I seek leave to move a motion to refer bills to the Federation Chamber for further consideration.
Leave not granted.
by leave—I move:
That the order of the day be referred to the Federation Chamber for debate.
Question agreed to.
I again seek leave to move a motion to refer bills to the Federation Chamber for further consideration as per the agreement between the opposition and the government.
Leave granted.
I thank the House and move:
That the following bills be referred to the Federation Chamber for further consideration:
Judges and Governors-General Legislation Amendment (Family Law) 2012;
Corporations Amendment (Future of Financial Advice) 2011; and
Corporations Amendment (Further Future of Financial Advice Measures) 2011.
Since, I think, February of 1994 the Main Committee, now the Federation Chamber, has operated with great success. It has taken considerable pressure off the main chamber in this place and more often than not it has been used as a forum for bipartisan discussion and debate. For all of that period, part of its success could be, and has been, attributed to agreements about the way in which we refer bills to the Federation Chamber for further consideration. In my 16 years here—and I am sure back to 1994—never has the opposition of the day denied the Chief Government Whip the opportunity to refer bills to the Federation Chamber or what was then the Main Committee.
This is just another example of the wrecking ball being taken to this place by those who sit opposite. Their view, sadly, is if they cannot run the country, no-one can. They will do anything and everything to frustrate the processes of government in this country. I say to them: this morning was another very severe miscalculation on their part as was their decision to deny the member for Dobell leave during the week.
My advice to them is to get back into the game, become responsible and send a very clear signal to the Australian community that they are here for the right reasons. They are here to be a responsible opposition and, while it is their entitlement and their obligation to challenge government legislation and government policy, they are also here to make this place work and, if you like, shape the right outcomes for the benefit of the Australian people. What occurred this morning is another very unfortunate precedent and, in my view—and I am sure in the view of the Australian community more generally—was a disgrace.
Question agreed to.
I move:
That this bill be now read a second time.
Introduction
I am pleased to present:
They represent the third tranche of legislation that implements the government's reforms to Australia's antidumping system announced in June last year.
These bills are introduced into the House together.
They contain reforms designed to provide better access to the antidumping system for Australian industry, and to ensure any applicable remedies are available as quickly as possible.
Substantive m easures
This third tranche of legislation includes four substantive reforms to the antidumping regime.
1. All facts available provision
First, this bill clarifies the CEO of customs and border protection and the minister's power to take 'all facts available' into account when:
This reform ensures that our antidumping system better reflects the World Trade Organisation Agreement on Subsidies and Countervailing Measures.
2. Expanding CEO/Minister powers—Continuation Inquiries
Second, this bill removes the need for a separate review of antidumping measures and continuation inquiries to be run in close proximity to each other.
This is achieved by enhancing the powers that the CEO and the minister have to conduct a continuation inquiry to allow for similar results to those currently available in a review of measures.
Through this amendment, customs and border protection will be able to recalculate the level of the duties of an antidumping measure during a continuation inquiry.
This reform will streamline the process, meaning quicker outcomes for all interested parties.
3. Removing Limitations—profit and normal value
Third, this bill implements the recommendation of the International Trade Remedies Forum—to remove the current limitation to the inclusion of profit when calculating the 'normal value' of a good in its country of origin, in certain circumstances.
This amendment improves the effectiveness of the 'particular market situation' provisions in the Customs Act—by providing greater flexibility for Customs to more accurately determine the 'normal value' of goods.
These first three reforms are delivered through this bill.
4. Additional forms of interim dumping duty
The fourth reform is delivered by the Customs Tariff (Anti-Dumping) Amendments Bill (No. 1) 2012 which amends the Customs Tariff (Anti-Dumping) Act 1975.
This allows for different forms of interim duty to be applied from those currently used.
The types of interim dumping duty which could be used will include an ad valorem duty, a fixed amount of duty, a combination duty, or a floor price mechanism.
The methods for working out these new forms of interim dumping duty will be outlined in regulations to be made in support of this amendment.
Release of the two working group reports
Today I am also releasing two reports from the International Trade Remedies Forum (the ITRF) that make important recommendations to improve the antidumping system.
The International Trade Remedies Forum is made up of 21 members representing manufacturers, producers and importers, as well as industry associations, trade unions and relevant government agencies:
The first report examines Australia's 'particular market situation' provisions. It was prepared by the market situation working group made up of representatives from:
The report makes 16 recommendations. The government will implement all of them.
One of the recommendations (3.4) is to remove the legislative limitations to determining profit when constructing the 'normal value' of a good.
This reform is made in this bill.
Other recommendations include:
The government will implement these changes administratively—through changes to relevant guidelines, manuals and other arrangements.
The second report was prepared by the close processed agricultural working group of the ITRF, made up of representatives from:
It made six recommendations—and the government will implement all of them.
These include:
Not all of the views that are expressed in these reports are endorsed by the government. The government's purpose in reforming Australia's antidumping system is to improve access to the antidumping system for businesses and ensure that the antidumping investigations can be resolved more quickly.
These reforms also continue to ensure that Australia's antidumping system complies with our international trade obligations.
Together, the bills in this tranche of reforms and the 22 recommendations from these reports will make a number of important improvements to our antidumping system.
Foreshadowing t ranche f our r eforms
The fourth and final tranche of legislation to implement the antidumping reforms announced last year is planned to be introduced in the next parliamentary sittings.
The fourth tranche will contain reforms in three broad areas:
It will further amend the subsidies provisions of the Customs Act to ensure they better reflect the World Trade Organisation Agreement on Subsidies and Countervailing Measures.
These changes will increase the clarity of these provisions by removing long-term interpretive issues that stakeholders have identified with these provisions.
Second, it will establish an anticircumvention framework in Australia.
The framework will prevent parties involved in importing goods into Australia which are subject to antidumping measures illegitimately circumventing Australia's antidumping system to avoid duties.
Anticircumvention schemes have already been implemented overseas in the United States, the European Union, New Zealand, Brazil and, most recently, in India.
The development of an overarching framework to address circumvention practices will send a strong warning to businesses which intentionally seek to avoid measures imposed through our antidumping system.
Third, it will strengthen the provisions that deal with noncooperation.
I want to ensure Australia's antidumping system is effective in dealing with parties that do not cooperate with antidumping investigations. The next tranche of legislation will include further amendments to support the minister's power to impose tougher dumping margins for parties that refuse to provide necessary information within a reasonable period.
Conclusion
These reforms directly address the concerns of business, workers and unions.
They will implement the reforms announced last year—and provide for a clearer and fairer system.
I commend these bills to the House.
Debate adjourned
I move:
That this bill be now read a second time.
As I have just outlined, this bill allows for different forms of interim duty to be applied from those currently used.
The methods for working out these new forms of interim dumping duty will be outlined in regulations to be made in support of this amendment.
Together with the other reforms, this represents the third tranche of legislation implementing the government's reforms to Australia's antidumping system.
I commend this bill to the House.
Debate adjourned.
I move:
That this bill be now read a second time.
The Customs Tariff Amendment (Schedule 4) Bill 2012 contains amendments to the Customs Tariff Act 1995 that will repeal and replace schedule 4 of that act.
Schedule 4 delivers a wide range of tariff concessions, which have the effect of reducing or removing the normal rate of customs duty that would otherwise apply. These concessions lower costs for businesses and individuals importing goods.
However, the current schedule 4 is complex and difficult for industry and importers to use. During 2010, the government announced a Better Regulation Ministerial Partnership to examine and simplify the tariff concession regime. Under this partnership, the relevant government departments—including Customs and Border Protection; Finance and Deregulation; and the then Department of Innovation, Industry, Science and Research—conducted a review of schedule 4.
The review included consultation with relevant government agencies, a public discussion paper and consultation with key industry bodies. The consultation process showed that stakeholders, especially business, support a more user-friendly tariff concession regime.
Significant recommendations of the review included removing items that are redundant or have no clear policy intent, consolidating items that have similar coverage and restructuring the schedule to place similar items together.
The schedule 4 bill that I have just tabled gives effect to those recommendations.
In addition, the revised schedule 4 formally incorporates the extension, to 31 December 2014, of the SPARTECA—TCF Scheme that relates to textile, clothing and footwear concessions for prescribed Forum Island countries. This extension was contained in Customs Tariff Proposal (No. 1) 2012, tabled in parliament on 16 February 2012.
The bill also contains consequential amendments to the Goods and Services Tax Act and related legislation. When enacted, the schedule 4 bill will result in a renumbering of the items in schedule 4. As the GST and related acts refer to existing items in schedule 4, the schedule 4 bill contains amendments to those acts to update those references.
When enacted, the schedule 4 bill will reduce the existing tariff concession schedule to around half the current number of items and improve its clarity and usability. However, the schedule 4 bill will preserve the scope of the various concessions and their concessional duty rates.
Debate adjourned.
I move:
That this bill be now read a second time.
This bill amends various taxation laws to implement a range of improvements.
Schedule 1 amends the Income Tax Assessment Act 1997 to implement the 2011-12 budget measure to disallow deductions against government assistance payments.
The schedule responds to the High Court decision in the Commissioner of Taxation v Anstis where it was held that expenses incurred in satisfying an activity test for taxable government assistance income are deductible.
The consequence of the High Court decision is that taxpayers with the same level of income have different tax liabilities depending on whether or not they receive taxable government assistance income that is eligible for a tax offset.
Leaving the tax law unchanged will create inequality in the tax system. Amending the tax law to overturn the High Court decision will increase equity by ensuring that taxpayers with the same level of income pay the same tax. This measure will also provide certainty as to the scope of eligible deductions.
From 1 July 2011, taxpayers who receive taxable government assistance income that is eligible for a tax offset will no longer be able to claim a deduction for expenses they incur in satisfying an activity test to qualify for assistance income. Government assistance income in scope of the amendment includes Abstudy, Austudy, Newstart allowance and youth allowance. This recognises that taxable government assistance payments are effectively tax free.
The government considers that the most targeted and timely assistance is provided through the transfer system, not the tax system.
This is why the government has introduced several key measures aimed at supporting students, including start-up scholarships for new university students, relocation scholarships for those studying away from home and reducing the age of independence for youth allowance to 22.
These measures provide more timely assistance to students when they need it most.
Schedule 2 removes the ability of complying superannuation entities to treat certain assets (primarily shares, units in a trust and land) as trading stock, which is consistent with the general industry practice of treating these assets on capital account.
These changes promote certainty in the superannuation industry by removing the present ambiguity concerning the appropriate tax treatment of gains and losses made from the sale of shares owned by a complying superannuation entity.
Schedule 3 exempts from income tax the ex-gratia payments to New Zealand Special Category Visa holders who were affected by the recent floods in New South Wales and Queensland. These ex-gratia payments are made for disasters where the Australian Government Disaster Recovery Payment has been activated, and are of an equivalent amount.
By exempting these disaster relief payments from income tax, the maximum amount of assistance is provided to affected individuals. A tax exemption for these payments is consistent with the exemption provided for equivalent payments made in response to other disasters, such as the widespread floods of the 2010-11 summer, and Cyclone Yasi.
Schedule 4 amends the Income Tax Assessment Act 1936 to implement the 2011-12 Mid-Year Economic and Fiscal Outlook measure to phase out the dependent spouse tax offset.
The dependent spouse tax offset originated around three-quarters of a century ago—a time when the single-income family was the norm and the welfare system was in its infancy. This was a time when a breadwinner was expected to 'maintain' a spouse even without children, and there were limited employment opportunities for women.
In today's modern economy, where unemployment is around five per cent, increasing employment participation and expanding the workforce is vital for the strength of our economy and the living standards of our community.
That is why the government is phasing out the tax offset for taxpayers with a dependent spouse born on or after 1 July 1952 to reduce the disincentive for dependent spouses from undertaking paid employment.
From 1 July 2012, taxpayers with a dependent spouse born on or after 1 July 1952 will no longer be eligible for the dependent spouse tax offset.
Dependent spouses with children are not affected by this measure, nor are taxpayers whose dependent spouse is a carer, an invalid or permanently unable to work. Taxpayers eligible for the zone, overseas forces or overseas civilian tax offsets are also not affected by this measure.
Schedule 4 will introduce minor amendments to ensure that taxpayers who maintain a dependent spouse are only able to claim one offset in respect of that spouse in determining their zone, overseas forces or overseas civilian tax offset entitlement. Schedule 5 includes several miscellaneous amendments to the taxation laws.
Amendments such as these are periodically made to correct minor technical or drafting defects in the taxation laws and to address unintended outcomes. Advancing these amendments gives effect to the government's longstanding commitment to uphold the integrity of the taxation system.
Full details of the measures in this bill are contained in the explanatory memorandum.
Debate adjourned.
I move:
That this bill be now read a second time.
The Agriculture, Fisheries and Forestry Legislation Amendment Bill (No. 1) 2012 reflects the government's commitment to more effective regulation by cutting red tape and creating clearer Commonwealth laws.
The bill will amend eight portfolio acts and repeal one act entirely.
It contains no significant policy changes, but the amendments will provide consistency, amend outdated or unclear provisions and reduce the likelihood of reader confusion. The bill responds to industry requests for reform of existing regulation. It will streamline existing administrative arrangements and improve response times.
The bill will amend requirements of the Label Integrity Program under the wine legislation. The program aims to ensure truthfulness of label claims on vintage, variety or geographical indication of wine. It relies on accurate record keeping so that wines and label claims can be audited effectively.
Retailers have demonstrated the need for differentiation of record-keeping requirements between producers and retailers, and the proposed amendments are supported by retailers, wholesalers and the wine industry.
The proposed amendments will reduce the record-keeping requirements of people who supply or receive wine goods that are packaged for sale to a consumer. Suppliers and retailers who do not change or affect any label claims about wine goods will be required to provide the Wine Australia and Brandy Corporation auditors with details of the manufacturer or supplier of the wine goods, rather than all the details to substantiate vintage, variety or geographical indication label claims. This maintains the integrity of the program, while meeting the practical requirements of suppliers and retailers.
For the purposes of defining 'vintage' on a wine label, the bill will amend the Wine Australia Corporation Act 1980 to assist producers by ensuring grapes grown in the same growing season can be labelled with the same vintage year. For example, producers will now be able to label wine made from grapes harvested from 1 September 2012 through to 31 August 2013 as a 2013 wine, not a 2014 wine.
The bill will amend the Fisheries Management Act 1991 to ensure that provisions are consistent and wording is clear. The amendments will correct a grammatical error and remove redundant wording in provisions relating to directions to close a fishery or a part of a fishery. They will also make compliance with a direction to close a fishery a condition on all types of statutory fishing concessions. The amendments will better reflect the intention of the provisions, clarify requirements and simplify the administration of the act.
The amendments to the Fisheries Administration Act 1991 will correct a drafting error made in an earlier amending act so that agreed co-management arrangements can be implemented. The drafting error applied a delegation of powers provision to section 93 rather than to section 92. Once the provision is applied correctly to section 92, co-management arrangements—in which stakeholders will assist the Australian Fisheries Management Authority to perform powers and functions for the sustainable management of fisheries—can be implemented.
The Primary Industries Levies and Charges Collection Act 1991 is being amended to allow the Secretary of the Department of Agriculture Fisheries and Forestry to consider all requests for the remission of late levy payment penalties. At present, only the portfolio minister can remit penalties exceeding $5,000. The proposed amendment mirrors efficient penalty remission arrangements for the Dairy Adjustment Levy. The process will be more streamlined and response times will be improved for levy payers. Levy payers will still be able to approach the minister to review a decision made by the secretary.
To assist with clearer Commonwealth legislation, the bill will make the following technical amendments.
It will renumber an alphabetical list in the Primary Industries and Energy Research and Development Act 1989 to remove any doubt about whether the list is incorrect or incomplete.
It will replace the United States spelling of 'authorized' with the Australian spelling of 'authorised' in the Export Control Act 1982 and the Quarantine Act 1908. The Australian spelling is the preferred style for Commonwealth legislation and these changes improve readability by ensuring consistent spelling throughout the two acts.
It will remove redundant text in the Fisheries Management Act 1991, including several cross-references to provisions that have been repealed. These amendments will promote consistency in the act and reduce the likelihood of reader confusion. In line with the legislative drafting protocols, it will remove specific references to departments and secretaries in the Farm Household Support Act 1992. This will mean any references to department or secretary are related to the correct portfolio responsible for administering the act and will reduce the need for future amendments arising from changes to the Administrative Arrangements Orders.
The bill will also repeal an entire act—the States Grants (War Service Land Settlement) Act 1952. The War Service Land Settlement Scheme commenced in 1945 to assist returned soldiers into farming after World War II. Authority for the scheme was established under Commonwealth legislation. The Australian Government has negotiated the sale and transfer of the scheme to each of the states, and now the Commonwealth legislation is redundant and suitable for repeal. The scheme served its purpose but has generally outgrown its original intent. Repeal of this act marks the end of an era and closes a chapter in Australia's history.
Debate adjourned.
I move:
That this bill be now read a second time.
On 1 July 2008, the Australian government reformed wheat export marketing arrangements with the abolition of the single desk and the establishment of the Wheat Export Accreditation Scheme, known as the scheme, administered by Wheat Exports Australia (WEA). Previously, Australian farmers could not choose who would export their wheat.
The abolition of the single desk has led to improved productivity and created new global export markets for Australian growers. This has led to improved job opportunities in rural and regional centres. There are now 26 accredited exporters, with 19 of these being active in the last marketing year.
As promised by the government when the reforms were introduced, an independent review of the arrangements was undertaken by the Productivity Commission in 2010. The commission found that the scheme had served industry and the nation well, but that the industry was now mature enough to move to a deregulated model.
The government agrees in principle with the commission's recommendations. However, after carefully considering the views put forward by industry, it has decided to introduce the next set of changes through a staged approach which will provide a more efficient transition to full market deregulation in the longer term.
The first stage was the introduction of a 'lighter touch' accreditation scheme to be applied until 30 September 2012. This change has reduced the level of 'red tape' for exporters while still meeting grower concerns about 'fit and proper issues' and maintaining the link with the access test for port operators that many exporters believe is critical. It is, however, not a 'softer touch' as the WEA still has the capacity to respond to any issues that may relate to the accreditation of an exporter.
Passage of the Wheat Export Marketing Amendment Bill 2012 will implement the next stages of the government's response and complete the transition to a fully deregulated bulk wheat export market.
The bill will abolish the scheme and the wheat export charge (WEC) on 30 September 2012. The WEA will continue in operation until 31 December 2012 to complete outstanding tasks such as preparation of its final annual report and also the Report for Growers.
Abolishing the scheme will ensure that the benefits to industry provided by accreditation during the transition to deregulation are not undermined in the longer term by the direct and indirect costs of continuing with a scheme that has served its purpose. These costs include the WEC and the administrative and regulatory burden of accreditation, as well as the negative impact of unnecessary regulation on efficiency and competition in the wheat industry over time.
The recent strong export performance has led to the WEA special account holding more funds than are required to fund the operation of the WEA. As this represents an overpayment of industry funds, the government will look to amend the regulations and set the WEC rate at zero as soon as possible.
However, the account will still hold surplus funds when the WEA is abolished. The Department of Agriculture, Fisheries and Forestry will be repaid $500,000 owing from a previous funds transfer that was not used. The remainder will be reinvested in the wheat industry after consultation with relevant stakeholders.
The government agrees with the commission's recommendation to retain the access test until 30 September 2014. The link between the access test and the ability to export bulk wheat will remain during this period. This action responds to concerns among some growers and traders about possible anticompetitive behaviour with respect to grain port terminal access.
Retaining the access test until 2014 will give the industry sufficient time, and appropriate incentives, to adjust to the new trading environment. It will also allow for some new features of the competitive environment to be institutionalised while minimising the chances of damaging future investments or undermining reasonable returns to existing asset holders. The bill will facilitate the removal of the access test requirements for grain port terminal operators on 30 September 2014. The market will then move to full deregulation, with all aspects of the industry subject to general competition law administered by the Australian Competition and Consumer Commission. This will bring the wheat export market into line with other agricultural commodity markets and promote further competition in the wheat export industry, leading to increased productivity and profitability.
To provide certainty for growers and bulk wheat exporters about security of access to grain port terminal services in the longer term, the access test will only be abolished if the industry has a non-prescribed voluntary code of conduct covering grain export terminal operations in place. The code must include continuous disclosure rules and be consistent with ACCC guidelines for voluntary codes of conduct. The Minister for Agriculture, Fisheries and Forestry will determine if the code of conduct is of a standard that will allow the abolition of the access test.
The implementation of an industry code of conduct will give growers certainty that, irrespective of which exporter they sell to, their product will gain access to grain port terminal services. It will reinforce Australia's international reputation as a reliable wheat supplier and give overseas customers certainty that all Australian exporters will be able to meet supply commitments. It will also help ensure that these facilities have the necessary throughput to attract the level of return on investment required to keep them viable.
The government is aware of some concerns from parts of the wheat industry that a lack of access to market information on stocks and flows of grains is impacting on competitiveness. The government is willing to help industry find a solution, potentially through the voluntary code of conduct. It is already working with Grain Trade Australia and the wider industry to develop the code and strongly encourages all industry sectors to engage in this process.
If an acceptable code is not approved, the requirement for bulk wheat exporters that are grain port terminal service providers to pass the access test in order to be able to export will continue.
The bill reflects the government's commitment to promoting competition within the wheat export industry. Australian producers are the most innovative and efficient in the world. Passage of the bill will further develop a wheat-marketing system that rewards this and provides benefits to all industry sectors. I commend the bill.
Debate adjourned.
On behalf of the Special Minister of State, 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: Construction of projects two and three of the Christmas Island new housing program.
The Christmas Island New Housing Program was approved by the government in May 2010 to address a critical housing shortage on Christmas Island, with a total budget of $26.6 million comprising $25.1 million administered capital and $1.5 million for departmental and administered expenses. The housing program was approved as part of a $97.3 million package of measures to address the pressures being placed on the critical infrastructure on Christmas Island due to increased immigration activities on the island. The package was approved in two parts: $50 million in December 2009 and a further $47.3 million in May 2010.
The cost of rental accommodation on Christmas Island has increased considerably. The rental cost increase is estimated to be more than 50 per cent. I know this from my observations of the island for over 25 years. These rental increases have created enormous pressure. They are directly impacting on ordinary workers on minimum wages, with rental costs becoming beyond the reach of locals on low to medium incomes, and this is a matter of some concern.
The Christmas Island New Housing Program has as its objective to reduce the number of houses leased on the private rental market to accommodate Commonwealth employees. The impact of this program on the private rental market is expected to be an increase in the supply of rental housing and lower rental costs, making accommodation more affordable to the local community.
Project One of this program was notified to the Public Works Committee as a medium work on the construction of 16 dwellings and associated infrastructure, commenced in September 2011, with a contract value of $11.4 million. The department has also purchased two established houses on Christmas Island at a cost of $0.950 million. Other costs including project management and professional fees total $1.65 million.
Project Two, estimated at $7.9 million, is to design and construct 14 dwellings at Drumsite village on the remaining portion of the site adjacent to the Project One site. Project Three, at an estimated $1.7 million, comprises the design and construction of a number of large family homes containing four to five bedrooms in an established part of the Silver City residential area. An amount of $1.5 million has been set aside to cover contingencies and cost escalation.
In its report, the Public Works Committee recommended that these works proceed. Subject to parliamentary approval, construction will commence in May 2012 and is programmed for completion by June 2013. On behalf of the government, I thank the committee for its support and I commend the motion to the House.
Before I sit down, I think it is important that I make a couple of observations about this. As I say, I have been visiting this island since 1987. Its economy has waxed and waned depending on particular circumstances. The backbone of the economy has been, up to date, a phosphate-mining operation, which employs around 200 people. But, with the development of a detention facility on Christmas Island, the economy changed substantially. Whilst before its establishment accommodation was easily available and at a reasonable rental cost, and even purchase prices were affordable, with the impact of a large population moving onto the island to work at the facility and associated organisations which were indirectly and directly related to it, accommodation became at a premium, and of course the cost of building on Christmas Island is substantially different from the cost of building on the east coast of Australia, given its location and the difficulty of accessing particular goods and services. This expediency motion is very important so that we can provide opportunities for people on Christmas Island to access the private rental market because at the moment they have been squeezed out by the need to deploy Commonwealth employees and contractors to Christmas Island to service the immigration detention facility. This has meant that locals have been unable to get affordable accommodation. It is something that we are obviously keeping our eyes on, but it is very important that we support this particular motion and I commend it to the House.
Question agreed to.
On behalf of the Standing Committee on Infrastructure and Communications, I present the committee’s advisory report on the Telecommunications Amendment (Enhancing Community Consultation) Bill 2011, together with the minutes of proceedings, and I move:
That the House take note of the report.
Debate adjourned.
In accordance with standing order 39(f) the report was made a parliamentary paper.
by leave—I move:
That the order of the day be referred to the Federation Chamber for debate.
Question agreed to.
I appreciate the opportunity to continue my remarks from last night, which were interrupted by the adjournment debate. The comments that I was making last night were related to the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and to the general concept of the integrity of the electoral roll. As I said last night, I personally experienced a problem with the integrity of the electoral roll in the seat of Cowan and leading up to the 2010 federal election.
My experience related to a house on Wanneroo Road, a major axial route within Cowan. The address was 64 Wanneroo Road, Marangaroo. This house had come to the attention of my office because a number of locals had complained, about a year out from the election, that it had been occupied by squatters and had been pretty much trashed and was completely unliveable. That had been confirmed to me by a couple of different people—people who were reliable sources.
So it came as quite a surprise to have found during a subsequent check of the electoral roll about a month later, as we moved closer to the election, that two names were suddenly enrolled on the electoral roll at that house. The two names were quite familiar to me because they were, in fact, the main supporters of my Labor opponent at the last election. I was again informed that the standard of the house had not improved. Because it was on the route from my office to my home, I drove past the house every day. Whilst I did see a large amount of electoral advertising put up on the walls—apparently contrary to the City of Wanneroo's by-laws, but let us not let that get in the way of matters of integrity—and that there was occasionally a car parked during the day outside the house, there were never any lights on at night. There was never any activity. It seemed to be the same decrepit house that it had always been, or at least that it had been in the months since it was pretty much destroyed. However—surprise, surprise—there were those two names on the electoral roll and they were known to me. I knew exactly who they were.
That is an interesting case when we look at matters to do with the integrity of the roll and I do know that the government has been lecturing and quite sanctimonious on these matters. My personal experience in 2010 was that a couple of dodgy enrolments had taken place and, with the exception of what were obviously campaign meetings in the month before the election, there was never a light on in that house at night. Yet for six months or so there were people on the electoral roll for that house. I am quite sure they were not on my side; my opponent got a couple of extra votes out of that. I decided I was not going to do anything about it before the election, but after the election I approached the AEC and said, 'Well, there's clearly no-one living there, can you investigate that?' Their officers seemed to agree with me that there was no-one there, but it took another six months or so before they changed their enrolment back to where they actually did live. I found it to be quite an interesting experience, and I guess the government should take heed that there are some problems out there and that there are some other problems with the electoral roll that could be fixed up.
I also said last night that there were two things I wanted to mention with regard to matters in Cowan and the integrity of the electoral roll. Back in 2007, when I was first elected, on the night of the election after the polls had closed I was approached by my booth captain for Blackmore Primary School, which was one of the booths in Girrawheen. I was told by the booth captain that he believed that there was one person who had voted three times. They were never in the same shirt, but a very familiar person seemed to show up on two extra occasions after their first vote. They were never carrying my how-to-vote card, not that that should matter, of course. So I asked the booth captain whether he had reported it to the AEC manager. Apparently he had, but I do not know what happened after that. Without doubt there is electoral fraud going on in this country and there are people doing the wrong thing.
As I said last night, the government are very keen on taking these sorts of positions on election funding with bills exactly like this. But it always seems to be the case that whatever they propose absolutely favours their own interests. With electoral funding, unions are of course never part of those sorts of reforms, but any other form of election funding or support is always part of reforms proposed by the government.
If the government genuinely wanted real electoral reform, they would ask for photo ID from people turning up at polling booths. I think that would be quite a step forward. It does seem strange that, for just about anything you do in this country—whether it is turning up for accommodation or turning up to take possession of a package left for you at Australia Post—you are always required to show photo ID, yet for one of the greatest responsibilities you have as a citizen you do not need to identify yourself. All you need to do is assert your identity. All you need to do is say, 'I am such and such,' and they will find that name and just tick it off. If there were a real interest in electoral reform, making sure everyone is exactly who they are meant to be would be the right thing to do—particularly requiring provisional voters to show photographic ID. I think that would be a reasonable step forward.
I stand with the coalition in opposing this legislation. There are better ways to have electoral reform in this country. We will see how this vote goes, but I stand with my coalition colleagues in opposing these ridiculous bills.
I speak in support of the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012. Our side of parliament is about enfranchising people, not ensuring they remain disenfranchised—as many people have been up until now. So many people turn up to vote on election day, find out they are not on the roll and scratch their heads and wonder why. They may now get a bit of an insight into what has gone on.
These two bills amend the Commonwealth Electoral Act 1918 to allow the Electoral Commissioner to update the address details of an elector on the electoral roll and automatically enrol new electors based on reliable third party information. These bills are based on recommendations of the inquiry by the Joint Standing Committee on Electoral Matters into the 2010 federal election. That committee tabled a report entitled The 2010 federal election report on the conduct of the election and related matters. In the report, the committee said:
When considering electoral reforms, our priority must be: enfranchisement, not disenfranchisement.
That is a sentiment I wholeheartedly agree with. The report continued:
The Committee remains concerned about the long-term effects of the decline in enrolment participation rates, and notes that the decline has continued despite ongoing efforts on the part of the Australian Electoral Commission, the AEC, to arrest it using measures currently permitted under the Commonwealth Electoral Act.
Over recent years, the AEC has invested substantial funds in encouraging people to enrol and keep their details up to date. Indeed, in the lead-up to the 2007 election, the AEC spent $36 million on a project to increase enrolments, including $14.9 million on pre-election advertising.
In its submission to the committee's inquiry, the AEC said:
If we have to spend $36 million every election year then that is a significant amount of money over successive elections. But, perhaps more importantly, it does not lead to a permanent or long-lasting improvement in the electoral roll. These gains are quickly dissipated months after the close of rolls as people start to move again and the same challenges
There is an ever-growing number of people in Australia who should be on the electoral roll but are not. The Electoral Commissioner told the Joint Standing Committee on Electoral Matters that an estimated 1.2 million eligible electors were not on the electoral roll in mid-2009. By the end of December 2009, that number had risen to approximately 1.39 million. By 30 June 2010, that number had grown to 1.59 million people—people who should be electors but are not.
If you were to average that number across the seats represented here in the House, you would come up with a figure of about 10,000 people per electorate who are not voting in elections—for either side. They have no say. It is not participative democracy if there is a large group in the electorate not having a say. In its submission to the committee's investigation of the 2010 election, the AEC addressed the question of the best way, in their view, to deal with this decline in participation. They said:
Our view is that we now need to go further with our recommendation, suggesting direct update of the electoral roll based on third party information
I wholeheartedly agree with that statement. These bills will introduce automatic address updating based on third-party data from sources such as state driver-licensing bodies.
When people move house, one of the last things on their minds is changing their enrolment address. There are good reasons for that. It is not something that comes around every month or every quarter as do power bills. It is not something that you necessarily think about outside of an election period. This happens with other services as well. Some of the things we all use which are only paid annually or which are only renewed every three or five years, such as a licence perhaps—that sort of updating can simply slip people's minds. They eventually catch up, but in the meantime, especially when it comes to enfranchisement—the right to vote—it can actually impact quite severely and take that right away.
In addition to the challenges of encouraging people to update their address, the AEC actually takes people off the roll without their consent. Information from reliable third-party sources is currently used by the AEC to monitor the accuracy of the roll and to remove people from the roll. Current examples of data used in datamatching are Australia Post redirection advices, Centrelink change of address advices and some state motor transport data on new licences. What that means is that the very data that these bills propose to use to put people on the roll or keep them updated on the roll is currently used to take people off the roll. To those who say there is a lack of integrity in the process, I would say you cannot have it both ways—if there is integrity in the data that is used at the moment to take people off the roll, the integrity in the data should equally be good enough to maintain people on the roll.
The AEC posts out a single monthly mailout to addresses identified by this external data as being addresses of current electors who appear to have moved address without updating their enrolment with the AEC. Last financial year the AEC mailed out over four million letters reminding electors to update their enrolment details. The AEC has advised that response rates were generally between 15 and 20 per cent for the monthly mailouts during periods when there are no major electoral events—when, as I said, the vast majority of the population do not have their minds on what happens in a place like this. Each year approximately two per cent of all electors are removed from the electoral roll by this process. The AEC advised the joint standing committee that the votes of over 200,000 people who had cast pre-poll, absent or provisional votes at the 2010 election were rejected due to those individuals being incorrectly enrolled or not enrolled at all. The Electoral Commission has suggested that 'they are clearly potentially part of the group that have fallen off the roll because, at some stage, they did not respond to an AEC letter' and were removed under this process.
Some of the decline in participation in Australia's elections can also be traced back to a number of people not enrolling for the first time when they turn 18. This is a very longstanding problem, and something that I have direct experience of. I missed out on voting in the 1983 election, having turned 18 only shortly before the election was called. At the first opportunity I had to enrol I went to what I thought was the local AEC office on a Friday afternoon, the last day before enrolments closed. They said to me, 'Sorry, you have turned up at the wrong division—you need to go up the road to the next office'. I had just turned 18 and, like most people of that age in Victoria, I did not have a car, so I can admit here that I missed out on voting in the 1983 election. Subsequently I, like of course many other people in Australia, have continued to exercise my right to vote—a right which is a wonderful thing.
