledge becomes available it is only appropriate that we ought to continue to include others within the net of those people who are able to seek redress. After all, I do not believe that, at the time this service was conducted, the knowledge we have today on the adverse health effects could have been apparent. Today, were people involved in similarly hazardous activities then many more precautions would be taken. The honourable member for Hinkler, in his contribution, mentioned workplace health and safety. I suspect that, during the time these weapons tests were conducted, while the workplace health and safety standard then believed to be necessary was obviously followed, the extreme medical conditions suffered by so many people who served their nation in this way could not possibly have been envisaged. And it would be appalling were the government of the day to say, 'Well, too bad.' That is not the Australian way; the Australian way is to look at people who have served their nation, whether they be Commonwealth police, now members of the Australian Federal Police; whether they be protective service officers; whether they be people actually involved in the tests themselves; whether they be people who were involved in transporting material. All of those people played a very important part in making sure that the purposes of those tests were successful. And if, as a unwitting consequence, their health is adversely affected, as so many people have tragically been adversely affected in a health sense, it is vital that a compassionate nation recognises the debt that we owe these people who have made such an important contribution to their nation.
It is also very healthy that, in 2011, we do not in our community say that we do not support nuclear tests so therefore we are not going to give the medical assistance and other compensation necessary to give redress to people who were involved in those tests in Australia. One cannot reinvent history. The reality is that these tests took place in Australia. They were British tests but they were tests that took place with the full support of the Australian government and, in my view, the Australian people at the time. So I want to commend the minister and the government for bringing this legislation into the chamber. I anticipate that, as more information with respect to service and medical conditions becomes available, ministers in the future will bring in other amendments as required to further widen the field of those people able to access benefits. I commend the bill to the chamber and I congratulate the government for introducing it on this occasion.
Debate interrupted; adjournment proposed and negatived.
Firstly, I thank the members for Fadden, Ryan, Fisher, Hinkler, Shortland and Banks for their contributions to this discussion and to this bill, which amends the Veterans' Entitlements Act and the Australian Participants in British Nuclear Tests (Treatment) Act 2006. The amendments will improve access to compensation and health care for former Defence Force members. You may be aware that claims have been received from a small number of personnel who should be, but are not currently, eligible under the acts in respect of their participation in the British nuclear test program. Unfortunately, previously British nuclear test eligibility under the acts was restricted to specified test sites defined by a kilometre radius during specified periods. Personnel who were either in the specified test sites during the specified periods or involved in the transport, maintenance, recovery or cleaning of equipment, vehicles or aircraft used in the specified sites during the specified periods are eligible. However, up till now this eligibility has not extended to transport, maintenance, recovery or cleaning of aircraft outside of the specified periods or used to measure fall-out outside the specified test sites. Personnel who worked on these aircraft prior to their decontamination should be in our view—but currently are not—eligible under the act as the work or contamination occurred outside the specified test sites or specified periods.
This bill will enable these and any future eligibility issues to be rectified in a timely manner. This will be achieved by enabling the Repatriation Commission to determine additional eligibility criteria relating to participation in the British nuclear test program, under both the Veterans' Entitlements Act and the Australian Participants in British Nuclear Tests (Treatment) Act, through a legislative instrument. Due to the quality of the records from the test period and the secrecy surrounding the operation, further extensions of eligibility cannot be ruled out in the future. The use of legislative instruments to determine new eligibility criteria will enable the Department of Veterans' Affairs to be more responsive to British nuclear test participants and will enable compensation and health care to be provided with a minimum of delay. These amendments are a demonstration of the government's commitment to continually improve the services and support we provide to our current and former military personnel.
Question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Ordered that this bill be reported to the House without amendment.
We are here today to acknowledge a truly great achievement by one of our Australian scientists and his team. Professor Brian Schmidt of the Mount Stromlo Observatory at ANU has become one of just 12 Australians to win a Nobel Prize—indeed, the first since 1915 in Physics—and, in doing so, has not only made a significant scientific discovery but shown once again that Australia is at the forefront of innovation. Professor Schmidt led a team of approximately 20 international researchers who discovered that the expansion of the universe was not behaving as commonly believed, a very unexpected and exciting result. In short, contrary to what was believed, the universe appears to be speeding up rather than slowing down as it expands. This was unexpected, as gravitational forces act to slow things down by pulling down on all matter, so it was expected that, as the universe expanded, it would also be slowing down. However, Professor Schmidt and his team have discovered that this is not the case, implying that there is an additional push coming from somewhere to counteract these gravitational forces. This push acts like antigravity and is known as 'dark energy' although scientists are yet to determine where this push comes from or what dark energy is.
When interviewed about his achievements, Professor Schmidt was the first to acknowledge and emphasise the work of his team, which included two other Australian scientists, Professor Warwick Couch from Swinburne University and Professor Brian Boyle from the CSIRO. Professor Schmidt also acknowledged another international team which made the same discovery and is sharing the Nobel Prize with Professor Schmidt and his team.
Professor Schmidt's achievement underscores the excellence of Australian science, particularly Australian astronomy. Australia has been providing world-leading research for more than 50 years, in many cases outperforming the United States and Europe in scientific impact per paper, despite our much smaller population. Australian astronomers and researchers have proved their ability to make significant contributions to science and our understanding of the universe at the most fundamental level. Our telescopes and the teams involved in their operation are world class. The Parkes radio telescope, made famous, of course, by the Australian film The Dish, has just celebrated its 50th anniversary. Together with the Anglo-Australian optical telescope at Siding Spring, in the Warrumbungle National Park, it has provided the excellent data that has contributed to Australian and international discoveries and innovation. Whilst we celebrate these telescopes, we need to upgrade our access to facilities to continue to address the cosmic questions of the 21st century.
As Professor Schmidt's achievement shows, Australia truly is producing world-leading research and its facilities are cutting edge and help facilitate this research. As I mentioned in my maiden speech, Australia and New Zealand are now poised to secure the Square Kilometre Array site. The SKA will over the next 50 years provide essential opportunities for Australia to shine as an international leader in research, technology and innovation. As Australian astrophysicist Professor Peter Quinn says:
We can only dream of the amazing insights and Nobel prize-winning discoveries that the SKA will provide. The SKA will let us see the dawn of time—the first light from the first stars, discovering what dark energy is and finding out that we are not alone in the universe are but a few of the exciting discoveries we hope to make with an SKA based in Australia.
It is the quality of our scientific community, our technological experience and our capability that will ensure that Australia and New Zealand provide the best possible site for the SKA. This will allow the global community to realise the vast scientific vision and opportunity the SKA brings. Indeed, Professor Peter Quinn himself was researching dark matter at Mount Stromlo and subsequently was part of the ESO, the European Southern Observatory, team that built the world's largest telescopes at Paranal in Chile.
It is indeed a truly exciting time for Australian science, and I am pleased to have the opportunity today to congratulate Professor Brian Schmidt and his team on their outstanding contribution, recognised by their winning the Nobel Prize in Physics.
I rise to congratulate Professor Brian Schmidt, a joint winner of the 2011 Nobel Prize in Physics. The Royal Swedish Academy of Science has awarded Saul Perlmutter, Adam Riess and Professor Schmidt this distinguished prize for their evidence that the expansion of the universe is accelerating. It was Richard Feynman, the winner of the 1965 Nobel Prize in Physics, who said: 'If I could explain it to the average person, it wouldn't have been worth the Nobel Prize.' So I do not think I, as a non-scientific parliamentarian, will have great success in explaining the basis of this award. However, I would like to try.
In 1994, working at the Australian National University Mount Stromlo Observatory here in the Australian Capital Territory, Professor Brian Schmidt and other members of the High-z Supernova Search Team at observatories around the world started measuring the rate of expansion of the universe. They expected to find that the universe is slowing down, but by 1998 they were convinced their first three years of data showed the opposite: the universe is speeding up. This finding has had a profound impact on our understanding of the universe and its ultimate fate and is a reminder of the seriousness and significance of the work that astronomers, physicists, astrophysicists and cosmologists—indeed, all scientists—do.
Professor Schmidt was born in the United States in 1967. He developed his love of science as a young boy, watching his dad work on his PhD in biology in his lab, and went on to study physics and astronomy at the University of Arizona and his masters and doctorate at Harvard University. Professor Schmidt relocated to Australia with his wife, Jenny, in 1994. He still lives here in Canberra and is now an Australian Research Council Fellow and an astrophysicist at the Australian National University Mount Stromlo Observatory. He is also an Australian Research Council Laureate Fellow and a grape grower and winemaker who tweets under the name CosmicPinot.
Professor Schmidt is the 12th Australian to be awarded a Nobel Prize and the second to win it in physics, the other winner being Sir William Lawrence Bragg, who shared the 1915 prize with his father, Sir William Henry Bragg. He joins the ranks of fellow Australian Nobel Prize winners, including Sir Howard Florey, Sir Frank Macfarlane Burnet, Peter Doherty and Barry Marshall, all pioneers of medical science, and some giants of 20th century physics, including Max Planck, Albert Einstein, Niels Bohr, Werner Heisenberg, Erwin Schrodinger, Paul Dirac, James Chadwick and Enrico Fermi.
On behalf of a grateful nation, I congratulate Professor Schmidt on being a joint winner of the 2011 Nobel Prize in Physics, an incredible achievement of which we are all very proud.
As a physicist by training, I am very proud of our physics laureate Professor Brian Schmidt. The winning of the Nobel Prize in Physics makes me think of the way that science operates, which will be part of my discussion today.
We have heard a lot about scientific consensus, meaning that the views of anthropogenic global warming sceptics should be discounted. But let us examine scientific consensus in light of this year's Nobel prizes in both physics and chemistry. Twenty years ago, the unanimous—not just the consensus but the unanimous—view of physicists, cosmologists, astrophysicists et cetera was that the expansion of the universe was slowing as gravity inexorably pulled galaxies towards each other. The question then asked was whether there was enough mass in the universe for the galaxies eventually to collapse towards each other—the so-called 'big crunch'. No-one questioned that view until Professor Brian Schmidt and two others smashed this consensus by discovering that the expansion of the universe was in fact accelerating. As a result, they were awarded this year's Nobel Prize in Physics.
Similarly, this year's Nobel Prize in Chemistry has been awarded to Dr Daniel Shechtman for work on quasicrystals. As a result of this work he was ridiculed by the establishment and was asked to leave his research group at the prestigious National Institute of Standards and Technology in the US. It took a full two years before a peer reviewed journal deigned to publish his work.
This year's Nobel prizes for both physics and chemistry have been awarded for smashing scientific consensus. As I said in a discussion with Chief Scientist Professor Ian Chubb, major advances are made breaking a consensus, while only incremental advance occurs within a consensus. We need to be careful of mindguards and groupthinkers who insist that simply because a certain view is a consensus view it is correct and must be defended at all costs. So to anthropogenic global warming, where consensus and support from scientific institutions are invoked in defence of this idea. This is despite the science of anthropogenic global warming being less 'settled or secure' than that of quasicrystals or of the universe's expansion decelerating prior to revolutionary thinkers and observers challenging the accepted view. The whole premise of mankind and, in particular, carbon dioxide emissions being responsible for climate change is not the result of fundamental physics but of computer model outputs.
Computer models must be judged in terms of their predictive capacity, and it is here that these models have proved to be lacking. It has been said of computer models it is garbage in, garbage out, except in the case of climate change computer models, where it is garbage in, gospel out. Problematically, the predictions made by the Intergovernmental Panel on Climate Change using these much venerated models have not matched what has been observed. In terms of global average temperature, the models predicted an increase in the last decade, even for the case where carbon dioxide concentration is held constant. Observations using the IPCC's own Hadley Climate Research Unit dataset show no increase in global temperatures this century.
Ms Hall interjecting—
Is the member for Shortland seeking to ask a question?
No, I am seeking to raise a point of order, Mr Deputy Speaker.
The point of order being?
The point of order is that the member for Tangney is not speaking to the motion and he is actually doing a disservice—
The member for Shortland will resume her seat. The member for Tangney will continue with his speech. I am listening carefully, and he is within the parameters but skirting on the edges.
Certainly, Mr Deputy Speaker. Thank you. I was saying that observations show no increase in global temperatures this century and, for the benefit of the member for Isaacs, nor does the satellite record show this, as is evidenced by Remote Sensing Systems satellite data. Hence the wave of peer reviewed papers—and I stress 'peer reviewed'—from consensus scientists now being published in an attempt to justify, in hindsight, the lack of warming. The Prime Minister's climate science adviser, Professor Will Steffen—
Mr Deputy Speaker, I rise on a point of order. The motion before the House is on Professor Brian Schmidt, whose work is on the accelerating universe.
Can I remind members that this is a statement on indulgence, which gives broad scope to what the speaker can speak on.
Ms Hall interjecting—
Order! I have made a ruling. It is a statement on indulgence and there is broad scope to what the speaker can speak on. The member for Tangney.
Thank you, Mr Deputy Speaker. The Prime Minister's climate science adviser, Professor Will Steffen, says that warming has occurred in the oceans, which is why observed global air temperature increases have not been observed. Unfortunately, since the very accurate Argo Buoy network was launched in 2003 there has been no heating of the world's oceans. With this network there has been more data on the world's oceans collected than for the rest of human history combined. Similarly, we have heard the dire predictions on sea level rise; but, once again, sea level rise has been observed to be decelerating, not accelerating as predicted by the models. Funnily enough, this is in contrast to Professor Schmidt's work on the universe where the opposite has occurred. It has been found that the universe is accelerating its expansion rather than decelerating it.
In 2011 the term 'the science says' is being used in the same way as 'God says' was used in the past in an attempt to stop any debate or discussion. We need to ensure that the mind-guards of today are not allowed the same unfettered, unquestioned power as in times past. This year's physics and chemistry Nobel laureates demonstrate why the carbon tax has scientific bedrock that is very unstable. Thank you.
I remind members that this is a statement by indulgence, which gives broad scope. Nevertheless, this statement is on Brian Schmidt but there is broad scope because it is a statement by indulgence.
Professor Brian Schmidt's day job involves measuring the difference between exploding stars, studying dark energy and tracking the expansion rate of our universe billions of years back in time. But, after becoming Australia's newest Nobel laureate, the most important task at hand for Professor Brian Schmidt was making sure he was not late for class the next day. The Royal Swedish Academy of Sciences has recognised the incredible work of Professor Schmidt, a lecturer with the ANU's Research School of Astronomy and Astrophysics, awarding him the 2011 Nobel Prize in Physics, an award which was shared with Professor Adam Riess and Professor Saul Perlmutter, both from the United States.
After 20 years of painstaking research and observation Professor Schmidt joins the likes of Wilhelm Roentgen, who discovered X-rays, and James Chadwick, who discovered the existence of the neutron. He follows on from Australia's last winners of the Nobel Prize in Physics, father and son duo William and Lawrence Bragg, who won the prize in 1915 for their work on X-ray crystallography. Let us hope it is not another century before Australia brings home another Nobel Prize in Physics.
To have a scientist of such high calibre as Professor Schmidt teaching at the Australian National University, a university which I am proud to represent, is a great blessing. It is testament to Professor Schmidt's dedication to building the astronomers and physicists of tomorrow. Professor Schmidt's prize-winning body of work focused on the nature of the universe itself. By examining the strength of light coming from exploding stars—supernovas—Professor Schmidt and his team discovered that the universe is speeding up as it expands, rather than slowing down as had previously been thought to be the case.
Reflecting back on a lengthy period of study, Professor Schmidt said, 'What we were hoping to see was how the universe slowed down with the gravity within it over time, but what we found was the opposite: the universe was not slowing down at all; it was speeding up.' In addition to this Professor Schmidt and his team have discovered that 75 per cent of the universe is constituted by dark energy, the existence of which was previously not even known.
The study of physics was the prize area that Alfred Nobel mentioned first of all in his will. At that time, in the late 19th century, physics was regarded as the foremost field of scientific study. With Professor Schmidt's revolutionary discoveries coming to light over 100 years later, it reinforces the value of the constant pursuit of knowledge and reminds us how much we have yet to learn. This is upheld by Professor Schmidt himself, who presented his regular lecture the day after receiving his award. One of his students commented on his commitment to teaching: 'He brings it down to a level where all of us can really understand and he gets really involved in everything he is teaching us.'
Professor Schmidt credits his strong education with his success and he is passionate about ensuring his students are afforded the opportunities that were afforded to him. He said he sees his award as a positive for the broader Australian community and has expressed his hope that it will give aspiring young Australian students the inspiration to pursue a career in their area of interest. Noting the prosperity of Australia, Professor Schmidt said a strong scientific legacy will only be attainable if 'we make our citizens the best educated in the world'. He has highlighted the importance of strategic funding and the management of the Australian education system. According to Professor Schmidt, 'They say in politics that education and science do not win elections but they are what make nations rise and fall.'
Professor Schmidt has been vocal in his public advocacy since winning the Nobel Prize, speaking out, for example, in defence of the strong consensus of Australian science that the world is warming and humans are causing that warming. I had the pleasure of meeting Dr Schmidt at an ANU reception last Friday. When I went up to shake his hand, he had just been mobbed by a group of what he thought to be about 200 students. He said it was not something he ever thought would happen to him on a university campus.
I asked Professor Schmidt what he thought was most important to report back to the parliament as the member representing the Australian National University, and he made two points. First of all, he said his Nobel prize was a reminder of the fact that the Australian National University is not just another university; it is an institution that was created with the notion of furthering research boundaries. It is the nation's premier research institution. Professor Schmidt said it was only at the ANU that he felt he could have done this prize-winning work. Secondly, Professor Schmidt reminded me that it is the international outlook of Australian academia that allowed him to do the work that he did. It allowed him to collaborate with international teams in the United States and Europe. Professor Schmidt said that, while many researchers in the US are at the cutting edge, sometimes they can forget to look outside the boundaries of their own country. That is not a mistake that Australian researchers typically make.
In closing, I would like to also pay tribute to the recent Nobel laureates in economics, an area which I know a little more about than physics. The Nobel this year went for work on empirical macroeconomics and particularly the identification of low-frequency macroeconomic events. These questions are absolutely critical in considering the optimal role of fiscal policy. Thomas Sargent did his work on structural econometrics, emphasising rational expectations, which is the notion that economic decision makers do not make systematic mistakes in forecasting. It is an important framework, particularly for interpreting the inflation and unemployment experience of the 1970s and 1980s. Christopher Sims did his work around vector autoregression techniques aimed at identifying the causal impact of low-frequency events using time series data. I commend them both for their work in economics.
Winners of the Nobel prizes were announced in Sweden on 4 October 2011 and this year the prize in physics was shared by three astronomers who discovered that the expansion of the universe is speeding up. Professor Brian Schmidt from the Australian National University is one of the joint winners. His work is said to have changed the face of astronomy. The Montana America born Australian citizen will share the prize with his long-time friend and collaborator Professor Adam Reiss, an astrophysicist at John Hopkins University in Baltimore, Maryland, and the Space Telescope Science Institute. The first Australian to win a Nobel Prize in Physics since 1915, Professor Schmidt and his team discovered in 1998 that the expansion of space was accelerating. This holds out the prospect of a bleak cosmic future in which stars will eventually dim and bring about a new dark universe.
Professor Schmidt and his team were hoping to see how the universe would slow down over time because of gravity. But what they discovered was quite the opposite. The universe was not slowing down at all; in fact, it was speeding up. As a result of this work, he and his team reached a conclusion: the universe was doing the opposite of what science thought it would. To the ABC last week, Professor Schmidt said:
It certainly means that gravity as we know it is not operating in the universe the way we expect it … It would seem that what we've discovered is about 75% of the universe is the stuff we didn't know existed—which we now call dark energy.
Professor Schmidt sees the Nobel physics award as something positive for Australian science in general and hopes that his example will inspire others to give young people a chance in their chosen fields.
Professor Schmidt told the Australian that the work that he had done was made possible by the way that Australia does science. He said that he hoped that the award would show the opportunities that we have here in Australia to do great work. He said that the win is a celebration of the science that has been done here in Australia by astronomy and by physics as a whole.
Universities all over Australia are celebrating the recognition that science so rightfully deserves and the award for Professor Schmidt and his team will hopefully instil into students all over Australia the difference that they can make in a profession. His award certainly delighted both lecturers and students at the Charles Sturt University campus at Wagga Wagga. I know the groundbreaking work and effort that they put in on behalf of science and for Australia is well recognised and well appreciated.
Professor Schmidt, a popular lecturer at Canberra's Australian National University, is humbly continuing his teachings at the universities as students prepare for important end-of-year examinations. Students at his third-year astrophysics class at the ANU spoke of the professor's easy-going nature with some quite unaware of his involvement in the discovery, and this quote is from the Australian:
'You certainly don't expect your lecturer, who just appeared to be a normal lecturer, to win the Nobel Prize,' said 19-year-old Tom Juhola.
Pete Kuzma, 21, said, 'I had no idea that he actually did this work. To head into university and find out that he was the one who did this study, and that he's internationally renowned for it, was a very big surprise.' For Australia's 12th Nobel Prize and the sixth for the Australian National University, I offer my congratulations to Professor Schmidt and his team, to the university and also to science. Professor Schmidt said:
They say in politics that education and science don't win elections, but they are what make nations rise and fall. They are the engine behind Western civilisation …
When I first came to Australia 15 years ago, it was a well-off nation that was isolated by oceans from the rest of the world. Now we find ourselves a very wealthy nation in the middle of Asia, the place where the world's economy is booming.
I will continue to quote, because his words are extremely important and relevant today—certainly in today's politics:
We have to take this opportunity, which is really as good as Australia has ever had it, and ensure we get a lasting legacy for the next century.
Indeed we do.
The Australian article continues:
Speaking to the Australian exclusively ahead of the awards ceremony at Parliament House, he said that legacy would come only if 'we make our citizens the best educated in the world and from that, from strategic planning, use those people to progress science and technology.'
'Getting our wealth by digging it out of the ground is fine in the short term, but we need to add value and create things that we and the rest of the world want to use,' Professor Schmidt said.
'We have a great platform: we are in the right place geographically, we have the resources to do it and it's a matter of putting together a long-term plan of how to do it. It might take a very long time to sort out, but it needs to be done.'
On behalf of the Riverina, certainly on behalf of this parliament and the nation, I say again to Professor Schmidt: well done.