These bills will enable the AEC for the first time to automatically enrol people on the proviso that the Electoral Commissioner is satisfied that the person is entitled to enrol and has lived at an address for at least one month. Under this proposal the AEC would write to the individual that the AEC proposes to enter his or her name and address on the electoral roll, and they will be given 28 days to respond if they do not live at that address or are not entitled to enrol. These bills will allow the AEC to place people on the roll based on external data such as driver licence details, school enrolments, Centrelink information or Australia Post redirections.
This legislation adopts changes that have already been put in place in Victoria and New South Wales. Automatic enrolment was introduced in Victoria and NSW in 2010—slightly different systems but they certainly go along the same path as this legislation. The SmartRoll project, established by the New South Wales Electoral Commission, minimises the need to complete and lodge enrolment forms; electors who have changed their address details and notified a New South Wales agency of that change are automatically enrolled at their new address. It has been estimated that over 500,000 electors change their address each year in New South Wales. SmartRoll will help to ensure that eligible voters retain their right to vote. The Victorian Electoral Commission estimates that there may be up to 180,000 electors in Victoria with out-of-date details. After finding voters that have moved without notifying the VEC, the VEC writes asking them to change their address. The average response rate to this program over the five years to 2009 was only 23.5 per cent and dropping. According to the VEC:
Generally, people are becoming less inclined to respond to written communications.
The intent of these bills is also to ensure that young people get on the roll as soon as they are eligible to vote. Before the introduction of SmartRoll in New South Wales the enrolment of young people, those who have just turned 18, was low. Of the approximately 67,000 17- to 18-year-olds who were registered with the New South Wales Office of the Board of Studies and completed the HSC in 2009, only 50 per cent enrolled to vote. That was even after a letter was sent to students asking them to enrol. It only got through to half of them. This lack of enrolment can lead to many of these potential electors not exercising their right to vote for a considerable time. The Victorian Electoral Commission, upon adopting an automatic system, reported back on its success:
We wrote … telling them that they were on the roll and they had 14 days to let us know if we had got it wrong. We received no correspondence from anyone saying that we got it wrong, due to the safeguards that we had in the process.
The Commonwealth now needs to adopt this legislation because of the impact over time of the New South Wales and Victorian automatic enrolment system working alongside the Commonwealth roll. Since the introduction of SmartRoll in NSW there has been a growing gap between the Commonwealth electoral roll and the New South Wales state roll. As at June 2011 there were around 20,500 additional voters appearing on the New South Wales roll that were absent from the federal electoral roll. Based on the New South Wales Electoral Commission automatically enrolling approximately 10,000 people per month, Antony Green, the well-known political commentator, estimates that there could be a difference of 200,000 people between the Commonwealth and New South Wales state electoral rolls by the time of the 2013 federal election if current provisions remain the same.
As I have said, automatic enrolment is already in place in New South Wales and Victoria, and Queensland is on track to adopt the process after this year's state election. It would appear that if the federal roll does not adopt automatic address change there will be a growing number of people who will be eligible to vote in a state election but excluded from voting federally. The AEC in their submission to the joint parliamentary committee inquiry anticipated that direct enrolment would provide the following benefits: assist eligible persons in meeting their obligation to enrol; build on the direct update model already supported by the Australian government; and balance existing provisions which enable the AEC to remove an eligible elector from the electoral roll where it believes, based on data received from a number of agencies, that an elector is no longer entitled to be enrolled at an address.
On 24 November 2011 the House of Representatives Selection Committee requested the Joint Standing Committee on Electoral Matters to inquire into and report on the Electoral and Referendum Amendment (Maintaining Address) Bill 2011. Their report on the bill was handed down only recently and the committee recommended that this bill, which is one of two bills in this cognate debate, be passed by the House. In the public hearing held on 8 February 2012, Mr Ed Killesteyn, the Electoral Commissioner of the Australian Electoral Commission, said:
… direct update of elector addresses using reliable third-party information is not only a next logical step in the evolution of electoral roll administrative practices but also consistent with growing expectations of many in the community for seamless use of data across government agencies.
There is a clear trend of declining enrolment participation in Australia. These bills provide the Electoral Commissioner with the ability to use modern processes to protect the participation of eligible Australian citizens in the electoral process. It is therefore a matter of logic that the more people who vote the more accurately parliament will reflect the will of the total electorate. Currently, it is estimated that over one and a half million Australians are not enrolled to vote. As I said, that is an average of 10,000 potential voters for each electorate represented in this House.
These bills will not change the grounds on which a person becomes entitled to enrol or entitled to vote. They will simply enhance the integrity of the Australian electoral roll and help the AEC do its job. I commend these bills to the House.
I rise today to speak on the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012 and the Electoral and Referendum Amendment (Maintaining Address) Bill 2011. I do not support these bills as I believe that they will significantly reduce the integrity of the electoral roll. The integrity of the roll is at the heart of the issue that we are debating today. The integrity of the roll is something that we need and must preserve now and into the future, and we must be very mindful of that with any amendments that are being proposed. We must ensure that wherever possible the integrity of the roll is maintained and that the data contained on that roll is as accurate as it is possible to make it. I do not believe that the proposed bills are the way to go about achieving the integrity of the roll.
We are debating two bills today and I would like to briefly discuss the provisions of each bill. Firstly, there is the Electoral and Referendum Amendment (Maintaining Address) Bill 2011. This bill seeks to amend the Commonwealth Electoral Act 1918. The amendments provide for the details of an elector to be added to the electoral roll when the commissioner is satisfied that the elector lives at the address. This bill does not propose to directly enrol electors on the roll. However, the other bill being debated today does seek to do this.
This brings me to the second bill being debated, the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012. This bill does propose to introduce automatic enrolment. Under this bill, amendments are being introduced to provide the Electoral Commissioner with an ability to directly enrol eligible individuals who are not on the electoral roll. This direct enrolment will occur if the commissioner is satisfied that the person has lived at an address for at least one month and the person is not enrolled. This bill also seeks to allow the commissioner to enrol certain persons who have been removed from the electoral roll and to admit their declaration votes.
In Australia, voting is compulsory and it is therefore vitally important to our very democracy that the integrity of the electoral roll is upheld to ensure that we have the most efficient and fair electoral system. I believe the Commonwealth Electoral Act 1918 as it currently stands is appropriate in respect of enrolments. Section 101 of this act already requires individuals to update their enrolment details within 21 days of residing at their new address for at least one month. A person who fails to comply with this requirement will have to pay a $110 fine as per section 101(6).
An inquiry into the 2010 federal election was recently conducted by the Joint Standing Committee on Electoral Matters, with numerous electoral matters inquired into and subsequently reported on. The Labor and Greens committee members recommended that eligible electors be put directly on the electoral roll through the introduction of automatic enrolment. Automatic enrolment will mean that individual electors may be put straight onto the roll without an enrolment form ever being filled out by them. Instead, automatic enrolment will occur based on information from other government sources. This is the central provision being introduced that I have several concerns about.
My concerns are threefold: firstly, that the individual responsibility of electors to update their own enrolment details, such as changing their address, will be diluted; secondly, that the accuracy of the information to be relied upon for automatic enrolment is compromised; and, thirdly, that automatic enrolments will erode the integrity of the roll.
In relation to individual responsibility, electors must currently update their own details and the onus is on them to ensure that they do so. However, I am concerned about proposed changes which will permit personal address details of individuals to be changed by the government, on the individual's behalf, without their knowledge or consent. The Australian Electoral Commission's website talks about the importance of the right to vote and actually states:
The right to vote is one of the privileges of living in a democracy—you get a say in who runs your country.
I could not agree more with this point.
In their dissenting report on the conduct of the 2010 election, the coalition members of the Joint Standing Committee on Electoral Matters noted that Australian citizens have four duties in relation to their enrolment:
The Gillard government does not have faith in the Australian people to maintain these responsibilities. It should not be seeking to dilute these duties. These are not obligations that are too onerous for Australian citizens and electors. If individuals are told they do not have to take proactive steps to ensure that their electoral details are correct, then they will just presume that their engagement with government agencies will guarantee the accuracy of their electoral details. This is a direct dilution of an elector's responsibility to compulsorily enrol.
The other concern I have with regard to automatic enrolment relates to the accuracy of the information relied upon to make entries on the roll. An inquiry into automatic enrolment in New South Wales made reference to this issue, stating:
One of the concerns about receiving data from trusted agencies for the purpose of automatic enrolment or automatic update of electors is that any address data sourced from these agencies was not gathered for the purpose of collecting electorate information.
The Electoral and Referendum Amendment (Maintaining Address) Bill 2012 will allow the Australian Electoral Commission to change elector address details by determining what are 'reliable and current data sources'.
The coalition has concerns about this provision. It does not take into account the fact that the address provided by some electors to particular government agencies is merely a point of contact rather than their actual place of residence. Under this provision, however, this point of contact address may be applied to the electoral roll. Furthermore, if data is being relied upon from state and territory governments, there is an additional risk of error as the accuracy cannot be verified by the Commonwealth. As I mentioned previously, the only way to ensure this information is accurate and to maintain the electoral roll's integrity is to continue to give the responsibility of updating these details to the individual and not to a third party.
The final concern I would like to discuss today is in relation to the impact automatic enrolment will have on the integrity of the electoral roll. I believe this is also closely linked with the issue of individual responsibility of electors, which I have already discussed. The basis of my concern is straightforward: if an individual updates their electoral details, details which they know are accurate and appropriate to them, then the accuracy and therefore the integrity of the roll will be ensured. However, if this responsibility is taken away and given to the Australian Electoral Commission, there is a much higher chance that an error will occur, particularly if this change of address is made without the knowledge of the elector. We must remember also that there are many people who have multiple places of residence and, if their enrolled address is changed without their knowledge, there is clearly a high likelihood that an error will occur and they will be automatically enrolled at an address that is not their principal place of residence.
In their dissenting report on the Electoral and Referendum Amendment (Maintaining Address) Bill, my coalition colleagues highlighted three groups of people who will be impacted by this legislation, to the detriment of the integrity of the roll: firstly, those who have more than one place of residence; secondly, electors who move temporarily; and, thirdly, those people whose place of employment is a residential address or who, for whatever reason, receive mail at a different address. The best way to ensure the integrity of the electoral roll is to maintain the not-so-onerous responsibility on the elector to update their details, not to transfer this responsibility to a third party who could make errors.
Automatic enrolment already occurs in New South Wales and Victoria and has been tested at their recent state elections. Because there are several variations between the federal and state legislation, numerous electors in New South Wales and Victoria are enrolled for state elections but not for federal elections. This means that these electors are sent an enrolment form by the AEC when their details are changed or added to the relevant state electoral roll. Following the New South Wales state election last year, it was found that only 64.3 per cent of those electors who were automatically enrolled for the first time turned out to vote.
Based on the New South Wales experience, the high non-participation rate indicates that the information used to put new electors on the roll is unreliable. This also means that, because incorrect address details have been used on the electoral roll, some electors will be issued with a fine for not voting when it was in fact their information that was incorrect in the first place. Does this sound like a ringing endorsement for automatic enrolment? It certainly does not and I do not support it.
Individual responsibility is a tenet of our great liberal democratic system in Australia and efforts should not be made to dilute this. Electors can and currently do update their enrolment details themselves—these are not onerous requirements. These bills, however, will introduce a system of automatic enrolment which forces government into the lives of people to change their enrolment details, at times without their knowledge.
I therefore oppose these bills on the three premises I have outlined: firstly, the dilution of individual responsibility; secondly, the problems with ensuring the accuracy of information which is being relied upon to change an elector's details without their knowledge; and, thirdly, the overall impact on the integrity of the electoral roll. Let us not have government intrude into the lives of Australians and let us have confidence that the current responsibilities placed on electors to update their own electoral details are not too onerous. I oppose these bills.
My electorate of Fraser has one of the highest number of enrolled voters in Australia. As a result, we send out hundreds of enrolment forms to potential new electors and it is my pleasure to be able to send out every month hundreds of letters to people who have joined the rolls. It is a genuine delight to welcome somebody onto the electoral rolls.
In Australia we have had compulsory voting since 1924. We have recognised that with the many rights of citizenship there are responsibilities as well. One of those responsibilities is that an elector is required to vote every three years or so in federal elections and every four years or so in state or territory elections. It is a right of all Australians and it is a great privilege, I believe. As other speakers have noted in this debate, there are many countries in the world in which people fight and die for this very right.
High voter participation matters, because we know that in countries where voter turnout is low the voter turnout is unrepresentative. In the United States and the United Kingdom, where about half of the electorate votes, you end up with those who vote not being a representative slice of the electorate. They are too often more affluent, older and better educated. As a result, governments are elected that do not truly represent the demographics of the entire electorate.
When we on this side of the House look at the issue of the electoral roll, we look at it through the lens of Labor values of equity and fairness and our belief that all should participate in the electoral process. But so often we have seen those on the other side of the House approach the issue of enrolment through a partisan lens. In a contribution last night in this debate the member for Moreton referred to the point at which the Howard government closed the electoral rolls, in 2007, attempting to deny tens of thousands of people their say in that election, as one of the more shameful moments in the Australian democracy. That attempt to shut down the electoral rolls is something that this country should never see again.
Why did they do so? We know why. Study after study, including some of my own work, has shown that younger voters are less likely to support the coalition parties. Making a purely political judgment, those on the coalition benches have decided that they should do what they can to deny a say in the electoral process to younger voters.
It is also the case that people who were born overseas are less likely to vote for the coalition. I am sure that those opposite know this as well as I do or any researcher in this space does. That is why they, during the Howard government era, under-resourced efforts to ensure that new migrants join the electoral roll. They have also under-resourced efforts to ensure that young people maintain their electoral enrolment.
We on this side of the House do not believe that elections should be won or lost depending on who you manage to get onto the electoral roll. We believe that all Australians should be on the electoral roll and that election results should turn on the views of all Australians. So we are not prepared to sit back and let an estimated 1.5 million voters stay off the electoral roll.
We are seeing a widening gap between the number of eligible voters and the number who are on the roll. The Australian Electoral Commission has estimated that since 2001 there has been an increase of over half a million electors who are not on the electoral roll. They estimate that, by 2013, 1½ million eligible voters will not be on the roll and will not be able to cast their votes. That is an average of 10,000 people per electorate—10,000 people who do not get to have their say in choosing the direction our nation should take. They do not get to participate in the choice that we will face at the next election between an optimistic, nation-building government—one that is prepared to tackle the big challenges, to make the investments that lay the prosperity for Australia's future—and a constantly carping and negative opposition. They will not get to make that choice. I think it is a pity for any Australian not to get to make that choice.
The reforms in the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 have been described as some of the most significant since the very introduction of compulsory voting in 1924. Yet the opposition do not support the bill. As a result, they will keep people off the electoral roll. It is almost as though they believe only the right Australians should be able to vote in elections. Those were the words of the Leader of the Opposition when asked about school retention. Last November he said:
It is all very well keeping kids at school past year 10, but they have got to be the right kids …
The opposition's opposition to this bill reflects the same philosophy. It is all very well having people on the electoral roll, but they have to be the right sort of voters. For those opposite the right sort of voters are not younger voters or overseas born voters, because they know that those voters are particularly unlikely to support the coalition parties. The Leader of the Opposition should explain which voters do not deserve to be on the electoral roll—which voters should not be participating in our electoral process. The Labor Party is founded on democratic principles. It was the progressive parties that saw the introduction of the universal franchise, first getting rid of the property qualifications, then extending the franchise to women and then extending the franchise to Indigenous Australians. All these expansions of the franchise have occurred thanks to the progressive side of politics—and each has been fought by the conservative side of politics. You can go all the way back to the Eureka Stockade movement to find those in the progressive movements in this country encouraging the expansion of the franchise against the conservative moneyed interests who wanted the franchise as restricted as possible.
Labor believes that casting a vote is a basic expression of democratic participation. We want all Australians who are eligible to vote to do so, particularly young people, who are becoming increasingly disengaged from politics. We want them to be engaged in the democratic process. I took the opportunity to look at the share of Australians in the last half-century who have cast a valid vote—the share of Australians who have turned up to the electoral polling place and not voted informally—and that share has been declining. There is a greatly concerning downward trend in the share of Australians, even conditional on being on the roll, who are actively participating in the democratic process. I think that is a pity, and it is something we need to reverse.
As a result of this bill the Electoral Commissioner will be able to directly update an elector's enrolled address following receipt from reliable and current data sources from outside the AEC. That will be particularly important in my own electorate of Fraser, which has a high level of mobility—many Australian moving here to study at one of the great universities in the ACT or to work in the fine Commonwealth Public Service. This bill will enable them to maintain their democratic rights to vote and participate by making sure that their record on the electoral roll remains accurate. At the moment eligible electors are being removed from the roll despite the AEC having accurate information of their current address. That is having a detrimental effect on enrolment rates, and we want to change that.
Under this bill an elector will be notified of the intention to enrol them at a new residential address. They will be given an opportunity to object to the change, and people who are not on the roll will still need to enrol in accordance with the current requirements of the Electoral Act. In response, there has been some scaremongering, and I think this scaremongering has been put to bed most nicely by the member for Melbourne Ports, who has noted that between 1999 and 2010 there were six electoral events, including a referendum, and 72 proven cases of electoral fraud. Within those six events, approximately 72 million votes were cast. As the member for Melbourne Ports points out, this is a fraud rate of one in one million. This is not a problem that should cause us to hold back 1½ million Australians from the electoral roll.
I am proud of the fact that my own electorate of Fraser has a lower informal voting rate than the national average, but I am concerned by the fact that that informal voting rate has risen—from 2,679 voters in 2007 to 5,171 voters in 2010. I do not want to represent an electorate in which everyone has not had their say. I want that informal voting rate to be as low as possible. I want Australians to be participating in the democratic process.
In Disconnected I encourage civic engagement, contacting politicians and participating in the political process. In recent elections we have seen one out of 10 Australians failing to participate in the electoral process, even those who are on the roll—either failing to show up to the polling booth or spoiling the ballot paper. That is emblematic of a wider disengagement across other aspects of civic participation. In Australia it is a democratic right and responsibility to cast a vote and have your voice counted in the choice of government.
The next election will be a critical election for our nation's future. It will be one in which the Australian people have a clear choice between the economic management that saw us through the global financial crisis and an approach to economic management that says, 'When downturns hit, governments should cut back and cause Australia to slide into recession.' We have an opposition with a $70 billion black hole—$70 billion of undisclosed cuts—and whose first priority will be to cut taxes on the most carbon-polluting goods, to cut taxes for the big miners and to reinstate a private health insurance rebate for millionaires and billionaires but who, when asked about an issue like a national disability insurance scheme, say, 'Well, we don't know if we can do that straightaway; that's not a priority for us.' The opposition, if elected, would cut 12,000 Public Service jobs, and they have said that the axe would swing hardest on the ACT. The member for North Sydney talks about making 12,000 Canberra public servants redundant. When the issue arose, we heard the member for Kooyong interject, 'And that's just for starters.'
We are proud of our record. We are proud to go to the Australian people. We want to go to the next election with the biggest rolls possible—with as many Australians as possible on the rolls and eligible to participate. Ours is not a philosophy that the franchise should be restricted—that it should be kept to only the right sort of people. We want those 1½ million eligible Australians to be able to cast their vote at the next election, because we believe in the fundamental values of equality, democracy and fairness. I commend this bill to the House.
I was listening to the comments of the member for Fraser with great interest and was very surprised to hear him cast aspersions on us on this side of the House, saying that we do not want to encourage people to participate in the democratic right of voting, which is an absolutely outrageous claim. He was talking about welcoming 100 people to his electorate every month. I also have a high turnover on my electoral roll and I really care about making sure that the roll has integrity. At the moment my roll does not have integrity. So I am disappointed that the member for Fraser would cast such aspersions on this side of the House.
The bills before the House are the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012. The first bill seeks to provide a mechanism whereby the Australian Electoral Commission, the AEC, can automatically update details relevant to an elector in terms of residential address, based upon information obtained from sources other than direct advice to the AEC by that elector. The second bill is designed to expand the implications of the first by allowing the AEC to enrol new voters directly to the electoral roll where the Electoral Commissioner has been satisfied the person is eligible to be on the roll and has been residing at an address for a period of one month. Quoting directly from the explanatory memorandum, the bills will:
The amendments afforded by both bills move the AEC toward an automatic enrolment capability whereby the AEC can automatically update when an elector changes address or becomes eligible to be on the roll.
I hold grave concerns about the current quality of the electoral roll, particularly within my own electorate, as I have already mentioned. Only within the last month I was in contact with the AEC directly in respect to inconsistencies in the roll for my electorate, specifically the omission and removal of persons from the roll. In several cases, this related to electors who were removed from the roll without a change of address or change of electoral details in any way, shape or form. In this instance the AEC investigated and advised my office of the outcome, that being that some of the processes they had in place had inadvertently removed a number of eligible electors, without justification, from the electoral role. It just so happens that those people that contacted my office that were removed from the roll were actual conservative voters. There is a bit of a concern there.
This hiccup in the system I understand has now been fixed. But what concerns me most about this seemingly minor procedural error is how it could happen in the first place. How can a system based on a premise that details can only be changed following formal advice from the elector remove people from the roll? If this can happen now with a system reliant on elector contact, what are the checks and balances to be in place when the system no longer relies upon an elector as the best source of information? The explanatory memorandum, as I have been stated, notes 'analysis of reliable and current data sources'. My question remains: what are the checks and balances? By whom and how is this analysis of data determined to be reliable? Integrity of the electoral roll is an absolute must. At no time should the opportunity exist, or be allowed to develop, where corruption of the data contained within the roll occurs or can occur, nor should the situation be allowed to develop where the individual person can shirk their responsibility in terms of maintaining accurate records for the AEC. It is not optional to vote in local, state and federal elections; it is mandatory. The ramifications in terms of electoral validity, should there be doubt in the integrity of the electoral roll or corruption of data, are broad and erode the very foundations upon which our voting system sits.
Similarly, the legislation has been designed by Labor and the Greens solely for electoral advantage. In preparing this speech I noted the Joint Standing Committee on Electoral Matters released a report in July 2011 relating to an inquiry into the 2010 federal election. The Labor and Greens members on that committee prepared recommendations, one of which was the introduction of automatic enrolment—a situation whereby an individual elector will have their details entered directly onto the electoral roll without the need for them even to contact the AEC. This, in the view of the coalition, has privacy implications on top of the concerns relating to data integrity. I can think of many a situation whereby an elector may have an address other than their specific home address in order to address some set of circumstances in their life, be it personal or otherwise. Government has yet to mandate that a person can only have one address. What of the people who are employed in fly-in fly-out occupations where they have multiple addresses? What of people who own multiple properties? What of people who are forced to move temporarily due to circumstance—for example, bushfires, floods and cyclones? Certainly this is the case within my own electorate. I can cite further examples of why people may have alternative addresses. But the issue is not the address; the issue with these bills is once again a government seeking to again denigrate the personal responsibility expected of individual Australians when it comes to managing their own privacy and their obligations in terms of correct and accurate electoral details for the AEC and ultimately the electoral roll.
As I have demonstrated, there are factors at play which cause me great concern. To add further substance, all we need to do is look at the New South Wales and Victoria examples. Both Labor governments prior to the last state elections introduced automatic enrolment, a tactic designed to advantage both Labor and the Greens. Unfortunately, a number of the electors were enrolled for only the state election and not for the federal election, due to differences in state and federal legislation. Additionally, when an elector has been added to the roll or has had their details changed, they are sent an enrolment form by the AEC. Antony Green noted in an article on 16 July 2007 that only 64.3 per cent of the first-time voters who were automatically enrolled prior to the New South Wales state election actually turned out to vote. The low turnout suggests that the information used to put those electors on the roll may have been unreliable. To take this example a step further, if the lower rate of turnout was a result of those electors being unaware that they were on the roll, how could they be fined for not voting if the AEC chose to follow that path?
The coalition remains concerned with the potential for electoral fraud. At present the process of being added to the roll or changing one's details is evidenced by an AEC document signed by the elector. This singular event in any formal legal proceeding for fraudulent voting activity provides a sound basis for the determination of elector knowledge. With the implementation of an automated system utilising data sources external to the AEC determined by the AEC to be reliant and current, it is my assertion that this in fact dissolves elector responsibility and makes the process of investigating and prosecuting electoral fraud substantially more difficult. We on this side of the House have voiced our disappointment with the AEC's attitude to the questioning of prosecuting cases of fraudulent voting. Despite there being over 20,000 multiple voters at the 2007 election, not one has been prosecuted.
If I thought for one moment that the initiatives being proposed by these bills were without risk to the integrity and ongoing confidence of the electoral roll, ensured the integrity of the roll and were measures designed to ensure equality in the roll I would consider supporting these bills. However, clearly these bills ring alarm bells and prompt more questions than answers. Any measure to divest individual electors of their responsibilities in terms of accuracy in AEC and electoral roll details is not warranted, nor do I believe it is the role of the AEC to make a determination as to what resources are reliable and accurate. The view of the coalition echoes this point. The AEC is not equipped, nor should it be empowered, to make determinations as to what is reliable and accurate in external data sources. In addition, I have been unable to determine whether a suitable risk assessment has been undertaken on the roll or if in fact a document risk analysis reviewing the potential impact of the measures being introduced by these bills has been conducted.
To add further food for thought, how accurate are the sources of data being considered? Are they actually fit for purpose? An audit report by the ANAO, No. 24 2004-05: Integrity of Medicare enrolment data, stated:
ANAO found that up to half a million active Medicare enrolment records were probably for people who are deceased.
Such inconsistency in Commonwealth data is clearly not acceptable or legitimate for the AEC to update the electoral roll. How accurate and trusted are other Commonwealth data sources? It is the assertion of the coalition that any external data sources which the AEC may draw on to update electoral roll details are potential risks to the integrity of the roll. Without integrity, the roll becomes a tainted record, one that potentially has the capacity to damage public trust in the roll and the electoral process.
In conclusion, the amendments proposed by these bills before the House in essence provide the mechanisms for the AEC to automatically update elector details and to automatically enrol new electors. The New South Wales and Victorian state Labor governments introduced such measures prior to recent elections in both states not as a value-added initiative to the electoral roll or to boost integrity in the roll but for electoral advantage for Labor and the Greens. We talk about responsibility and empowering people, yet the measures sought through these bills would diminish the responsibility of the elector to maintain accurate records in terms of their address and electoral compliance. As I have stated, the integrity of the electoral roll must be maintained. Opening the way for the AEC to source data from external resources without the proper risk assessments and without definitive knowledge of the accuracy of those records can lead to only one result—that is, a loss of integrity. Without integrity, the very electoral system which the electoral roll underpins will became tainted, resulting in a loss of public faith and credibility and in the potential for illegal electoral activities, including the instance of electoral fraud.
So, no, Mr Deputy Speaker, I cannot support these bills. Without 100 per cent compliance to integrity and without value of data, the only way to ensure the electoral roll remains true is the continuation of current practices. That includes the responsibility of individual electors to maintain accurate details for the roll and the prosecution of those who fail to enrol or who seek to manipulate the roll for some advantage.
I am pleased to contribute to the debate on the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012. These bills amend the Commonwealth Electoral Act and the Referendum (Machinery Provisions) Act. They arise from the inquiry by the Joint Standing Committee on Electoral Matters into the conduct of the 2007 federal election. The first bill is said to implement the government's response to recommendation 10 of that report and the second to recommendations 1 and 24. I need hardly add that these recommendations were not supported by the coalition members on the committee. The key provisions in the set of bills before us today will do two principal things: firstly, they will allow the Electoral Commissioner to directly update an elector's enrolled address following the receipt and analysis of what is determined by the AEC to be reliable and current data, from sources outside those already maintained by the AEC, which indicates that an elector has moved residential address; and, secondly, they will grant the AEC the capacity to directly and automatically enrol new electors.
What is the framework in which the coalition analyses the policy measures proposed in the bills which are put before the House for its consideration this morning? The coalition approaches these bills as it does every piece of legislation brought forward by the Rudd and Gillard governments on electoral matters and the electoral roll—in a spirit of intelligent scepticism. Naturally, we wish to believe the best of this government and all who comprise it, but as that great conservative statesman Ronald Reagan so well articulated, a good principle by which to live your life is 'trust, but verify'. As we apply this principle to the motives which may lie behind the Rudd and Gillard governments bringing forward this package of changes to the law as it governs the integrity of the electoral roll, we think it is important to look at the historical matrix and ask ourselves the question: does the Australian Labor Party have form when it comes to rorting the electoral roll?
The answer to that question is very plainly on the historical record. The Australian Labor Party does have form when it comes to rorting the electoral roll. I am sure you are familiar, Mr Deputy Speaker Leigh, with the Shepherdson inquiry, which looked into matters of electoral roll integrity in the state of Queensland, and I am sure you would be familiar with the episode in which a member of the Queensland parliament and former state secretary of the Queensland ALP was asked, under cross-examination, about an address he was listed as living at which had appeared on the roll some years before. He was asked whether he had actually lived at that address. After being forced to admit that he had never lived at that address, he retired to consider his position. Very shortly after, the parliamentary career of Mike Kaiser came to an end. I note parenthetically that, happily, his very good friend the Minister for Broadband, Communications and the Digital Economy put him into a $400,000-a-year job as the head of government relations at NBN Co. An onerous job, you might think—managing relations with the government when the company is 100 per cent owned by the government—but far be it from me to ask whether the Minister for Broadband, Communications and the Digital Economy had carefully turned his mind to the question of whether the government was getting value for money.
Mr Deputy Speaker, I rise on a point of order. Is this relevant to the legislation? Also, the assertion about the appointment of Mike Kaiser to NBN Co. is incorrect. That was not a decision of the minister.
There is no point of order.
Thank you, Mr Deputy Speaker. I return to the conceptual and philosophical framework in which the coalition analyses whether the changes to the legislation regarding administration of the electoral roll put forward by the Rudd and Gillard governments have merit and whether they ought to be supported. I am making the point to assure the House of the careful historical context within which we consider this question. We approach the question of the merits of this legislation in a spirit of intelligent scepticism. Having applied that analysis to this legislation, we are reluctantly forced to conclude that we are not satisfied of the bona fides of the government in bringing forward this legislation. We are not satisfied that their motives are pure and beyond reproach.
Let me make three points in the brief time I have available to me. Firstly, on this side of the House we consider that it is entirely appropriate that electors should bear responsibility for taking the necessary action to change their own address on the electoral roll. Secondly, we note with concern that the bills before the House fail to implement important safety mechanisms which were recommended in the joint standing committee's report. Thirdly, and consequently, the package of measures contained in these two bills threatens the integrity of the electoral roll and nothing could be more serious when it comes to the continuing operation of the tremendously successful Australian parliamentary democracy in which we all take justified pride. We must be tremendously sceptical of changes—no matter how high-minded the stated motives for those changes—which, on analysis, present the real and present danger of undermining the confidence of the citizens of this country in the democratic process and which are so important to the maintenance of this tremendously successful parliamentary democracy in Australia.
Let me turn, firstly, to the question of personal responsibility. As you would be aware, under the law today citizens have an obligation to enrol to vote and to accurately maintain their enrolment at their permanent place of residence. We do not think that these requirements are unreasonable and we fundamentally object to the measures in this bill, which would remove that responsibility from an individual. We think it is poor policy and objectionable in principle. We also take the view that the positive action required of a citizen to notify of his or her change of address is not unduly onerous. We think it is a perfectly reasonable responsibility to expect a citizen of our democracy to exercise. In addition, I note that the Australian Electoral Commission regularly conducts information campaigns to encourage Australians both to enrol and to maintain the currency and accuracy of their enrolment. I have myself participated at forums in local high schools in my electorate where the Australian Electoral Commission has been informing 16-, 17- and 18-year-olds about the importance of getting on the roll.
The second point I wish to make is on the grave failure in this bill to implement vital protections recommended in the joint standing committee's report. In its report the committee was careful to recommend a number of very important preconditions to the notion that the AEC should be able to obtain data from external sources to update the roll. The first precondition was that the elector should provide their proactive and specific consent to opt in for the data to be used to update the roll, and the second was that there must be surety that the proof of identity processes used by the respective government agencies have sufficient integrity. What is proposed in this bill is that a data source which has not previously had anything to do with the electoral roll or the integrity of the electoral roll is now to be drawn on for the purpose of automatically updating somebody's enrolment. Yet we have had no satisfaction provided to us by the Rudd-Gillard government as they bring forward this legislation as to the methods which will be used to ensure the integrity of the data in that external data source which is now to be used for the purpose of upgrading the electoral roll. That is a vital protection which one would expect as a bare minimum before a change of this magnitude were proposed; extraordinarily, there has been no satisfaction provided to the coalition side of this House as to the adequacy of those protective mechanisms.
That brings me to the third point that I want to address, which is the vital need to protect the integrity of the electoral roll and the loss of integrity to the roll which will inevitably result from these ill-conceived changes contained in the bill before the House. When you think about the matter, a very important safeguard of the integrity of the roll is that the citizen is required to take a proactive step to update the commission as to a change in his or her address. Amongst other things, that means that there is a paper trail which can be followed to verify any particular entry in the roll, because there must be a form signed by the relevant citizen or there must be alternative high-quality data sources that are based upon processes of proven existing integrity and which can be resorted to in order to verify the quality of the information in the roll.
The measure proposed before the House today does not build in those safeguards. Therefore, it represents a fundamental undermining of the processes which exist for a very good reason, which is to safeguard the integrity of the roll, which in turn is vital to underpinning public confidence in our parliamentary democracy. If confidence in the integrity of the roll is lost, if a suspicion emerges that there are large numbers of entries on the roll which do not accurately reflect the existence and the true address of those individuals, that will greatly undermine confidence and, in turn, will undermine the quality of our parliamentary democracy.
In this regard, I note that in the minister's second reading speech and in the explanatory memorandum we are told that the Australian Electoral Commission will rely on data sources that are 'reliable' and 'current'. Those words appear nowhere in the bill. The bill does not explicitly require that the data sources used by the AEC are 'reliable' or 'current'. The only requirement is for the commissioner in his or her absolute discretion to be satisfied that the elector lives at another address.
This is a highly dangerous degree of discretion to give to the commissioner, and the danger inherent in that is reinforced by the fact that on all the evidence available about large-scale databases managed by the Commonwealth government, there are very large numbers of false positives. There are very large numbers of entries in those databases which do not correspond on a one-to-one basis with real, living people. As other speakers from this side have done, I refer the House to a 1999 report by the House of Representatives Standing Committee on Economics, Finance and Public Administration which found that there were 3.2 million more tax file numbers than people. Similarly, an audit report found that 'up to half a million active Medicare enrolment records are probably for people who are deceased'.
I cannot comment as to whether any of those people appear in Labor Party branch records. I have a strong suspicion that they do, based upon the evidence of the Shepherdson inquiry and other indicators that we have seen of a lack of commitment on a day-to-day basis by the Labor Party to the integrity of the roll and indeed based upon the conduct of individuals, including Labor parliamentarians, to actively rort the roll. It is because of that grubby and shameful record that we look at this set of provisions with a degree of intelligent scepticism. There is a high burden of proof which ought be discharged if these fundamental changes are to be made, and that burden of proof has not been discharged. These changes are a threat to our democracy and we strongly oppose them.
One of the many things that is internationally recognised and respected about our great nation is the strength and fairness of our democracy. While we do not pretend that our system of democracy is without flaws, we know that as Australians we have every opportunity to contribute to the national debate about the issues that impact us and the issues that are important to us. In fact, many would say that my very presence in this place, my election to the House of Representatives, is illustrative of the fact that anyone with the passion and the desire to make a difference in their local community can actually do so. In this country, age, race and gender are not characteristics that exclude individuals from having a voice that is heard. Every single adult Australian citizen has a voice, and they have the opportunity to use it. They have the opportunity to simply stand up and put themselves forward to participate in the national debate and to be part of democracy in action. It is the very fact that people can have a say, even if it is to disagree with the majority, that adds strength to our voting system.
Democracy is a concept that is thousands of years old and has taken many forms over the ages, but it is a concept which is empowered by our voting system, a voting system that gives every citizen—every man and woman over the age of 18—the opportunity to vote for their representative in local, state and federal elections. One voice equals one vote, and the majority vote rules. In a practical sense, it is a system which enables us at the federal level to have a say about who we want to represent us on the issues that affect our daily lives and will determine the future direction of our country. And it is this system that we are here to debate today as we speak to the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the cognate Electoral and Referendum Amendment (Protecting Electoral Participation) Bill 2012.
These bills propose fundamental changes to the powers of the Australian Electoral Commission under the Commonwealth Electoral Act and consequently serious changes to our voting system, changes that I have serious reservations about. The electoral roll is one of the key tools that enables democracy and facilitates our voting system. It is a key tool that ensures that our elections are fair and unbiased and it prevents electoral corruption. The accuracy of this tool is vital. Australia relies on it to ensure that no-one has more than one vote and no-one misses out on their chance to vote. But the key changes outlined in this legislation have the ability to compromise, rather than strengthen, our democracy by threatening the accuracy of the electoral roll. This legislation effectively takes away the responsibility and authority from voters and instead hands them to the Australian Electoral Commission.
Let us make it very clear what this debate is about. This is not a debate about the need to improve the quality and the consistency of the electoral roll. While there is no denying that more can be done to further increase the accuracy of the electoral roll, the debate that we are having in this place is not about the need to do so. No, what this is about is the means by which these bills seek to achieve greater accuracy. Today the debate is about the vague and nondescript powers that these bills provide the Australian Electoral Commission with. It is about the lack of accountability that there will be for the Australian Electoral Commission in determining who should and should not be on the roll and where they should be enrolled. It is about the lack of external scrutiny of the processes and information that the AEC will use when making a decision about what details are current and what details are outdated.
These bills bring us to a point of automatic electoral enrolment. We know that the Labor and Greens members who were on the recent Parliamentary Joint Standing Committee on Electoral Matters inquiry into the 2010 federal election even went so far as to recommend that automatic enrolment be instigated, so it is no wonder that this Labor government is putting forward legislation that seeks to achieve this. These bills will allow individuals to be put on the electoral roll without their knowledge or their input. These bills also provide for individuals' addresses to be automatically updated by the Australian Electoral Commission without their knowledge.
We members of the Liberal Party have always believed in individual responsibility. We believe that every single person is responsible for their own actions. We also believe that it is not an overwhelming responsibility for citizens to be responsible for their own enrolment, to take the simple steps of completing a form to enrol to vote and submitting another form to update their enrolment address. But these bills ultimately undermine the responsibilities of Australian citizens and they detract from societal civic accountability.
I am concerned that this devalues the privilege that we share, as Australian citizens, to have a voice and a vote. We cannot afford to take this privilege for granted, and it should be highly respected. The last thing that we, as policymakers and leaders, should be encouraging is for citizens to lose respect for mechanisms that ensure equitable and stable democracy in our country—that is, an electoral roll that is managed by the citizens themselves, with the responsibility for updating it in their hands. By removing the responsibility for people to update their details on the electoral roll, we are breeding complacency and disengaging our constituency. This is a dangerous path to travel and one that we on this side of the House believe should be avoided.
Not only is personal responsibility a key factor in this issue; the irregularities that will potentially arise on the electoral roll as a result of automatic enrolment and updating of details are a serious concern. These bills will provide the Australian Electoral Commission with the discretion to determine what data they utilise to inform their decisions, and the combination of data sources that the Australian Electoral Commission would use to identify voters and update their details cannot be relied upon to provide accurate details. This measure makes the assumption that other data sources will be up to date and accurate, but this assumption is misguided. Not only this, but it assumes that the AEC will be able to make value judgments about which information is legitimate without any requirement on the AEC's part to justify their choices. An individual alone should be advising, firsthand, about their current details. As in so many other areas of life, when you are dealing with only half the information and half the picture, there is a large margin for human error. The opportunity for irregularity is simply too high, and it is a risk that we, for the sake of our democracy, cannot afford to take.
Not only this, but with inaccuracy comes the opportunity for abuse. With individuals being unaware of their enrolment, the opportunity for someone with malicious intent to manipulate and abuse this, effectively taking away a person's opportunity for a voice, is a real threat, a threat that I do not want to see any opportunity or any advantage given to.
There is tangible proof that systems of automatic enrolment are fraught with errors and actually decrease engagement and accuracy. Last year this system was employed for the New South Wales state election. The results speak for themselves: 35.7 per cent of people who had been automatically enrolled did not turn up to vote. It is clear that while individuals may be enrolled, there is no guarantee that their details are correct—such a high non-participation rate demonstrates this.
In my electorate of Longman, more people rent than have a mortgage. Clearly they will be changing their addresses on a reasonably frequent basis, and it is simply not possible that second-hand information obtained by the Australian Electoral Commission will be able to accurately keep up with these changes. It is up to us in this place to be doing more to encourage those young people to get enrolled on the electoral roll and to encourage all citizens to keep their electoral enrolment up to date. Education is the key, and engaging with our constituents and our communities is vital. It is through continued effort on these fronts that we will see people take their personal responsibilities seriously and understand how they go about undertaking their responsibilities.
Only through enrolment details that are advised by the individuals themselves can we maintain an accurate electoral enrolment roll and, consequently, a voting system that gives every adult citizen the chance to have an equal vote. I am aware that for the most part, and particularly for young people, a lack of knowledge is a barrier to getting on the electoral roll. Many young people are unaware of their responsibility to enrol as soon as they turn 18 and believe that they can do it before the next election. Others are confused about how this process takes place and mistakenly believe that as long as they are enrolled before polling day they will be able to vote. The key here is not automation, but education. Only a concerted educational push that engages voters, rather than disengages and distances them, can resolve this issue.
In Australia we are afforded many privileges and opportunities to contribute to the future of our country. The views and ideas of all of our citizens are valued, respected and encouraged. Our voting system is prized as an example of democracy in action. We are beholden as policymakers to uphold and strengthen this voting system, not to undermine it. These bills, and the changes they intend to make to the Electoral Act, will indeed undermine our voting system. They will remove the responsibilities of individuals, and will instead grant additional powers to the Australian Electoral Commission, making the waters of electoral enrolment murky and vague and breeding irregularities that have the potential to be manipulated. This is not what we want to see happen to our voting system, and this is why I oppose these bills.
It is a great pleasure and privilege to follow the member for Longman and his outstanding contribution to this debate on the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Refendum Amendment (Protecting Elector Participation) Bill 2012. I congratulate him on it. As a young person in this parliament—the youngest ever elected to federal parliament—he knows that the Labor Party's false and misleading campaign that these bills are about ensuring more young people are enrolled to vote is more about the Labor Party seeking electoral benefit rather than any detailed evidence to the contrary. It really sums up why these bills are so hideous and should be opposed by this House and by the Senate. These are bad bills and they should be opposed absolutely.
We have said this time and time again, and I note the work of the member for Mackellar, the shadow spokesperson for this, and in particular Senator Scott Ryan, who has done outstanding work exposing the flaws in this legislation brought again before this parliament. The Labor Party, and their coalition partner the Greens, see this legislation as a way to obtain some sort of electoral benefit by reducing the integrity of the electoral roll, which is one of the most important and fundamental elements of our democracy.
We have seen this with state Labor governments in New South Wales and Victoria. The member for Casey, a Victorian, knows about this and saw it in operation. It should be noted that no matter how much they fiddle with the electoral laws, nothing will save a bad Labor government from facing the appropriate treatment by the electors. Might I add, that nothing will save Anna Bligh's government this weekend, and nor should it, when the electorate gets to speak about its performance.
This is purely and simply about weakening the integrity of the roll, significantly decreasing privacy for individual electors and removing virtually all individual responsibility for electors to take care of their own enrolment. I am enjoying very much Karl Rove's book, and I enjoyed particularly the section where he recounted details of the 2000 US election, which is a very famous election where the result in Florida became absolutely vital to the result of that election. The Democrats in the United States took significant and sustained legal action questioning the integrity of the voting system. They did that because—and much as I admire the United States for their democratic principles and their commitment to freedom and their world leadership in that matter—the integrity of their electoral roll is not one of their high points. What that led to was—in this election for the presidency, the greatest prize in US politics, the leader of the free world—a month of uncertainty as the Democratic party and its candidate, Al Gore, questioned the result in Florida, which was extremely close. They took it through all the court systems that they possibly could, and the matter was not resolved until late December 2000, a month or so after the initial election had actually taken place.
Of course, there was nothing wrong with the Democrats doing that; it was completely within the US law and their system. However, it showed that when you reduce the integrity of your roll, you open it up to genuine question. This bill does that. This bill hands unelected bureaucrats the power to remove electors or change the enrolment of electors on a whim, using data sources which they describe as reliable. This is this parliament handing over to a bunch of bureaucrats the opportunity for them to change an individual's electoral information. We should be very careful if we take this step because this goes very much to the integrity of our roll. Each of us in this place relies very much on knowing that when we go into an election campaign that, in large part, the electoral roll reflects our communities, reflects who lives there and so forth. Sadly, there are always people who do not take responsibility for themselves and do not inform the Electoral Commission of their movements. There are people who forget and there can be other circumstances where people do not immediately inform the Electoral Commission, but they get time. It is not as if people are unaware of their obligations—they get told. If people are not aware of their obligations, we should certainly be educating them better.
But what we should not be doing is taking out of their hands the responsibility to ensure their personal information on the electoral roll is up to date. It is their responsibility to do that so they can participate in deciding who will govern their country, who will govern their state and who will sit on their council. This bill will reduce the ability of people to look after that responsibility themselves. It hands to unelected bureaucrats—people who are not responsible to this parliament and not responsible to the electorate—the ability to play around, within their own guidelines, with people's electoral information.
As the member for Longman pointed out, this legislation raises all sorts of questions about people with temporary addresses or residences. As we know, there are increasing numbers of people working in fly-in fly-out industries—in the mining industry, in particular—in places like Queensland. Even in my home state, with the developments at Olympic Dam, we are seeing increasing numbers of fly-in fly-out workers. Some of these workers take the opportunity to spend their weekends back at home in Adelaide and its surrounds, flying to mine sites across the state—even across the country—to earn their money during the week. In fact, the husband of one of my staff is an engineer at a goldmine. He flies in and flies out each week. The question arises: if the Electoral Commission decides, for whatever reason, that he is no longer a permanent resident at his home address—that he is now a permanent resident at the mine site—should it change his electorate?
He would not be able to vote you out.
The minister is right—he would not be able to. And Mayo, as you know, is a tight marginal seat.
Mr Crean interjecting—
Mr Perrett interjecting—
What he does with his vote is his decision. We are not like the Labor Party—we do not force people to follow the ticket. We do not ask for ballots to be shown. We just let people get on and make their own decisions based on the policies put before the electorate. I am very happy for the people of Mayo to make their judgments based on what I do and put to them before the next election. I think the minister at the table knows that. I think he is just being a little frivolous, which is disappointing because he is not a minister I ever thought would be frivolous in this place.
But this legislation is not frivolous. These bills are very serious. They are a very serious attack on the fundamentals of our democracy and on the integrity of the electoral roll and they are designed purely for the political benefit of the Australian Labor Party and the Australian Greens, their coalition partner. They see the opportunity to drag in votes which they think are rightfully theirs. They base their judgment on data which suggests that people who are not enrolled would be more likely to vote for the Labor Party or, at worst, the Australian Greens, from whom the Labor Party know they will get the preferences in the end.
So they are creating law to make it easier for bureaucrats to make decisions about electoral enrolment rather than ensuring that electors make those decisions. We should oppose this. These are bad bills and this is a bad direction for our country to go in. We have a tremendously successful electoral system. We are very lucky that our elections are largely free of corruption. There have been very few examples of serious matters being taken to the Court of Disputed Returns. That is something we should be very proud of. Generally we know that the winner announced on election night—there are exceptions of course and the last federal election was one of those—will indeed turn out to be the winner. In fact, following the 2007 election, I remember an American friend commenting to me that he was always taken aback at how simply a change of government occurs in Australia—how people accept the result, the verdict of the electorate, and move on. The new government come in and make their decisions—sadly, this one has made some very bad decisions and we are suffering from that now—and we accept the fact of democracy and that we put our fate in the hands of the voters. But we do so on the basis that we completely trust the integrity of the electoral roll.
Mr Perrett interjecting—
Let me tell you, Member for Moreton, that I will trust the voters of Queensland this Saturday. I reckon they will get it right, as Bob Hawke once said.
We need to guard against moves which will weaken the integrity of the electoral roll, especially moves based on spurious reasons which, at their heart, are more about political benefit for one side or another. That is why these bills should be opposed. They should be opposed by this House and, if they get to the next house, they should be opposed there as well.
I join with the other speakers from this side of the House in opposing the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012. In following the member for Mayo, I highlight the point he made at the very beginning of his speech—that in our country we have a compulsory voting system and a compulsory enrolment system. As a corollary of that, it is the responsibility of individual citizens to be on the electoral roll from age 18 and to turn up to a polling booth on election day—or, as is increasingly the case, to a pre-poll centre in the days leading up to election day—and, at the very least, have their name crossed off the roll. It is a feature of Australian democracy and it has been for a number of decades. It is the law of the land that all eligible Australians must vote. That is not the law in a lot of other democracies, but it is here in Australia. What goes with it is that you must be on the electoral roll. It is your responsibility to be on the electoral roll when you are eligible and, when you change address, to ensure that the roll is updated.
As the member for Mayo and all of the speakers on this side of the House have outlined, these bills seek to damage the integrity of the roll through an automatic update and automatic enrolment process. On the one hand, this parliament is saying to every citizen, before these bills come into law, that under the existing law you must be on the electoral roll if you are eligible and you must vote, even if that means getting your name crossed off on election day and destroying your ballot paper. You must exercise your choice. On the other hand, the parliament is saying: 'If you do not enrol we will automatically enrol you. If you do not keep your address details up to date on the electoral roll, they will be automatically updated—through some data source that the House is simply assured will be accurate.'
Like your drivers licence.
Of course how that will work in practice is, as so many members on this side of the House have indicated, very open to question. I say to the member for Moreton that this is a serious debate. I know it is customary to interject, but we are not at two o'clock yet—it is not question time. I am glad the member for Moreton is still with us, since we are talking about elections. He was on the verge of calling a by-election. These are bad laws. They are laws which Labor think, in their heart of hearts, will favour them. They think that if they can enrol people who do not want to enrol, if they can update addresses of those who have not updated them—in other words, if they can take action on behalf of that small percentage of Australians who do not want to vote—that may somehow give them electoral advantage. These are bad bills and we are opposing them here and in the other place. As our shadow minister the member for Mackellar pointed out just yesterday, these bills will compromise the integrity of the Australian electoral roll. We hope they do not pass; we suspect they will. If they do, they should not become part of the fabric of our electoral system, which has served our country so well.
I rise today to speak on two bills this government is introducing to amend the Electoral Act, allowing the Australian Electoral Commission to automatically update the details of an elector when they change their residential address, based on information obtained from other sources, as well as when an Australian turns 18—again, based on records obtained from other sources. According to the explanatory memorandum, the Electoral and Referendum Amendment (Maintaining Address) Bill will:
… allow the Electoral Commissioner to directly update an elector's enrolled address following the receipt and analysis of reliable and current data sources from outside the Australian Electoral Commission that indicate an elector has moved residential address;
What will those reliable and current data sources be? Will they indeed be reliable or current? Enrolling to vote is a wonderful privilege afforded to all Australians. We have one of the best electoral systems in the world and one of the fairest. Walking into a polling booth on an election day certainly conjures a tremendous feeling of pride for many Australians. With the current state of affairs, many Australians wish they were exercising their vote sooner rather than later. There will be an opportunity to change this nation for the better at the next election—something that residents in my electorate speak to me about on a daily basis. Residents in Macquarie are concerned about many issues, and they are particularly concerned when they have arisen because this government has failed to consult with the electorate on important issues—like the carbon tax, the mining tax, cutting the private health insurance rebate for Australians it deems too wealthy to be given a break, and the list goes on. With this legislation the government has again failed to consult with the people it will impact on, meaning that it is again dictating to the Australian public what it wants for Australia.
What will this legislation achieve? We already have a system of compulsory voting. Socially we have come leaps and bounds since Federation, with every single Australian citizen being given the right to vote. It will achieve more votes for the very group of people that Australians are unhappy with: Labor and the Greens. That is all this government is concerned with—gaining votes the only way it knows how, by deciding who is and who is not on the roll based on information that may or may not be reliable or accurate. What about people's personal responsibility? I think everyday Australians know when they need to change their details. They are very capable of deciding when to fill out a form or when to contact the Electoral Commission and make the recommended changes.
Clearly, this government does not concern itself with personal responsibility. It imposes responsibility on people without so much as giving them the choice or the chance to correct what may or may not happen on the electoral roll with regard to their capacity to vote. The government purports that its proposed amendments to the bills will restore the integrity of the electoral roll. These amendments will do just the opposite. These amendments will mean that many Australians may not be aware that they are registered to vote or that they are no longer registered to vote.
I note in the 2010 dissenting report from the Joint Standing Committee on Electoral Matters that the committee outlined the duty of each Australian citizen when it came to voting, and I would like to highlight them now. Firstly, it is the duty of each Australian citizen to enrol to vote. Secondly, it is also the duty of each Australian citizen to maintain their enrolment at their permanent place of residence. Thirdly, Australian citizens have a duty to cast a vote when an election is called. Lastly, and most relevant to this House and the reason we are able to stand here and debate these poorly constructed amendment bills, Australian citizens have a duty to fully extend preferences to all candidates contesting election for the House of Representatives in their electorate. These duties are the cornerstone of our democratic system of parliament and governance. If we strip away these duties and responsibilities from everyday Australian citizens, we expose our system of parliamentary democracy to fraud and irregularities. These amendments contravene the very idea that is basis on which our democracy resides and, if this legislation is passed, it will be a very dark day for democracy and for this nation.
The coalition takes issue with the amendments proposed by the government for several reasons. The first is something that I have already alluded to, and that is a reduction in the integrity of the electoral roll. If electors are to have their details updated automatically and without their knowledge, it will lead to a high number of potential irregularities. It so often happens that mail is returned to my office because of incorrect details on the electoral roll. Flaws already exist in the system. I understand that a database of millions of people will not be without some flaws; I accept that. But what I do not accept is this government providing a platform for potential additional flaws to our system to take place, not to mention the potential for fraud that could result from automatic enrolment. This would not achieve anything except to give a greater power and a vague power to the Electoral Commission and allow this government to capitalise on those flaws.
It is all too often the case that we see legislation that gives the government broad and vague powers and that plays to the Greens rushed through this House. It seems that this government is far too concerned with a track record of introducing as much legislation as it possibly can before Australians exercise the little power and choice they have left to vote it out at the next election.
This brings me to the second matter that the coalition takes issue with regarding the government's amendment bills, and that is that the AEC is empowered with the discretion to determine what are current and reliable data sources. That a broad scope for discretion is inserted into legislation is not an uncommon practice by this government. In fact, with most of the government's bills, when they are debated in this House, I and many of my colleagues on this side of the House have on a number of occasions taken issue with the vague and broad discretionary powers given to departments, to ministers and to the government. The broad discretionary powers given to this government is the reason that so many Australians are placing importance on their vote at the next election. They are unhappy about being dictated to and dealing with uncertainty.
The third issue is that these amendments undermine the confidence that this government has in its own citizens. Governments should exist for the people, not in spite of the people. It seems this is the unfortunate position that the government has forced Australians into. The coalition is not in support of these changes. They are broad, they are vague and they provide the unfortunate opportunity for the system to be abused and for people to potentially front up to a polling booth to find that their name has been removed from the poll without them knowing it or that they are listed at an address where they are not residing. In view of these challenges, I do not support the bills.
I rise to speak on the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012 and the Electoral and Referendum Amendment (Maintaining Address) Bill 2011. The Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012 seeks to amend the Electoral Act to allow the Australian Electoral Commission, AEC, to directly enrol new electors on the electoral roll when the Electoral Commissioner is satisfied that an individual has been living at a particular address for one month and is eligible to be on the electoral roll. This bill follows on from the Electoral and Referendum Amendment (Maintaining Address) Bill 2011, which will give the AEC the authority to change the address of electors when it believes they have changed their residential address. As with the previous bill, the coalition opposes this legislation because it will greatly reduce the integrity of the electoral roll.
In 2011, the Joint Standing Committee on Electoral Matters conducted an inquiry into the 2010 federal election. One of the recommendations from the Labor and the Greens committee members was to introduce automatic enrolment. This is a process by which an individual elector is put directly onto the electoral roll—without them ever having filled out an enrolment form—based on information from other government sources. The coalition opposes this recommendation as it will greatly reduce the integrity of the electoral roll and will mean a number of electors are put on the roll without their knowledge. The bill seeks to implement this recommendation. We, on this side of the House, are not only concerned about the impact that this will have on the integrity of the roll; we also firmly believe that the responsibility to get on the roll and to protect the right to vote lies entirely with the individual.
Clearly, the right to vote is one of the great things about our democracy. At every election, we ensure that the elected representatives of our councils and state and federal governments are held to account. It is the right of every Australian citizen over the age of 18 to cast a vote. One of the things I love about Australia is that voting is compulsory—you can only whinge about the results of an election if you have had your say. But that vote comes with a responsibility to register and maintain your right with the AEC. It is a precious gift given to you by the country, and all the country asks in return is that you keep us up to date with where you live.
But what is a reliable source of information? We note that there were 3.2 million more tax file numbers than people in Australia at the last census. We also note that there were 185,000 potential duplicate tax records for individuals; 62 per cent of deceased clients were not recorded as deceased in a simple match. In Townsville we have a highly transient population. We have the Army, the Airforce, the Navy—ADF. We are a university city. We are fly-in fly-out specialists. We have a great number of renters. You only have to drive the streets of Townsville every weekend and see the number of utes piled high with furniture to see how many people are changing address. It is up to the individual to make sure that their bills get changed across and that their voting records are changed across.
We saw this government send cheques in the first version of the stimulus package to dead people, people living overseas and the like. Is this a reliable source? If the government cannot get it right when they are sending out free money, what hope has the Electoral Commission got of maintaining the roll without the actual person taking the responsibility to vote seriously?
I heard a member opposite state that the AEC spent $36 million on advertising in the lead-up to the 2007 election, and that the AEC stated that this cost would have to be ongoing election after election. So, I am not so sure that this measure will be a cost-saving measure. My question to the AEC is: how much will it cost them to maintain this roll using the new methods? What is the quantum of paying a huge number of public servants to act on tip-offs as to people's whereabouts? Will they be buying the membership lists from Video Ezy and cross-correlating the information? Will they be standing on street corners in trench coats, under a street lamp—lit cigarette dangling from the bottom lip—saying: 'Psst. Who lives in that house and have they lived there for more than a month?' Where will this end? Will we end up with a system where votes will be taken by electoral officials travelling from house to house saying, 'Pick a name, any name,' and moving on to the shops to finish their election while having a pie and a coke?
No, the right to vote is precious and it should be treated as such. The individual must take that right seriously and when they do shift house, they should remember to update their address details with the AEC, just like they do with their bank and their insurance. It is a simple process and the work involved to keep your enrolment up to date is not onerous.
We heard the member for Mayo earlier talk about the great democracy that is Australia, and that the winner of the election is normally the winner that is called on election night. The only disputed one I have heard of was the disputed election in the 1998 Mundingburra election, which caused a by-election, which of course led to the seat of Mundingburra going to the Liberal-National Party coalition and toppling a government, when Frank Tanti beat Tony Mooney. That led to the Shepherdson inquiry, which led to a whole heap of electoral roll rorting by some local branch members of the ALP in Townsville. So, if we are looking for reliable information, there is probably not a good place to start.
The coalition is also concerned about the difficulties experienced in New South Wales state elections. Both New South Wales and Victoria have introduced automatic enrolment at their recent state elections, which means a number of electors in these states are only enrolled for state and not for federal elections. This is due to the differences in state and federal legislation. What happens here is that, when an elector has their details changed or added to the state electoral roll in New South Wales and Victoria, they are sent an enrolment form by the AEC.
The ABC's election analyst Antony Green wrote in an article on 16 July 2011 that only 64.3 per cent of those people automatically enrolled for the first time during the 2011 New South Wales state election actually turned out to vote; so 35.7 per cent did not turn out to vote or were enrolled incorrectly. Surely this would suggest that some of the information used to put new electors on the roll is unreliable. Surely, the low turnout and nonparticipation could be blamed in no small part to the poor information installed in the first place. As with everything, if you put rubbish in, you get rubbish out.
My niece lived with us in Townsville for a couple of years. When she moved to Townsville from Brisbane, this 19-year-old had the sense, all on her own, to change her enrolment details with the AEC. She even told me she voted for me at the last election—but we had been arguing that week so I cannot be totally sure. She has since moved back to Brisbane and, hey presto, she has updated her address details on the electoral roll all by herself. She will be voting this weekend in Brisbane to make sure that Campbell Newman gets in up there. The three electorates of Townsville, Thuringowa and Mundingburra will also have new LNP members after this weekend.
Every month I send out letters of welcome to people who have enrolled in the federal seat of Herbert. All these people have done the right thing and completed the form to change their details. Many of my electorate's schools get the seniors of each year to pre-enrol when they are leaving school to make sure they have their right to cast a vote. In the ADF when they turn up to their new post, they have the AEC forms there ready for them. People are organised. It is not that hard to maintain your roll with the AEC.
No amount of legislation will cover every consequence. No amount of legislation will make up for personal responsibility. The right to vote is a right which carries but one tiny piece of responsibility—that is, to maintain your address with the AEC.
This government can go on and on about the amount of red tape we are going to put into this, the amount of things we are going to have to do, but if someone does not want to do it, they will not do it. It is a right to vote. It is something you should follow through with. It is something very precious that has been bestowed upon the people of Australia by this government. I think it is not too hard to understand that this can be done and I therefore do not support these bills.
There have already been many excellent contributions this morning on these bills before the House, the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012. I congratulate the member for Herbert on his contribution and those who have spoken before me in this place highlighting the great value we must place on our democracy. We should never take for granted the opportunity to vote and choose who represents us in this place.
This debate goes to the core of what it means to play an active role in this great democracy we have in Australia. Like many members I get the opportunity to speak to school groups on a regular basis. When I talk to them I often raise what I consider are core values in our community: respect and responsibility. I tell the students it is important they respect others and they should respect themselves and the skills and abilities they have within themselves. It is important they try to achieve their best and make a contribution to our great nation. When I mention responsibilities I encourage them, once they turn 18, to make sure they enrol to vote. I often refer to it. I say, 'One of the responsibilities you have as an Australian citizen is making sure that once you turn 18 you enrol to vote and have your say in the future of this great nation.'
I welcome the school group that has just walked in here today and encourage them, right now, that when they get to the age of 18 they enrol to vote and come into the polling booths, when the time presents for them, and make a choice of who will represent them in their electorates. It is an important thing. It is a responsibility we should never take for granted.
The member for Herbert was correct when he said that the right to vote is precious. He, like me, writes to new members of his electorate, when they change their enrolment details, and introduces himself. It is not very hard for people when they move to our electorates to change their roll status, to make sure they keep it up to date. I do not believe it too onerous to place that responsibility on our citizens, but it is something this bill seeks to change.
I know it is not fashionable to be standing up in parliament or standing up in school classrooms and talking about responsibilities. We have seen a progression over many years, at state and federal level, of a nanny state approach by this government and the Greens parliamentary team. I am concerned that these bills before the House send a message from the Labor Party and the Greens that they do not trust Australian people with this core responsibility of making sure that their electoral roll details are up to date. It is a bizarre judgment to be making upon our community—that you cannot be trusted with the most basic responsibility of making sure you are enrolled to vote, that your details are updated when you move and that you exercise your rights at an election.
I refer to the dissenting reports which were submitted by coalition members of the Joint Standing Committee on Electoral Matters. I congratulate the coalition members of that committee: the member for Mackellar who is a fierce champion of issues relating to electoral integrity, the member for Fairfax, Senator Ryan and Senator Birmingham for their contributions to the dissenting report. The key issue they raised in this reportwas the integrity of the roll.
I am sure that even the most casual observer would understand that the integrity of the roll is very important. The importance of it is very clear to the most casual observer. The recent election is a great example of that. There was not a clear majority; there were many seats won on a wafer-thin margin. That has always been the case. In fact, the member for Hinkler was telling me just the other day that in the seven elections he has contested four of them have been won by a margin of less than 500 votes. They are very close results. No wonder the member for Hinkler is turning grey in this place. It is important in those very close results that the people in that electorate, and the broader Australian community, have confidence in the integrity of the roll. If they are to accept the result of these very close-run contests they must have confidence in the integrity of the roll. These are the key concerns that the coalition members of the Joint Standing Committee on Electoral Matters raised in their dissenting report.
Their concerns were that the legislation will severely damage the integrity of the electoral roll by adding new electors, who may not be entitled to vote, without their knowledge and potentially without their consent should the elector not receive the Australian Electoral Commission's notice of enrolment. The concerns about integrity in the report go on to state: 'When the responsibility for enrolling and updating individual elector details is taken from the individual and given to the AEC', as this bill will do, 'the potential for errors to occur is significant. It also opens up the roll to fraud.' The Labor and Greens members of JSCEM as well as the Australian Electoral Commission seem to consistently downplay this issue of the integrity of the electoral roll. It was the member for Mackellar who made this very clear and highlighted the critical importance, from a legal point of view, of the electoral roll being reliable and accurate at all times.
This leads me to concern about the sources of information that are proposed for updating the roll under the government's approach in the legislation as it is presented to the House. As the dissenting report indicates, the AEC has said in its submission to the inquiry that it will use Centrelink and state government records from the Roads and Traffic Authority. As previously stated, information from Australia Post will not be used. The use of these agencies is not legislated but they are merely stated as sources the AEC considers reliable, without providing any evidence to establish the reliability of this information. The dissenting report states that in reality the AEC could use any data source it sees fit, including records from the tax office or Medicare. The coalition has previously highlighted in its dissenting reports to the JSCEM inquiries into the 2010 federal election and the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 the extraordinary risk of using those agencies, given the high number of duplicate records.
The coalition has great concern that individuals not entitled to vote may be added to the roll because of this bill. They go to the core of our issues in relation to the integrity of the roll. For all the reasons I previously mentioned it is clear that the first responsibility of the AEC is to uphold the integrity of the roll. But there is a concern with the direction we are seeing, through this bill, that the AEC is tending to focus now on maximising the number of people on the roll. It is a point that was raised during the inquiry process by Dr Roger Clarke of the Australian Privacy Foundation. In his submission he said:
I believe part of the problem is that the presumption is that there is a desire to maximise the number of people on the rolls. I do not believe that is an appropriate objective. The notion of the vote is a right—it is an entitlement—and turning it into an obligation, which is what that entails, I just do not believe is appropriate in a democratic process. The intention should be to maximise people's opportunity to enrol and to vote, and this goes well beyond that.