Sitting suspended from 12 : 21 to 16 : 01
I rise to speak on the statement made by the Treasurer yesterday in the House of Representatives on taxation. In doing so, I join with the shadow Treasurer, who responded in the House of Representatives to the Treasurer's statement yesterday. Of course, the Treasurer's statement followed last week's tax forum. It is very important that it be called a 'tax forum' because the Treasurer, Mr Swan, was very determined it not be called a 'tax summit'. The last time there was a tax summit was back in the 1980s. The road to this tax forum says so much about this government and so much about the Treasurer's grasp of economics and his true interest in tax reform, which is of course next to zero. When it comes to tax rises, this Treasurer's track record shows that is where his interest really lies.
This Treasurer has occupied that post since the election of Prime Minister Rudd back in November 2007. At that time he did not exhibit any interest in tax reform whatsoever. In fact, in the 2007 election the only tax policy the current Treasurer had was to copy the income tax cuts announced by the previous Treasurer, Peter Costello, and the previous Prime Minister, John Howard. We all remember that when those tax cuts were announced in the first week of the election campaign they were greeted with determined silence by the now Treasurer, who waited a week before saying he would copy them lock, stock and barrel except for some planned cuts to the top rate, which he said would be an aspiration for another day.
Then he got to his first budget, which of course followed the you-beaut 2020 Summit held in this place, where reams of butchers paper were sacrificed to a whole host of ideas for the new government to give it some sort of direction. One of the ideas out of that 2020 summit was the Henry tax review. That preceded over many, many months. When it was finally completed it was handed to the Treasurer, and he held it like it was some kind of dangerous device—for six months. It was going to be released 'as soon as practicable', he said at the end of 2009. But it took almost six months—in fact it was dropped about 10 days before the budget. I think it was the Sunday before the Sunday of the budget. Of course, it was released at that point when the Treasurer announced he liked one idea, which of course was the infamous mining tax. The road to this forum began after the election, at the insistence of the member for Lyne. There was going to be a tax summit by 30 June at the latest, and the tax summit was then shrunk to a tax forum. Many commentators wondered what the difference between a tax summit and a tax forum was, but luckily the Treasurer, Wayne Swan, was on hand to explain the difference. When asked by a journalist what the difference was, he said that a forum included about 150 people while a summit was a pretty tiny forum. The mind reels, but at least the forum, which occurred at the insistence of the member for Lyne, was delayed until last week and, of course, was shrunk in duration. Forty-eight hours is a generous interpretation. There were two days of talking and at the end of it another promise by the Treasurer of something he thought he would like to do in the future—
Another aspiration—
As you said, back in 2007, if he could. When it comes to tax reform, this government are interested only in tax rises. After they announced that they would agree to have their tax forum, of course, they announced their carbon tax. That was not allowed to be discussed, nor was the mining tax. The Australian public are a wake-up to this Treasurer and this government. Whenever they mention tax, they are always thinking of tax rises. The Australian public know it. The Treasurer's statement of bluff in the House yesterday will do nothing to dissuade them of that view, nor will the forum which he agreed to under sufferance to satisfy an Independent to give them government.
It is a pleasure to rise to speak in this tax reform discussion and it is also a pleasure to follow the desperately irrelevant member for Casey, another member who, like his colleagues, has opposed every reform ever put forward by a Labor government: superannuation, Medicare, the NBN, clean energy and now tax reform.
Over the past few years we have heard media commentators declare that the reform era has ended, that the Hawke, Keating and Button reforms of the 1980s and 1990s were the high point of reform in Australia. But we saw at the government's tax forum last week, which I attended, that the dialogue of reform is ongoing. It is alive and well. It is a conversation that this Labor government will continue to engage in proactively with all Australians. Yet those on the other side were not even there.
At the tax forum we heard from big and small business; we heard from community groups, the welfare sector and unions; we heard from tax experts, economists and members of state and federal parliaments, including the Premier of New South Wales; and of course we heard from our Prime Minister and Treasurer. At times, there were sharply opposing views expressed, but we found some genuinely common ground and achieved a strong level of consensus among organisations and individuals with contrasting positions. By bringing stakeholders together and hearing each of their at times divergent voices, the tax forum provided what a program director of the Grattan Institute and participant at the forum, Saul Eslake, described in the Age today as the ‘starting point’ for far-reaching reforms.
At the tax forum held last week the penny finally dropped. It dropped for all those members attending and it dropped for some in the media. And that penny was taken up by the Treasurer. The tax forum demonstrated how goodwill and constructive policy discussion can build consensus. Unlike those in the Liberal Party and the National Party, we believe in a way of doing government that is evidence based; that does not listen to the inflexible negativity of cynics and those in the opposition but focuses on those positive and reasoned voices in the Australian community; and that works to build consensus around ideas like tax simplification and national harmonisation. While the forum produced a number of strong reform outcomes, as the taxation review chairman, Ken Henry, observed, its key role lies in opening people’s minds to a forward-looking reform agenda in order to meet the current and future needs of our patchwork economy.
As part of the carbon pricing scheme, we have tripled the tax-free threshold, effective from 1 July 2012. And the Treasurer announced at the end of the tax forum that, as the budget allows over the coming years, we will gradually increase the threshold to $21,000 in order to remove the low income tax offset and further simplify the tax system so as to spare over one million low-income earners from the inconvenience and expense of lodging a tax return. Remember that 80 per cent of Australians go to a tax agent, even though there is not always the need to. Saving them that expense is an important thing to do. According to George Megalogenis, writing in the Weekend Australian, this ‘is the reform we have to have … placing economic efficiency above political expediency’. The Treasurer also announced the establishment of a business tax working group that will develop ideas about the tax treatment of losses and explore ways to fund any changes to business tax as well as look at longer term business tax reform ideas. The states, led by Queensland and New South Wales, will develop a plan for state tax reform to bring to COAG in order to address existing inefficient state taxes. That was a landmark, and I congratulate those representative state parliaments who generously offered to work with us.
We heard from the member for North Sydney today that tax reform meant smaller government. The subtext to that assertion, though, is that, like their Tea Party cousins in America, ideology rather than common sense governs the economic thinking of the Liberal Party. Tax reform is about modernising and simplifying the tax system in a changing economy, while ensuring that government has adequate financial resources to support essential public services and meet the future needs of the Australian people. I encourage the member for North Sydney to consider what was said by Ken Henry at the tax forum, particularly that the fairness of the taxation system must be understood within the context of the system as a whole and not be based on the fairness of each of its specific taxes.
Finally, I would like to leave you with this insight expressed by George Megalogenis when he said that with the passage of economy-wide tax reforms, such as the carbon tax, by this Labor government:
Abbott becomes not a conservative but a reverse-engineer. What hope for reform in, say, 2016 if a prime minister Abbott is still furiously trying to return Australia to 2006?
(Time expired)
I rise this afternoon to make a contribution following the statement to the House on the tax forum conducted here in Parliament House last week. I am very disappointed in that tax forum. I come from one of the rural areas in Australia that are mining, agricultural and resource rich and that also provide much of the wealth for this nation, yet we see so little of that in terms of taxation revenue returning to these regions. What was missing in the debate last week was any serious discussion on the impact of the current taxation system—whether it is Commonwealth, state or local government for that matter—on businesses and communities in rural and remote parts of Australia.
At the time of Federation, when all the states came together to form the Commonwealth of Australia, almost 70 per cent of the population lived in rural, regional and remote parts of Australia and the rest lived in our capital cities. Today that number has reversed. Unless we get serious about decentralising our economy, those numbers will continue to grow. Madam Deputy Speaker Vamvakinou, I am sure you and others who live in capital cities are also concerned about the growth of cities and the challenges faced by state governments and local authorities in dealing with the impact of congestion because of the continuing population drift to the capital cities. We have to ask ourselves: why is that? Is it because of the job opportunities, the services provided and the health opportunities in the cities?
Today in rural and regional Australia, as this mining resource 'boom'—I do not like using that word—continues, it is quite extraordinary what is happening in electorates like my electorate of Maranoa and my home town of Roma. The Surat Basin, the Cooper Basin, the Galilee Basin and the Eromanga Basin are resource rich areas that are seeing unprecedented growth in my electorate. We are seeing fly-in fly-out workers who do two weeks on and then two weeks off. We are also seeing very little of the wealth created in the region enabling the local businesses in those communities to grow. That is where I would like to see a focus. I know that the states get the large bulk of the royalties that come from the resources under the ground, whether it is the mineral wealth or whether it is the oil or gas wealth, but we are seeing that wealth, the royalties, largely being spent in our capital cities. So there is a transfer of the wealth generated in rural and regional areas to our capital cities through the royalties. What I would like to see—and this is our party's policy—is 25 per cent of the royalties going back into the regions where the wealth is created, so we can start to grow the economies of those rural, regional and remote parts of Australia. If we can do that it will be a step forward, but how that money is spent will be only one aspect of it. The other side of that coin is: how do we encourage businesses to locate in those regions, create jobs, grow an economy and, at the same time, use the royalty money to build education, health and other services that will be required?
I was thinking the other day that if the resources of Kalgoorlie, Broken Hill and Mount Isa were discovered today, those communities would be built on a fly in, fly out model. They would not be the significant communities that they are today. The workers went there, the mines were built there and they grew those economies. It is the fly-in fly-out operations that are hampering one aspect of growth in these resource rich areas. I was looking at Nebraska, in the United States of America, where they have enterprise zones. Through the state of Nebraska, special tax credits are given to qualifying businesses that increase employment and make investments in the area. Nebraska is a very interesting study, because the state has approximately 1.8 million people and, in 2010, 755,000 of those people lived in the rural areas. Something like 80 per cent lived in towns of 3,000 or less, and the balance lived in the capital cities of Nebraska.
We must have a serious debate about the principle of an enterprise zone. I am serious about it, and I think that if we are ever to decentralise this great nation of ours we must start now. (Time expired)
I am pleased to rise to contribute to this discussion on the statement on the tax forum and tax reform. The tax forum last week was an important opportunity for a community discussion on Australia's tax reform journey. It was a national conversation involving more than 200 representatives of community groups, businesses, super funds, investors, academics, professional economists, federal parliamentarians, state treasurers, unions—a whole range of different participants contributing really constructively to where we go as a nation.
There was a lot of discussion about how we can reform the tax system to ensure that it meets the needs of Australia into the future, because we are facing—as the previous member spoke about—a mining boom. But the boom is not being shared equally across this country. That is why the government has moved to look at the minerals resource rent tax to fairly share some of that boom. I will get to that in a minute. Unfortunately, we saw the opposition not wanting to act constructively in this conversation. Instead they wanted to get out and spread negativity and 'no' as usual. While they might be going out there and creating noise, we will get on with the job of actually reforming our tax system. Indeed, we have started that process. Over the past year and a half, we have announced 32 reforms that deliver on directions identified in the Henry tax review, and I would like to commend the Treasurer on his effort to look into this area and start reforming our tax system.
One of the biggest areas, as I mentioned before, is looking at how we can deliver the benefits of the mining boom across our economy, because not all businesses are benefiting from the mining boom. We have a huge pipeline of investment, a huge amount of excitement around this Asian century, but we need to make sure that all Australians benefit from this boom—unlike the previous government, who had $100 billion in excess of revenue from the mining boom mark I and squandered it. They absolutely squandered it. Unfortunately, it does fall to this government to ensure that there is long-term investment from this resources boom. That is why we have said that we will look at our non-renewable resources—resources that we can never get back—and we are going to gain revenue.
This tax will create $7.4 billion over the forward estimates. It will gain that revenue so that we can actually do some important things with it. We can boost superannuation. There is no better way to ensure that we are preparing families for the future than by boosting their retirement savings to ensure that they live a good quality of life in their retirement. This is incredibly important.