It is not much to expect eligible Australians to actually enrol to vote when they turn 18 and then make sure that their details are kept up to date. That is a responsibility that best rests with the individual and not with the state. During this debate we have heard a lot of discussion about what could be the motive of the government in relation to this issue: why is the government seeking to move in this direction? The government's view seems to be: 'Simply trust us. We know what is right for you. You can trust us to do the right thing.' The member for Bradfield in his contribution highlighted that those on this side of the House have every reason to question that motive—and I am not going to go through the long history he outlined—but, when it comes to manipulating the roll for political advantage, the Australian people simply have no reason to trust a government which is saying: trust us. I think there is an enormous trust deficit between the current government and the Australian people. You only need to refer to the famous quote from our current Prime Minister that 'there will be no carbon tax under a government I lead' to understand that fundamental breach of trust.
The coalition has concerns, first of all, with the motives of the Labor Party and the Greens in relation to these bills before the House, but there are also concerns that it will make it more difficult to investigate and prosecute cases of alleged fraudulent voting. In the dissenting report it was highlighted by the coalition members that they had some level of disappointment about the failure of the AEC to prosecute any cases of fraudulent voting stemming from the 2007 legislation despite there being over 20,000 cases of multiple votes at that election.
I would like to refer to Senator Scott Ryan's contribution in the dissenting report in which he raised a valid point about how this legislation would make it harder for the Director of Public Prosecutions to prosecute cases of fraudulent voting. When electors are put on the roll automatically, potentially, without their knowledge or consent, there will no longer be a signature available for the returning officer to compare it to, if an elector is making a declaration vote. Senator Ryan said:
If there are cases of potential electoral fraud, that is one less piece of evidence the commission will have in its armoury.
You currently have a form that you can compare signatures to if, for example, people are using declaration votes and have to sign the envelope. That will not be available under these provisions.
I think these are legitimate and well-founded concerns on this side of the House about the motives of the bill put before us today and the need for these bills in the first place. I believe they are unnecessary. I think they are intrusive and have the potential to undermine the integrity of the electoral roll. As I have stated earlier, I believe it is a nanny state provision that should be resisted in this place.
I think this is more about Labor and the Greens seeking to achieve some form of political advantage than actual genuine electoral reform that will boost confidence in our democracy. I believe it will have the reverse impact: it will erode confidence in the integrity of the roll. My greatest concern is that the key elements of these bills have the capacity to weaken rather than strengthen the integrity of the electoral roll. I join my colleagues in the coalition in opposing these bills.
The bottom line is: it simply should not be up to the AEC to determine when a person has moved; it is up to the individual to notify the AEC, as is their duty as an Australian citizen. I do not believe that is too much of an onerous responsibility to place on the Australian people. Being an Australian citizen bestows great rights upon a person, and we all benefit from those rights that, sadly, too many Australians have fought and died for in conflicts in the history of our great nation. It also places some important responsibilities on our citizens. Our citizens are expected to uphold the laws of the land, to make a contribution in whatever way they can to our great nation. But, surely, one of these responsibilities which remains and can remain into the future is to enrol to vote and maintain the accuracy of your own address and to exercise that right and that responsibility at election time. I have great faith and every confidence and trust in the Australian people that they can exercise that responsibility into the future. I am worried this government does not believe they have that capacity.
This government seems to think so little of the Australian people that they do not believe they can be trusted with even that most basic responsibility. They are taking away that responsibility, which I believe sets a very negative precedent. The level of government influence in our lives is already quite extraordinary. We are subject to a ridiculous array of restrictions on our activities under nanny state laws and regulations that send the message that people simply cannot be trusted to accept responsibility for their own actions. We in this place need to push back at every opportunity when more of these nanny state intrusive regulations are placed before us. As I have said, this is a bad move. It is unjustified and it should not be supported in this House or any other place.
I rise to support the previous speaker. In a nutshell, the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 seeks to give electoral advantage to the ALP by bringing into question the integrity of our electoral roll. It is a shameful political act which goes to the heart of our democracy. The integrity of our roll is a cornerstone to the integrity of our voting system and to the integrity which brings every member to this place, and this bill brings this into question. The sad, sad fact is that it does this for base political purposes.
There has been no significant evidence put forward to show that this will have any other broader benefit other than trying to bring people onto the roll who, as previous members of the other side have said, are more than likely to vote for them.
Why should it be opposed? In the 2007 and 2010 election we had serious questions raised about the integrity of the role and, in particular, about people voting more than once. I know this from having been involved in the 2007 election campaign for the seat of McEwen. The vote was incredibly close. It had to be counted, recounted and ultimately ended up in the courts before we got a final decision on who would win the seat. During that process, examples came forward which showed some of the rorting that had taken place. In particular, there was an example of a priest from a country town who was written to by the AEC asking him why he had voted three times in the electorate McEwen. He wrote back to the AEC and said that in fact he had not voted three times within the electorate of McEwen because he had been interstate on election day and had voted interstate. Someone had walked into three different polling booths in that electorate and used his name to vote three times. So rorting does take place. We should be looking to strengthen the processes so that we do not see a continuation of that behaviour. Instead, sadly, what we are seeing with this bill is that process being weakened further.
We have seen why this will occur. Now it is possible for people to be placed on the roll without, at a minimum, having their signature on a piece of paper. There is a deafening silence and a dearth of action taken in instances of the roll being exploited. One of the requirements that we could have that could protect the integrity of the roll—a signature—is now being weakened. That will lead, sadly, to more rorting rather than less. I think it is beholden on all of us here to say enough is enough. We have to strengthen the system that we have; we do not need to weaken it.
This legislation also raises privacy concerns. We are in many ways becoming the world's greatest nanny state. This legislation takes away the responsibility of an individual to participate in the democratic process. Because we do have compulsory voting at federal elections, this legislation puts more requirements on individuals to enrol and does so with complete disregard for their privacy. It would be interesting to see, if the bill went to the Privacy Commissioner, what the commissioner's views would be on whether this process will actually benefit the privacy of individual citizens or whether it is another step in eroding it.
The government is putting forward another regulation, basically forcing people onto the electoral roll. This is not something that we should do lightly, because many people take their individual privacy extremely seriously. They do not want to see their privacy diminished because a government, for their own base political purposes, wants to put forward a bill which gives the AEC powers to put people on the roll when they might be already on the roll but it is unknown to the AEC or when there might be other compelling reasons that they have chosen not to do so. The privacy aspects of automatic enrolment are something which definitely need to be taken into consideration.
I now turn to the dissenting report of the Hon. Bronwyn Bishop, the Hon. Alex Somlyay, Senator Scott Ryan and Senator Simon Birmingham. I would ask all members of the House, before they vote on this bill, to read this dissenting report. I think in many ways the opening paragraph sums it up. It states:
Coalition Members and Senators strongly disagree with the Labor and Green members of the Joint Standing Committee on Electoral Matters that the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012 (i.e. automatic enrolment) be passed by the Parliament. The Coalition has long opposed moves by the Labor Party and the Greens to introduce automatic enrolment and notes that this Bill is being introduced solely to improve the electoral prospects of both Labor and the Greens. This follows similar moves by the former Labor Governments in NSW and Victoria prior to their last state elections.
Sadly, summed up in one: it is being done for base political reasons. We are starting to see a systemic desire by Labor and the Greens to do this, not only federally but at the state level as well. The dissenting report goes on to say:
This legislation will severely damage the integrity of the Electoral Roll by adding new electors who may not be entitled to vote without their knowledge and potentially without their consent, should the elector not receive the Australian Electoral Commission’s notice of enrolment.
An excellent report that in a nutshell sums up the basis of why we, on this side, are opposing this legislation.
The report then goes on to outline the main reasons for dissenting. I have touched on some of these, but it is worth highlighting the issues in this excellent report. The integrity of the electoral roll is the first issue raised:
It is imperative that the Roll which is used to elect our Parliamentarians is accurate and reliable, particularly in the wake of the 2010 Federal Election where no political party won a majority of seats in the House of Representatives and results in a number of individual electorates came down to only a few hundred votes.
As I have pointed out, I saw this firsthand in the 2007 election in the seat of McEwen, and I fully endorse this dissenting report for making that point, because it is entirely accurate and extremely worrying. Privacy concerns are also raised:
Coalition Members and Senators also note the risks relating to the privacy of individual electors raised during this inquiry and the previous inquiry into the Electoral and Referendum Amendment (Maintaining Address) Bill 2011. Dr Roger Clarke from the Australian Privacy Foundation told the JSCEM Roundtable hearing on 29 February 2012 that he was particularly concerned about the lack of consultation about the Bill, was not aware of any privacy assessments taking place and believed that the outcome of the inquiry appeared to be predetermined
Here we have someone from outside the political process sadly being able to sum up these concerns in a nutshell by saying that this inquiry and this legislation appeared to be predetermined. In many ways that says it all.
The dissenting report also goes into the issue of fraudulent voting. There is already some dismay at how fraudulent voting is dealt with by the AEC. There has been a worry that no prosecutions are occurring. It seems to be a practice that you receive no more than a slap on the wrist. Yet the fundamental basis of our democracy is the fact that we have one valid vote, and that is all that we should have. The dangers associated with fraudulent voting have been brilliantly summed up in this dissenting report.
The report also goes into issues regarding New South Wales, and we know the steps that the former New South Wales Labor government would go to. There is no doubt that these issues have been adequately addressed in the dissenting report as well. The report concludes:
Coalition Members and Senators realise that this Bill is being introduced by Labor and the Greens solely to increase their electoral advantage, despite the severe risk it contains to the integrity of the Electoral Roll and significant concerns about individual privacy.
It is a sad reflection on the other side that we are in here debating this legislation today. It shows that they will stop at nothing and that they are prepared to jeopardise the integrity of our electoral roll for their own base purposes. At some stage, those on the other side are going to have to understand that ultimately what they need to deliver for the Australian people is good policy—policy that is in their interest and in the national interest—rather than spending the whole time cooking the books to give themselves an electoral advantage. (Time expired)
I rise for the second time in less than 12 months to defend the integrity of our electoral roll in what is the greatest democracy on earth. I find this is one of the most important roles that we should have here as representatives of our parliament. That is why I feel compelled to stand up and speak against the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012, which we are debating today.
I have said before in this House that all Australians have rights and freedoms which they can rightfully expect to have unhindered access to. These include the freedom of speech, the freedom of religion and the freedom of movement, with the right to shelter, food, health care and, of course, most important, the democratic right to vote for your elected representatives. These are rights that must be steadfastly defended at all times, and sometimes they even must be defended at the point of a gun.
Once again we find ourselves in this House debating proposed legislation that is ill thought out and misguided, for in our society for every single right we have there is also a corresponding obligation. We must balance those rights. We must balance the right to vote with ensuring the integrity of our electoral system and protecting it from the risk of fraud, as this is the only way we can protect our democracy. The Electoral Act provides both a right and an obligation to all citizens and, as I have said before, for every right in our society there is an equal, corresponding obligation. Section 101 of the electoral act currently provides that there is an obligation upon all citizens who are entitled to have his or her name placed on the electoral roll to do so within 21 days, but unfortunately these bills will take away that obligation.
There are a few specific reasons why these bills should be opposed. The Electoral and Referendum Amendment (Maintaining Address) Bill 2012 will allow the Australian Electoral Commission to automatically update details of an elector when they change their residential address based on information obtained from other sources. According to the explanatory memorandum, this bill will allow the Electoral Commissioner to directly update an elector's enrolled address following the receipt and analysis of reliable and current data sources from outside the Australian Electoral Commission which indicate an elector has moved addresses. It simply seeks by default to introduce automatic enrolment and take away the obligation citizens have to update their address on the electoral roll.
There are five specific problems that this will cause and five reasons why we should be voting against this bill. The first is that the bill will greatly reduce the integrity of the electoral roll, with electors having their details updated without their knowledge, potentially leading to a higher number of irregularities. Secondly, this bill gives the AEC the discretion to determine what reliable and current data sources are. Could this be a credit card from one of the major department stores? No-one knows. This is not defined in the bill. There are many sources from which the Electoral Commission can obtain information, none of which you can be sure is correct.
Thirdly, the coalition believes in personal responsibility and if electors treat their democracy with the respect it deserves, they should be in charge of enrolling and maintaining their address details so that when they change their address they do not sit back and let the government do it on their behalf. This is all about individual responsibility. Fourthly, this bill is a step towards automatic enrolment. Those who have turned 18 and become citizens should have enough respect for our democracy, our history and our traditions to know that it is their obligation. If they wish to participate in our democracy, they have to take the simple step of enrolling. Fifthly, the coalition is particularly concerned about the reliability of other data sources. As the coalition members on the Joint Standing Committee on Electoral Matters noted in July 2011 in their dissenting report:
The reliance on external data sources that have been collated and that are utilised for other purposes does not make them fit for use in forming the electoral roll.
That is exactly correct and is why the bill should be opposed. The dissenting report goes on:
As outlined in the p revious report into these proposals, a 1999 report by the House of Representatives Standing Committee on Economics, Finance and Public Administration: Numbers on the Run – Review of the ANAO Report No.37 1998-99 on the Management of Tax File Numbers found that:
There were 3.2 million more Tax File Numbers than people in Australia at the last census.
Given this fact, how can we rely on this data to maintain the integrity of our electoral roll? Secondly:
There were 185,000 potential duplicate tax records for individuals; 62 per cent of deceased clients were not recorded as deceased in a sample match.
Similarly, an ANAO Audit Report (No.24 2004–05 Integrity of Medicare Enrolment Data) stated that ‘ANAO found that up to half a million active Medicare enrolment records were probably for people who are deceased’.
This dissenting report shows exactly why we cannot rely on the so-called 'other sources' for the Electoral Commission to take their records from. It must be the obligation of the individual citizen.
The second bill is the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012. Again I would like to give full reasons why this House must oppose this bill. Firstly, this bill will corrupt the integrity of the electoral roll, with electors potentially being put on the electoral roll again without their knowledge. It must be the obligation of every citizen to take that step, to fill out the AEC enrolment form to put their name on the electoral roll. That shows they are taking responsibility, and not taking that responsibility shows disrespect for our democracy. Unless people are prepared to do take those steps, people should not be allowed to vote.
Secondly, as with the Electoral and Referendum Amendment (Maintaining Address) Bill 2012, this bill gives the AEC the discretion to determine what reliable and current data sources are. Again, there are so many data sources in our society today and we simply do not know the integrity of those data sources, but this bill will allow the AEC to use data sources to put names on the electoral roll, completely corrupting our electoral roll and therefore undermining the very principles of our democracy.
Thirdly, the coalition believes in personal responsibility, that electors should be in charge of enrolling and maintaining their addresses on the electoral roll. When details change, it should be up to the individual citizen to show respect for our democracy and make the changes on the electoral roll rather than leaving it for the government to do it. We see so many bills go through this House. We see a reduction of individual responsibility where roles for which citizens should be responsible are handed over to the government. This unfortunately is another of those bills and yet another reason why it should be opposed. Fourthly, the coalition is particularly concerned about the reliability of these other data sources. As the coalition members on the Joint Standing Committee On Electoral Matters emphasised in the same dissenting report, there are 3.2 million more tax file numbers than people in Australia, and there are 185,000 duplicate tax records for individuals.
Fifthly, and the main reason we should be opposing these bills, is it gets back to the importance of our democracy. It gets back to making sure that individual citizens respect our democracy and that they realise that it is something that has been fought for and passed down to them by previous generations—by their forefathers. It is not something that is just handed to them on a platter. It is not to be taken for granted. If these bills are passed, that is what they will do. It will take away the obligation of the citizen to take those formal steps to enrol which have been set out and followed throughout the history of our democracy. These are bad bills. I hope that, even if there are not a few government members that would stand up and oppose it and stand up for our democracy, we will at least see some of the crossbenchers realise how bad these bills are and that they should be opposed. The cornerstone of our democracy is to protect the integrity of our electoral roll. These bills will weaken our electoral roll. They will weaken its integrity and they will weaken our democracy. That is why they should be opposed.
I rise to speak on the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012. The first bill will empower the Australian Electoral Commission to modify the address of electors when it believes the elector has moved address. The second bill will empower the AEC to add individuals to the electoral roll when it is satisfied they are 18 years old, living at a particular address and entitled to vote—that is, automatic enrolment. These are bad bills. That is why the coalition opposes them both.
At the heart of this legislation is a move by the Labor Party and the Greens to gain electoral advantage. The same tactic was adopted by the Labor Party in both Victoria and New South Wales, where they sought to gain electoral advantage by introducing automatic enrolment before the last state elections in each of those states. These automatic enrolments were failures. They should not be repeated at the federal level. In effect, these failures have corrupted the integrity and the reliability of the electoral roll.
There could not be many more important subjects than the future integrity of the one document which is relied upon to form the federal government—to elect the legislators that shape the future of our country. This is what is at stake: the heart of our democracy. These matters have been the subject of considerable discussion by the Joint Standing Committee on Electoral Matters, which reported in July last year. The dissenting report—and I want to pay particular tribute to my colleagues Bronwyn Bishop, Alex Somlyay, Senator Scott Ryan and Simon Birmingham—is very instructive. Let me say what a great job our special shadow minister for state, the member for Mackellar, has done, assisted by her Senate colleagues and by Alex Somlyay, in shining a light on the weakness in this dangerous legislation. The dissenting report found that, were we to proceed to automatic entitlement, the legislation would severely damage the integrity of the electoral roll. It would have extensive privacy implications and it would undermine the fundamental notion that people need to take responsibility for ensuring that they are correctly recorded on the electoral roll.
In terms of the integrity of the electoral roll, automatic enrolment opens up the real possibility of both error and fraud, As Professor Graeme Orr in his book The Law of Politics has written, the integrity of the role is paramount. He wrote: 'Like other official public registers, such as land registers, a chief feature of the electoral rolls is their finality. The purpose of a roll is to be a definitive statement of the entitlement to vote, leaving aside the provisional provisions, thus there is conclusive evidence of the entitlement to vote. Reinforcing this is the secondary rule in almost all jurisdictions that a court of disputed returns is not to inquire into the correctness of the roll.'
The problem here is that the AEC has sole discretion, and the data that the AEC would seek to rely on is not clearly defined. In fact, in their submission to the committee on the second bill, the Australian Electoral Commission said:
… the AEC would receive data from a third party data source, conduct a data matching process including a check of the eligibility of individuals to enrol, notify eligible individuals and, after a period of 28 days, make additions to the electoral roll and inform electors of the AEC’s action.
What data is deemed reliable? What restrictions are there on the type of data that could be used? What is the standard of proof that is applied in these matters? The AEC will make use of Centrelink, state government roads and traffic authority information, and even materials from Australia Post. They will, no doubt, even go to the Tax Office and other sources of sensitive information.
Use of this material raises real concerns. Previous parliamentary reports have found that there were 3.2 million more tax file numbers than people in Australia at the last census; there were 185,000 potential duplicate tax records for individuals; and 62 per cent of deceased clients were not recorded as deceased in the sample match. The Australian National Audit Office has also separately found that 'up to half a million active Medicare enrolment records were probably for people who were deceased'. The problem here is that the AEC is just trying to expand the role and the size of the roll for the sake of expanding it. In the process, they are undermining its integrity and increasing the margin for error.
Dr Roger Clarke of the Australian Privacy Foundation said:
I believe part of the problem is … that there is a desire to maximise the number of people on the rolls. I do not believe that is an appropriate objective. … The intention should be to maximise people's opportunity to enrol and to vote, and this goes well beyond that.
Indeed, in regard to the privacy implications of the legislation before us, Dr Clarke of the Australian Privacy Foundation has also raised real issues about publishing people's details on the electoral roll without their knowledge or approval and, importantly, without their having the opportunity to register as a silent elector. This is a particular concern for people who have been victims of domestic violence or who would like their addresses suppressed for a range of safety issues. At a hearing in February this year Dr Clarke said of this legislation:
We are not aware of any risk assessment having been performed. We were not aware of any privacy impact assessment having been performed.
This is really inexplicable, and it reeks of political advantage and political opportunism on the part of the Labor Party and their co-conspirators in this legislation, the Greens.
I have mentioned the experience in New South Wales and Victoria. What is instructive about the experience in New South Wales is that the people who had the automatic enrolment did not turn out in the numbers expected. In fact, only 64.3 per cent of these first-time new enrolments turned out to vote. Compare this to the overall turnout of 92.3 per cent for the 2011 New South Wales state election. This raises serious issues about the integrity of this automatic enrolment process and about the potential for fraud.
In conclusion, these are bad bills. These bills are motivated by an opportunistic desire for political advantage. There has not been proper and rigorous assessment. In fact, we have heard from experts, from parliament committees and elsewhere about the dangers involved. These bills, and the subsequent changes, will compromise the integrity of the Australian Electoral Act. They will raise significant privacy issues that will affect all Australians. What is more, they will undermine the personal responsibility that is incumbent on individuals in Australia when they reach voting age to take the opportunity to vote in Australia for their political representatives. There are not many more important subjects than this. I implore all the Independents, who will not have the same political motivations as those opposite, to take this opportunity to vote against this legislation and ensure that the integrity of the Australian electoral roll is maintained.
I rise to speak on the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012 out of a great concern for the implications that these two bills will have for Australian democracy. Australia is one of the world's oldest democracies. We have been a democracy since our inception. At the very heart of our democracy lies the fact that each Australian citizen has the franchise; the ability to put themselves on the electoral roll so that they can vote for their representative in this place and in the Australian Senate.
Under existing legislation it is very clear who is currently able to put themselves on the Australian electoral roll: anybody who is over 18 years of age and who is an Australian citizen, a British subject and or on the Commonwealth electoral roll as at 25 January 1984. This is pretty clear. More than this, in advance of somebody turning 18, at the age of 16, a citizen of this country who meets the criteria can in advance put themselves down on the electoral roll so that when they reach their 18th birthday they will automatically become entitled to vote, should an election be called. These two bills, however, seek to undermine the way people are put onto the Australian electoral roll. It is, according to this government, a necessary evil. They say that so many people are disenfranchised under the existing system. They say that many young people, in particular, are disenfranchised because they do not have time to put themselves on the electoral roll. But of course any basic examination of these facts demonstrates the paucity of the government's argument and invites anybody who understands this issue to ask themselves the question: what is the real motivation for this government in seeking to make a change to how citizens are put onto the electoral roll? Already, under the existing rolls—and I quote from the AEC website:
The electoral roll is continuously updated, however, following the issue of the 'writ' for an election, which sets the election timetable, the roll for the election is closed. The roll for the election closes at 8pm local time on the third working day after the writ is issued and cannot be updated after that date.
So it is very clear that when an election is announced—when the writs are issued—people most certainly do have the ability to put themselves on the electoral roll. Whether they be young or old, they themselves can go to the AEC and put themselves on the electoral roll so that they may vote in that election for their representative.
Instead, the government is seeking to automatically put a number of people onto the electoral roll. It is seeking to do this through data matching. Without anyone's consent or permission, this government would put people onto the electoral roll or make changes to an entry for an existing person on the electoral roll as to where they are entitled to vote. This would be the result of the Australian Electoral Commission, in and of itself, determining how that person is to appear on the electoral roll.
This concerns us greatly, because it should be for the individual themselves to go through all the proper and correct processes to put themself on the electoral roll. Only in this way can we be assured of the integrity of the electoral role, that there are proper checks and balances—that people are in fact entitled to be on the electoral roll and are enrolling in the correct place and not seeking to skew the electoral roll in any way. This government would rather see the Australian Electoral Commission make a determination as to who should be on the roll and how they should be on it. This concerns us because the Australian Electoral Commission will be forced to rely upon information that is provided to it by third parties that it determines are of sufficient quality to be allowed to make that determination, yet there are no criteria on which this is based.
I would like to refer to the Joint Standing Committee on Electoral Matters. My colleagues Bronwyn Bishop, Senator Scott Ryan, Alex Somlyay and Senator Simon Birmingham wrote such a stellar report pointing out a number of the flaws with this legislation. Bronwyn Bishop spoke with the AEC and asked a very pertinent question about the process that went to the issue of the integrity of the roll:
I want to go back to the process. Supposing you have decided, because of your checking with your material, that Mrs Bloggs has actually moved from her previous address. Under this legislation, you would write to the new address and say, 'We have changed you', because you are satisfied that she has moved.
Mr Killesteyn replied:
We would not say that we have changed it; we would write to the individual and say, 'We have information which leads us to believe that you are at this address. You have 28 days to advise us whether that is not the case.' If there were no response, then we would change the address at that point.
That is a great concern. You could have a situation in which somebody has provided their address details to one of these third-party organisations or government agencies and the AEC decides to write to a new address, which could in fact be a holiday home that is frequented only on occasion. As a result of this, someone's electoral enrolment could be radically changed. The enfranchisement of that person to vote for the individual or representative in the electorate in which they live would in fact be changed, and there are no adequate checks and balances in order to deal with this. I think this is a very critical point, and it goes to just how flawed this legislation actually is.
When you look at it even more closely you can see that there are some significant flaws in the way in which the Australian Electoral Commission will go about supposedly matching up data. They are going to rely, as I said before, on third-party sources. I quote again from the dissenting report, which refers to another dissenting report:
In their dissenting report in July 2011 to the Joint Standing Committee on Electoral Matters’ investigation into the 2010 Federal Election, Coalition members of JSCEM noted the risks of using external data sources such as the ATO, Medicare or other Government agencies to update elector details:
It then quoted from that dissenting report:
The reliance on external data sources that have been collated and that are utilised for other purposes does not make them fit for use in forming the electoral roll. As outlined in the previous report into these proposals, a 1999 report by the House of Representatives Standing Committee on Economics, Finance and Public Administration: Numbers on the Run – Review of the ANAO Report No.37 1998-99 on the Management of Tax File Numbers, found that:
There were 3.2 million more Tax File Numbers than people in Australia at the last census;
There were 185,000 potential duplicate tax records for individuals; 62 per cent of deceased clients were not recorded as deceased in a sample match.
Similarly, an ANAO Audit Report (No.24 2004–05 Integrity of Medicare Enrolment Data)stated that ‘ANAO found that up to half a million active Medicare enrolment records were probably for people who are deceased’
So there is no level of comfort here that the records that are supposed to be data matched are in fact accurate themselves. Yet this is the information that the Australian Electoral Commission will rely on in order to change the electoral roll. We think this goes to the very heart of the integrity of the electoral roll and it is incredibly flawed and dangerous for our democracy.
Moreover, the third-party sources are going to be entirely at the discretion of the Electoral Commissioner and can be changed at any time. This also concerns us because, while the ATO have supposedly been ruled out, now this could in fact change and it is of the initiative of the Electoral Commissioner to determine what may or may not be appropriate. There are no guarantees. So much is unknown. Again, as can be seen from my previous statement about previous reports, this is clearly a government agenda to change the electoral roll. You have to ask yourself the question why—why are they seeking to do this? The only response you can give to that question is that the government believes it can seek an electoral advantage by changing the electoral roll, which is why it has been so committed to try and achieve this.
But there are other significant concerns. Privacy, of course, is one of them. Dr Roger Clarke from the Australian Privacy Foundation gave very strong evidence to the JSCEM, stating that there were concerns regarding the matching of data, particularly in light of the fact that there may be a number of people who do not wish that data to find its way onto the electoral roll. We hear of many awful instances of domestic violence, of stalking, whether that be cyberstalking or physically stalking a victim. We know that there are a number of people for a variety of reasons who would not wish to appear on the electoral roll, for reasons of safety and the safety of their family. Yet under these changes put forward by the government we would see circumstances where these people are automatically placed onto the electoral roll without any consent, without any checking, which could pose a grave risk to them. This concerns us, and again there is no sufficient response from the government to give us any comfort that they have considered these most serious issues.
There should be an incredibly high burden of proof. There should be some incredible harm that is occurring for the government to make such serious changes to the electoral roll. Yet we do not hear any such evidence from the government—far from it. In fact, the evidence that has been heard by the committee, not only in the most recent inquiry but in the inquiries before it, has been that we do have a strong electoral roll now. It works well and it balances many competing interests, and it is the best way to ensure the enfranchisement of citizens of this country. The potential for fraud and the potential for error are very significant if these changes are made. I have mentioned privacy breaches. We do not support these bills. (Time expired)
I rise to speak on the cognate debate of the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012. Just as we have seen on several occasions in this place, these bills may have harmless-sounding names but they represent a dangerous step in our nation's democracy. As a result I speak in strong opposition to these bills before the House today.
In brief, the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 will give the Australian Electoral Commission the ability to change the address of electors when the AEC believes that the elector has moved addresses. The Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012 will give the Australian Electoral Commission the ability to add individuals to the electoral roll when they believe they are 18 years of age, living at a particular address and entitled to vote. This is known as automatic enrolment.
These bills do not carry the civic responsibility that the government spin doctors may try to attach to them. They are plainly and simply an attempt by the Labor Party-Greens alliance to gain an electoral advantage. This legislation will severely damage the integrity of our nation's electoral roll, where a centralised and unelected government funded bureaucracy can add new electors and change the enrolled address of new electors without the individual's knowledge and potentially without their consent. We are a nation that embraces the idea of individual responsibility. It is an elector's individual responsibility to enrol to vote and to inform the Australian Electoral Commission if they change address. It is also an elector's responsibility to vote at an election. These are pretty simple responsibilities and they should not become yet more victims of state intervention. This point has been made time and again by my colleagues since the formation of the inquiry of the Joint Standing Committee on Electoral Matters into the 2007 election.
My colleagues have also noted the extensive implications for issues of privacy that this legislation raises. Dr Roger Clarke of the Australia Privacy Foundation provided the joint standing committee with some valuable insights regarding the individual privacy concerns that this legislation raises. He was particularly concerned about the lack of consultation about the legislation, and he said that he was not aware of any privacy assessments taking place and that the outcome of the inquiry appeared to have been predetermined. He said:
We are not aware of any risk assessment having been performed. We were not aware of any privacy impact assessment having been performed. We were not aware of consultation processed which the Electoral Commissioner has just referred to. We are not aware of the APF or any of the civil liberties organisations being involved in any of those. We have checked back through our records and confined our evidence of that in our own records.
… … …
Finally, the outcome of the inquiry does appear to be predetermined. The inquiries being held by the same committee came forward with a related proposal, and when we sought further time to address this matter we were told that, 'The committee was merely focusing on the adequacy of the bill in achieving its policy objectives.' This sounds rather less than substantive consideration of the matter.
It must be of very real concern to all individuals if their personal details are published on the Commonwealth electoral roll without their knowledge and without them being given the opportunity to register as a silent elector. This would cause alarm in particular for people who are victims of domestic violence, for people involved in custody disputes and for people who, for any other reason, wish their name to be suppressed. These bills pose some genuine dangers to people who are most at risk in our society, and their needs and protection should far supersede the stated motivations of these bills.
The process of automatic enrolment will put into question the integrity of the electoral roll. There are few documents which we have greater dependence on for their integrity to ensure an effective and representative democracy. When a centralised system has authority over an individual's listing on the electoral roll, we are opening our system up to error and the possibility of fraud. As we have seen in times past, the Labor Party are capable of very creative strategies when faced with a campaign to hold onto power. Allowing automatic enrolment is opening a Pandora's Box that may commence with good intentions but can quickly become corrupted. A procedure where the Australian Electoral Commission relies on notification received in reply to their correspondence is a very dangerous way to manage an electoral roll. The chief electoral commissioner of New South Wales has admitted that the response rate is about 20 per cent. This means that on average 80 per cent of people whom the AEC writes to to inform of a change to their enrolment will not confirm their receipt or understanding of this change. Progressively, the integrity of the electoral roll will become diminished as a result of these bills.
In the coalition's dissenting report on these bills, the shadow minister quoted Professor Graeme Orr's book The Law of Politics. I repeat the words of the shadow minister:
… Mr Orr writes: 'Like other official public registers, such as land registers, a chief feature of electoral rolls is their finality. The purpose of a roll is to be a definitive statement of the entitlement to vote'—leaving aside the provisional provisions—'Thus there is a rule that the roll is conclusive evidence of the entitlement to vote. Reinforcing this is the secondary rule in almost all jurisdictions that a court of disputed returns is not to inquire into the correctness of the roll.
In his chapter 'Enrolment and the Roll', Professor Orr also cites the case of Perkins and Cusack: 'The federal Court of Disputed Returns faced a petition claiming that many people were on the roll for the seat of Eden-Monaro whose real place of living was outside the electorate. Even though it was alleged that some enrolled electors lived at addresses that lay outside the divisional boundaries, Justice Starke refused to allow any evidence to be tendered that might contradict the face of the roll.'
One of the curious aspects to this bill, which should raise many an eyebrow around the nation, is that it is even more extreme than the recommendation made by Labor and the Greens in the report of the Joint Standing Committee on Electoral Matters into the 2010 federal election. In this inquiry, Labor and Greens members recommended that the sources of data used by the Australian Electoral Commission to automatically enrol electors should be subject to disallowance by parliament, yet these bills provide sole discretion to the Australian Electoral Commission. To quote from this report:
The Committee recommends that, wherever appropriate, the Commonwealth Electoral Act 1918 should be amended to allow the Australian Electoral Commission (AEC) to directly enrol eligible electors on the basis of data or information provided by an elector or electors to an agency approved by the AEC, as an agency which performs adequate proof of identity checks, where that information is subsequently provided by that agency to the AEC for the purposes of updating the electoral roll. Approval of such agencies by the AEC should be made by disallowable instrument.