The other important thing we are going to do is to cut the company tax rate. Let us be clear: while the Labor government are going to cut the company tax rate, which will help businesses that may be finding it difficult to compete for labour and other resources in a mining boom to be competitive, what will the opposition do? They are going to increase the company tax rate by slapping a levy on businesses to fund their maternity leave scheme, with no thought to the impact of that cost being passed on to families. So rather than helping companies to be more competitive and to expand during this Asian century, they are going to ensure that businesses remain uncompetitive by adding a big levy for them. That is their first plan. We understand there is a patchwork economy, and that is why we want to help business to be competitive. We want to use the revenue from the mining boom to ensure that they continue to thrive.
There are a whole range of reforms, as I said, and we are starting on 32 reforms. The Treasurer made a number of commitments, looking at how we can continue to encourage participation in the workforce, but I would like to finish on this point: while we are being constructive, the Liberal Party are out there with no ideas except one, and that is the one the member for Mayo mooted: to put the GST on fresh food. That is their plan, without any discussion of any of these other reforms. They have one idea, and that is to put the GST on fresh food. That will impact on families in my electorate of Kingston, and I think that is a poor outcome for them. (Time expired)
The member for Kingston's contribution was much the same as the others: a lot of noise about no outcome and a lot of aspirational statements with no concrete foundation to them. You would imagine that the purpose of a tax summit would be to discuss and determine some sort of reform with some concrete measures for the future. But, lo and behold, as with most things this government does, it achieved nothing. The increase in the tax-free threshold had already been announced through the carbon tax—which has far greater effects on the economy than any compensation will ever achieve, and no compensation will be great enough for people who have lost their jobs.
This tax forum was just the latest in a long line of forums over the years. In total there have been eight since 1950. The latest prior to this one was the Henry review, of course, which had 130-odd recommendations of which the government succeeded in implementing two. They have announced another 30-odd reviews but, again, there are no outcomes and no practical direction in which way they want to go.
Since this government were elected in 2007, they have succeeded in introducing 19 new or increased taxes. Last time I studied any economic theory, the actual solution to growing your economy and building a stronger economy for the future was not more taxation but less taxation. A recent study by the Cato Institute in the United States bears that out: the higher you make the taxes, the less revenue you generate, because people, particularly at the wealthy end, try to find ways to minimise their tax, because they have the resources to do so. If, however, you lower taxes, your tax revenue actually increases, because there is less incentive to minimise your tax and there is more incentive to grow your business or grow your wealth. I suggest that perhaps this government start to expand the range of literature they read.
The coalition, by way of contrast, are committed to serious tax reform and we have long proven our commitment in doing so. Whilst there has been plenty of debate around the carbon tax and commentary on our introduction of the goods and services tax, the result of the introduction of that was that we reduced the income tax payable by 80 per cent of Australians to such an extent that they paid no more than 30c in the dollar. There are a number of stamp duties abolished, including the stamp duty on the transfer of shares. Given that we have a very active share market and our superannuation funds invest significant amounts in the share market, it helps reduce the cost of our superannuation retirement portfolios.
The coalition, despite the protestations of the government, has a plan for a more productive economy. At the heart of this plan will be the provision of competent, effective and stable government. The coalition will stop wasteful spending, will rescind punishing taxes and will encourage greater productivity and workforce participation. We have been very clear today that we will scrap the carbon tax because that will mean lower prices for electricity, gas and fuel.
In the spirit of debate, let us look at the carbon tax. This is where I have a real concern about the modelling that has been produced. There is the example of a cotton T-shirt and what energy goes into making that T-shirt. Energy is required to grow and harvest the cotton, transport it to the factory, and make, package and transport the chemicals used to bleach, dye or condition the cotton. Energy is used to run the machines on which the T-shirt is processed, it is used to create the packaging materials, it is used to ship the T-shirt to the store and it is used to keep the air-conditioning and lights on in the store. This does not include the energy we require to go to the store to purchase that T-shirt. Given the government's track record in projecting expenses in other things, I have serious concerns that those effects are properly modelled and that the compensation package is even going to get close to covering those costs. (Time expired)
I congratulate the member for Forde—not that I agreed with all of the suggestions he put forward but he did actually put some positive ideas forward in his speech. I have to say that listening to the opposition talking about the tax forum over the last few days and today I have not seen much positivity. I have seen quite considerable negativity, as we have come to expect from the opposition. It has highlighted for me what was so special about the tax forum. It was like two days of a patch of blue, two days of sucking in clean air and walking out at the end of it lighter than air because we had two days of some of the smartest people in the country in a room cooperating and talking positively not about themselves now but about what we need to do to make sure that Australia is a prosperous and secure nation in 10 years, 20 years, 30 years and 40 years.
All of us in this House know that we can get stuck in the media spin cycle and get stuck in very short-term issues in this place if we do not work very hard at looking for the long term. This was for me a wonderful opportunity to listen to people whose focus absolutely was on the long-term good of the nation. There were some wonderful examples of that. I should say that in my more cynical moments I think partly it was so positive because the opposition was not there and if they had come in they might have brought their negativity with them. But perhaps I should take some of the positivity from those two days and bring it into this place as well. In the spirit of positiveness and cooperation I will move on.
There were some announcements made at the end by the Treasurer that took some of those ideas raised at the forum and moved them forward. The business tax working group will develop ideas about the tax treatment of losses and ways to fund any changes from business tax and then look at the longer-term business tax reform ideas. The session for the states was particularly interesting and very productive. We had admissions from quite a few of the state representatives that there are taxes at state level that one would call bad. There was talk about harmonisation across states, there was talk about simplification and there was talk about extensive programs through COAG. Again, there was an incredibly interesting and positive discussion about the future, and a recognition that sometimes the simplest tax system for the user is not necessarily the system that the collector wants. But again, there was very open dialogue about that contradiction in the way we put our tax system together, and the need to address it in a very real way. There were even those almost utopian ideas of taking all the land based taxes—insurances, stamp duty, land tax, council rates and capital gains—and trying to find a way to make one harmonised simple system. That is utopia for the user—probably not achievable in my lifetime but certainly a great indicator that people are looking to the future and are prepared to talk absolutely about the way it should be in a perfect world. We should all do that much more often. Sometimes we cannot get there but sometimes we can get a lot closer.
There was also quite a bit of discussion about personal tax. The government's first priority in the personal tax arena is to build on the tripling of the tax-free threshold by increasing the threshold to $21,000 as the budget allows. The first part of that, the increase to $18,000, is part of the clean energy future package, which passed the House of Representatives today. So part of that is now on its way, and a very good thing it is too.
There was a range of other outcomes, from looking at small business complexity to superannuation during the drawdown phrase, not-for-profit concessions, improved tax system governance, and a new centre for excellence in research into the tax and transfer systems. It was really clear from the tone of the discussion through those two days that many people took with them the sense of commitment to the future out into their own constituency. I have no doubt that over the next few years we will see extraordinary contributions from that tax forum flowing through our tax system.
We have had a million-dollar gabfest on tax reform from a bunch of experts the week before we are introducing the biggest reform that Australia has had in taxation, the carbon tax. It is funny that that was off the agenda. I want to put it on the agenda again. We have passed it today but the people I want to talk to about reform are the electorate. The people in my electorate are saying a lot of interesting things about the carbon tax, this major tax reform. Lynne Kingston of Glenella says that she voted for the Prime Minister at the last election but she will not make that mistake again—because of this carbon tax. There is Alan Zamparutti of Dolphin Heads, who says that the tax has nothing to do with the environment and it should not have gone ahead. Marc Turner of Cannonvale says that while we should be taking reasonable steps to reduce emissions, this tax is going to be inappropriate in the current economic conditions of the world. These are emails that came into me this morning.
Robert Hadley of Mackay says that this does nothing for the environment; it is just a government revenue raising piece. Paula Cooper of Blacks Beach is also opposed to the carbon tax. I have Lisa Hildenbeutel of Glenella who says to the government, 'How dare you do this to the nation?' These are the people who missed out on a say in this major tax reform. They were not invited to any place to come and sit down and talk with the government about this. I have Rachael Halls of Andergrove who says that the carbon tax is going to make costs go higher and not solve anything. Steve Halten of Airlie Beach tells the government that we should be voting no on the carbon tax. Ross and Linda Csincsi of Idalia say that the carbon tax is just a money grab. I have a Chris Bowen of Blacks Beach who feels the carbon tax is more about money and less about the environment. Robert Anderson of Beaconsfield says that this tax is pointless. Dr Greg Canning of Annandale reminds the Prime Minister that she said there would be no carbon tax and tells her to show some integrity. There is a Donna Bloedow of Mackay who says that this carbon tax is just another money grabbing scheme. Yvonne Davis of North Mackay tells the government that they do not have a mandate to bring in the carbon tax. Carol Ward of Rural View is appalled that this tax has not been put to a vote by the people. Olwyn Doyle of Beaconsfield has never seen such a blatant money grab as this carbon tax. John Doyle of Beaconsfield says that he cannot support a carbon tax that drives up the cost of living. Helen Virgo of Glenella wants to know why a carbon tax is being implemented on lives. Grace Veldhuis of Blacks Beach says that this tax will do nothing for the environment. Jack and Diane Dobbs of Proserpine say that this carbon tax should be stopped for many reasons. These are people who have been left out of having their say on this major tax reform. Again, John Daymond, of Slade Point, calls the carbon tax a money grab. Linda Dempsey of North Mackay says that under this carbon tax things are going to get worse. Steven of Seaforth says that the carbon tax will just send our businesses offshore. Paul and Kellee Fogg, of Cannonvale, point out that the cost of living will increase under the carbon tax. Murray Brehaut of Annandale says that the carbon tax will kill off business investment and be a financial strain for all Australians. Bruce Hart of Annandale says no to the carbon tax and tells the government that this will add to the cost-of-living burden that people currently have.
John Beningfield of Wulguru calls the carbon tax a scam. Bill Tuckett, again of Wulguru, says he is opposed to the carbon tax. Delma Coleman of Wulguru says that this will do nothing for the environment. Graeme Lodge of Mackay says, 'Reform as big as this requires a mandate, not a minority government.' Brian Eade of Ayr says no to the carbon tax. Laureen Hearne of Ayr says that Australians do not want this 'wealth redistribution tax'. Matthew Reed of Midge Point wants to know how the government can guarantee that he will not lose his mining job and then his home because of this carbon tax.
Anne Bundesen of Proserpine also calls the tax a money grab. Carley Radel of Mackay says that she is waiting for the next election to axe the government if they do not axe the carbon tax . Peter Ahchay of Eimeo says, again, that it will do nothing for the environment. David Jarrott of Mackay, who is a self-funded retiree says, 'This carbon tax is a "fighting-windmills" exercise.' Trevor Mackenzie of Mackay says that when the government went to the polls the Prime Minister said she would not bring it in and now it has become law. He says that the government do not have a mandate. These are all people who were not heard by the government on the most major tax reform that we have had in this nation, the carbon tax.
It is with great pleasure that I stand to make my contribution to the statement on tax reform. I would like to congratulate the Prime Minister and the Treasurer for holding the tax forum here last week. It was really refreshing to see a government that is prepared to embrace tax reform and to examine the way that they are going to do things.