Whilst I have a lot of faith in the Electoral Commission and respect for the impartiality of the work that they do, it sets a very dangerous standard for an unknown future when an unelected bureaucracy has this kind of power. The Electoral Commission has confirmed that under these bills they will list any individual on the electoral roll if they believe the individual is eligible after consulting various data sources. These bills do not specify what data sources are required or will be considered reliable, nor are there any restrictions placed on which data sources the AEC can use to enrol an elector. There is no provision in these bills to specify the standard of proof the Electoral Commission needs to enrol an elector. These judgements and decisions fall far outside the scope and jurisdiction of the Australian Electoral Commission. The first obligation of the Electoral Commission is to maintain and improve the integrity of the electoral roll. Instead, these bills will focus their attention on maximising the number of people on the electoral roll at the expense of that obligation.
Dr Roger Clarke of the Australian Privacy Foundation told the committee on 29 February 2012 that the intention of the AEC should be to maximise the opportunity for people to enrol, not to do it on their behalf. He said:
I believe part of the problem is that the presumption is that there is a desire to maximise the number of people on the rolls. I do not believe that is an appropriate objective. The notion of the vote is a right—it is an entitlement—and turning it into an obligation, which is what that entails, I just do not believe is appropriate in a democratic process. The intention should be to maximise people's opportunity to enrol and to vote, and this goes well beyond that.
In the dissenting report, my colleagues made clear our concern about the risk of duplicate records as data is sourced from organisations as varied as the ATO, Medicare, roads authorities and Centrelink. The report stated:
The reliance on external data sources that have been collated and that are utilised for other purposes does not make them fit for use in forming the electoral roll.
A previous report found:
Similarly, an ANAO audit report stated:
ANAO found that up to half a million active Medicare enrolment records were probably for people who are deceased.
There are also serious concerns that, as a result of these bills, individuals not entitled to vote will be enrolled. There is no requirement in these bills for the Electoral Commission to check whether a person is over 18 years of age or an Australian citizen before they are added to the electoral roll.
For these reasons, many constituents may well ask why these bills are being introduced into this House. The answer is clearly that the Labor-Greens alliance has determined that it will be the recipient of an electoral advantage. Any move that threatens the integrity of our electoral roll and therefore tarnishes our democracy should be rejected by this parliament. The responsibility of enrolment should remain with the individual Australian citizen and not be given to a centralised government bureaucracy.
The Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012 questions the integrity of the electoral roll. Surely this goes to the essence, the very core, of what we are about here in this parliament and who we represent. This bill could potentially result in electors being put on the electoral roll without their knowledge. The number of irregularities this could lead to boggles the mind. This bill, as with the Electoral and Referendum Amendment (Maintaining Address) Bill 2011, gives the Australian Electoral Commission the discretion to decide what are 'reliable and current data sources' from which information about electoral addresses is able to be obtained.
This is way beyond the capability of the Australian Electoral Commission, as sound an organisation as it is. The onus and responsibility ought to be on individual electors to supply accurate details about their enrolment and to update those details when they move or when their situation changes. The coalition is a big believer in personal responsibility. People need to take responsibility for their own actions. We should not be taking control out of the electors' hands. We should not be taking their responsibility to choose to enrol away. This bill will reduce the responsibility of people to ensure that they are looking after themselves.
It raises questions about temporary residents and people in fly-in fly-out or drive-in drive-out situations. I am a member of the House of Representatives Standing Committee on Regional Australia, inquiring at present into fly-in fly-out and drive-in drive-out arrangements and the working practices of people in regional Australia. We have heard evidence from people in mining and other communities in regional Australia. It was very interesting to go to Moranbah in Queensland recently to hear about the difficulties that people in fly-in fly-out or drive-in drive-out work arrangements have with enrolling and with voting. Some of them think the onus is on the mining company to provide that sort of information; others think it is their own responsibility. There are all sorts of difficulties around what happens when voting is held—or when the government wishes to conduct its census, which occurs on a Tuesday night. If we cannot get it right for those people, how can we expect this bill to get it right if it is enacted?
Labor and the Greens are hoping that with these bills they will gain more votes, and the member for Bennelong made that point in his speech just a few moments ago. That is the core of these bills: Labor and the Greens, who are running Labor, are hoping that they will get more votes. At present, we have a tremendously successful electoral system, but it still has its flaws. Prior to when I ran for parliament in the August 2010 election, we sent out direct mail to people who we thought were at their right addresses in the electorate of Riverina, and it cost quite a lot of money. But, prior to and after the election, boxes upon boxes of mail came back which had been incorrectly addressed, and I am still getting them. Now and again, I still get one or two of these letters back in the mail with 'incorrect address'.
Where do you think we got the information on these supposed voters in the Riverina? It came from the Australian Electoral Commission, so their records are not always entirely accurate. Certainly they do a great job. We all in this House recognise the wonderful but difficult role they have, but with modern technology that role sometimes becomes even more onerous. Whilst they try to do the job as accurately as they can, the role does have its flaws and irregularities. If these bills become law, they will create even more hassles. I hate to think of the number of boxes of wrongly addressed mail I will receive when I next run for parliament if these bills are passed. Last time, I actually had an Australia Post truck roll up in my front driveway to hand them back to me. There were five or six boxes, which I took to the Australian Electoral Commission in Narrandera, which is in the heart of the Riverina. They were able to follow them up to see why they were incorrectly addressed, to cross-reference them with the records of addresses that those voters had given to the Australian Electoral Commission but which obviously had not been updated.
These bills seek to damage the integrity of the electoral roll, as I said. It is the law that you should be on the roll if you are eligible and over the age of 18. The member for Mackellar pointed out that these bills will compromise the integrity of the Australian electoral roll. As with all matters procedural that the member for Mackellar raises in this House, she is correct once again. We hope they will not pass but we suspect that they will. Information will be updated from sources such as Centrelink and the maritime and roads authority. Coalition members and senators strongly disagree with Labor and Greens members on the Joint Standing Committee on Electoral Matters that the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012—that is, automatic enrolment—be passed by this parliament.
The coalition has for a long time opposed moves by the Labor Party and the Greens, to whom they are beholden, to introduce automatic enrolment and notes that these bills are being introduced solely to improve the electoral prospects of both Labor and the Greens—I hope from experience of this parliament that Labor actually puts the Greens last on their voting tickets at the next election, and I hope every member of parliament does the same; I know I did in the Riverina in the 2010 election—following similar moves by former Labor governments in New South Wales and Victoria prior to their last state elections. It is interesting to note that both of those New South Wales and Victorian governments were indeed Labor and that now both sit very much where they belong, on the opposition benches.
The coalition also notes the extensive privacy implications that this legislation raises which, unfortunately, have been ignored by both the Labor Party and the Greens. The coalition has very real and genuine concerns about electors having their details published on the electoral roll without their knowledge and without the opportunity to apply for silent elector status. Can you just imagine the confusion that will surround the voting process when people who do not even know that they are on the roll all of a sudden start getting fines in the mail after an election or when voting material is sent to the wrong places if this bill goes through? That is exactly what will happen.
The coalition has great concerns that individuals not entitled to vote may be added to the roll because of this bill. None of us in this place should want that. Coalition members and senators are extremely disappointed with the Australian Electoral Commission's attitude to fraudulent voting and have consistently noted the AEC's failure to prosecute any cases of fraudulent voting, despite there having been more than 20,633 multiple votes at the 2007 election.
Mr Lyons interjecting—
I can hear the member for Bass interjecting there. I am not quite sure what he said but I am sure that he, like all of us in this place, would be concerned about fraudulent voting. I did say that the AEC do a marvellous job, and they do. It is a very difficult and onerous job, particularly in these days of technology, to make sure that the electoral roll is as good as it can be, but these bills are not providing that. I am sure that the member for Bass would not want people fraudulently voting. I am sure that people in Bass would not be fraudulently voting but, unfortunately, they are in other areas of Australia because there were 20,633 multiple votes at the 2007 election. Goodness knows how many there were at the 2010 election.
At present, an elector must fill out an enrolment form to be added to the electoral roll, and that is the way it should be. However, if they are automatically enrolled, there will be no specific record that refers to how they were enrolled, why they were enrolled or, indeed, who was enrolled in the first place. On 29 February 2012, Senator Scott Ryan raised a valid point about how this legislation will make it more difficult for the Director of Public Prosecutions to prosecute cases of fraudulent voting. When electors are put on the roll automatically, potentially without their knowledge or consent, there will no longer be a signature available for the returning officer to compare when an elector is making a declaration vote. That is just a disgrace. If you go into a shop and you use your credit card for a purchase of $10 or more, a trifling amount, you have to have your signature on the back of your credit card verified to make sure that you can take that purchase, but, if these bills come into place, people whose signature will not be able to be verified will be on the electoral roll and they will not even know they are on the electoral roll. How will they know next time that they ought to be voting for the National Party or indeed—as the member for Dawson joins me—the Liberal National Party in Queensland? It just beggars belief.
Senator Ryan noted that this will be one less piece of evidence that the Director of Public Prosecutions will have available if they are attempting to prosecute a case of fraudulent voting. It is interesting to note Senator Ryan's comments there:
We currently have a signature on a form with an enrolment. We have had a number of discussions in this committee and the Senate committee the AEC comes before in estimates about the difficulty proving certain electoral offences and the burden of evidence required for the DPP to take action. I am concerned that, if we move to what I am going to continue to call automatic enrolment—simply because I think it is automatic in the sense that it does not require action from an elector—we are going to lack that signature from a voter. That worried me. If there are cases of potential electoral fraud, that is one less piece of evidence the commission will have in its armoury.
You currently have a form that you can compare signatures to if, for example, people are using declaration votes and have to sign the envelope. That will not be available under these provisions.
That is a damning indictment of these bills, and truer words could not be said.
The previous New South Wales Labor government, under Premier Kristina Keneally, introduced automatic enrolment prior to the March 2011 state election, and the result was that a large number of electors automatically added to that state's electoral roll failed to turn up—that is right; they failed to turn up—to vote at the 2011 election. I wonder why that is? I wonder why those people failed to turn up? I will tell you why they failed to turn up: because they did not know they had to. They did not know that they were on the electoral roll. They could have turned up and they could have even given the coalition more votes than we received, and we could have had more members in parliament, and we could have jettisoned Labor further to where they belonged in that particular election, because we had had 16 years of the worst state Labor government that New South Wales had ever had to endure. You could say it was 16 years of hard Labor!
Back to the bills in question: coalition members and senators realise that these bills are being introduced by Labor and the Greens solely to increase their electoral advantage—shame on them—despite the severe risk they pose to the integrity of the electoral roll and the significant concerns about individual privacy. We hear so often from those opposite about privacy issues and how it is important to have privacy absolutely paramount in today's society. Indeed, we do need to have some of those privacy issues at the forefront of any legislation that we bring before this House.
As such, coalition members and senators believe that this legislation should be rejected by the lower house, and hopefully it will not even make it to the Senate, in order for the responsibility of enrolling to remain with individual Australian citizens and not be given to the bureaucracy. We have enough bureaucracy. We have enough red tape being foisted on us by this Labor government. We do not need any more. When the coalition were in office, we had to remove prisoners from eligibility to vote, but the Labor Party changed that too. As I say, we should reject these bills out of hand, and I commend to the House that we do that.
Before I call the member for Aston, I remind people about putting things on desks—so it is better on chairs.
Australia is a truly great democracy. We are indeed one of the great democracies of the world, the longest continuous democracy on the planet despite our relatively short history as a nation. We have never had a coup. We have never had a revolution. When we have elections at the state and federal level they are abided by. People go and cast their vote peacefully, generally without interruption. The ballot is cast, the votes are counted and the decision is made, and people adhere to that decision.
In fact, I often pose a question to members of school communities when I am speaking in their civics and citizenship classes. I ask: 'What normally happens after we have had an election and the government has lost the election? What normally happens the next day?' They look at me and scratch their heads and wonder what I am talking about, but of course the answer is that the next day after a government has lost an election, just like the Howard government did in 2007 when they lost to Kevin Rudd and the Labor Party, you go into your office and you pack up your office quietly. You go to your files and you shred some of your files, you tidy it up and you leave very peacefully. And you hand over the keys to what had previously been the opposition. That is what happens. It is a remarkable thing about democracies that this occurs. You do not need the police to come in. You do not need the military to come in to assess that or ask one party to leave and to hand the keys over to another party. No, it is all peacefully done, and enormous power is transferred from one group of people to another on the basis of an election.
The reason that that can occur is that we have integrity in the voting system. Both sides of this House and the Australian public know there is integrity in the voting system because we know that there is a system whereby people have to enrol to vote and that there is integrity in that process and we know that there is integrity in the process where the roll is marked off, where the votes are counted and where there is scrutineering all through the process.
I am deeply worried about the bills before us, the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012, because I think they will damage this integrity. That is my primary concern in relation to this legislation, because this legislation enables the Australian Electoral Commission to use a variety of sources of information—which are unspecified to date—to update the electoral roll, whereas presently the system is that an individual must go and enrol to vote and must go and update that enrolment record if he or she has changed their circumstances, such as by changing address.
We on this side of the House are concerned that the system which is proposed here by the government and is outlined in this legislation will lead to a number of negative consequences.
It being 1.45 pm, the debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.
Today is World Down Syndrome Day and I would like to commend a group of parents in my electorate who have dedicated their lives to supporting families living with Down syndrome in Macarthur. The Right Start Foundation is committed to raising awareness about Down syndrome and giving their children the best chance in life. The main objective of this group is to establish Australia's first Down-syndrome-specific centre in Macarthur to ensure children and families receive all the therapies and support they need for the right start in life.
I have worked with this group on many occasions to help raise awareness and funds for their cause. They are a wonderful group of parents who want only the best for their children and work tirelessly to achieve this despite the tough challenges they face on a day-to-day basis. I have also spent time with their beautiful children, who are some of the most courageous, inspiring and amazing children in my electorate: Jake Graban, Talara Gray, Claire Robinson, Ash Longbottom, Brodie Ellul, James Pennock, Aiden Puttock, Joshua Richardson, Joshua Batten, Harrison Golden, Maia Careres, Olivia Montgomery and Emily Laws. They all live with Down syndrome and, together with their parents, they are bringing support, hope and joy to the lives of other families living with the condition in Macarthur.
As we celebrate World Down Syndrome Day today, I hope that we, as leaders of our communities, can show our support to all families living with Down syndrome. I give special praise to the members of the Right Start Foundation who work so hard to make this world a better place for their beautiful children.
I rise today to congratulate the Hackham West R-7 School in my electorate for their commitment to helping people with leukaemia through the World's Greatest Shave. This was brought to my attention by a parent at the school, John Creedon, and I particularly mention Mr James Reid's year 6/7 class at Hackham West R-7 School who raised close to $3,000 for the Leukaemia Foundation, more than doubling their original goal of $1,000. All the students in the 6/7 class either coloured their hair or shaved their hair, with some of the teachers and parents also getting into the spirit. Mr Reid said, 'I am immensely proud of the group of kids who are in the area of disadvantage having big hearts to raise money for people in great need.' I pay special tribute to one of the girls, Emily, who was especially brave for shaving off her very long hair to raise money.
Mr Reid's year is one of many teams around Australia who are doing fantastic work to raise money for the Leukaemia Foundation. The World's Greatest Shave raises funds for the Leukaemia Foundation's important work providing free and practical emotional support. I would like to take this opportunity to congratulate Mr Reid who is an example of a teacher who puts in great effort for his class, not just in the teaching but also in ensuring that kids have an understanding of what it is to contribute to society. So congratulations to all the kids in the 6/7 class at Hackham West R-7 School, Mr Reid, Mr Creedon and everyone involved.
As this is the second last sitting day before Easter, I take this opportunity not only to wish members a safe, happy and meaningful Easter but to raise an important and re-emerging threat to our natural environment. Along with Easter eggs, the Easter bunny has become a commercial symbol of Easter. In an effort to raise public awareness and funds to support the fight against this unwanted and destructive pest, the Foundation for Rabbit-Free Australia, in association with the iconic Adelaide company Haigh's Chocolates, has promoted the Easter bilby as a replacement for the Easter bunny.
Within 70 years of their introduction to Australia, rabbits had colonised two-thirds of the continent. They have caused unimaginable environmental damage. Myxomatosis, introduced in the 1950s, gave us our first successful biological control and lifted profitability in the wool and meat industry by about $1 billion a year in current terms. Unfortunately, the rabbits have become increasingly resistant to the virus and in 1995 the calicivirus was released as our second biological control, reducing rabbits to a historically low level for over 10 years.
The agricultural benefits of calicivirus had been valued at over $2 billion, but numbers are rebuilding and the next tool of control must be found quickly. In the medium to long term, rabbits will decimate the Australian landscape, including local extinction of plant species, irreversible changes in vegetation across vast areas of Australia and a loss of fauna dependent on those vegetation communities. Members will find an eastern bilby, courtesy of the Foundation for Rabbit-Free Australia and Haigh's Chocolates, in their places. I ask them to enjoy and consider what they can do to help Australia with this four-legged pest.
I mourn the deaths in Toulouse, France of four innocent people—Rabbi Jonathan Sandler, his daughter Gabrielle Sandler, age 4, Arieh Sandler, age 5, and Miriam Monsonego, the daughter of the principal of the school in Toulouse. The tragedy of what has happened in France should be clear to all people. Three innocent children were gunned down, including the daughter of the principal, who was grabbed by the head by this monster and shot in the head as she reached the door of the school room.
This is one of the worst international incidents I have heard of. I hope the government of France is able to catch the criminal who apparently is responsible for the murder of three Muslim soldiers in the French army. This is an outrage. One of the witnesses said, 'Now, when I close my eyes, I can see their bodies on the ground in front of me.' Their mother has lost her husband and her two children and is alone now with a 10-month-old baby. Can you imagine what it is like for her? I am sure I send messages of condolence and grief from many people in this House to the bereaved families in France.
I also add my condolences. March 21 is Harmony Day, a day when all Australians celebrate our cultural diversity, and it is also the United Nations International Day for the Elimination of Racial Discrimination. In 2012, we celebrate the important role that sport plays in bringing Australians from all walks of life together to share in a common passion, with the key messages of play, engage and inspire. The aim of Harmony Day 2012 is to encourage everyone regardless of background to participate in sporting activity, to increase understanding and to be inspired or to inspire others. Harmony Day encourages and embraces community participation, inclusiveness and respect. Since 1999, when the Howard government initiated the Living in Harmony program, more than 25,000 Harmony Day events have been staged in childcare centres, schools, community groups, churches, businesses and federal, state and local government agencies. The event is growing in popularity and participation. Last year nearly 6,500 events were registered. In schools throughout the country it provides a great opportunity for students to learn not only that they share common ground with other cultures but also that our differences make Australia a very special place to live.
I was very pleased to attend and address the Harmony Day Festival opening on Saturday at Multicap in Eight Mile Plains. I thank Global United Ethnics, particularly their president, Shan Ju Lin, for their invitation to this event. (Time expired)
I rise to table a petition on the plight of Tamils in Sri Lanka.
The petition read as follows—
To the Honourable The Speaker and Members of the House of Representatives
This petition of concerned citizens of Australia draws the attention of the house to the plight of Tamils in Sri Lanka.
Since independence the minority rights enshrined in the constitution has been systematically eroded. State sponsored colonisation, periodical pogroms and policies of discrimination resulted in Tamils demanding federal system of government through civil disobedience campaigns. They were met with force. Unable to tolerate this tyranny Tamil Youth took up arms. The Government unleashed a violent response and indiscriminately killed Tamil Civilians. Report of the UN Secretary-General's (UNSG) Panel of Experts revealed credible allegations of war crimes and crimes against humanity which have been committed. The government's LLRC report was rejected by many in the International Community. The ongoing exodus of Tamil asylum seekers demands an examination of the root causes of this conflict. As a country that upholds the rule of law and principles of human rights and as the chair of the Commonwealth organisation, Australia could play a significant role in finding a solution to this conflict.
We therefore ask the House to do all in its power to recommend to the Australian government to:
(a) Demand the UNSG to implement the main recommendations of the panel he established —to establish an independent, international Mechanism to monitor SL's domestic accountability process and to conduct investigations independently into the alleged violations and
(b) Support publicly the US led initiative at the current 19th session of the UNHRC.
from 2,550 citizens
Petition received.
I could not agree more with this petition. The world is crying out for justice for the Tamil people. (Time expired)
I inform the House that, at the age of 56, Lincoln Hall passed away this morning from mesothelioma. Lincoln Hall was one of Australia's foremost mountaineers and he was a friend. He was left to die at that top of Mount Everest in 2006 after having summitted, something he had sought all his life to achieve. As I joked to him, no human being in the history of the Earth has ever slept at a higher point and survived than did Lincoln.
Lincoln was a formidable man and he has a magnificent wife and family. Michael Dillon, who came up Mount Kilimanjaro with us as a film man, was the one who, back in 2006, rang Barbara to tell her that her husband had died at the top of Mount Everest. No wife should have to be informed on two separate occasions that her husband has died.
The big C wins again. Even someone with his fortitude and courage was unable to beat cancer. It is for all of us to give our condolences to Dylan, Dorje and Barbara and to remember that the hand of God cannot be defied again and again.
Today is Harmony Day and the theme of this year's celebration focuses on the positive influence that sport has in our multicultural nation. So I am delighted to rise today to recognise the efforts of Australia's greatest sporting team in promoting our great multicultural society. I am talking of course about the Central Coast Mariners.
The Mariners have agreed to wear the Harmony Day logo on their strip when they take to the field tonight in their Asian Champions League game at Bluetongue Stadium against the Nagoya Grampus side from Japan. The logo will be on the Mariners' jerseys for the next three Mariners games in the Asian Champions League in Korea, Japan and China. Thanks to the Mariners, an estimated viewing audience of 150 million people will be presented with a positive image of Australia's culture of inclusion and tolerance.
As the Minister for Multicultural Affairs, Senator Kate Lundy, noted today, sport has a tremendous power to build bridges of understanding and respect and is a marvellous platform for inclusion. Involvement in sport, whether as a participant, volunteer, spectator or administrator, unites people of all ages. Importantly too it fosters that sense of belonging and an acceptance and understanding of other cultures. So my wholehearted congratulations go to the chairman of the Mariners, Peter Turnbull, and to coach Graeme Arnold and his players for being such great ambassadors for the New South Wales Central Coast, the game of football, our country and international harmony. The Mariners are all class. I would also like to acknowledge Regional Development Australia and DIAC for their assistance in making this possible. (Time expired)
I rise to pay tribute to the life of Frank Jordan, vice-patron and life member of the Cronulla Surf Life Saving Club, Olympian at the Helsinki games, founding father of the Cronulla Sutherland Water Polo Club, dedicated teacher and mentor, loving husband to Shirley for almost 57 years, devoted father, grandfather and great-grandfather to Robyn, Jenny, David and their families and a great mate and friend to all those who had the pleasure and privilege to know him.
Last Friday I joined with our community at the Woronora cemetery to pay tribute to Frank. Frank grew up in Bankstown, less than a mile away from the local pool. His swimming journey took him to Cronulla Surf Life Saving Club, where he gained his Bronze Medallion in 1951, and to a culture he would know, enjoy and nurture for the rest of his life.
Frank's competitive achievements in the surf were the forerunner to decades of service as a coach and a mentor, enabling hundreds of young shire athletes to realise their potential and learn some important life lessons from Frank along the way. In 1964, Frank convened a meeting at Cronulla to form what is now the Cronulla Sutherland Water Polo Club, which has produced Olympians and champions from Andrew Kerr to Alicia McCormack.
To paraphrase the president of the Cronulla surf club, Greg Holland, who joins me here today, Frank Jordan swam a good race with honesty, integrity and authenticity. His life was one of vigilance and service in the great tradition of Australian surf lifesaving. To Shirley and all her family, I express my sympathies and condolences but most of all the thanks of a grateful shire community for Frank's faithful life of service. You knew him in his greatest role—a great family man. There is no greater achievement for a man than that.
I rise to congratulate a family in the north-east region of my electorate of Bass—Michael and Raylene Taylor. Michael and Raylene own and operate a specialist service that provides Proud-Aid, a product they developed and sell. This product has won the O group's Business Enterprise Centre national award for best home-based business in Australia, a fantastic achievement.
The O group supported this business to help take it to where it is today and I congratulate John Brown, the manager of Launceston's Business Enterprise Centre, for his assistance to this business and to many other small businesses in my electorate. Congratulations to Michael and Raylene and their family, not only for receiving this award but for their innovative ideas, passion, hard work and commitment to getting the business to where it is today. All the best to them for the future.
In accordance with standing order 43, the time allotted for members' statements has concluded.
I inform the House that the Minister for Trade and Competitiveness will be absent from question time today and tomorrow as he is leading a trade delegation to Jakarta, Indonesia. The Minister for Resources and Energy and Minister for Tourism will answer questions on his behalf.
My question is to the Prime Minister. I remind the Prime Minister of an Energy Users Association report out today showing that Australian electricity prices are 70 per cent higher than in the United States and 130 per cent higher than in Canada. Why is the government adding the world's biggest carbon tax to the world's highest electricity prices?
I thank the Leader of the Opposition for his question. I am aware of the report, and of course I am aware that many Australian families struggle to make ends meet and certainly feel the pressure when the electricity bill comes in. It is important that Australian families be clear about the causes of rising electricity prices. The truth is that we have seen over decades and decades underinvestment in the capital necessary for our electricity systems, and that means that we are now seeing catch-up investment with all of the costs that come with that catch-up investment. The fact that this exists as a pressure on electricity prices has been acknowledged by all sides of politics. I do note, for example, that the member for Groom acknowledged this when he said that power prices were set to double over the next five to seven years, irrespective of who was in government—lack of planning had led to an investment drought. He also said:
Australians in all states are feeling the impacts of rising power prices, in large part due to the neglect and mismanagement of State Governments.
I know on all sides of politics there has been an acknowledgement of power rises and that, for example, the Premier of Western Australia, Colin Barnett, apologised to the people of Western Australia for increasing electricity charges by as much as 50 per cent. He said:
That was a difficult decision. I knew it was the right decision … I apologise for it for the hurt. But we had to do it.
That was an acknowledgement of the pressures that exist as a result of underinvestment in electricity generation and electricity supply due to, I would say, some severe neglect by state governments.
In respect of carbon pricing, which comes into effect on 1 July, of course Australians around the nation will see assistance for an average family of more than $500 a year. There will be tax cuts, increases in family payments and increases in pensions. There will be that money on hand to assist people and, as we know in this parliament, the threat to Australians having and retaining that money is the Leader of the Opposition.
Mr Speaker, I ask a supplementary question. Does the Prime Minister accept the Energy Users Association view that the carbon tax will make a bad situation worse by adding 20 per cent to what are already the world's highest electricity prices?
Of course what I accept is the analysis of Treasury about the impacts for households, and as a result of that analysis we are providing the money I have just spoken about in the form of tax cuts and pension increases and family payment increases. But the Leader of the Opposition is obviously very interested in the words of the Energy Supply Association of Australia. What they have said is that uncertainty over carbon pricing—that is, the reckless scare campaign of the Leader of the Opposition and his very futile promises to remove carbon pricing; something he will in fact never do—is having an impact on electricity. The Energy Supply Association have said:
We're concerned that if there is any uncertainty around a future price of carbon it will affect the ability for electricity generators to invest. And that it will also impact on their ability to offer—
Mr Speaker, I rise on a point of order which goes to direct relevance. I asked about the Energy Users Association, not the Energy Supply Association. This is about the people who use power, the Australian public, who are being—
The Prime Minister has the call to answer the supplementary question.
I am addressing issues about electricity pricing. The Leader of the Opposition professes concern but does not want to deal with the facts out of the Treasury modelling. He professes concern but he wants to rip assistance out of the hands of working Australians. He professes concern but he does not acknowledge that the uncertainty that he is creating is also bad for electricity supply, bad for pricing and bad for Australian families. The Leader of the Opposition ought to acknowledge that.
My question is to the Prime Minister. How is the government securing the future of the Murray-Darling Basin?
I thank the member for Kingston for her question and I thank her for her continued advocacy on behalf of the people of her electorate and the people of South Australia about the future of the River Murray. I was very pleased to join her this morning, along with other South Australian government MPs—the member for Wakefield, the member for Makin, the member for Hindmarsh, the member for Adelaide and Mr Butler—as well as Senator Wong at an event organised by the Adelaide Advertiser to put a spotlight on the River Murray. As a result of that event, many people in this parliament today are wearing the badges that say they love the River Murray.
I would like to congratulate the Adelaide Advertiser for its continued focus on the future of the River Murray. Growing up in South Australia, I understand what it is like for the people of South Australia and the people of Adelaide to worry about the future of the river. I know what it is like to be in Adelaide in days of drought. I know what it is like to have that sense of relying for your water security on the river and knowing that what is available in South Australia depends so much on the conduct of others upstream. I understand that the people of Adelaide do worry about too much water having been taken out of the Murray and, as a result, they worry about its future. We are working through a—
Mr McCormack interjecting—
The honourable member for Riverina will remain silent for the balance of the Prime Minister's answer.
Thank you very much, Mr Speaker. I understand an alternative view is being expressed about whether or not we should focus on the River Murray. I would be very grateful for the member to put it very clearly on the record and then we will compare whether or not it equates with, for example, what the member for Sturt says. That would be a very interesting comparison. As for the government, we are very focused on making sure that this important national river system, the Murray-Darling Basin, is managed properly and managed nationally.
We are very focused on the needs of the river. We want to see environmental benchmarks, like the mouth of the river being open nine years out of 10, met. We want to make sure that there is security, that there is an understanding of what will happen for the future of the river and that we do have a reform that meets the needs of South Australia, that meets environmental benchmarks like keeping the mouth of the Murray open nine years out of 10 and that meets the needs of the people of South Australia. We will continue to work through to secure a Murray-Darling Basin plan. The people of South Australia have an opportunity to have their voices well and truly heard in that debate. I welcome them lifting their voices today, and we look forward to continuing to hear the voice of South Australia. (Time expired)
My question is to the Prime Minister. Is the Prime Minister aware that Sunfresh Linen, which employs 130 people in Darra in suburban Brisbane, faces a carbon tax bill of at least $83,000 and rising, despite the fact that Sunfresh has invested $2 million in becoming more energy efficient in reducing its emissions by 436 tonnes annually? How does the Prime Minister expect this company to continue to invest in Australia when it is expected to pay such a high price under the carbon tax?
To the member who asked the question, of course I value very much what businesses around the country do in creating wealth and prosperity and in providing jobs for Australians. Indeed, I value that so much that we want to lift some of their burdens by giving them a company tax cut. We want to lift some of their burdens by making sure that they pay less company tax. I think it is probably very disappointing for the member who asked the question that he is not in a position to walk in the front door of that business to meet with the people who work there and to say to them that he supports a company tax cut for that business.
Mr Speaker, I rise on a point of order. The Prime Minister was asked about the carbon tax and the effect of the carbon tax on the 130 workers at Darra. She was not asked about any other matter and she should limit herself to answering the question.
I think the Prime Minister was explaining why the imposition of the carbon tax would not necessarily have the adverse impact suggested by the honourable member for Bonner. The Prime Minister has the call and she is aware of the terms of the question.
I was asked a question which went to the continuation of this business, its welfare and its ability to provide work for Australians, and I am addressing that question. In addressing that question, I think it is relevant to note that the government wants to provide that business with a tax cut as part of ensuring that Australians around the nation get a fair share of the resources boom. I understand that those opposite are opposed to this business getting its fair share of the resources boom—they want it to pay more tax—but I do not think that members opposite can come into this parliament and feign concern about individual businesses and not acknowledge that they are opposed to providing those businesses with a tax cut.
On the question of carbon pricing and that business, and Australian businesses generally, we are determined to make sure that we seize the benefits of a clean energy future and that we do it in the most cost-effective way—that is, we do it in a way that is best for Australian businesses and Australian working people, because it is at the least cost. That is the plan of the government, a least-cost plan, and it stands in stark contrast to the shambolic, expensive scheme that that Leader of the Opposition advocates—
The Prime Minister will return to the question.
which of course includes making the working people at that business worse off by taking tax cuts off them, by taking family payment increases off them and by taking pension increases off aged members of their families. If you care about the Australian economy, its strength and its future, if you care about making sure that we cut carbon pollution, you have got an obligation to look for the lowest cost way to do it. We have. The Leader of the Opposition and his political party have not, and that is bad for Australian businesses and Australian jobs.
My question is to the Minister for Sustainability, Environment, Water, Population and Communities. Will the minister advise the House on the progress of consultation on the draft Murray-Darling Basin Plan? Have there been any limits on the consultation process so far?
I want to thank the member for Hindmarsh for his question. He has shown a long-term interest, as have the many South Australian members on this side of the House, in wanting to see a good outcome in a national approach to the Murray-Darling Basin.
One hundred and twenty-two days ago, the consultation on the draft plan began. There are only 26 days left in that consultation process. There have been meetings held, which a number of members from each side of this House have attended. Some members from my own side have made submissions. I know the member for Kingston has made a submission, calling for a tougher plan and wanting a better outcome for South Australia. I know some members opposite have stood up and asked for the numbers to go down in respect of their communities.
The difference between the submissions from each side of the House during this consultation process is that on this side of the House, when we are participating in that process, we participate with the certainty of knowing we will be on the side of backing the reform when it lands. We know that we will be on the side of having a national approach to the Murray-Darling Basin, whereas the most notable submission from those opposite was the one made by the Leader of the Opposition at the Griffith meeting, when he said that he would only support a 'good plan' without defining what a good plan would or would not involve.
Opposition members interjecting—
Mr Champion interjecting—
The honourable member for Wakefield will remove himself from the chamber under the provisions of standing order 94(a).
The member for Wakefield then left the chamber.
Mr Speaker, I rise on a point of order. How could this be relevant to the question the minister was asked, to verbal the Leader of the Opposition, when the opposition is also in favour of a national plan for the Murray-Darling Basin?
If the Manager of Opposition Business takes a similar point of order, he will be ejected under the provisions of standing order 94(a). The minister was asked whether there were any limits on progress and he was answering the question.
There is a clear game that is going on during the consultation process with the Leader of the Opposition not defining what a good plan is or what a good plan would be. With 26 days to go, he is running down the clock without saying what he would and what he would not support. If your support is conditional—
Mrs Griggs interjecting—
The honourable member for Solomon will remove herself under the provisions of standing order 94(a).
The member for Solomon then left the chamber.
then you have got to let on to the public what those conditions are. Instead, what happens is they just run down the clock so that when the basin authority comes back with a final plan those opposite can say, 'Oh, that's not what we meant by a good plan,' and then, reluctantly, the Leader of the Opposition will be compelled to vote no. Who would have thought? Who would have thought that you would have a design of a line which is—every step of the way there—to not let on what sort of plan you would vote for, and, in the whole consultation period, to run down the clock for the final 26 days and not make clear what the conditions would be for coalition support?
Make no mistake: there are people on this side of the House who are arguing strongly for changes to the plan. But there is no-one on this side of the House, during the consultation period, who is saying, 'Let's spike the reform.' There is no-one on this side of the House who is saying that we should abandon the hope of having a national plan. Yet every word that has come from the mouth of the Leader of the Opposition has been designed to get to the day the authority comes back and then say, 'Oh, I never thought I had to support something like that—I will just vote no.'
Mr Speaker, I ask a supplementary question. The minister talked about consulting a lot of communities around developing a basin-wide plan. Can the minister tell us about the importance of this for my home town of Adelaide?
An opposition member: It's not even in the basin!
I thank the member for Hindmarsh for the supplementary question. Can I make clear: Adelaide is the one part of the entire Murray-Darling Basin where their catchment is the Murray-Darling Basin—more than half of their drinking water comes from the Murray-Darling Basin. There is an understandable level of commitment from those South Australian members, and in particular those from Adelaide, in wanting to see national reform. There is also a degree of peril. During the meeting organised by the Adelaide Advertiser today, they saw that the one person who did not join the Leader of the Opposition during his speech was the shadow minister for water. He was there but would not be in the camera frame when those words were being said. The puppeteer of water policy on that side of the House, and he would have described today—
Order! The minister will withdraw that reflection.
I withdraw.
Does the member for Sturt have a point of order?
I ask how it can be relevant for the minister to falsely claim that Senator Joyce was not there this morning when he simply was there this morning. It is a completely false claim.
The honourable member for Sturt will remove himself from the chamber under the provisions of standing order 94(a).
Mr Speaker, with respect, I ask you to reconsider that. The minister was making a false statement. He said that Senator Joyce was not there. All the member for Sturt was trying to do was correct a false statement, which is surely of assistance to the House.
I pointed out previously to the member for Sturt that if he took another point of order that was an abuse of standing orders he would be ejected. He did so. There are other forms in the House if someone wants to correct a record. The honourable member has been here long enough to know that.
I apologise for further detaining you on this matter. I certainly did not hear your warning to the member for Sturt. It is more than possible in the hubbub that the member for Sturt did not hear your warning and under the circumstances if you extended a certain amount of leniency you would be reflecting well on the conduct of the chamber.
I thank the Leader of the Opposition.
The member for Sturt then left the chamber.
I think the concerns of the member for Hindmarsh on behalf of the people of Adelaide were best reflected by an interjection that occurred during that exchange. The member for Riverina interjected, 'The environment will fix itself; it always has.'
The minister will be directly relevant to the supplementary question.
The reason this plan needs to be in place, the reason the member for Hindmarsh is concerned, and the reason that this consultation process must lead to national powers over the Murray-Darling Basin is that you cannot just leave the environment to fix itself. It needs a national plan. (Time expired)
My question is to the Prime Minister. Are you aware of comments by the head of Queensland company Zarraffa's Coffee that:
… it won't be long before coffee is an expensive commodity as we shoulder carbon tax impacts across transport, power, rents and so on.
How does the Prime Minister expect this company, with its over 50 stores, to remain competitive and to continue to invest in Queensland when the CEO himself warns that the carbon tax may be the final undoing of many small to medium businesses?
To the member's question I say this: I want to make sure that we are supporting small businesses in this country, medium sized businesses in this country and bigger businesses in this nation, which is why I want to ensure those businesses get a tax cut. I want to ensure that the very business the member refers to gets a tax cut.
Unfortunately, the member who asked the question, who professes concern about this business, is opposed to giving that business a tax cut. I hope he has taken the opportunity to explain that to every person who works there.
I rise on a point of order concerning direct relevance. The question related to the carbon tax being the final undoing of many small businesses and in particular, Zarraffa's Coffee.
The Prime Minister will direct her answer to the specifics of the question.
Of course, I am talking about the future of this business. In its future I want to see it get a tax cut and get tax relief. Whether it is incorporated or not I want to see it get a benefit—a company tax cut, if it is incorporated. Whether it is incorporated or not it will get the benefit of an instant asset write-off of $6,500 a year. Whether it is incorporated or not it will have the ability to get a tax benefit of $5,000 when buying a new motor vehicle. The member who asked the question is opposed to all of that.
On the question of carbon pricing and this business, or any Australian business, and the Australian nation, if we are committed to reducing our carbon pollution by five per cent by 2020, as is bipartisan politics in this parliament, then action needs to be taken. Once you have agreed to that—reducing it by five per cent—there is only one question you then need to ask yourself. Do you do it in the most cost effective way or do you do it in a more expensive way?
Prime Minister Howard and his government recognised that the most cost effective way of reducing carbon pollution was to put a price on carbon. Prime Minister Howard was right. The Leader of the Opposition was right when he campaigned with Prime Minister Howard on that platform in the 2007 election. All of the members of the coalition who are on the record supporting carbon pricing—
The Prime Minister will become directly relevant—
as the most effective plan, the cheapest plan, are right. Consequently, if we are to cut carbon pollution and look after this business that is the plan we need and it is the plan the government has provided. We do not need the costly plan, smashing into families at $1,300 a year, as recommended by the Leader of the Opposition.
My question is to the Prime Minister. The Commonwealth Grant Guidelines state that 'agencies are responsible for advising their ministers on the requirements of the Commonwealth Grant Guidelines, and must take appropriate and timely steps to do so'. Today the Joint Committee of Public Accounts and Audit released two lists, one of 33 instances and one of 11 instances in which the Commonwealth Grant Guidelines have not been followed. What assurances, therefore, can the Prime Minister give the House that all ministers will make sure all agencies follow their obligations under these Commonwealth Grant Guidelines?
I thank the member for Lyne for his question. I know he is centrally interested in this because of the role he plays on the Joint Committee of Public Accounts and Audit. Since coming to government we have made a significant number of reforms to improve whole-of-government transparency and accountability in grants programs. So we established the Commonwealth Grant Guidelines in 2009 following the highly critical Auditor-General report into the program run by the Howard government—which came, for good reasons, to be known as 'regional rorts'. Having seen that slamming report, in which the word 'corruption' was used, we determined that it was appropriate to act.
Our government has implemented the first ever comprehensive guidelines, established at the Commonwealth level, to ensure transparency in federal grants programs. I note that the Audit Office, in its report, has said—positively—about this development:
For the first time, the Government's expectations for Ministers, agencies and officials when performing duties in relation to grants administration, were clearly articulated.
The office of the auditor has examined some 800 ministerial briefs. It has identified only 33 cases of under-reporting of grants in a minister's electorate. So there is that transparency, and I think that that transparency is a good thing.
With the Auditor-General now having pointed out this matter, the message must be received by ministers and by departments—because, as the member would be aware, in the audit report there is reference to the conduct of departments in dealing with these questions—that these guidelines must be honoured and must be honoured consistently. But I would point out to the House that we have seen a considerable improvement from the free-for-all we saw under the Howard government. Overwhelmingly the Audit Office, in looking at these briefs, has found compliance. It has found noncompliance in a limited number of cases.
The Prime Minister will return to the question.
The message is now clear to all ministers and all departments about the need for compliance with these guidelines.
My question is to the Treasurer. What benefits will flow throughout the Australian economy following the passage of the minerals resource rent tax? In particular, has the government assessed the impact the corporate tax cut will have on Australian industries? And how is that government dealing with proposals to increase the corporate tax rate?
I thank the member for Moreton for that very important question. We on this side of the House understand the importance of the change in weight in the global economy of the movement from west to east. That is producing a stunning investment pipeline of something like $455 billion in resources in Australia. We on this side of the House understand the absolute importance of spreading the benefits of that investment pipeline right across our country and right across every postcode. That is why we have introduced the MRRT as the revenue stream that will fund a tax break for 2.7 million small businesses through the $6,500 instant asset write-off. In the electorate of Moreton, that will go to something like 19,400 small businesses. That is why we are having this historic boost to superannuation savings, which will go to 8.4 million workers in our country. It is worth an additional $100,000 for a 30-year-old on average earnings. In the electorate of the member for Moreton, that is something like 50,000 people who will benefit, across all age groups.
This is a massive way to spread the benefits of the resources boom right around our country. But we should also do more, and that is why we on this side of the House want to cut the company tax rate by 1c, starting first of all with small businesses and then moving across the board. There is a very clear contrast here, because those opposite want to jack it up by 1½ per cent. They do not really have any comprehension of what it is like for all those businesses that are not in the fast lane of the resources boom—for example, small businesses on the Sunshine Coast, and right around the country.
I have been having a look at the difference between, say, a 29c rate and 31½c across various industry sectors. In the manufacturing sector that would be an additional tax bill of $392 million in manufacturing alone if they had their way. In the retail sector it would be a difference of $270 million.
Mr Speaker, on a point of order, I refer you to page 553 of Practice, where it says, under the old rules of relevance, that 'an answer must maintain a link to the substance of the question'. Under direct relevance, it is even stricter. The Treasurer is certainly not connected to that, and I ask you to ask him to return to the question or else sit down.
The Treasurer was asked about the impact of not reducing the company tax—maybe not in those words, but that was the gist of it—and he is being directly relevant.
In the retail trade sector and the wholesale sector it would be an additional $400 million of tax paid by companies. In the media and telco sector it would be an additional $188 million and in the construction sector $322 million. In agriculture, forestry and fishing, an additional $306 million would be paid by companies in those sectors. So a proposal to increase corporate tax, precisely at the time— (Time expired)
My question is addressed to the Prime Minister. Is the Prime Minister aware of findings of the Energy Users Association released today that show Queenslanders are paying amongst the highest prices for electricity of 91 countries and provinces surveyed? Does the Prime Minister really think it is fair to slug Queensland families and businesses with a carbon tax when they are already paying more for electricity than 27 countries of the EU, the United Kingdom and every state of the United States?
To the member for Hinkler, perhaps I could use these words in answer to him: 'You can't reduce greenhouse gas emissions unless you have a price on carbon.' They are the words of John Howard on 27 May 2007. I think Prime Minister Howard was absolutely right. The member for Hinkler thought he was absolutely right too because he campaigned alongside him—
Mr Speaker, I raise a point of order. The question was quite clear: does the Prime Minister think it is fair to slug Queensland families with a carbon tax?
I heard the question. The Prime Minister has just started her answer and I am quite sure she is going to address the specifics of the question.
I was referring to one eminent Australian who thought it was fair to put a price on carbon, that being former Liberal Prime Minister John Howard and his cabinet colleagues and backbench colleagues who campaigned alongside him for a price on carbon. Prime Minister Howard believed that because Prime Minister Howard, as I do, believes—
The Prime Minister will return to the specifics of the question.
If, as I do, you believe we need to cut carbon pollution—and that is bipartisan politics in this parliament—then you have got to work out how to do it. The cheapest, most effective way to do it is to put a price on carbon.
Then, having put a price on carbon, you need to support Australian families as they go about their daily work, including Australian families as they go about paying their power bills. We have determined to do just that, to make sure that we use money that flows from a price being paid by companies that are generating carbon pollution to support Australian families, including the Queensland families that the member refers to. So, looking at an average family, they will receive assistance of more than $500 a year to deal with impacts flowing from putting a price on carbon. Many families in fact will end up with more assistance through tax cuts or family payments or pension increases than they need—that is, they will end up in front as a result of the government's scheme.
To the member who asked the question, I simply ask him to contemplate the alternative. He himself is a member of a political party committed to reducing carbon pollution by five per cent by 2020. I ask him: why does he want to do that in a way that is more costly for Queensland families? Why does he want to reject the advice of former Liberal Prime Minister John Howard about the most cost-effective way to do this? Like the Leader of the Opposition, he is committed to sending those families a $1,300 bill.
My question is to the Special Minister of State. Will the minister update the House on recent reports of multimillion-dollar donations to political parties? What challenge does this represent to the integrity of our electoral system?
I thank the honourable member for his question. It reflects an interest that many members of parliament have in the integrity of our electoral system. It reflects a concern that this parliament has had since 1984, 28 years ago, the first time we legislated to create a disclosure regime for political donations—a regime that was put in place to ensure transparency, a regime that was put in place to ensure integrity and a regime that was put in place because it acknowledges the fundamentally important role played by individuals and organisations who wish to contribute to the political debate.
On my side of politics we have trade unions that make donations to political parties. Their donations are disclosed. I was asked in particular about donations of $1 million, and it is of course the case that in the last election the Greens party did receive a donation of $1.6 million from Mr Greg Wood. But I was caused earlier this week following media reports to peruse the total contributions of other individuals too. The House may wish to be aware that the contributions of individuals of substantial net worth are now at a point that should be brought to the attention of this place. High net worth individuals of course are at liberty to make decisions to support our political parties and our political processes, as is their wont. I was made aware that last year Mr Clive Palmer made a contribution in the order of $1 million to the coalition. I am aware that the total contribution now to the coalition from individuals—
Mr Speaker, I raise a point of order. I refer you again to page 553 of the Practice and the holding of previous Speakers that there should be no contrast between government and opposition. I would remind the minister that the Western Australian Labor Party received $160,000 in donations from Mr Palmer.
The honourable member for Mackellar will remove herself from the chamber under the provisions of standing order 94(a).
The member for Mackellar then left the chamber.
While on the subject of the core of the question, which is individuals of high net worth making contributions, the total contribution to the coalition now from Mr Palmer is over $4 million—in the last few years, $4 million. I make the observation that never in the history of our parliament have we had an allegation of corrupt or inappropriate behaviour from any of us in this place about donors to the political system. I do make this observation.
Mr Christensen interjecting—
Order! The honourable member for Dawson is warned.
Ms O'Dwyer interjecting—
Order! The honourable member for Higgins will remove herself from the chamber under the provisions of standing order 94(a). The honourable Special Minister of State will be heard in silence for the balance of his answer.
The member for Higgins then left the chamber.
The amount now of $4 million in donations, as recently disclosed by the Australian Electoral Commission, is a point of note for all Australians. It is a very large number. It is a number which is important for us to understand—and the purposes perhaps behind it. (Time expired)
My question is to the Treasurer. Will the Treasurer confirm that BHP, Rio Tinto and Xstrata will not pay any of the government's new mining tax over the next three years?
Mr Speaker, I heard the shadow Treasurer make this statement on television this morning. I am not sure how he can do the work of the tax commissioner or indeed of the Treasury. What I can say is that we have put in place the MRRT. We have worked closely with the industry. In particular, through the Argus process we worked our way through the design of the tax, and we are absolutely satisfied that the revenue streams that we have forecast will be delivered. I do not know on what basis the shadow Treasurer makes that claim; I do not know on what basis he makes it at all.
Mr Simpkins interjecting—
Order! The member for Cowan will remove himself from the chamber under the provisions of standing order 94(a).
The member for Cowan then left the chamber.
If he has some information he would like to share with the government or with the parliament I would certainly welcome the receipt of it, but for him to claim he could do the job of the tax commissioner in this parliament just demonstrates how he has not got the most basic understanding of the tax system.
My question is to the Leader of the House. Will the Leader of the House outline how the government has progressed its policy and legislative agenda through the House? How has the government overcome obstacles, including attempts to influence its legislative program, to deliver this agenda? Why is important that we take a balanced and evidence based approach to dealing with government legislation?
I thank the Chief Government Whip for his question. Indeed, the House has now passed almost 300 pieces of legislation in the 43rd Parliament, delivering a mainstream agenda, making sure we get the economy right, making sure that we create jobs and taking action on climate change, better retirement incomes and of course nation-building infrastructure. This is significant progress, in spite of the obstacles and the relentless negativity we get from those opposite and also from some outside the parliament.
All of our major reforms have been opposed by those opposite and fought for on the floor of this chamber, and their actions have been supported, and indeed bankrolled, by their allies outside this place. We will see one of them outside this place tomorrow morning, when Clive Palmer addresses tomorrow's Global Warming Hoax rally. We will see, yet again, Clive Palmer with all the signs and the whole campaign.
Mrs Mirabella interjecting—
Maybe we will see the member for Indi travel to outside my electorate office to attend a meeting with these people, Mr Speaker.
Order! The Leader of the House is aware that Clive Palmer is not relevant to the answer. The Leader of the House has the call to be directly relevant.
Indeed what is relevant, Mr Speaker, is what occurs in terms of the legislation that is before this parliament and whether people use their great wealth to try to undermine the processes of this parliament. Mr Palmer is saying that he will take the legislation that was carried by this parliament to the High Court. He does not respect the views that have been put by the democracy in this parliament through the House of Representatives and the Senate.
Mr Speaker, I rise on a point of order. The minister is now directly defying the ruling that you made without any prompting from us on this side, and he should be brought back to the question.
The minister was skating very close to doing that. He will return to the substance of the question and not mention Mr Palmer again.
With the legislation that is before this parliament it is very important that we take into account people's views. It is important that we take into account people's views based upon the democratic principle of one vote one value, not on the basis of people's wealth or their the ability to influence. It is important also that we respect the democratic decisions of this parliament. The Treasurer outlined the significant benefits that we are making through this parliament in reducing the taxation regimes of small business. Those opposite are supporting slugging those small businesses with increased tax just so that they can give a tax cut—
The Leader of the House will return to the question in his remaining seven seconds.
to Mr Palmer. I table the Courier-Mail article which says, 'Liberals ask Clive Palmer to be party president.'
The Leader of the House will resume his seat.
Mr Speaker, I rise on a point of order. I make this point very seriously: there could be no clearer or more blatant defiance of a ruling which you made. You said that the minister should not mention that individual again. You gave him a chance. He has now defied you, and I urge you to take the action which should be taken in the interests of the decorum of this chamber.
I sat the minister down and I warned the honourable Leader of the House. A warning of course is a precursor to a naming.
My question is to the Treasurer. I refer the Treasurer to the blow-out in this year's forecast budget deficit from $13 billion in the 2010 budget to $23 billion in the 2011 budget to $37 billion in the 2011 MYEFO. Why should Australians believe anything said by this government on budget night when forecasts of this year's budget deficit have blown out by 184 per cent in just 18 months?
I do welcome that question because we hear questions like this, and points made like this, from those opposite all the time—talking down our economy every day, every week and every year. The fact is that our public finances are in the best shape of any developed economy in the world.
Opposition members interjecting—
I know that they guffaw, but the truth is this: they like to come into this House and pretend there is nothing like a global financial crisis or a global recession.
Order! The Treasurer will answer the question.
As a consequence of the global financial crisis, and the global recession, we have written down our revenues by $140 billion over the forward estimates.
This year! This year! We're asking about this year!
The honourable member for North Sydney will remain silent for the balance of this answer.
One hundred and forty billion dollars has been written down over the forward estimates, and in the mid-year budget review last November we wrote them down by $20 billion, coming to $140 billion over the forward estimates—and that is why we are in deficit. We are in deficit because we moved to support our economy, during a global recession, to keep the doors of small business open and to keep Australian workers in their jobs. We have behaved completely—
Mr Speaker, on a point of order—it was a very simple question: how could the government get the figures wrong four times in a single year? And the Treasurer should be directly relevant to that question.
I am sure the Treasurer is going to address the specifics of this very narrow question.
I have been addressing the very narrow question. The reason that we have had these outcomes is revenue write-downs. We are currently engaged in the fastest fiscal consolidation in our history to bring our budget back to surplus in 2012-13.
Mr Dutton interjecting —
The member for Dickson will remain silent.
The reason we have deficits is that revenues have been weak. But they choose to stick their heads in the sand and not understand the most basic elements of macroeconomics. It just shows how unqualified they are for government in this country.
My question is to the Attorney-General and Minister for Emergency Management. How does the government respond to claims about covert actions by overseas intelligence agencies allegedly undertaken to undermine the Australian coal industry?
I thank the member for her question, because I think a lot of members in this chamber would have been concerned to hear these allegations that were very widely aired by Mr Palmer, who asserts that one of our closest intelligence allies is using its intelligence agency to stop coal seam gas investments in Australia. This is a pretty extraordinary claim and I would have thought that those opposite—I mention in particular the member for Berowra, a member of the joint intelligence committee and a distinguished former Attorney-General who had a very close relationship, as in fact many Attorneys-General have had, with our intelligence agencies in the US and in Australia—
I know the point of order that the member for Menzies is about to make. The Attorney-General, I think, is aware as well. She will become directly relevant.
The point I am making is that when allegations like this are made about one of our closest allies it is important for us to call it what it is. This is a bizarre allegation and I do have to wonder whether perhaps Mr Palmer has been watching too much Get Smart. Certainly he is working very closely with 'KAOS' over there. I just want to say that it is an important issue. Our intelligence agencies work closely with our allies. The Americans are lead allies. To have such a donor closely associated with the opposition—
Mr Speaker, on a point of order: the minister is again mentioning that individual. She is defying your ruling.
The minister has not been directed not to mention an individual. The minister will return to the question and will be specific.
The point that I am simply trying to make is that national security is much more than jokes about shoe phones or jokes about other things. National security is about protecting real people from real threats, about making sure that our laws are operating properly, and I would have thought that those opposite would want to dissociate themselves from comments like this that just feed conspiracy theories and do us no justice when we want to work closely with those around the world to share intelligence about real threats that are emerging across the world. What I am calling upon the opposition to do is to make sure the Leader of the Opposition calls Mr Palmer and gives him a dressing down for this sort of behaviour—and he can use his shoe phone if he thinks that is a better idea.
Order! The Attorney-General will resume her seat.
Mr Speaker, on a point of order: under section 75 of the standing orders, this is tedious and repetitious. The Prime Minister does not bother attending NSC meetings; she sends her bodyguard—and the Attorney-General lectures us on national security.
The honourable member for Fadden will remove himself from the chamber under the provisions of standing order 94(a).
The member for Fadden then left the chamber.
My question is to the Treasurer. Treasurer, if a small business paying the company tax rate purchases a new ute worth $35,000 after 1 July this year, will not the first-year after-tax benefit from the government's instant asset write-off arrangements be $1,300, not the $6½ thousand that the government was claiming yesterday?
I will restrain myself, Mr Speaker. I just have to go back and run through some of the facts. We have a $6,500 instant asset write-off which can be claimed by up to 2.7 million small businesses. That will be a very substantial benefit, particularly to the cash flow of many struggling businesses right around our country. In the last budget, we did say that the first $5,000 of any car purchase—namely, a ute—could be written off within that framework. That is what we have said so yet again I have not the faintest idea what he is talking about.
I have a supplementary question, Mr Speaker. Will the Treasurer confirm that any first-year tax benefit will be offset by higher tax liabilities in subsequent years, so that the net value to the business of the instant asset write-off over the life of the asset is likely to be about $300 and not the $6½ thousand that the government was claiming yesterday?
This is a fundamental reform because we are—
Opposition members interjecting—
It just shows that you do not get it.
The Treasurer will be heard in complete silence for the answer to the supplementary question.
This is one of the most fundamental reforms that we could make to the tax system for small business. It has a very substantial benefit in terms of cash flow in the year that it is claimed and it also simplifies the system because it does away with complex depreciation schedules. So this is really welcomed by small business. This is one of the recommendations of the Henry review, and we are doing it in an affordable way.
Mr Van Manen interjecting—
The honourable member for Forde will remove himself from the chamber under the provisions of standing order 94(a).
The member for Forde then left the chamber.
Those opposite are acutely embarrassed by the fact that they have voted against this measure both in the House of Representatives and in the Senate, because it brings the benefits that I was talking about before.
I raise a point of order, Mr Speaker. The Treasurer is not being directly relevant to the question; the issue was the value of the write-off being $300 not the $6½ thousand claimed.
The honourable member for Cowper will resume his seat. Has the Treasurer concluded?
Yes.
My question is to the Minister for Immigration and Citizenship. What work is being done in the national interest to tackle people-smuggling and to deter people from taking dangerous boat journeys to Australia? Why is it important to have workable and practical border protection policies supported by other countries in our region, and what is the response to these policies and to other proposals to deal with people-smuggling?
I thank the honourable member for his question, which goes to what is being done in the national interest to tackle people-smuggling. This week, debate started in the House on the legislation moved by the honourable member for Lyne. That legislation would allow the government of the day to implement deterrence to dangerous boat journeys to Australia. It is legislation that the government will support in the national interest. The bill from the member for Lyne would allow the minister to designate a country if it is part of the Bali process, if the minister is satisfied with the protections and, perhaps most importantly, if the country involved agrees to be a partner with Australia in that endeavour.
It is very important that the country involved agree to receive people transferred. For example, a minister could not be satisfied with the protections in place if that country had not agreed to receive people. Whether people are being removed from Australia by boat or by plane, I would have thought it would be evident to most reasonable people that you would actually have to have the agreement of the country in question.
What happens to the people on the boats that don't leave Indonesia, Chris?
The honourable member for Cook will remain silent for the balance of this answer.
Even those opposite have recognised this in the past. At the last election, the Liberal Party's policy was that 'a commitment from the return country not to return persons seeking asylum to the place from which they came, claiming to be fleeing persecution, would be key'. That statement would lead you to believe that, if such an agreement could not be reached, nobody would be returned to that country. But, alas, it pains me to say that that appears now not to be the case. We have had a major policy development from the opposition. The Leader of the Opposition is good at saying no, but when a close partner and neighbour says no he appears not to understand the meaning of the word.
The Indonesian foreign minister said in this building last week that it would be impossible and ill-advised to have boats turned around on the high seas and sent to Indonesia. He said, 'That would give you a hint of our approach.' He is right. Hints do not get much bigger than that. Yet the Leader of the Opposition seems to think that this policy is not dead. Apparently it is just pining for the fjords. The policy of turning back the boats is not dead, and the Leader of the Opposition and the member for Cook seem to say that it does not matter what Indonesia thinks, they will send people there regardless. They say they want a foreign and asylum policy that is Jakarta focused. Well Jakarta have told us their focus and their focus is to reject the cheap populism of those opposite, to reject this cheap policy which puts at risk the lives of Australian Defence personnel and—
The minister will focus on the specifics of the question.
Australia's asylum seekers. It breaches our international conventions and will never work.
My question is to the Prime Minister. Given that your ministers have on 33 occasions deliberately failed to declare millions of dollars of grants to their own electorates—
Order! The question is ruled out of order.
My question is to the Minister for Housing, Minister for Homelessness and Minister for Small Business. How will government policies like tax breaks support small businesses and help them to thrive and grow? What support has small business expressed for these measures, and what are the challenges for small business that need to be addressed?
I thank the member for Page for her question and her long association with small business. Indeed, she has over 11,000 small businesses in her own electorate. I also thank her for her advocacy for the small business commissioner, something that we have responded to in recent times.
The Gillard government, of course, is committed to helping Australia's 2.7 million small businesses around the country. We are helping them in a number of very important ways. Firstly, there is the reduction in the company tax rate from 30c in the dollar to 29c. Secondly, there are the income tax rates from 1 July for those unincorporated small business owners, who will receive an increase because of the increase in the tax threshold to $18,200. Indeed, I might add that there is also an increase for those who can receive personal tax cuts, if they are an employee of their own company, and also receive the company tax cut. There is the $5,000 write-off for vehicles and the $6½ thousand instant asset tax write-off for assets purchased in that financial year, which is very important. It provides cash flow solutions to problems that may occur from time to time, particularly for microbusinesses, sole traders—those small companies that really need some assistance.
I might add, in relation to the question that was asked earlier by the member for Goldstein, in relation to the $6,500 instant asset tax write-off, that that is for each asset purchased under $6,500, not just one asset, so there could be multiple assets. So this is a great boon for small businesses around the country. It can only be done, of course, because we have enacted the minerals resource rent tax—
Mr Hockey interjecting—
The honourable member for North Sydney will remain silent.
which will allow us to distribute the mineral wealth around the country, providing opportunity for small businesses, particularly those—
Mr Hockey interjecting—
The honourable member North Sydney will remove himself from the chamber under the provisions of standing order 94(a). I asked that he remain silent; he did not.
The member for North Sydney then left the chamber.
This is a very important support for businesses, particularly in sectors like tourism and manufacturing that are confronted with challenges including the high Australian dollar.
I know small businesses are astounded that the opposition has not supported this initiative. One of those is Derek Stewart from Queanbeyan Diesel Service, just down the road from here—indeed, so close that the Leader of the Opposition went there last year to do a media opportunity. Mr Stewart was quoted in the Australian today, and he said he was concerned that the Leader of the Opposition 'missed the bus' when it came to tax cuts for small business. Well, Mr Speaker, he has missed the bus. I am sure he would not miss Clive Palmer's jet, but he did miss the bus. The fact is that we will continue to—
The minister will resume his seat. I call the honourable member for Kooyong—
Mr Speaker—
I called the member for Kooyong, Prime Minister, because I saw him first.
Prime Minister, my question—
Mr Speaker, I raise a point of order. Under the standing orders, question time concludes at 3.10 pm each day.
It is within the competence of the Prime Minister to ask that further questions be placed on the Notice Paper. However, I had called the honourable member for Kooyong before the Prime Minister did that. The honourable member for Kooyong has the call.
My question is to the Prime Minister. Given that the Auditor-General has found that on 33 occasions ministers have failed to declare millions of dollars of grants to their own electorates, including the Minister for Infrastructure and Transport, who has made three major grants to local councils in his electorate totalling more than $3 million without declarations, what action will you take to discipline the minister?
In answer to the member for Kooyong's question, first, I draw his attention to what the ANAO actually found. The member for Kooyong had his first question ruled out of order because he in part sought to misrepresent that, and I would counsel him against that in this question as well. Second, I remind the member for Kooyong that this government has moved to introduce guidelines because of the conduct of the Howard government under regional rorts, causing the Auditor-General to author a report that used the word 'corrupt'. The member for Kooyong should understand that. The word 'corrupt' was used in that Auditor-General's report. We have responded to those kinds of findings about the conduct of the Howard government by making sure that there is a new system of transparency.
Mr Speaker, I raise a point of order. The question was: how is the Prime Minister going to discipline the minister for infrastructure? It did not refer to a previous government.
The Prime Minister's answer is relevant.
Thank you very much, Mr Speaker. What we intend to do is act in accordance with the findings of the audit report. That is what the government will do. That is, of course, a different approach than has been taken in the past. We are a government that have introduced transparency guidelines because we were disgusted by the conduct of the Howard government. If the member for Kooyong is truly disturbed by such matters then I find it hard to explain how he can serve behind this front bench, given their conduct in the regional rorts affair—
Order! The Prime Minister will return to the specifics of the question.
and the conduct of the Howard government generally.
Mr Speaker, with those words I ask that further questions be placed on the Notice Paper.
You're not a Prime Minister's bootlace.
Mr Speaker—
The Leader of the House will resume his seat. I believe the honourable member for Dickson made an inappropriate comment. Did the member for Dickson interject a moment ago? If he did, he would assist the House by withdrawing the imputation cast in the direction of the Prime Minister.
I am happy to assist, Mr Speaker, but I seek your direction. By saying that this person is not a Prime Minister's bootlace, is that unparliamentary? If so, I am happy to withdraw.
Ms Roxon interjecting—
The member for Dickson has been saved by the Attorney- General. The member for Dickson will return to the dispatch box and will withdraw his statement without reservation.
I withdraw.
I now call the honourable Attorney-General to the dispatch box to withdraw what she said.
I withdraw, Mr Speaker.
I thank the Attorney-General.
Mr Speaker, I seek leave to give a personal explanation.
Does the honourable minister claimed to have been misrepresented?
I do, Mr Speaker.
The honourable member may proceed.
And I have been, and continue to be, on a number of occasions. In relation to the report that was referred to in the question by the member for Kooyong, the grants concerned are the Roads to Recovery money that go to every local council in Australia. They are set by the Commonwealth Grants Commission. It is no different from the Minister for Families, Community Services and Indigenous Affairs having to disclose that there are pensioners in her electorate.
The minister will show where he has been personally misrepresented.
The fact is that there is local government. These were not discretionary grants and the question raised by the member for Kooyong makes assertions or imputations, as have also been raised by a number of the interjections, that there was something inappropriate. If you look at the report, it makes it very clear it was just Roads to Recovery money.
Mr Speaker, in accordance with standing order 105(b), 'Replies to written questions', I ask that you write to the Minister representing the Minister for Foreign Affairs seeking answers to the following questions in writing: question 330, outstanding for 363 days, and question 543, outstanding for 216 days.
I will write the appropriate letter to the minister.
A document is presented as listed in the schedule circulated to honourable members earlier today. Details of the document will be recorded in the Votes and Proceedingsand I move:
That the House take note of the following document:
Renewable Energy Regulator—Report for 2011.
Debate adjourned.