From my electorate I could see the excitement as people from business, industry, unions, employers, workers, and members of this parliament joined together to discuss tax reform. Since the start of 2010 the government has announced 32 reforms that deliver on direction identified in tax reviews. It is a great pleasure to see that the member for Oxley has joined us, because the member for Oxley has been very involved, over the period that he has been in parliament, in issues surrounding tax reform. Tax reform is one of the most important issues, I think, facing our society, because unless we reform our tax system—unless we look at doing things differently—there will be a very negative impact on employment and jobs. If the tax system does not keep up with the expectations and needs of our society it will affect our productivity and economy.
I listened to the previous speaker from the opposition. He spent his whole contribution in this debate not talking about the future or what exciting new things can be done to improve the way our economy functions but talking about the clean energy legislation. He referred to it as a carbon tax. He was reading out comments from people in his electorate. I think he missed a unique opportunity. I note that the member for Forde put forward some positive ideas and the member for Maranoa showed that he is a man who can think about the issues and the need to change. That was what the forum was about. It was about embracing the spirit of all the sectors of our community and saying, 'How can we do this better? What outcome could we come up with that is going to deliver a better tax system and a better economy for our country?'
As I mentioned earlier, 32 reforms have been delivered. The first wave was aimed fairly and squarely at responding to the emerging pressures of the patchwork economy and delivering on core directions in tax review. It is well known that we do have a patchwork economy. In the area I represent we have got a strong mining industry, which has seen the economy in the Hunter thrive. But there are other areas that are struggling, and the government wants to look at the whole economy, address the whole issue and address this patchwork economy.
One way of doing that is to get a better return for Australia's non-renewable resources through a profit based tax. Members of the opposition have opposed this. They have opposed any resource rent tax and they have said that they will repeal it if they are elected. I say to the members of the opposition that they need to think long and hard about this. This is mainly foreign companies operating in Australia, dragging out our resources. This is about them giving a fair return for those resources that they are taking out of our country. We want our resource industry to continue to thrive but we want those companies to contribute to our economy.
The other thing that was very, very refreshing that came out of that was the increase of tax-free threshold that was voted through parliament today—which those on the other side of this House opposed—and the commitment that was made at the tax forum to lift that tax-free threshold to $21,000. I congratulate the Prime Minister and the Treasurer for holding the tax forum and for engendering the discussion that took place. (Time expired)
Last week we witnessed the spectacle of over 200 delegates assembled here in Canberra at a cost of $1 million of taxpayers' money. I suppose that, since this government has already clocked up a combined deficit in just four years of $150 billion, what is another $1 million to throw away? The tax forum that we had last week was more fitting of a John Cleese comedy—the one where he stood up and said, 'Don't mention the war.' Just as absurdly, at this tax summit there was an order for no-one to mention the carbon tax. After two days of talk, what do we have to show for it? We have a working group. That is it, a working group—another forum, another working group, a lot of promises but absolutely nothing done.
Since we have had a tax forum, it is worth looking at how a tax system will have to work in the future. I was glad to hear the previous speaker talking about the future, because we need to consider how a tax system will work. One thing that we need to do as a nation and as a government is find the money to be able to afford a national disability insurance scheme. This is estimated to cost $6 billion a year.
Are you opposing it?
Absolutely not. We have heard from this government that it is going to take seven years.
Are you going to oppose it?
What I oppose is the idea that we will have to wait seven years for a national disability insurance scheme. The Second World War was won in fewer than seven years. Carers and kids with disabilities should not have to wait seven years for it. That is something that we need to look at.
Why didn't you do something when you were in government?
Order!
Ms Hall interjecting—
Order! The member for Shortland is defying the chair.
Sorry, Madam Deputy Speaker.
Firstly we will need to look at how we are going to clean up the mess of the $150 billion of combined Labor deficits that have been run up in just four years. The interest payments alone on these combined deficits that we are going to need to fund in the future are going to amount to $7.5 billion a year at least. And we have to come up with that $7.5 billion from tax receipts until we start paying back the principal. In fact, it is interesting that those interest payments that we have to make for this wasteful and reckless spending of the last four years are greater than the cost of a national disability insurance scheme. Of course, even if we can get that $7½ billion just to pay back the interest, we also have to look at the principal. We have heard about the great Labor surplus that is coming in 2012-13. Let us just assume for a minute that the planets actually align and we do get that surplus—a grand total of $3 billion. At that rate it is going to take us 50 years to undo the mess of just the last four years.
The other thing where we need to look at how we are going to fund it in the future is the compensation for the carbon tax. We have heard this government promise that the compensation would be permanent. I see some head-nodding over there.
What?
I can see some head-nodding. Compensation for the carbon tax will be permanent; I believe that is correct. What we have to understand is that the starting price of $23 a tonne goes up and up every year. Therefore, the compensation that we will need to find for this carbon tax also needs to go up and up every year. At $23 we have little more than a money-churning exercise. But, as the carbon price goes up and up and up, if it is to be an effective tax and if it is to change the behaviour that this government talks about then companies will avoid the tax and use other forms of electricity generation. So what will happen is that there will no money going into the pot for compensation but the permanent costs will be there. We have to work out how we are going to fund this shortfall. Then, once we get to the emissions trading scheme, we find that 50 per cent of the cost of buying permits will be sent offshore, so again there is not going to be the money in the pot to fund the compensation. These are massive black holes that we are going to have in our taxation system, caused by this carbon tax. That is why we need to have a closer look at our tax reform. (Time expired)
I thank the member for Shortland for her wonderful contribution; it is a very timely opportunity as well. Last week was a good week for democracy in this country, and I think having the tax forum was a really positive and good thing to do. Like many people I went there with a view that maybe this would be just another talkfest. That was probably a fair criticism pre the tax forum, but I have to say that after two days I walked away with a completely different view. My view now is not only that this was tax forum absolutely essential, was good for this country, was in the national interest and was an absolute bargain at just $1 million but also that it is something we should look at doing every year. I think we should do that, because there was something that came out of it that really was important. It is important to get all of our community leaders in the one place, in the one room—the government leaders, the state treasurers, the Commonwealth Treasurer, ACOSS, the heads of unions, the community sector—and get everybody together to bang a few heads together, to actually talk about the issues and to say: 'Hang on, if we are all agreed on certain parts, why can't we get through this? What are the barriers? What are the blockages for us actually getting through some of this stuff?' There are significant barriers. Tax reform is not about a switch that is on or off; it is about long-term reform and long-term processes. But if we are ever going to get to that table—if we are ever going to get to that point—then you have to bring people to the table. You have to do it where they are all in the same room at the same time, where they can argue points through and they can say on the public record: 'We're interested. The states want to reform. They want to get rid of land tax; they want to get rid of certain taxes, certain levies, certain fees, taxes on insurance and fees on insurance.' They cannot just do it on their own. This is the great opportunity that is being missed by the opposition: by getting everybody together, Labor and Liberal governments—and that is the beauty about this: you can find new paths and new ways through dialogue, through talk and through listening—if we have a common goal, we will find a way to achieve it. I think that for the bargain basement price of just one small million dollars—it is a lot of money in the scheme of people's lives, but in the scheme of the national government of the Commonwealth it is a very small fraction of our democracy—it is a really good thing that we did that.
Today is a good day to be talking about this because today we heard a lot of calls about democracy. What does democracy mean? Let me tell you what I think democracy is about. It is about accepting the decision of the people. The people always get it right. Australian governments, like them or not, have always been in some way good. We do not always agree. I cannot say I agreed with governments of the opposite persuasion, but I did respect the fact that they got elected. Regardless of how governments get elected, they are the elected government of this country. I respect that process. I believe in the Constitution and in what this place represents. To disrespect that when it does not suit your own agenda is a slap in the face to all Australians—and not just to us, not just to our government, but to the office of Prime Minister. The office of Prime Minister is not about an individual. As we have seen in recent times, the Prime Minister can change. So it is about respect for that office and what it means for all Australians. By diminishing the office of Prime Minister you diminish all future Prime Ministers in that office—and that I object to.
Democracy should be about respecting the office of government. You do not have to agree. You are allowed to argue your point. You are allowed to fight for what you believe in. You are allowed to do all of those things. But the shambles and the disrespect we saw in question time today from people who were bussed in and signed in by the Liberal Party in full knowledge of what these people were going to do shows great disrespect for the institution of democracy and the institution of parliament. This is the sort of stuff we all tut-tut about when we see on the television screen at six o'clock the uprisings in the Middle East and in other countries where they cannot sort out their own internal affairs through proper election processes. Well, in this country we can, and we ought to stick to that.
This tax forum is part of that democratic process. I am not going to gild the lily in terms of how it came about. It came about through an agreement with one of the Independents, Rob Oakeshott—and that is fine. So we got to that place and we had the tax forum, and I think good things are going to come out of it. I am quite happy about what took place. We had more than 200 key decision-makers in this country sitting together and genuinely listening to each other. I really felt there was some genuineness in that room about trying to tackle some of those big and difficult issues that the Howard government, in its 12 years, could never fix—and in another 12 years could still never fix. Unless you bring people together you are never going to get through those difficult issues. I congratulate the government and everyone who participated, because that is what democracy is all about.
I stand here today proud to be part of a government that can deliver. I acknowledge the great words of the member for Oxley, who not only put things succinctly but also touched on the importance of our democratic system and tax reform. This tax forum was not just one of those forums where people sit around a room and talk a lot and go away and nothing is done. This was one of those forums that can really see great change come about. We saw this in the chamber this morning with the passing of the Clean Energy package through the House. We have seen it in healthcare reform, we have seen it in delivering for our schools and we have seen it in the Gillard Labor government's commitment to tax reform. Since the start of 2010 the government has announced 32 reforms to Australia's tax system which will deliver for small business, industry, the environment, working families, seniors and future generations—as you can see, the list is long. These reforms include cuts to business tax to help the struggling firms, with a company tax cut and a $1 billion tax break for small business; boosting superannuation and making concessions fairer; as well as promoting participation by tripling the tax-free threshold from $6,000 to $18,200. This demonstrates that Labor delivers.
What we as a Labor government have done is promote inclusion. We have sought to hear from groups and individuals across the country about what they want to see in reforming our tax system. We did this by hosting a two-day tax forum which showed that constructive and positive policy can be achieved when everyone comes along with goodwill. Almost 200 businesses, unions, community representatives, tax experts, federal parliamentarians and state treasurers came to the forum to have a meaningful and productive conversation about the direction of our country's tax system.
Among our other achievements, a few that stand out in my mind are those proposed in the 2011 budget, including plans to increase from 15 to 30 the number of hours people on a disability support pension can work and still retain access to their pension; the introduction of an immediate write-off for the first $5,000 of the cost of a motor vehicle for small businesses; the establishment of the Australian Charities and Not-for-profits Commission; and better alignment between family tax benefit part A and youth allowance. What is more is that Labor recognises that not every family or every individual is the same, which is why we have sought reforms which cater for the different needs of different Australians. We have improved participation incentives by delivering personal income tax cuts of $47 billion in our first three budgets. We will free over one million low-income earners from needing to lodge a tax return. We will make tax time simpler by introducing an optional standard tax deduction for work related expenses, starting in 2012-13, starting at $500 and increasing to $1,000 in 2013-14. We are increasing the superannuation guarantee age limit from 70 years to 75 years, helping mature workers remain in the workforce.
We have increased the childcare rebate from 30 per cent to 50 per cent of out-of-pocket costs, as well as delivering a historic increase in pension rates. We have introduced a new work bonus to reward age pensioners who do part-time work. These are great Labor initiatives and reforms.