Mr Speaker, I seek your advice. On 9 March 2012 Mr Murray Dawson-Smith, Chief Executive Officer of Autism Victoria, wrote to the Department of Parliamentary Services seeking to have the parliament building lit up for World Autism Day. I understand that you have very generously been supportive of that but that it may not have received similar support from your fellow Presiding Officer. Would you be able to advise the House in due course as to what is the correct position, what is the policy in relation to a group such as Autism Victoria seeking assistance and, if the answer is no, why it is no? I would also note that, as is appropriate, the House is currently being lit up for World Harmony Day in the evening.
For approval to be given for lighting, there must be agreement between the Presiding Officers. I am quite happy to discuss personally the general policy with the honourable member for Flinders if he wishes to come and see me.
I have received letters from the honourable member for Goldstein and the honourable member for Chifley proposing that definite matters of public importance be submitted to the House for discussion today. As required by standing order 46 I have selected the matter which, in my opinion, is the most urgent and important; that is, that proposed by the honourable member for Goldstein, namely:
The urgent need for the Government to deliver budget transparency for the business community.
I therefore call upon those honourable members who approve of the proposed discussion to rise in their places.
More than the number of members required by the standing orders having risen in their places
Over the last 10 years in office, Labor has never delivered a surplus. In fact, it has racked up a total of $241 billion worth of deficits—or a quarter of a trillion dollars—over those 10 years of wall-to-wall deficits since 1989. This compares with $103 billion of cumulative surpluses over the last 10 years of coalition government. To go from such a surplus to such a deficit and to have nothing to show for it is what Australians find unbelievable and unforgivable. Yet, if you listen to Australia's lightweight Treasurer, you would think all was well. It means that we all have to look beyond Labor's spin and instead look at the facts because Labor has turned sophistry—clever but deceitful arguments—into a fine art. Today I would like to provide just three examples of potentially hundreds of examples of this sophistry. I highlight the deceit of Labor's stimulus claims, I highlight the deceit of Labor's spending claims and I highlight the deceit of Labor's surplus claims.
Let us look at Labor's stimulus claims. A report out today by the Australian National Audit Office once again suggests that the mammoth $87 billion spending splurge failed to boost growth as promised or, as endlessly claimed by our lightweight Treasurer, that the overall stimulus meant that Australia avoided a recession in 2009. The auditors found that the last of the payments under the inspired Greens initiative to create jobs by building bike paths, a key part of the $650 million so-called Jobs Fund, unveiled at the height of the GFC, was not expected to be made until next month. This is almost two years after the funds were meant to have been spent and a full three years since the end of the first quarter of 2009, the quarter that would have confirmed a recession following the negative 0.7 per cent growth quarter at the end of 2008. The Audit Office actually rebuked the government for not ensuring that taxpayer funds delivered the economic gain. A similar audit from 10 July of the separate $550 million regional community infrastructure project found the cash was spent too slowly to ensure the gains first claimed—the sorts of claims we have heard ad nauseam in this place for three years now. We know Treasury confirmed that a massive $10 billion of stimulus money was still to be spent this year, 2011-12. These are the facts as distinct from the spin. By the way, it is all borrowed money which will not be repaid for years and years.
The Orgill report into the $16 billion school funding program showed that spending began several months later than planned and it is still being spent to this day—several years after the GFC. One-ninth of the stimulus was spent towards the end of the one quarter of negative growth, which was the 2008 December quarter. We supported that first stimulus because of the collapse of confidence. In fact we suggested how it should be spent. Despite the nonsense peddled by our lightweight Treasurer, a Treasurer so far out of his depth—
Order! The member for Goldstein will refer to the member appropriately.
Despite the absolute nonsense peddled by our Treasurer, a Treasurer so far out of his depth, a Treasurer who claims that the stimulus was the reason Australia avoided a technical recession, almost all the stimulus was spent after the economy was bouncing back, which it was by the end of the first quarter and the start of the second quarter of 2009.
It was the automatic economic stabiliser of the exchange rate and the work of the Reserve Bank which restarted our economy. In the first quarter, you might recall, our exchange rate fell to 60c against the US dollar. We all understand the significance of that now. It is not a surprise that the biggest trade surplus in Australia's history came in that first quarter of 2009—in the middle of the global financial crisis. Then the Reserve Bank cut interest rates—not only cut but slashed. They took 4.25 percentage points off interest rates between September 2008 and April 2009. The stimulus money had not been spent, but by April 2009 the pockets of households had more in them than they had ever had as a result of the 4.25 percentage point cut in interest rates.
The interesting point is that seven months later, in November 2009, when some of the spending was starting to take place, interest rates were back up by 3½ percentage points. Why was that? It appears the Reserve Bank was worried about overspending in the economy. The RBA had reduced interest rates by 4.25 percentage points—that got us going—but by the time the money was being spent out of the government's $87 billion stimulus, they were reducing interest rates due to worries about overspending. These are the facts as distinct from the spin. By the way again, it was all borrowed money and it will not be repaid for years and years.
This deceit has been used to justify borrowing and spending of $87 billion and more. All that has meant is that the government has been in the market borrowing $100 million a day ever since. The effect has been to push up interest rates for households and for small and large businesses; push up our exchange rate; ensure that many small and medium sized businesses have not been able to access finance for love or money, many going to the wall as a consequence; and make Australia highly vulnerable to any—even a reasonably modest—downturn in commodity prices. That vulnerability is due to our huge structural deficit, a deficit which is twice Germany's and even 30 per cent worse than Italy's, would you believe. Yet you never hear our Treasurer talk about structural deficits. Do not lecture us about transparency. The rest of the world, especially Europe, talks—is consumed with concern—about structural deficits. The Treasury are not even allowed to produce a figure for the structural deficit. The words have hardly ever even passed the Treasurer's lips in this place. This is yet more spin.
Let us look at the deceit of Labor's stimulus claims. I could recite a litany of issues which have not been addressed by this government, yet they continue to parade this nonsense that the stimulus had some effect. It has had an effect; it has had a deeply negative effect over the last three years and it is contributing to the huge debt hanging around the neck of every Australian.
Let us look at the deceit of Labor's spending claims. The government's response to every problem has been to tax, borrow and spend, spend, spend and then to do high fives after they have passed each tax and spin it as reform. The government should be paying down debt to position Australia for some of the best and most extraordinary opportunities—across virtually every sector, including manufacturing—which are emerging in the Asia-Pacific. They should be paying down debt to weatherproof Australia's economy against growing volatility on world financial and commodity markets—as the Howard-Costello government did ahead of the global financial crisis. That is why we got through the global financial crisis—we went into it with a $20 billion surplus and with a balance sheet that was $70 billion in the black. That and the automatic stabilisers are why we got through it, not the politically inspired stimulus spending which we are still suffering from and which businesses are still suffering from.
Instead, this Treasurer who is out of his depth has consecutively delivered the four biggest deficits in Australia's history—$27 billion, $55 billion, $48 billion and $37 billion. I will not be surprised if that $37 billion blows out a lot further to help manufacture a surplus for 2012-13. Under Labor, annual spending has grown from $272 billion in 2008 to an estimated $370 billion this year. That is an increase of $100 billion in just 4½ years—$100 billion out of a budget which started at $262 billion. That is a 40 per cent increase. I suppose they would say it has kept pace with inflation, but inflation over those 4½ years was only 13½ per cent.
Despite all that, they are increasing spending again this year. Forget the stimulus for a moment. Let us say that the stimulus was warranted, that it has not brought thousands of small businesses to their knees because they cannot get finance as a result of having to compete against a government borrowing $100 million a day. You would think that, after they had spent the money on the stimulus, they would come back to something like the long-term level of spending, would you not? That is what a household would do if they had put an extension on their house. The next year they would come back to their long-term level of spending. Not this mob.
Under this government the deficit has gone up and up—$87 billion, but they could better that. Now they are at $100 billion more than they were spending 4½ years ago. That is why they never talk about expenditure. This Treasurer is out of his depth and he never talks about expenditure. This government has had two to three per cent more overexpenditure than previous governments as a percentage of GDP every year, on average, for 4½ years. Look at the facts, not the spin. So much for fiscal consolidation. It is a monstrous amount of money, much more than the $87 billion. This government has spent $70 billion over and above that $87 billion they have spent above the long-term spending trend. And they talk about fiscal responsibility. This fiscal consolidation line is, again, more spin.
Labor's third outrageous line of spin is its claims about the surplus. Labor has been boasting for three years about its projected 2012-13 surplus while delivering the biggest deficits in our nation's history. You will hear it again this time—they will brag about a surplus that they have never delivered and try to bury one of the four biggest deficits in our history. In fact, a detailed look at their budget figures shows we have every reason to treat the surplus, if we ever see it, as thoroughly dodgy and thoroughly manufactured. It is a product of accounting tricks to shuffle money and hide spending to keep it off the budget bottom line and engineer the appearance of a surplus next year.
Let me give just one of the many examples that I documented in a speech last Friday to VECCI. Labor accept that their damaging carbon tax poses a threat to Australia's energy security, and in response they will spend over $1 billion this year, 2011-12, to support energy markets through its Energy Security Fund. Jump forward two years, to 2013-14 and 2014-15. They will spend another billion dollars in each of those years. What happened in the middle? What happened to 2012-13? Apparently the carbon tax magically poses no threat to energy security in 2012-13. They are spending 1,000 times less—$1 million, not $1 billion. So it is a billion, one million, a billion, a billion.
I could take you through 34 examples of very obvious cases where they have done this. Again and again they have brought spending forward or they have pushed it back into those two years. Get up and answer those claims. Explain to us why it is a billion, one million and then a billion, a billion to alleviate the threat to business from the carbon tax. This Treasurer has been pulling forward expenditure for two years and now it is being pushed out from 2012-13 into the subsequent two years, and he does not think anyone is looking. A forensic examination of the budget papers shows dozens of examples of this sort of chicanery. It is one reason why Labor's claim to be delivering a wafer-thin surplus in 2012-13 should be taken with a very large grain of salt. All these things add up to tens of billions of dollars. In fact, whatever they come up with in May, the real truth will be tens of billions of dollars more in deficit. This is a government that has practised and perfected the art of spin.
Finally, we have the most notorious example of the government's spin. They have not only shuffled money around but have about $100 billion of items for which there is no identified funding, or they are hidden. They have taken it off the balance sheet or they have not identified funding. There is the Clean Energy Fund, the NBN, the structural black holes inherent in the mining and carbon taxes, the 12 new Australian-designed submarines—all of these add up to an extraordinary amount of money, $100 billion. That is the real $100 billion black hole. Remember on budget night Labor's $100 billion real black hole? Remember Labor's cumulative deficits over the last 10 years in office, including a whopping and shameful deficit this financial year of $37 billion, adding up to a total of over $200 billion? For God's sake, look beyond the spin and look at the statistics. (Time expired)
The last comment was not worthy of parliament.
Despite all of the allegations of spin, we have just seen more spin than a Shane Warne wrong'un. The member for Goldstein tried to spin his way out of what is a $70 billion black hole, but he will have to do better—and he will have to do better each and every day until the next election. We are going to hold him to account. He might have thought that at the last election he managed to skate through, but we all recall what happened back then. He recalls it really well. In fact, he was scarred by the experience. Most of his colleagues have made sure he was scarred by the experience. The buck-passing exercise that occurred amongst their shadow of an economic team left the blame fairly and squarely at his feet. And he is hurting—he is smarting from it.
I feel a bit sorry for him because he was not the only one to blame. We all remember the budget reply speech that did not turn out to be a budget reply speech—it was more of a flick pass out the back to the shadow Treasurer, who was then given the opportunity at the Press Club a week later to detail where all these savings would be made. He failed abysmally. We then had another flick pass, and the poor old member for Goldstein was left holding the baby. There he was, with the football in his hands, left to account for their black hole. He could not do it. We all remember the 'time to call it quits' press conference, when the press secretary started motioning, in a cutthroat fashion, to bring that painful press conference to an end. The pain and suffering of that experience is not about to come to an end. We are determined to make sure that excruciating, painful experience that the member for Goldstein endured lives on. His own conduct and the conduct of his colleagues have contributed to that. After the election, we saw in all of its ugliness the $11 billion black hole that the opposition went to the election with. It was only exposed because we had a hung parliament and the Independents, whom both the Prime Minister and the Leader of the Opposition were negotiating with, determined that it was only fair and reasonable that the costings of both parties be placed on the table and that the sunshine be shone on what was ultimately an $11 billion black hole. Those are 11 billion reasons why those opposite are on that side of the chamber. It hurts. I know it hurts. But the reason it hurts most is that you have not learnt from your mistakes. Instead of going to the next election with an $11 billion black hole, it is looking more and more like a $70 billion black hole. This is not a figure that we have plucked out of the air. It was one of a number of figures that the member for North Sydney shared with his colleagues. In fact, I think the $70 billion was the figure he told the member for Goldstein. He also told a few other colleagues a few other figures—I think 50 and 60. Who knows? There might have even be an 80 in there. Just like the documents that are circulated with little secret markings to identify who the culprit is in the event that they are leaked, the member for Goldstein was caught out in leaking the $70 billion figure, and the member for North Sydney was brought to account in an interview.
The Assistant Treasurer will resume his seat. I ask him to be relevant to the matter before the parliament.
Madam Deputy Speaker, I ask that you ask the member to withdraw that lie and that accusation that I had leaked—
The member for Goldstein will resume his seat. The member for Goldstein knows he has other forms of the House to use, but the minister will withdraw.
I withdraw, Madam Deputy Speaker. The matter before the House is about transparency. I find it extraordinary that the member for Goldstein would call for transparency when nobody has more to fear from transparency than him. What we have seen with the $70 billion black hole—and that is only what they have admitted to—is that there are absolutely no plans to provide those savings at this point in time. In fact, what we saw recently was the so-called commission of audit that is going to be established.
They've got a great track record with auditors.
The member for Chifley reminds me of a very important point, and it goes to the question of auditing. I should have made this point a little earlier. When those opposite went to the last election with an $11 billion black hole that was ultimately exposed, the member for North Sydney came forward and said, 'But all of our costings have been audited.' He used the 'A' word. He said they were all audited. But we saw subsequent to that that, in relation to the costings of the opposition and the so-called audit report which had been provided by accountants, those accountants ended up finding themselves being reprimanded for not having audited properly. In fact, they did not seek to audit those costings, even though the member for North Sydney said that they had been audited.
Don't be too tough on them.
The member for Chifley!
I appreciate the member for Chifley's concern—
I don't.
about me being too tough on the opposition. I have not even begun. So we have this so-called commission of audit. This is what I like to call the chamber of horrors, because it is about locking up all of those nasty cuts that those opposite plan to make. You are just not honest enough to put them before the Australian people before an election. What you do is say: 'We've got it all under control. Trust us. Once we get elected, in the next term of parliament we'll set up this you-beaut commission and it will go through with a fine toothcomb and determine all of those places where appropriate cuts need to be taken.' If you think you need to make cuts, come clean with the Australian people and explain to them which vital services you intend to cut. What sorts of cuts are you going to make to Medicare? What sorts of cuts are you going to make to school funding? What sorts of cuts are you going to make to universities? What sorts of cuts are you going to make to family payments? These are the questions that people in electorates like mine and in communities like mine all around the country deserve to know before they go to the next election. We know about the $70 billion black hole; we just want to know how you intend to fill it. What cuts are you going to make to fill that hole?
It is really interesting that we never actually see both the member for North Sydney and the member for Goldstein running side by side in one of these debates. That is because every time they open their mouths they contradict each other. They contradict each other every time they contribute to a discussion. On this question of whether or not they have costed their policies, the member for North Sydney has an answer for all occasions—the member for Goldstein knows that—but those answers are not always right. The member for North Sydney was asked a question about whether or not the coalition had done the hard yards on costing their policies. He said:
Based on what we know now, we are doing all the costings. All our policies are costed.
The journalist said:
So you have found those savings you were looking for?
And the member for North Sydney said:
Yes, we have found the savings that we were looking for.
That was on 13 March 2012. Just a few days earlier, on 5 March 2012, the member for Goldstein said:
We haven't finalised any of our major policies …
That it was a very productive week of policy work I find hard to believe. Why should we be expected to believe that they managed to do in one week what they have not managed to do in the last four years, and that is develop policies, develop plans, for Australia's future and cost them? They have not done it for four years, so I find it just a little bit difficult to believe that they did it in about a week.
I have to say that I have some sympathy for the member for Goldstein, because I tend to believe him more than I believe the member for North Sydney. When the member for North Sydney says, 'Don't worry, she'll be right, all the policies are costed,' I do not believe it. The coalition have an enormous task ahead of them when it comes to filling that $70 billion black hole. They do not have any plans and, if they do, they are not prepared to share them with the Australian people because they are so scary and so nasty that nobody would ever vote for them. The coalition could come forward and say, 'We'll start to rip out the heart of Medicare,' in the way in which coalition oppositions have always wanted to do, but very rarely have they ever been brave enough to say it.
Dr Stone interjecting—
The member for Murray might not get her opportunity to speak if she continues.
Which other essential services are they going to rip the guts out of in order to fund their $70 billion black hole?
I mentioned earlier that the member for North Sydney and the member for Goldstein have all sorts of difficulty in agreeing on basic matters. It is a bit of a problem when they are two of the key figures in the shadow economic team. One issue where there has been a lot of disagreement has been on the question of a surplus. The government's position on a surplus is very clear: we will return the budget to surplus. That will require some difficult decisions, but we will do it because that is what the nation requires. We need to stick to the plans that we have made; they are tough fiscal plans, but, all around the world, capital markets are looking to governments to actually deliver on these plans. We are a government that is intent on doing that and, by doing that, we will keep pressure off interest rates and keep interest rates low for families.
The member for Goldstein was asked whether or not the opposition would deliver a surplus. 'Would they commit to a surplus?' He said, 'Well, it just depends.' The member for North Sydney—not as directly contradictory as he normally is—simply said, 'Maybe.' The Leader of the Opposition said, 'We will do it as quickly as possible.' But then there was poor old Senator Abetz, who did not get the memo. Senator Abetz was out there and said, 'Look, we are not in the business of making extravagant promises.' Promising to return the budget to surplus is not of itself an extravagant promise, but when you are wallowing around in a $70 billion black hole, that is a very ambitious commitment to make; a very extravagant one, to use Senator Abetz's term.
When it comes to the contradictions in their positions on key questions of economic policy—and of course this matter of public importance goes to the importance of transparency in budget policy when it comes to business making the decisions that business needs to make—there are very few areas that have exposed just how flaky the policy approach of the opposition has been on economic policy quite as much as the question of tax cuts for business.
We have seen them cutting each other up over the last couple of weeks. Talk about poor judgment! Who was the brains trust that decided that they were going to lead the Liberal Party off this cliff? Who decided that they were going to come into this place and vote against tax cuts for business? If you go through the Hansard, you will see that just about every person on that side of the House came into this place and professed their 'unabashed support' for businesses large and small—'generators of jobs', 'creators of wealth'; but not worthy of a tax cut. When it comes to delivering a tax cut for them, they want to talk about how tough it is out there in the business environment. They talk the economy down, but when it comes to delivering them tax relief they come into this place and vote against it. To their eternal shame they will do that, and each and every one of them will have to go back to their electorates and explain why they voted against tax relief for the businesses in their electorate.
On the question of business tax cuts, just last year the Leader of the Opposition said, firstly, 'The government should keep its commitments,' and, secondly, 'We support company tax cuts.' But then, just a couple of days ago, the member for North Sydney was asked the same question about whether or not they would support a cut in the company tax rate. The journalist asked, 'Are you signalling that when this comes to the House you will support a cut in company tax?' The member for North Sydney said, 'No, No, No, No, No,' and just for further effect he said, 'We have said no.' Six noes. Not one, not two, not three; six noes. When it comes to cutting tax, they say no.
In fact, when it comes to any good idea proposed by this government, they say no. The only thing they will ever say yes to is a big fat tax cut to the likes of Clive Palmer. We have seen over the last couple of days—and in particular in the last 24 hours—some extraordinary comments from Mr Palmer. You would have thought there would be a handful of people in the Liberal Party sensible enough to come forward and at least acknowledge that perhaps it was a little bit of overreach. Talk about conspiracy theories: the CIA!
The only CIA that the Australian people have to worry about is Clive's influence agency. Those on the other side seem rather beholden to it. They want to give a big fat tax cut to the millionaire miners but not to the Australian— (Time expired)
Probably no government since Federation have spent so much time with personalised attacks on an opposition rather than actually explaining their policy and their extraordinary debasement of Australia's opportunities and the futures of our kids.
Andrew Robb, the shadow finance minister, has just observed in the press today that a staggering 73 per cent of finance minister Penny Wong's press releases are attempts at diversionary attacks on the opposition leader, the shadow Treasurer and the shadow finance spokesman. There is something going on. There is something not smelling right in Denmark, as they say.
The Australian public is seriously sick of Labor's endless negativity and shrill attempts to distract everyone from what they are doing with the economy. Unfortunately the public is not unwise and they are experiencing the impact of the government's debt levels that are now afflicting all Australians—some $6,000 for every man, woman and child. We have young people now in despair and not able to pursue careers that they imagined would be something for them. We have empty shops and retail confidence at rock-bottom levels. We in fact have an economy that should be bubbling along, that should be in great shape, but that is now looking pretty bad. As our first speaker, the shadow finance minister, said, our economy unfortunately has structural deficits rivalling the poor men of Europe.
Labor is desperate to distract the public and paper over the fact that it has converted the coalition government's legacy of no government debt—$70 billion in net assets and a $20 billion surplus—into a staggering $130 billion net debt, with interest payments on average of about $6.5 billion annually. Under Labor, productivity has slowed, growth has stalled and only a few new jobs have been created. We are in a serious mess. None of Labor's debt can be paid off until it manages to produce a surplus, something it has not been able to conceive. It will have to be a very decent surplus to seriously tackle Labor's debt. On the current prediction for what the Treasurer, Mr Swan, calls a wafer-thin surplus, it would take over 100 years to pay off Labor's debt.
As I said, our structural deficit is a serious problem. We do not hear about that. I wonder if Mr Swan still believes that all we have to do is pray to China. 'China will save us,' he says, 'We are such a lucky country.' I doubt the Treasurer is sleeping well at night, now that China has downgraded this year's growth forecast to well below its average for the last 10 years. This government has hung all of its hopes for getting away with its profligate spending on rivers of gold continuing to flow out of the mines of Australia to feed China's insatiable demand for new goods and services.
Unfortunately it is not that simple. China's growth is dependent on a strong performance in its own export markets as well as in its domestic demand. Europe's debt crisis obviously affects China's exports and that in turn translates into slower demand for what they want to buy from us. So we have to be smarter than simply saying, 'Spend, spend, spend—China will fix us.' If only we had a government that was more disciplined and had some depth of understanding of interacting factors, causes and effects—those sorts of factors that influence a nation's prospects. Instead, in the last four years we have had four of the country's biggest deficits.
We have a government, typical of all previous Labor governments, that has overspent taxpayers' hard earned cash on hair brained and/or totally mismanaged schemes. Labor has wasted not just millions but billions of dollars and it continues to borrow about another $100 million per day to fund its unstoppable government spending. We have a huge Public Service administrating more government red tape and regulation than this nation has ever seen. The coalition will reduce that Public Service.
Take the pink batts. Everyone in Australia knows what I mean by those two words. Mention those two words to ordinary Australians and they either guffaw or groan. This program must go down as one of the most misguided, mismanaged and deadly that any government has ever cooked up in any country. Labor spent more than $1 billion to put the batts into hapless people's roofs and over $1 billion to take them out again when too many houses caught fire. You can understand why this government would also want to create smoke screens to hide the fact that they spent over $16 billion on new school buildings. But unless you were one of the lucky few in the independent school system you did not get what you wanted or needed. You could not employ locals and the value for money was just a joke.
Meanwhile, on Labor's watch, we are now just about at the bottom of the OECD league tables in terms of literacy and numeracy improvements and teacher capacity. It is not just about a new BER hall, sadly, and this government does not get that. They think a website will fix it up: the new NAPLAN and My School websites. Sadly, that is a cruel joke as well. Imagine the cruelty of this government's intentions when it identified the need for a national disability insurance scheme—something the coalition also understands the need for—but did not and cannot put a single red cent on the table to turn it into reality. Not a red cent. But they have put it out there as though it is going to happen. I have had people with disabilities in my electorate saying: 'Isn't this fantastic! At last, a national insurance scheme.' I say, 'Look I'm terribly sorry; it's a great idea but they've got no money.'
Imagine a government that introduces a paid parental leave scheme which is the cheapest and nastiest scheme you will find anywhere in the developed world. On top of it being the cheapest and nastiest it denies these new mothers any superannuation at the time of their leave. So the poverty of older women in Australia continues—no superannuation continuation in their working lives. Imagine a country that slaps a new national food plan on the table, very proudly, acknowledging that globally and especially in our region there will be enormous additional demand for fine food. At the same time it proposes to take away much of the key means of production in the Murray-Darling Basin—the water—from farmers in what is the largest food-producing zone in Australia.
They have slashed Customs and Biosecurity funding as well and they have slashed the research and development effort that is going to help farmers innovate and meet that global food task. It is cruel and it is absurd. No wonder there is now a crisis in confidence in one of the nation's biggest employers, the food and farm production manufacturing sector. Applications to do agricultural science courses have crashed, universities have halved their course offerings and skilled and graduate jobs in agriculture go begging. People have basically given up on this government. Then there is the Gillard government's $500 million carbon farming initiative. There are doubts now that it can ever deliver real emissions reductions and the scheme will be too costly and too bound with red tape for most to even bother about it.
The Greens have a lot to answer for. They are a key cause of the urgent smoke-and-mirror campaigns of the Labor government. With the Greens, Labor are trying to cover up the economic troubles their marriage has helped to create, and the vulnerabilities they cannot understand or can no longer respond to. The carbon tax was the price of the keys to the Lodge. We all understand that, but we are the laughing stock of the world. Other countries like us acknowledge the need to live in a carbon constrained world but no one else intends to smash their competitiveness, to beggar their people by destroying jobs—by closing down businesses or shrinking them—because the cost of their energy will be beyond any reasonable price.
All of us on the opposition benches are closely in touch with our big businesses and also our small businesses, which are the generators of wealth and opportunity in our economy. We acknowledge the risks these businesses take. Unlike Labor, we applaud when they prosper and grow the wealth and productivity of the nation. We acknowledge that these businesses are now in great fear of the impacts of risings costs, as they see their power bills surge in anticipation of 1 July. The Murray Goulburn Cooperative, Australia's biggest dairy company, has worked out it will cost them, per annum, over $15 million a year extra. All of this will be passed onto their farmers, because the big supermarket duopoly laughs when they suggest putting up the prices of dairy products on the shelves. This is the sort of country we are now living in, a country where Labor's spin gets desperately louder and shriller every day. We just had an example from the previous speaker—attack the man, attack the woman but do not for heaven's sake let anyone look closely at what is going on with the figures, the finances, the debt and the deficit. (Time expired)
You get to hear a lot of crazy things in public life and in the sweep of public affairs. Only a few days ago we heard that apparently the CIA in tandem with the environmental movement is working tirelessly to shut down our Australian coal industry.
Shame on them!
I thought—exactly—I had heard it all, Minister, and then I saw this MPI. This is an MPI in which those opposite are calling for us to have budget transparency. I am going to hear the mafia call for law and order campaigns next.
These people on the other side are incapable of demonstrating what they are able to do in terms of even meeting a surplus, even being able to show where they could make savings.
Mr McCormack interjecting—
Member for Riverina, you can rest safe at night. Can I tell you, member for Riverina, that those opposite have been working very hard. In fact, the member for Goldstein, as your shadow minister for finance, is working night and day to find those $70 billion in savings. And do you know what? After all that painstaking research and all that time at night, he has had his eureka moment: $50 million in savings in government consultancies—$50 million down, $69,950 million of savings to go. Thank you for your great work in identifying savings. What a joke. We have had the fastest fiscal consolidation in four decades, and the best they can do is reach for that old chestnut of government consultancies where they reckon they can save $50 million.
You know what? I will be happy to compare our record with the record of those opposite any day. We inherited inflation at just under four per cent, now under three per cent. With regards to total tax take, when those opposite were in power tax as a percentage of GDP was close to 24 per cent; now it is 21 per cent and headed lower. Regarding interest rates, there were only six months of the 11 years that they were in office during which it got as low as 4.25 per cent. Regarding spending, the member for Goldstein lectures us about spending. Nominate a year in which those opposite were able to cut government spending. One year; just one year—nominate it. You cannot. In 11 years, they were unable to reduce real spending, and in fact it grew in the last five years—
Mr Tehan interjecting—
The member for Wannon is warned!
When those opposite were in government, spending grew by close to four per cent every year. It has only grown by an average of 1.5 per cent a year under this government. The comparison is huge. If you look at it, we have had higher growth than many countries who had to go through the GFC; lower inflation; and lower unemployment. We are able to demonstrate a record that is way better than those opposite.
We have been asked to be transparent. Those opposite claim that apparently—I saw this the other day—they have 40 of 49 policy areas completed. Can you just name one—and not something small? Name us something that you have been able to achieve? You have said you are not bringing Work Choices back but where is your actual IR policy? You have now been for years working your way away from the claim that you are bringing back Work Choices, and the minute the business community sticks a stick in the cage, you suddenly find your courage and say: 'Oh no. We're bringing in flexibility.' Everyone in the general community knows that when you are talking about flexibility you are only talking about one thing.
The talk about transparency and they are unable, for example, to meet this simple challenge. Last weekend economist Stephen Koukoulas, ex Citibank, a one-time prime ministerial economics adviser, tweeted simply this:
The Govt publish its budget data twice a year: Can you publish your costings & program cuts? Just once?
He tweeted that to Joe Hockey, and Joe Hockey got uptight and responded to me by saying: 'That's unfair. You guys can't even get board appointments right.' I am thinking: you get back to me when you can work out how to appoint an auditor and then you can lecture me on how that should work.
Get a catering company!
Or catering companies; that is right. The member for Moreton rightly points out when they want to challenge immigration department figures, they go to the caterers. Who are the chief immigration officers on Nauru? The guys from MasterChef?
They are unable to stand up to the challenge. We are being challenged to be transparent. Let us be transparent about the decision-making processes of the economic team opposite. Laurie Oakes back in February talked about the economic decision making of those opposite. He said:
In August last year, as the Coalition's expenditure review committee looked for potential savings, there was a leak.
A news report claimed that documents from the so-called 'razor gang'—
this is the one that works hard to find $50 million in savings to meet a $70 billion target—
revealed a warning by Hockey that $70 billion needed to be found.
In fact, well-placed sources say, the documents did not contain an overall savings target at all. Hockey provided it to shadow ministers when he spoke to them in person.
And—here's the devious bit—he gave each of his colleagues a different figure.
This from those opposite—there is trust aplenty in those opposite.
It might have been the CIA!
That is right. The member for Hunter, the Chief Government Whip, points out rightly that it was the CIA perhaps. But those opposite are calling for transparency, yet even within their own ranks, within their so-called 'razor gang, they do not trust each other and hide real figures and are unable to show how they will get to surplus.
In fact, in early February they all took a big step back from even committing themselves to a surplus. In one week we had the member for Warringah, the member for Goldstein and the member for Curtin all taking a big step back as to when they would actually put a surplus together. We have committed to that process. They have been unable to, and their $70 billion hole has not been made any easier by their refusal to support the minerals resource rent tax. The reason is this: opposition policy is being shaped in the shadow of a magnate, and that magnate is Clive Palmer. When I think of Clive—our national treasure—I wonder where all the good billionaires have gone. Look at the quality of billionaires overseas. Bill Gates, former CEO of Microsoft, is worth $61 billion and has donated between $28 billion and $34 billion to charity. He has his Giving Pledge, a moral commitment of America's richest families. Billionaires in the US will donate at least 50 per cent of their fortunes to charitable causes of their own choosing. Michael Bloomberg is worth $19.5 billion and has signed up to the Giving Pledge; David Rockefeller—I know that they do not like Rockefeller opposite—is worth $2.2 billion and has signed up; Ted Turner, founder of CNN, is worth $2.1 billion; Boone Pickens, $1.1 billion; Warren Buffett, CEO of Berkshire Hathaway, is worth $44 billion and has promised to give away a full 99 per cent of his wealth. Then we turn back here to our home-grown billionaires. Over there they are building betting futures for others. Over here they are doing their best to wreck the A-League. What a contrast. That is what our billionaires do. Over there they donate half their wealth and here they put on tinfoil hats with antennas saying 'Take me to your magnate'. This is what we get from our billionaires: 'The CIA and environmentalists in an unholy alliance to destroy the coal industry'. What has happened to our home-grown billionaires? Why am I so concerned?
Mr Tehan interjecting—
The member for Wannon was warned. He will remove himself from the chamber under standing order 94(a).
The member for Wannon then left the chamber.
There you go. Goodbye and take that tin foil with you.
The member for Chifley will restrain himself.
I withdraw. It is because I am concerned. There is a huge influence of Clive Palmer.
The member for Chifley does need to be slightly relevant in his last 56 seconds if he can.
It is about transparency of the budget process. Those opposite have said they will repeal the MRRT and will be doing so because they have got someone who, since 2004-05, has donated a total of $3.7 million to the coalition.
Mr McCormack interjecting—
Wait for it, Member for Riverina: compare the $3.7 million Clive Palmer has given to your side with the $150,000 he has given us. Those opposite, who are committed to repealing the MRRT, are unable to be transparent in the way they operate and are unable to determine or show us how he influences policy, and they then lecture us about transparency. It is a joke. (Time expired)
The admirable Assistant Treasurer—
The member for Dawson should have listened earlier when I said that people will use appropriate titles or they will not be heard.