In five minutes I simply cannot cover the extensive list of reforms this Labor government have committed to in such a short period of time in government. We have made those commitments to ensure that we are governing for all Australians, that we are the party for all Australians, whether from regional, remote or metropolitan areas. Whether they are in the workforce or retired, we as a Labor government are committed to delivering the important tax reforms needed to take this country forward.
I am proud of what this government has committed to, but more importantly this government is committed to making the tough decisions now and into the future, whether it be on climate change—as we saw in this House this morning—whether it is introducing a minerals resource rent tax to help business to increase superannuation for people's retirements and investing in infrastructure in our communities, investing in education and health, assisting those most in need and strengthening our economy.
This Labor government is up to the job. We are committed to tax reform; we are committed to delivering for the people of Australia. We have proved that today, we have proved it in the reforms that we have delivered since coming into government in 2007, and we will continue with that commitment to the Australian people.
'Outcomes, outcomes, outcomes, outcomes'—that is how the member for Lyne opened his comments or should I say his ramble as part of his opening address to participants at the two-day tax forum last week. At least, he did not take 17 minutes to say it.
The summit was partly the member for Lyne's idea. It was part of his list of demands to support a Labor minority government following last year's federal election—and we all know how that government has panned out over the past sorry 14 months or longer. Goodness knows, if we have to put up with it for much longer, the taxpayers of this nation are going to be further cruelled, the family incomes will be further hard hit and many of the large businesses will become small businesses. Labor says it is a government for small business; that is because when they came into power in 2007 these small businesses were probably medium to large businesses.
I liked the comments of the economics editor of the Sydney Morning Herald, Ross Gittins, on 5 October about the tax forum. He said:
Sorry, but the tax forum reminds me of nothing so much as a bunch of kiddies lining up to sit on Santa's knee and whisper into his ear what they'd like for Christmas. Dream on, kids. The harsh truth is that neither the federal nor the state governments are in any position to simply cut this tax or that. They're all struggling to get their budgets back to surplus.
We hear the federal Treasurer so often say how he is going to get the budget back to surplus. I do not know who he is trying to kid; I think he is dreaming.
Mr Van Manen interjecting—All they got was hard boiled lollies.
Absolutely. Hard boiled lollies indeed. Mr Gittins went on to say:
So one of the ground rules Wayne Swan laid down was that all proposals for tax reform had to be 'revenue neutral' - if you cut one tax you have to increase another by the same amount. You'd like to pay less income tax? No probs - we'll just increase the rate of the GST to cover it. Or maybe we could increase the rate and remove the exemptions for food, education and health care. That would make the GST a far more robust revenue-raiser.
But the trouble with last week's tax summit or forum—call it what you like—is that the big ticket item, the carbon tax, which unfortunately passed through the lower house this morning, was not on the agenda.
The biggest taxation reform that this country has ever faced was not on the agenda of the tax forum and nor was it put to the people prior to the last election. It was not on the Prime Minister's agenda when she said, 'There will be no carbon tax under the government I lead.' Then, of course, we had that spectacle of the Prime Minister, the climate change minister, the Greens and the Independents lining up just a few months later saying that they were going to introduce a carbon tax. I say to them, as does the Australian public say to them: shame on you. One million lower income and part-time workers earning up to $18,200 a year will get to keep every dollar they earn without paying tax, while up to one million higher income earners on more than $80,000 a year will bear the brunt of the Prime Minister's price on carbon. Two days, 200 people and one million dollars, and the best this government's tax summit could do was to set up another committee and another review. This is in the year of decision and delivery. I mean, decision and delivery! What a joke. What a disgrace.
This government's idea of tax reform is to introduce—wait for it—new taxes. The member for Moreton knows this full well. To date, Labor has introduced and increased many taxes, including two big new taxes on mining and carbon. This government cannot name one tax that it has abolished—not one. It certainly cannot name a tax it does not like, because we all know, as the Treasurer said in his budget earlier this year, this is a typical Labor budget. Indeed it is a typical Labor budget. We all know how Labor likes to tax. The reason it likes to tax is that it loves to spend, and the reason it loves to spend is that most of the members on the Labor side of politics are ex-bureaucrats or ex-union hacks who have never had to run a small business. They have never run a small business, and they have never had the fear of not knowing where their next pay packet was going to come from. They have never had the fear of not knowing whether they were going to be able to put food on the table. All this government knows about is taxing. All they like to do is to rip the money away from farmers and families and good hardworking Australians. They do not back the people they espouse to back, the workers, but we on this side will. (Time expired)
It is always good to have you in the chair, Mr Deputy Speaker Murphy. I welcome this opportunity to address tax reform in this parliament and congratulate the Treasurer on convening a successful tax forum last week. It was great to see real policy debated, competing parties politely presenting competing ideas. See, Alan Jones, it can be done! You do not have to yell loudly. You can actually put your point of view forward politely.
All Australians know that we cannot bury our heads in the sand and pretend that our tax system is perfect. Neither can we pretend that there are no inefficiencies or inequalities in the system. I heard the member for North Sydney very quickly pooh-pooh the forum because he does not want to be part of the constructive conversation to better our economy. This is the same shadow Treasurer who refused to talk about economics after the budget and today oversees a $70 billion black hole in coalition policy. Meanwhile, Treasurer Swan convened a tax forum which showed just how positive discussions on tax reform can be when people come together with good will for the good of the nation.
It was not just politicians but also around 200 business, union, community representatives, tax experts and state Treasurers—Liberal and Labor—who came together. The forum provided a frank and open discussion on everything from business taxes, state taxes, personal taxes through to GST distribution and taxation governance. I particularly commend the contributions of my Queensland Treasurer, Andrew Fraser, and his Liberal counterpart from New South Wales, Mr Baird. These discussions and ideas will inform rational public debate as we continue to sensibly reform our taxation system.
Already the Treasurer, Mr Swan, has announced a business tax working group to review the tax treatment of losses and to look at longer term reform. Queensland and New South Wales state governments will come together to put political differences aside to develop a plan for long-overdue state tax reform. And the Labor government will also work to further increase the tax free threshold to $21,000—a boon for the hardworking lower paid people in our communities. The Gillard Labor government continues to deliver major reforms to our tax system because we know how important it is to modernise our economy. That is why the Treasurer commissioned the Henry tax review. In fact, over the last two years we have delivered 32 reforms in response to the sensible recommendations of the Henry tax review.
First the Rudd and now the Gillard government are following in the steps of the Hawke-Keating governments in driving reform. That is what the Labor Party does. There is no better case in point than the introduction of superannuation. Millions of Australians now rely on superannuation for their retirement. In many respects it is taken for granted today, but it was not introduced without a tough fight from the then coalition opposition. They lacked the courage to introduce tough reform then and they lack courage today. I hope for more ticker from the genial morning TV champion, the member for North Sydney, but I am starting to think that he might be all grin, no grunt.
I know it is pretty hard for the opposition to comprehend legislative reforms that are not about shoring up the short-term electoral cycle, but we must act in the best interests of our nation's future for the long term. Our reforms are about responding to the unique needs of our patchwork economy: reforms like getting a better return for Australians from the non-renewable resources that they own through a profits based tax; cutting business tax to help struggling firms with a company tax; and a billion-dollar tax break for small business. Big business and small business, all will get a cut—but they would actually get an increase under Mr Abbott's plan for maternity leave. It would be a 1.9 per cent increase. There are reforms like better preparing for an ageing population by investing in higher superannuation contributions, and promoting workforce participation by tripling—yes, tripling—the tax-free threshold from $6,000 to $18,200.
Of course, yesterday and today the parliament passed the historic Clean Energy Future package, surely a momentous day for the future of this nation, for our children and for our children's children. All those with vision recognise that. For the first time, the Australian economy will include a price on pollution. This major reform to our economy will facilitate a shift to a low-carbon future and also position Australians to embrace the clean energy jobs of tomorrow—a point made very deftly by the member for Wentworth, Malcolm Turnbull, in his speech overseas. He had to go that far away, to London, to be able to make the point that the Chinese are stealing a march on us already in some of these low-carbon future jobs. He wants Australians to be better positioned, and thankfully we have brought in the legislation today to make sure that that occurs.
I am pleased to rise to speak briefly on the important topic of tax reform. Let us give credit where credit is due. If there is one thing in which this government has a competitive advantage, if there is one thing in which this government has a superlative track record, if there is one thing in which this government has not been bested since Federation, it is in its capacity to convene forums, summits, reviews, inquiries and roundtables. The critical success factors are many. It is good to have a celebrity or two. If Kate or Hugh are available, that always adds to the magic. It is terrific to have some whiteboards, some butcher's paper, some focus groups, to really thrash through the ideas. But there is one critical success factor above all others when it comes to this government's unsurpassed expertise in summitology, and that is to ensure that you do nothing at the end of the exercise, because to do otherwise would be a most unfortunate misunderstanding of the purpose of the exercise.
I am sorry to say that in last week's tax summit—according to some; Tax Forum, according to others; tax non-negotiable, no liability, no responsibility accepted, informal exchange and interaction, according to others again—none of what was achieved has lived up to the promises. Sadly, we have seen once again the track record of getting people together and getting the media announcement but getting very little of substance to emerge. That is a matter for considerable regret because we clearly have a serious need to revisit the structure of our tax system here in Australia.
We had a tax summit which remarkably had many of the major issues ruled out from discussion immediately. The GST, the Treasurer said, was off the agenda. Carbon tax was off the agenda. The mining tax was off the agenda. And we had a very, very odd process in getting to the establishment of this exercise, starting with another summit, the 2020 Summit. Then we had the root-and-branch tax review, which the government did its best to ignore, and then the member for Lyne insisted that this grouping be convened. There are a range of serious issues that we could very usefully address when it comes to thinking about our tax system. We need to recognise that we are a relatively high taxing country in a relatively low taxing region. Many of the Asian countries with which we compete and which are part of the growth segment of the world have materially lower personal income tax rates than we do here in Australia. Many of those countries, for better or worse, do not have an expensive, full-service, Western world type social security system to fund as we do here in Australia. We need to recognise that capital is footloose and that one of the issues that is considered as capital and is allocated internationally is the tax system of various countries. If we want to be an attractive venue for international investment we need to make sure that our tax system is internationally competitive and is attractive to foreign investors.
Another reality of the tax system is that there is an inevitable and necessary nexus between how much you spend and how much you tax. Regrettably—though unsurprisingly, perhaps, under a Labor government—there was very little talk at the forum about containing spending and very little talk about getting the deficit down so that we can start to reduce the debt and we are not immediately spending the first $7 billion, $8 billion or $9 billion a year that is collected in tax in paying interest on debt. There was very little talk about those issues, and that is a matter for regret.
The other area that I want to talk about very briefly in the time left available to me is the superannuation system and some of the very perverse tax incentives which apply under that system. There are contribution limits that have been set by this government which make it now impossible to contribute more than $25,000 a year for those below the age of 50 and $50,000 for those above, and, in the latter case, you must also meet the second condition of having an existing balance of less than $500,000. There are extremely punitive tax rates if you inadvertently exceed those limits which can get up the high 90 per cent range—an extraordinary, inefficient, inequitable, ramshackle arrangement. So let us simplify the arrangements where people have made excess contributions and let us look at ways of making it easier for people to accumulate contributions, particularly where they have not used their full limit in one year. That would be a sensible thing to do.
It was my pleasure last week to participate in the Australian government's tax forum, a forum designed to continue the important conversation about how to build a better taxation system in Australia. This forum, of course, does not sit in isolation. This government commissioned a once in a generation taxation report in 2009. The Henry review reported back with a range of important recommendations which this government is pursuing. In my own submission to the tax forum, I argued that among the core principles for tax reform should be the following: taxes should be shifted from mobile tax bases to immobile tax bases, taxation of savings should be more neutral and sustainable, polluters should internalise the social cost of environmental damage, disincentives to labour force participation should be reduced, and the tax system should be as simple as possible.
The Gillard government is delivering on each of these priorities. We are cutting business investment taxes and introducing a mining tax. We are increasing the compulsory superannuation contribution rate. We are putting in place a carbon price with the historic vote in the House of Representatives today, and we are reforming the fringe benefits tax regime on cars to remove the incentive to drive excess kilometres. We are reducing disincentives to labour force participation by phasing out the dependent spouse tax offset and simplifying the tax system by tripling the tax-free threshold—taking one million people out of the tax filing system—and replacing the ineffective entrepreneurs tax offset with more straightforward measures, such as an improved instant asset write-off.
There was a serious and substantive discussion of tax reform at the forum—not including the sorts of comments that we heard from the member for Bradfield, who claimed that Australia is a heavily taxed nation. That is an odd contribution for two reasons. The first is that the tax take has fallen over recent years. The second is that, even when it was higher than it currently is under the former Howard-Costello government, the then Treasurer, Peter Costello, was reported as saying that Australia was a lightly taxed country, one of the most lightly taxed countries in the OECD. So it is clear that whether or not Australia is a heavily or lightly taxed country for those opposite depends more on which party is in power than actually looking at the hard statistics.
There was a range of issues canvassed at the forum. There was discussion over who bears the corporate income tax. Ken Henry persuasively argued, along with Greg Smith, another member of the Henry review panel, that ultimately the burden of the corporate income tax in a small open economy like Australia's falls on labour. There was a discussion of the treatment of losses and potentially a shift towards an allowance for corporate equity. A working group that will look into that issue has come out of the forum. There was discussion of federal-state tax reform and many of the inefficiencies caused, particularly in an economy in which we want to encourage workers to move to the most productive industries and regions, and the discouragement to mobility caused by state and territory stamp duty. There was discussion about the challenges in Australia in which people face volatile shocks caused by natural disasters or changes in circumstances and the fact that state and territory insurance taxes discourage people from taking up insurance.
There was also a discussion about the importance of simplifying the personal tax system, an issue I have written on as an ANU professor: arguing that the government should do everything it can to try and ensure that to the largest extent possible we take people out of the system. It should not be the case that three-quarters of Australians require professional help to file their return. The government's tripling of the tax-free threshold, moving a million people out of the tax-filing system, is critically important. I also commend the decision to fund an independent Tax Studies Institute and would encourage people to donate to the institute.
Finally, I would like to pay particular tribute to the academics who attended the tax forum. Many others who were representing interests were being paid for so doing. That was not the case for the academics and tax experts. I would like to pay particular tribute to Sue Richardson, Saul Eslake, Nicholas Gruen, Harry Clarke, Alan Duncan, John Freebairn, Deborah Cobb-Clark, Chris Evans, Peter Whiteford, Frank Stillwell, Dale Pinto, Ric Simes, Judy Yates, Flavio Menezes, Kerrie Sadiq, Richard Eccleston, Paul Gerrans, Robert Carling, Ross Garnaut, Ian Winter, Bruce Cohen, Graeme Cooper, Richard Highfield, Ann O'Connell, Miranda Stewart and Neil Warren for their participation in the forum. (Time expired)
It is interesting to hear from my colleague across the chamber on another litany of self-congratulation on tax reform. Today especially, to congratulate themselves on what is going to be an economy-wide crushing tax that they have passed, based on an untruth told to the Australian people before the last election, is a real disgrace and they should hang their heads in shame.
Wayne Swan, the Treasurer, has talked very big on tax reform. At the 2020 summit, which was the first big summit that was meant to be the big brains and ideas trust of the Rudd government, now the Gillard government, the big idea out of that was to have the Henry tax review. We had the Henry tax review. It was a review that cost the Australian people, as I understand it, around $10 million. It took two years to complete and delivered 138 recommendations. It was a review that was meant to be a full root and branch review that the Treasurer was then going to implement. Did he implement it? No. There have been about 2½ recommendations of those 138 that have in fact been implemented. The rest have been left to sit there ignored on the sidelines. So it is hardly root and branch tax review.
This is something that the government is very sensitive about because the Henry tax review received over 1,500 submissions. It did take a significant period of time to complete and when it was completed the Treasurer sat on it; for 1½ years it did not see the light of day. So this is hardly a reforming government when it comes to tax. Far from it. This government believes that tax reform is synonymous with bringing in new taxes. The record of this government is very weak.
I would just like to touch on the tax grabs of this government. We have had 19 new tax grabs since 2007, including: the alcopops tax, raising $3.1 billion over four years for the government; a new tax on Australians working overseas, expected to raise for the government $675 million in revenue; cutting what Australians can put into superannuation tax-free, which is going to get the government $2.8 billion over four years; and restrictions on business losses that is going to generate for the government a revenue of about $700 million over the forward estimates. And it goes on and on: changes to the employee share scheme, a hike on cigarette taxes of about 25 per cent, the imposition of a mining tax, ethanol taxation increases, LPG excise increases, tightening restrictions on medical expenses before you can claim them on tax, an increase on the luxury car tax, a new flood levy, a tax increase on company cars, the abolition of the entrepreneurs tax offset, the phasing out of the dependent spouse tax offset, disallowing deductions against government assistance payments, removing miners' eligibility for the low-income tax offset on unearned income, deferral of tax breaks for green buildings and, of course—the big one—the great big new carbon tax, passed in the House of Representatives today.
The government's record is very poor. We know that their carbon tax is going to be a $9 billion a year tax for the first three years and is only going to go up and up, costing Australian households around $860 per year. But we know the ambition for this is that it will not be $23 a tonne, because the Greens let the cat out of the bag when Senator Hanson-Young said she would like to see it go as high as $100 a tonne or even higher.
Our record is very different. We believe that tax reform has to be genuine. We believe that it needs to be lower, simpler and fairer, and our record under Treasurer Peter Costello demonstrates that. When the GST was introduced, it removed inefficient state taxes. It reduced personal income tax rates as well, such that 80 per cent of Australians are now on a marginal tax rate of 30c in the dollar. This is in fact a real tax achievement. This is real tax reform. Treasurer Wayne Swan could learn a thing or two from former Treasurer Peter Costello. We urge him in fact to look at what a real reformer does. We urge this government to reform taxes.
I am pleased to endorse the statement by the Treasurer this morning on tax reform and add my own comments in support. In doing so, I would like to focus on one critical area of tax reform and the economy—that is, superannuation reform. On Monday, with Minister Mark Butler, I hosted a forum 'A conversation about aged care' in Blacktown. The attendance there was phenomenal—the number of people who are nearing retirement age or beyond retirement age who are very concerned about not only their social wellbeing but also their retirement incomes. The importance of this cannot be underestimated. As the Treasurer mentioned in his remarks, one of the central thrusts of the tax review included saving for some of the gains and preparing for an increasingly ageing population by boosting superannuation and making concessions fairer. One of the announcements by the Treasurer following the tax forum was to examine potential reform for superannuation specifically during the drawdown phase.
As a government, we recognise the importance of longevity risk in the context of our retirement income strategy. We are committed to working with the industry leaders on this critical issue, as we have been to date, and identifying ways we can improve people's incomes after retirement and during the drawdown phase. We recognise that today a majority of Australians who reach retirement access their superannuation as a lump sum. Together with the superannuation industry, we need to encourage and remind people that there are benefits associated with the option of taking an income stream rather than a lump sum on retirement.
Without wanting to single out any superannuation providers in particular, on this occasion I want to mention Challenger as a great example of a life insurance company that recognises the importance of an attractive income stream for their products, such as annuities, available to Australians on retirement. I note that Jeremy Cooper, the architect of the Cooper review into superannuation and many of the proposals that feature in the government's stronger super reforms that were recently announced, is now driving some of these very important initiatives.
Ongoing reform of superannuation is not an option for Australia; it is essential. I note the transcript of session 4 of the tax forum, dealing with transfer payments and comments by Everald Compton, chair of the panel 'The economic potential of senior Australians', about how impressed he was that the Treasurer wanted a focus on the year 2050 and how Australia should be organised for the impact of our ageing population on our economy. These are the interesting statistics. Mr Compton noted that by this time—by 2050—the largest age segment of the population will be the age group between 85 years and 100 years and it will also be the fastest-developing segment of the population. So, in this context of the need to implement superannuation reform, I also note today the release of the latest Melbourne Mercer global pension index, which warns that, while Australia's retirement income system has climbed from fourth to second in the global comparison of pension income systems—that is recognising globally how well Australia performs in its retirement incomes policy compared to the rest of the world—we still require significant reform to help Australians secure sufficient retirement savings and to financially support this ageing population.
The report's author, Dr David Knox, commented that the best pension systems adopt what he refers to as a 'multipillar approach' to spread long-term risks between government, employers and individuals. His comments on this point are very enlightening:
Australia is very much in reach of becoming the first in the world to receive an A-Grade score—
in the index—
if we can address the issue of adequacy by raising the level of compulsory savings via superannuation and continue reforms to reduce costs …
For this reason, the government's policy is to lift the rate of superannuation from nine per cent to 12 per cent. That is why it is so important. In parliament this is an area where views are really at polar extremes. Everyone—the superannuation industry, workers, retirees, participants in the tax forum, independent modelling such as I just mentioned—accept and endorse the need to raise the rate of superannuation contributions from nine to 12 per cent. Everyone, that is, except the opposition. What hypocrisy. Those opposite enjoy parliamentary entitlements that far exceed the contribution currently enjoyed by most Australians. It is disgraceful how many of those opposite who were elected to government prior to 2004 enjoy defined benefits and notional contributions well in excess of the proposed 12 per cent, but they are so miserly, so politically motivated that they will not give workers the entitlements that they should be getting, an increase from nine to 12 per cent. They should hang their heads in shame. (Time expired)
Taxation remains one of the most controversial areas that any government or indeed any parliament must deal with. It is a fundamental responsibility of government to create and maintain a fair taxation system which meets the basic principles of equity, efficiency and simplicity. Taxation is essential if a government is to discharge its responsibilities. It is essential if we are to maintain defence of the nation, to ensure our citizens are protected from harm and to ensure that the social services that modern Australians have come to expect from their governments are continued. I would share with many others in this place the sentiment attributed to the American jurist Oliver Wendell Holmes Jr: 'Taxation is the price we pay for civilisation.' This is literally true. Without the protections and structures afforded by government, civilised society would not be possible.
I should make a disclosure: while I have no difficulty in paying my fair share as a citizen, as a former small business operator I did not always enjoy the process of complying with my taxation obligations. It was at times very complex and very difficult to comply. It really did add an extra burden to a busy business and cause many headaches—and thank you to my tax agent.
Designing a simple tax system that meets the needs of government to provide essential public services while at the same time making it the least burdensome it can be on the taxpayer, in terms of paperwork and red tape, is not easy. For this reason tax reform is an ongoing process. By 'tax reform' I refer not only to the major reforms, such as the mineral resources rent tax, but to the ongoing patient work of improving the taxation system to make it clearer and easier for taxpayers to comply. But beyond these aims we must always be conscious of the effects of taxation systems on important social objectives and, for example, there is a constant focus on making sure that the taxation system does not create disincentives, to moving on from the welfare system, by minimising the unintended high effective rates of taxation that can occur.
It was a little over a year ago that I ran my own small business, so I know very well the stresses that come with owning and running a small business, a microbusiness. I know the burdens that tax and red tape can impose on the operations of smaller microbusinesses. In my case, I was a sole trader so I had no-one else to help me in dealing with my taxes and with my obligations, apart from my wonderful tax agent, so I always welcome measures that make it easier for small business and microbusiness owners to comply with their taxation obligations and to be able to do it themselves, rather than having to be constantly on the phone to a taxation agent.
The Labor government has made many such reforms and improvements to benefit microbusiness and small business owners and all taxpayers. We have made changes to the PAYG system to reduce the PAYG instalments for the 2011-12 income year for taxpayers, who pay quarterly instalments on the basis of the GDP adjusted notional tax method. This frees up some $700 million in cash flow from Australia's 2.7 million small businesses. We have also increased the instant write-off for assets bought by a small business to $6,500 and have introduced an immediate $5,000 deduction for motor vehicles. While these are not big-ticket items like the mineral resources rent tax, which captured the headlines and public debate, they make a big difference in the everyday lives of Australians and in the everyday lives of microbusinesses and small businesses.
Another reform passed by the House this morning and opposed by those opposite will take the tax-free threshold from $6,000 to $18,200 in 2012. This will increase to $19,400 in 2015. I am greatly encouraged by this because I think it will greatly encourage women to re-enter the workforce, particularly those who are at home at the moment with babies or small children. It gives them more encouragement to participate in part-time work. This reform that we passed today in the House of Representatives, again resisted by those opposite, will mean that some 100,000 Australians will no longer have to lodge a tax return. That is an amazing achievement. This reform also means that all Australians earning up to $80,000 a year will receive a tax cut. However, this is not the end of the discussion, and I do not think there can ever be an end to a discussion on tax reform. It may never be possible to build the perfect tax system, a system that fairly shares the burden of a civilised society, but I believe this government has the courage to—(Time expired)
I was really pleased to be able to attend last week's tax forum and to see firsthand this government working to continue to engage with the community on the important issues before us. As we have seen today, we have a proud record of taking on reforms, and it was refreshing to engage with such a broad cross-section of different organisations to talk about some of the big issues of the future. I want to briefly address a couple of the issues which did feature prominently in the sessions that I attended. We saw quite a large discussion about the impact of mature age participation in our workforce. We saw contributions from Everald Compton, who was celebrating his 80th birthday on the day and I pass on my birthday wishes as well, from Ian Yates, the CEO of the Council on the Ageing Australia, and from Judith Sloan, the Chair of National Seniors Australia. We know that these important organisations have been working to address these challenges, which are challenges this government takes very seriously. We are well aware that this year the first of the baby-boomer generation becomes eligible for the age pension, so the time for talking about the future ageing of our population and workforce is over. It is happening right now and our government is responding right now to these challenges. It is perhaps a little-known fact that, whilst the unemployment rate for mature age people is low at 3.5 per cent, when older Australians do happen to lose their job they are at much greater risk than young people of experiencing long or very long-term unemployment. A loss of dignity and income through forced early retirement is not something this government is prepared to accept. We are serious about removing the barriers that prevent older Australians who want to work from participating in the workforce, including the barriers presented by negative employer and community attitudes. We saw just recently the government's appointment of an Age Discrimination Commissioner in order to address some of these issues.
We know that the willingness of Australians to work for longer is a strength, and it is an opportunity that we need to harness. We need to ensure that these mature age workers are properly supported. This is central to the challenge of the ageing population that we all face. Our economy is strong, unemployment is relatively low and the demand for skilled workers is unprecedented. So last week's forum did provide a positive discussion in relation to mature age workers and how we can increase the number of mature age people taking advantage of the growing opportunities in the job market.
We know that these challenges and barriers remain—employer attitudes, individual expectations—but the fact is that mature age workers bring opportunities and benefits to the workplace, including a strong sense of loyalty and of reliability, and insight built up over many years in the workforce. Our government is working hard to break down those barriers and we have announced our Delivering for Seniors package, which includes $100 million in new commitments for mature age people. It includes $30 million to provide up to $4,400 in grants to employers to help mature age workers aged 50 and over who have trade skills but no formal qualifications to undertake skills assessment and gap training. This builds on our Experience Plus program, which benefits mature age workers, job seekers and employers by allowing up to $4,950 for employers to train their mature age workers to supervise or mentor apprentices or trainees and to provide practical help to support and retrain mature age workers whose jobs are at risk due to a health condition, an injury or a disability. It helps to support and retrain mature age workers who are in priority employment areas and in physically demanding roles or who have been made redundant, and it also provides a free telephone based career advice and resume appraisal service for all Australians aged 45 or over.
I am pleased to report that the take-up of the Experience Plus programs continues to grow, with over 4,700 people now participating in programs since it commenced and some of the programs booked out up to two weeks in advance. The government will continue to work with the Consultative Forum on Mature Age Participation to work with the stakeholders who made their views clear at the tax forum last week and to ensure that we continue to work hard to place jobs as a priority of this government. That includes making sure that no-one gets left behind and that we look after the interests of mature age workers and mature age job seekers, who have so much to contribute.
I welcome the opportunity to contribute to this debate because what we saw in the last fortnight, in almost complete contrast to a lot of the public debate that has gone on over the last nine months, was the Australian government, the capital and many of those who comment on it focusing on the core issues at the centre of Commonwealth government—that is, economic management and the importance of the system of taxation to economic management, and I for one welcomed the opportunity to be involved in those discussions.
The tax forum was able to have a mature debate around some of the long-term challenges that we face in our tax system. Our system of tax is not only the means by which we raise revenue for the important government services and programs that Australians elect Australian governments to deliver but also an important way of regulating behaviour. We have seen that in the area of smoking and energy use, but we also see that in this government's determination to ensure that our tax system creates incentives to work and incentives to generate wealth through business. I am very pleased to be part of a government which has had tax reform at the heart of its agenda. Since the start of 2010, the government has announced over 32 reforms that deliver on directions that have been identified in the Henry review of taxation, including ensuring that we as a nation get a better return on our non-renewable resources through the minerals resource rent tax; providing cuts in business taxation to help struggling firms with a company tax and a $1 billion tax break for small businesses; preparing for the challenges of an ageing population, principally by boosting superannuation but also by putting in place record increases to our pension system; and, finally, by promoting participation through increasing the tax-free threshold, initially from $6,000 to $18,200—although at the conclusion of the tax summit the Treasurer indicated a clear intention from this government to further increase the tax-free threshold to $21,000.
That issue alone is one that will have an enormous benefit for the workers within my electorate because, on my analysis, there are over 49,000 people who have an annual income of less than $21,000, and the increase in the tax-free threshold from $6½ thousand to $18½ thousand and then further to $21,000 quite simply means more money in their pockets, so it is an incredibly important reform for us and one that we surely welcome. It adds to the three rounds of personal income tax cuts worth over $47 billion that we have already been able to deliver in our first three budgets. Quite simply, this means that people have more money in their pockets to assist them to put their kids through school, put food on the table, pay the rent or the mortgage and deal with cost-of-living pressures.
If there is one threat to all of this, it is the threat presented by those opposite in their plan to recklessly roll back the Clean Energy Future legislation, which has included within it a record increase in the low-income tax threshold. As I said earlier, there are over 49,000 people in my electorate who will avail themselves of this, and what those opposite are proposing is a direct hit to their livelihoods and it should be rejected with great vigour. I welcome the opportunity to have made a brief contribution to this debate.
I would like to thank all of the speakers who have commented on the tax forum thus far. Last week, the Gillard government convened a forum of almost 200 people here in our Parliament House in the nation's capital to discuss the next steps in tax reform. It proved to be a sophisticated, level-headed, constructive dialogue. It showed we can have a gentler form of debate about our economic future when the belligerent political cynicism and negativity is out of the way. It confirmed that we should be optimistic about our future, even while being realistic about some of the considerable challenges which lie ahead.
We drew together representatives from across our nation and we heard views articulated from the perspectives of the boardroom and the factory floor, small business and the not-for-profit sector, academia and the kitchen table. No topic was off limits for attendees and the conversation covered a broad range of ideas. We did not all agree with each other—it would have been pointless and sterile if we had—but I have to report that we did find areas of common ground across longstanding political and ideological divides. We will progress a number of these issues coming out of the forum as part of the second wave of tax reform.
Tax reform has been a central part of the Labor government's economic agenda since we were elected in 2007. After those long years of conservative neglect, we have a plan and it is being implemented. Certainly Australians had seen largesse, bankrolled by the windfall gains of repeated revenue upgrades from mining boom mark I during the Howard years, but Australians had not seen anything approaching real tax reform, I suppose, since the GST for all those long years until we were elected. It was Labor who commissioned Australia's Future Tax System Review, chaired by Ken Henry, to reinvigorate the tax reform debate, to give us a good economic story and theory of direction and purpose. Having received the tax review, we set about a broad and ambitious agenda of tax reform. Of course, one of the key issues is our response to the pressures of a multispeed economy. We have adopted several of the thrusts of the tax review. One is that we get a better return for Australia's non-renewable resources through a profits based tax. Another is cutting business tax to help every incorporated enterprise in the country with a lower rate of corporate tax, and a billion-dollar tax break for our hardworking small businesses. Thirdly, we have saved some of the gains to prepare for an ageing population by boosting superannuation and making the concessions fairer. Fourthly, in very recent times we have been promoting participation by tripling the tax-free threshold from $6,000 to $18,200, and the Treasurer has said that we will look at increasing this further in the years ahead. Fifthly, of course, we have implemented significant tax cuts, which see the person earning $50,000 today paying $1,750 less tax than they were paying when the Howard government was in. Indeed, even with the flood levy, which is very important, we are seeing people on $80,000 who are paying $1,400 less tax than they would have been paying back in 2007.
We have implemented a tally of 32 of the Henry review reforms already. We are doing this at the same time as keeping tax, as a share of the GDP, well below those high levels that we inherited. This year tax is expected to be 21.8c in every dollar of our GDP, well below the 23½c that we inherited from the other side.
In conclusion, at the forum we were focused on the future. We recognised that parts of our economy are under significant pressure and that responding to the forces of an economy in transition has to be our priority. There were different ideas on how to respond. There were different views about what should be the form of tax changes, but there was consensus, such as targeting measures improving the tax treatment of losses, and consensus about the best way to develop these ideas through a collaborative working group.
At the end of the forum, the Treasurer announced a business tax working group chaired by Chris Jordan. We will look at the losses of business and we will fund changes from within the business tax system. We will look at equity deductions and compare them to alternatives like changing the rate. We have a plan for the states to work together. We have discussed reform for the not-for-profit concessions, the rules governing superannuation annuities and a new centre of research excellence, and we will be establishing our tax system advisory board. This forum showed that when we gather people of goodwill, even if they have differing ideas, we can accomplish far more, and we encourage the opposition to join the reform locomotive. (Time expired)
Main Committee adjourned at 17:48