The Assistant Treasurer and the member for Chifley talked about Clive Palmer and the CIA. I do not know about the CIA but, gee, I wish I had one of those memory erasers that the Men in Black have because I cannot get back the 25 minutes of my life that was just wasted listening to the previous member's speech, but at least I can forget about it.
I welcome the opportunity to speak on this matter of public importance, which is:
The urgent need for the Government to deliver budget transparency for the business community.
The words of those opposite might rubbish billionaires but their economic policies rubbish families and small businesses right across this nation. Transparency is definitely needed. It is not just an urgent matter for business; it is an urgent matter for the community and the country as a whole.
Small business is the backbone of this country. It is small business that finds itself at the pointy end of some of the worst policies that any Australian government has ever produced. When small business is hurting, families are hurting. Right now small businesses are at a loss as to what the future holds for them. They see a government that is out of control. They see a government that is going out of its way to destroy the economy, industries, jobs and, quite honestly, families. They see a government desperately trying to hide—like a bunch of school kids who just broke the vase—the evidence, trying to hide the broken pieces of the economy and sweeping the evidence of their own recklessness and stupidity straight under the carpet. Manufacturing a network of deceit and fabrication to cover its tracks is not the answer.
The business community needs certainty and not the certainty that is being peddled by this government, not the certainty of tax, tax, tax and more tax, for that is certain failure. The best predictor of future behaviour for this government is its past behaviour. We look and see what this government has done. It is desperately trying to hide all of these failures, trying to sweep them under the rug and trying to hide the cost blowouts. In so many different programs it is trying to hide the waste, trying to hide the record budget deficits and trying to hide the record debt. But the problem is that there is no rug big enough to hide all that because it needs a bigger and bigger rug every day.
Remember when the government said the 2011-12 budget deficit would be $12 billion? That was just 12 months ago. Then it was revised to $22.6 billion. The budget deficit has almost doubled in a year.
It's worse than that.
You think it would not get any worse than that, as the member for Herbert said, but now somehow the most recent budget update puts it at $37 billion. Is it even possible that anyone in the world—the world's greatest Treasurer, for instance—could be that incompetent with a budget forecast? Maybe not, because the 2011-12 year is another write-off for this Labor government and another write-off for this nation. It is another Labor deficit to add to the collection. If you are going to stuff it up in the great old Labor tradition, you might as well go all the way; you might as will push as many costs under that rug as you can. You might as well take some costs out of future budget deficits and stick them under the rug too.
What we have is a smoke and mirrors situation going on in this government in a desperate bid to produce a budget surplus, just one. We are hoping you can get it, guys, just one. For the benefit of those of us who have never seen a Labor surplus in our lifetime, such as the member for Longman on this side, let us see if you can get it or at least get another rug to cover up what will turn out to be another deficit for as long as it takes to get to an election.
While the government is trying to manufacture their first surplus, we have minister after minister come into this place to justify their economy-destroying policies, the ones we were told would not happen—there will be no carbon tax under this rug. The carbon tax cannot be hidden any longer. We have seen the Labor Party and the Greens constructing this elaborate new paradigm that is supposed to stop a tax from being a tax. They try to justify the carbon tax with the illusion that there will be this wealth of green jobs. So where are these green jobs? Ask Spain how they are going to get all their green jobs and how they are going with that. Go down to Immigration and ask them, because that is where they are—all the young unemployed are coming to Australia because the whole green job thing did not quite work out for them.
In addition to the green jobs furphy, the government have tried to invent this new economy. That is because they stuffed up the old one. You can only talk about a new economy for so long because eventually people stop and realise, 'Hang on, this is just the old economy except there are fewer jobs and we are worse off.' The government try to dress up their carbon tax as the clean energy future, but what business really wants is for government to be the ones who come clean—to tell the truth. Business wants to know where they truly stand, not where the government can make people think they stand. And if they are going to come clean on the carbon tax they should do the same with the mining tax. Let us not try to justify this bad tax by selling it as something that it is not. The government cannot keep saying to businesses that they are spreading the wealth around to every postcode, in that dull voice that the Treasurer says it in. Giving a one per cent tax cut to companies is not spreading the wealth around; it is only giving a little break to companies. The government might be able to con a lot of the people like that but not small businesses.
Most businesses are small and it is small businesses that are more likely than not—70 per cent of them, in fact—to be sole traders or partnerships, not companies. They will not be the beneficiaries of this spreading of the wealth, but they will be the ones paying the extra three per cent in superannuation that the government desperately is trying to say it is doing. What a disgrace and what an affront to businesses around this nation for the government to say that it is the one creating the super when it is actually businesses doing it. That is not spreading wealth, it is increasing the burden even more. It should not try and justify the mining tax by telling us that it is going to fund things that it is clearly not going to fund. As a bit of a segue here, it is incredible that we had the Leader of the House give this statement today. He is now the minister for urban rorts: snout-in-the-trough Albanese rorting roads funding right into his own electorate. But we had the Leader of the House—
Mr Deputy Speaker, I raise a point of order that goes to relevance and misleading of the House. I know you were busy at the time, but it is about a reflection on the Leader of the House by the member for Dawson.
I did not hear the reflection. Someone was getting my attention to my side, so I cannot rule on that, but if the member for Dawson would assist the chamber—
I will withdraw, Mr Deputy Speaker. We had the Leader of the House here yesterday telling us the mining tax was going to fund the Peak Downs Highway, an important project for the region that I live in but, according to the budget, the work will actually start before the mining tax revenue kicks in. He goes on to say that the mining tax is going to fund the Mackay ring road study, which has already been done at a cost of $10 million. So the government cannot claim the mining tax is going to fund something that has happened in the past, unless the minister has a TARDIS. I am eagerly waiting next week's episode to see if the mining tax is going to fund the Sydney Harbour Bridge; it is only eighty years old.
The only way the government could create a good economy is to start with great one. You only have to look at Australia's gross debt, which is third only to Iceland and Ireland, to see how they have managed to do that. Imagine what a real government could have done from the position this economy was in when Labor took over. For a start, there was money in the bank, not a record debt. Thanks to Labor's reckless spending, Australia is now forced to pay $6 billion a year in interest on the debt they have created. Coincidently it is estimated the National Disability Insurance Scheme, which we support, would cost around $6 billion a year to implement. Labor is trying to create this illusion that it is going to fund the NDIS and the coalition is not. Well, if Labor supported it it would be in its budget this year. On this side of the House we support the NDIS, and we have the ability to fix the economy so that it can become a reality. In asking for transparency we ask for truth, because we have had a very, very long time where we have had exactly the opposite from this government.
I am pleased to speak on this matter of public importance. I am a bit astounded that this is an MPI that is being put by those opposite, because I would not have thought that one from the opposition benches would be seeking to raise matters about either transparency or concern about the business community at a time when two very significant issues are facing them. When they come into this place they are clearly opposing the interests of those they repeatedly propose to represent by opposing tax cuts for companies and for small business. They have shown themselves to be very emphatic on those points. It is extraordinary that they are coming in today and putting forward an MPI which professes to support the business community. And in terms of transparency, it is just as extraordinary that they are here today talking about economic transparency when the hot topic at the moment is exactly what the opposition has committed itself to in terms of budget cuts and exactly what this new commission of audit constitutes in terms of the opposition's policies.
The opposition have for almost 18 months gone about this place calling themselves an alternative government, trying at every opportunity to find a seat on the government benches of this place. Yet, when they are asked to provide very basic details about their economic policies, very basic details about costings and very basic details of what they do stand for, they go back to being the opposition. They go back to being not accountable and they go back to indicating that they will reveal this in due course, that it is somewhere off in the distance and that at some point in the future they will provide information for people to be able to put their finger on what the opposition represents in terms of job cuts and cuts to health and education budgets—all of those things that we inevitably see whenever any conservative government comes to power. I am certainly very familiar with that because we have recently been the beneficiaries of the Baillieu government in Victoria. We see very clearly that while in opposition members of conservative parties are very reluctant to provide specifics about their economic policies and to provide appropriate details about what their priorities are, and when they get into government, as is the case in Victoria with Ted Baillieu, they sit on their hands, they do nothing and they allow the state to stagnate, or they decide to slash and burn. We have certainly seen that in previous governments at a federal level and very certainly at a state level, in my state. So it is extraordinary that today we are being invited by those opposite to talk about issues of transparency and support for the business community when they so obviously fail repeatedly on both counts.
I am however very pleased to speak about this government's track record of transparency in relation to our economy and in relation to our support for the business community. I am somewhat disappointed to have heard the member for Goldstein, who brought this matter before the House, reflect on the events of the global financial crisis. So regularly as individual members, when we go to our electorates and see the benefits of construction projects in schools and housing developments, we hear of the benefits for ordinary people as a result of the stimulus spending put in place by this government. We see the practical effects of support for jobs in our own communities as a result of the very real policy commitments this government made during the global financial crisis.
It is extraordinary that the member for Goldstein stands repeatedly in this place and pretends that it did not occur. We have heard that throughout the three contributions of the members who have spoken from the opposition benches this afternoon. We have heard denial of the global financial crisis as a reality which affected the world several years ago and is continuing to be felt by countries around the world. We saw denial of the benefits of the Building the Education Revolution by the member for Murray. I can confirm that the 68 schools in my electorate which have been the beneficiaries of this government's economic responsibility at a very difficult time are very thankful for the commitments we made—the $110 million spent across my electorate.
We heard denial from the member for Dawson about the financial impacts of natural disasters. He, as a member who has been directly affected by natural disasters, should know very well about the economic impacts that people in his own electorate must have felt and must continue to feel as a result. He must know that there are realities for our economy which must be faced as a result of those natural disasters. So it is utterly ludicrous for the people who have stood here this afternoon, seemingly talking about transparency and support for the business community, to be denying the realities of pressures being felt by our economy and denying the reality that this government is responding to those financial pressures.
It is absolutely extraordinary that the opposition are speaking about transparency and accountability, because we have heard their proposals for economic transparency and accountability. I must say they leave rather a lot to be desired in relation to the most recent extraordinary plan about an audit commission. This is seemingly the way they are going to recover from the $70 billion black hole they have announced by various means will result in the event that they find themselves in office.
The reason I and others on this side of the House are incredulous about this so-called 'audit constitution' is that the understanding of members of the opposition and indeed the shadow Treasurer of what it means to conduct an audit and what an audit represents was made pretty clear at the last election. Seemingly audited accounts were revealed to have an $11 billion hole in them. We know that on ABC in August 2010 the shadow Treasurer said that their accounts had been audited. He said:
You know what? If the fifth-biggest accounting firm in Australia signs off on your numbers it is a brave person to start saying there are accounting tricks. I tell you it is audited.
Apparently they said that there were savings of $11.5 billion that the coalition had identified as part of their audit. This audit is an extraordinary thing because we now know that not only has it been revealed through appropriate scrutiny of those accounts that there was indeed an $11.5 billion hole in this supposed audit but that the ICA's appeal tribunal found that the audit the coalition had organised was not an audit at all. So industry bodies are aware of exactly what they mean by an audit. The Australian public and the Australian Treasury are certainly aware of what they mean by an audit. So in terms of transparency the opposition have a little bit of form about what it is to conduct an audit. They have a bit of form about whether or not their audit can be relied on.
So it is with incredulity that all of us on this side hear about an audit commission which they propose to set up to be able to identify cuts to services, cuts to budgets—the inevitable things that conservatives do when they come to office. All Australians have come to know that. They are certainly coming to know that in my state. I expect that when the appropriate scrutiny is applied to those opposite, their audit will reveal itself to be exactly what it was at the last election—a sham.
By contrast, we have been absolutely clear with the Australian people about our support for small business and for the business community in general. It could not be clearer that those opposite stand for undermining the business community generally and undermining small business that they so heartily profess to support when they come to this place, when they are out on the hustings, when they are back in their electorates indicating that they have done their very best to support small business, despite the fact that they inevitably will vote against cuts to taxes for small businesses and they vote against company tax cuts. We heard today from the Treasurer about the practical realities of what the coalition's proposals for company tax and small business tax reform that we are undertaking, and that they are opposing, would mean. We know that they oppose the tax cut for companies. In fact, they want to increase company tax by 1.5 per cent. We know that this means an estimated $392 million cost to the manufacturing sector. We know that it means an estimated $270 million cost to the retail sector. Quite frankly, if you are going to come into this place and put up a matter of public importance about support for the business community, it would be worthwhile not adding to their costs through your public policies. This is an extraordinary motion and one which should not be supported by the House.
I rise to speak on this matter of public importance about the urgent need for government to deliver budget transparency to the business community. Let me start by talking about the fact that transparency requires honesty, integrity and openness. I think the Australian public demands that of us. When I walk through my electorate and meet with small business owners and with other people, they ask why we do not put things up front for them so that they can understand the implications when it comes to the financial management of their businesses, including the financial management of their own homes. It is not hard to provide numerous examples of gross ineptitude by the government in demonstrating budget transparency.
If I were to do an analysis of all the answers that the Treasurer gives in this chamber to questions around budget and fiscal management, then I would find that there would be very little in the way of transparent answers, as opposed to attacks on the opposition and attacks on individuals—individuals who create the job opportunities for other workers which the government says that they represent but that we forget. That is a factor within any economy.
There are many facets to the economy that are important to the way this country develops its wealth and the way it supports the families and communities that we have been elected to represent. It would not hurt to have some transparency. It would not hurt to have the detail so that people can make judgments. There is a need to promote transparency so as to improve consumer confidence and assist the business community to effectively plan for the future. Just look at this week: we have had the biggest tax on our most successful industry passed by the Senate and yet the companies affected do not know the full detail. Today, when the Treasurer was asked what the arrangements with the big three companies were, he was not able to provide transparency around what has been negotiated and around what their contribution will be to the tax.
We have the carbon tax coming out on 1 July this year and still we do not know the final detail. I have companies in my electorate that say, 'Can you provide any of the detail that will roll out with this so that we can consider what the costs will be, what our decisions will be about the provision of services, what the decisions will have to be about our financial viability and about other arrangements we have in place?' I was talking to a builder who tells me that he now has on the bottom of all his invoices a reference to the fact that his price will be affected by the carbon tax and its implications. How can the Treasurer claim to be back in the black in this financial year's budget when he does not include future policy costings that the Gillard government is committed to but does include costings for policies that do not have the detail in the legislation and have not had the proper modelling released?
However, what the Treasurer can take claim for is creating uncertainty in our business community. How can our business and industrial sectors make decisions to address the compliance requirements? The flow-on effects of these taxes are huge and our business community does not yet know the detail. Let us look at some facts here. Labor have consecutively delivered the four biggest deficits in Australian history: $27 billion, $55 billion, $48 billion and $37 billion. The numbers do not lie. Labor say that this financial year is different. They say it will be back in the black. They say they have changed their ways, but we all know that a leopard does not change its spots. They say they have realised that pulling out Australia's credit card at every opportunity is not the definition of being fiscally conservative.
It has taken them a while, yet if you look at the information the Treasurer provides in the budget you will notice there are no ongoing financial commitments to the National Disability Insurance Scheme. As a public servant, I used to rely on the portfolio statements and the budget statements to forward plan in the work that I did. When I look through some of the portfolio statements now, I find there are gaps or I find there are elements of the financial thinking of the Treasurer and the relevant minister that puzzle me—their thinking is not reflected in the transparency that is required in order for people to make business decisions. Nor is there any mention of the Clean Energy Finance Corporation which is, in total, a hundred billion dollar black hole in the budget. Not to mention, within that one hundred million, the debacle that is the National Broadband Network. A lack of planning, a lack of consultation and, ultimately, a lack of transparency has plagued this government since former Prime Minister Kevin Rudd formed government in 2007.
I was at a breakfast just two mornings ago where the people who I was sitting with said that at one time there used to be green papers and white papers, which allowed the private sector or the business sector to provide input into the process before it became entrenched in a bill that was debated in this chamber. They had the opportunity to argue for a reduction in red tape. They had the opportunity of reflecting on the impact on them and on their business. We no longer do that; I have not seen evidence of that for some time. I hope that it is a practice that trickles back in. The coalition would certainly be committed to a process that engages those affected.
Accounting tricks to shuffle money and hide spending so as to keep it off the budget bottom line contribute to the government's projected surplus, which is one-tenth the size of the deterioration in this year's budget deficit over the six months between last year's May budget and the November mid-year economic and financial outlook. The biggest example of this mess is the government's Energy Security Fund. The government recognises that the carbon tax poses a threat to Australia's energy security. In response, it will spend just over one thousand million dollars this year to support energy markets. It will also do this in the 2013-14 and again in the 2014-15 financial years. But according to this government the carbon tax poses no threat to our energy security, because the government are spending less than $1 million dollars on it. You would think that if the government took the implementation of the carbon tax seriously—which, by the way, is coming into effect in the 2012-13 financial year—they would fund the Energy Security Fund at an amount equivalent to the other three financial years. The government only care about their promise to have a surplus next year and they put this above the security of our energy industry. You cannot play political games with our industries. Businesses cannot cope with this uncertainty and lack of transparency much longer. Businesses within Hasluck want certainty.
How can a small business plan for the future, when they do not know what the cost of the carbon tax will be on their bottom line? Small businesses are already struggling with many of the impositions placed on them over the last three years. Small business owners in Hasluck often say to me that they cannot make ends meet at the moment and cannot budget for the carbon tax because they do not know what the flow-on cost will be. We still do not know who the 500 companies are that will pay the carbon tax. How will flow-on costs be measured? There are many questions within the scope of fiscal and financial planning and within the budgetary cycle that need to be transparent to all those affected. When my colleague the member for Moreton has his turn to speak, I will be interested to hear what he will say with respect to transparency.
The Treasurer still refuses to tell the Australian public the real story about the full costings of all the associated measures surrounding this new tax. He should also explain what he promised the big three mining companies. This tax imposes a significant new administrative burden on all mining companies, even if they are below the government's threshold for paying the tax.
Wouldn't it be an incredible situation for the Australian public and the voters if they had honesty and transparency? They could see and understand the bottom line, they could see clearly and understand what was contained within the budget. Elements of the budget would not be hidden or taken out of the bottom line and they could be fully conversant with where the carbon tax sits in the context of the total budget. We expect it of financial planning and of businesses. They expect from this government and this Treasurer a clear indication of what the financial implications will be for them and for the work they have planned that will develop the Australian economy to a position of strength within a global society and economy.
It is very interesting to hear from the opposition about budget transparency. Indeed, it is not their strong suit. At the last election the government had many policies out there, all costed and transparent, while the opposition turned up with no costings whatsoever. Then, at the last minute, they decided they would get a company to do it. They would not put it to Treasury for costing. They put it to a firm that, it turned out, was fined for professional misconduct. So we see that the coalition's commitment to transparency is not that great.
This government will always cost its policies. We will always be responsible economic managers. This has been shown many times in the way that we go about our business. We have shown, even during the financial crisis, that we act in a fiscally responsible way. As we recover from the global financial crisis, once again it has taken this government to budget the largest fiscal consolidation ever in this country's history. It has taken this government to act to support business.
In contrast we see that those on the other side have not learnt from their mistakes of the last election, but continue to rack up potential debt with uncosted policies. We see a $70 billion black hole from which they keep promising things, whether it is a superannuation increase or their climate change policy, which will cost the average household if they end up imposing the $1,300 tax. They have not been clear about where this money is coming from.
When we look at delivering budget transparency for the business community and for the nation, we on this side of the House have been doing a very good job. This is in sharp contrast to the coalition, which have provided no transparency on where their $70 billion in cuts will come from to fill their black hole. The opposition clearly refused to put their costings to Treasury. I ask: what have they got to hide? Their policies depend upon who speaks for the opposition. Some have said they are done and dusted and have been put into the drawer ready to be pulled out at election time, but others say that no final policy exists. The shadow finance minister said that no policies are ready to go. It is hard to know which of these is true. It is certainly not transparent.
To conclude, on this side of the House the government has worked on providing certainty for business, on providing budget transparency and on acting in the interests of businesses. On the other side of the House there is disarray, uncertainty and no transparency when it comes to budgetary matters. I look forward to the opposition's budget reply when we come back here in May. I hope they can show some transparency about where their cuts will come from.
Order! The discussion is now concluded.
On behalf of the Standing Committee on Social Policy and Legal Affairs I present the committee’s report entitled In the wake of disasters:volume two: the affordability of residential strata title insurance, together with the minutes of proceedings and evidence received by the committee.
In accordance with standing order 39(f) the report was made a parliamentary paper.
by leave—Today I present the report of the Standing Committee on Social Policy and Legal Affairs into the affordability of residential strata title insurance. This is the second and final volume of its inquiry into the wake of disasters, which has examined a range of insurance issues following the natural disasters that have devastated many parts of Australia in recent years. The impact of Cyclone Lua in Western Australia and severe flooding in parts of Victoria, New South Wales and Queensland remind us that we live in a place that is prone to natural disasters. All Australians need to be able to access affordable and appropriate insurance to provide cover against the risk of being affected by these kinds of events. We need a healthy and competitive insurance industry that is responsive to the needs of its customers and has the capacity to provide adequate cover at affordable prices for all Australians.
On 27 February 2012 the House of Representatives Standing Committee on Social Policy and Legal Affairs tabled its report In the wake of disasters: volume one: inquiry into the operation of the insurance industry during disaster events. The report made a range of recommendations aimed at ensuring that the insurance industry has the capacity to respond to people's claims on their policies in a timely manner. During the aforementioned inquiry the committee also received evidence about spiralling insurance costs, both in disaster affected areas and across Australia more broadly. In particular, the committee heard of extremely concerning increases in residential strata title insurance in North Queensland. In view of these concerns the report also recommended the immediate establishment of a task force to address the rising costs and potential market failure in the insurance industry across Australia. Many unit and apartment owners, particularly those in North Queensland, have been confronted with increases of over 500 per cent in their insurance premiums in recent years. This has been a result of a complex range of contributing factors, none more so than a glaring lack of competition in the market for residential strata title insurance.
The committee recognised the urgency of residential strata title insurance affordability and resolved to conduct an inquiry into the issue with a short reporting time frame. The committee received the terms of reference on 24 November 2011, conducted four very well-attended public hearings and received 431 submissions and 17 supplementary submissions. The committee delivered its report today, outlining a clear and direct course of action to both alleviate immediate hardship and address longer term sustainability issues. The recommendations contained in this report call on the government to strengthen the regulatory frameworks of bodies corporate, examine the methodologies for the assessment and pricing of risk, increase transparency in all strata insurance cost components and raise consumers' awareness of their rights and responsibilities.
The committee is asking the ACCC to examine the cost drivers and relative profitability in the provision of strata insurance policies by insurers and to investigate whether there has been anticompetitive behaviour in the North Queensland strata insurance market. I reiterate that the committee responded expeditiously to the urgent issue of residential strata title insurance affordability. The committee trusts that the Australian government will be similarly prompt in implementing appropriate and much needed reforms in response to the recommendations contained in this report.
I thank the hundreds of people who made submissions to this inquiry and the many more who attended public hearings and bravely spoke about their dire circumstances. While there is no quick fix for this complex issue, I trust that this report sets in motion the actions required to balance the insurance market and address affordability issues for strata title insurance.
I thank the local senators and members who lent their support to their constituents during the public hearings, including Senator McLucas and the member for Herbert. The two supplementary members to the committee—the member for Leichhardt and the member for Dawson—made a fantastic contribution. I would also like to thank all the hardworking members of the committee for taking on this inquiry in addition to their already increased workload in recognition of the urgency of the issue and the need to initiate government action. I thank Dr John White and Dr Anna Dacre, as well as my Chief of Staff, Matt Jutsum, who finishes with me on Friday, for the great work he contributed to this report and also for his loyal service over the last few years.
by leave—I would just like to take a few moments to also associate myself with this report by the Standing Committee on Social Policy and Legal Affairs. In the first instance I would like to thank the chair and the committee for being prepared to move so quickly after dealing with the flood report, acknowledging the challenges that were being faced in Northern Australia by the emerging unaffordability of strata insurance. Public hearings were held in Port Douglas, Cairns and Townsville. We also had a videoconference in Mackay, and there was a further public hearing in Canberra. It became very evident very quickly that the rising premiums and the lack of competition seemed confined to the Northern Australia and Northern Queensland markets.
There was also a problem, given that there is a mandatory requirement in relation to strata title insurance. There was a concern that insurance companies were choosing low-risk markets and in doing so were creating regional inequities. Unfortunately, there is currently no requirement for insurance companies to offer strata title insurance and therefore there is no regulatory requirement to ensure that affordable insurance is available in all areas of Australia. It is interesting too that the insurance brokers in North Queensland were suggesting that the situation was indicative of a market failure, and evidence that was presented by Mr Dallas Booth, the CEO of National Insurance Brokers Association in Australia, conceded that the market was struggling in Northern Australia. He said, 'I cannot deny that it is getting very close to market failure.'
That was the challenge that we had. As the chairman rightly said, there were a lot of stories that were put into it, a lot of horror stories in fact about insurance. I think there were 400-and-something submissions to the inquiry, which is amazing. The recommendations that have come out of this, while they are not going to fix the problem immediately in relation to affordability, are certainly going to start a journey, if you like, that will hopefully start to bring some sort of conclusion here that will allow people to be able to afford their insurance again in this area.
The recommendations that came through I think were very good, particularly recommendation 2, where the committee recommended that the Australian Prudential Regulatory Authority conduct a review of the risk assessment methodology and in particular the failure to consider the changes in building codes and the cost of reinsurance. The others recommendations I would also like to mention include that the Attorney-General conduct a review of the state and territory legislative and regulatory requirements around strata insurance and looking at options to provide strata complexes with greater flexibility in their choices of insurance arrangements, including availability of tailored arrangements that may offer capped insurance to cover non-essential assets infrastructure.
As I said, this is not a silver bullet but I certainly look forward to having this presented into an area of mine which is greatly affected by this particular situation. Though there is no silver bullet, I think it needs to be remembered that there is a legislative requirement for strata property owners to be covered by insurance and this in itself is a guaranteed market for insurance companies. Therefore I think insurance companies could play a significant role in immediately easing the insurance crisis faced by strata title property owners in Northern Australia by recognising a social obligation and re-entering the market with affordable insurance. I would expect this would be far preferable to waiting for government intervention. I commend the report to the House.
I move:
That the House take note of the report.
Debate adjourned.
by leave—I move:
That the order of the day be referred to the Federation Chamber for debate.
Question agreed to.
On behalf of the Standing Committee on Social Policy and Legal Affairs, I seek leave to make a statement on the Judicial Misbehaviour and Incapacity (Parliamentary Commissions) Bill 2012 and the Courts Legislation Amendment (Judicial Complaints) Bill 2012, in discharge of the committee's requirement to provide an advisory report on the bills, and to present a copy of my statement.
Is there any objection to leave being granted?
Mr Deputy Speaker, I am inclined to withhold leave. I believe that this should be the subject of a substantial inquiry. I sought to be added to the committee. I have not been advised of any meetings that have considered the matter and I think that it is pre-emptory to deal with this matter until there has been proper consideration.
Leave not granted.
I move:
That the amendments be agreed to.
The Senate amendments amend clause 122 of the Telecommunications Universal Service Management Agency Bill 2011 and make other consequential changes to facilitate the disposal of information for complaint handling. They further support the processes of policy development and review for public interest communications services. The amendments enable TUSMA to disclose relevant information to the Telecommunications Industry Ombudsman. This responds to part of recommendation 1 of the Senate Environment and Communications Legislation Committee inquiry and reflects the Telecommunications Industry Ombudsman's proposal to the committee that TUSMA be permitted to disclose information to the TIO.
The amendment to clause 122 will also allow TUSMA to provide information to the Regional Telecommunications Independent Review Committee and the Secretary of the Department of Broadband, Communications and the Digital Economy. This will support the processes of policy development and review. In particular, it would allow for the provision of useful information to the committee when reviewing the adequacy of telecommunications services for Australians in non-metropolitan areas. The amendments also ensure that TUSMA members have a sufficiently diverse range of knowledge, skills and experience to enable the agency to fulfil its charter.
The amendment to clause 38 implements recommendation 2 of the Senate Environment and Communications Legislation Committee inquiry. The amendment would alter clause 38(2)(d) of the TUSMA Bill to delete the reference to 'economic' and require one of the appointments to be a person with direct experience in the field of consumer affairs. TUSMA members with experience in the telecommunications sector and business or finance will bring a necessary focus on efficient and effective service delivery to TUSMA's decision making. A person with knowledge and standing in consumer affairs would provide a valuable additional perspective to the decisions of the Telecommunications Universal Service Management Agency. My understanding is that this has the support of all the parliament. I thank the House for their support and I commend the amendments to the House.
Question agreed to.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Before I was interrupted for statements by members and for questions without notice, I was referring to Australia's great democracy and the pillars which underpin it. One of the essential pillars that does indeed underpin our great democracy is the confidence which we have in our voting system. There are many components to that. There is the way that the elections are conducted on the day and the way that the counting is done subsequent to the day, including having scrutineers and the like. But a critical component in us having confidence in the system is that we also have confidence in who is enrolled on the electoral roll and therefore who is eligible to vote. It is immensely important for all of us in this chamber, and indeed for everyone across Australia, to have confidence in that so that we can have confidence in the system overall. My great concern is that the amendments that have been put in front of us will diminish the confidence that we have in our system and that the integrity of the enrolments will indeed be diminished.
The legislation allows the Australian Electoral Commission to automatically update the voter records by taking into account a number of sources rather than leaving that in the hands of the individual. It is not clear exactly what sources the AEC will use to update that information, but it could have quite dramatic consequences if they get it wrong. That is our concern. You would think that they would look at, say, tax file numbers from the Australian Taxation Office, follow that path down its track and use the information to update voter records. But, if they did that, they could very well have many mistakes. An ANAO report found quite recently, in the last census, that there were 3.2 million more tax file numbers than people in Australia. Information as concrete as that, which you would think you would be able to rely on and therefore use to update the electoral roll, is in part not accurate. In fact, there were 185,000 potential duplicate tax records for individuals, and 62 per cent of deceased clients were not recorded as deceased in a sample match. There are some quite extraordinary figures from what we would typically regard as a very reliable source of information, let alone what they would be if we went to other potential sources.
I will use another example. We might think that Medicare is another source of information which is rock solid and something which the AEC might be able to use to update its records for the electoral roll. Again, though, I point out that an ANAO report found that up to half a million active Medicare enrolment records were probably for people who are deceased. So their records can be considerably wrong, and this report found half a million active Medicare enrolment records were, indeed, possibly wrong. That is one of our concerns. The last thing we want is for records which are incorrect to be updated because that will reduce the overall integrity of the electoral system.
The second problem I have with these amendments is they take away individual responsibility. We on this side of the House believe that individual responsibility is an incredibly important principle which should infuse all policymaking. We hold individuals responsible for enrolling to vote, accurately maintaining their enrolment at their permanent place of residence and casting their vote when an election is called, and we ask them to fully extend preferences to all candidates contesting elections for the House of Representatives in their local electorate. These are the basic responsibilities which individuals have, and we on this side of the House believe that individuals should rightly retain those responsibilities and the responsibility to update their records.
The third and final argument which I have against the amendments in front of me is privacy. This has been spoken about by the speakers before me. There is a significant concern that, if records are updated without the knowledge of individuals, they may not even be aware of being on the roll to start with or of what district or electorate they are enrolled in. Further, they may not be aware of the information which the AEC holds or what information the AEC is using to update their records. We believe there is no need for these amendments to occur. We do not believe there is a case to be made for changing the way the electoral roll has been managed so far. We believe the single most important principle is maintaining integrity in the electoral roll and, to date, both sides of the House have found, by and large, that we can have confidence in the electoral roll. We amend these laws and change this system at our peril. If we reduce the integrity that is inherent in the electoral process, that will be a poor result for democracy overall.
Like my colleagues, I do not support the amendments in both the bills before the House: the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012. In simple terms, the legislation will damage the integrity of the electoral roll by adding new electors, who may not be entitled to vote, without their knowledge and potentially without their consent—particularly if the elector does not receive the Australian Electoral Commission's notice of enrolment. I live in a rural and regional electorate and this certainly happens. That is evidenced by the number of inquiries I get approaching an election.
We on this side believe in personal responsibility. We believe it is an individual's responsibility to enrol to vote, to notify the AEC if they change their address and to vote at elections. The extensive privacy implications that this legislation raises have been virtually ignored by the Labor Party and the Greens. Previously today, in the debate on the Electoral and Referendum Amendment (Maintaining Address) Bill, we heard that Dr Roger Clarke of the Australian Privacy Foundation provided the committee looking into this with some valuable information about the individual privacy concerns that this legislation raises. We share those concerns. We have very real concerns about electors having details published on the electoral roll without their knowledge or the opportunity to apply for silent elector status. Depending on where the AEC sources this information from, this is a very real issue.
The integrity of the electoral roll is, as has been articulated by my colleagues, at the very heart of our democratic process. It is imperative, as a result of that, that we maintain the integrity of that roll. I think it is paramount in any democracy but particularly in this one in Australia. The roll needs to be accurate, as we have heard. We know that seats can and will be decided by a small number of votes, so the integrity of the roll, and the will of the people expressed by that, is paramount. The responsibility for enrolling and for updating individual elector details is so important—and it is an issue when that right and responsibility is taken from the individual, as this legislation will do, and given to the AEC. Not only is there the possibility for significant error; it also opens the roll to fraud, and I have no doubt that that is what we will see.
The legislation, as I said, will corrupt the integrity of the electoral roll. The fact that people are going to be put on this roll without their knowledge could lead to quite a number of potential irregularities. The legislation gives the AEC the discretion to determine what those sources of reliable and current data are and where those addresses can be obtained from. This is far beyond the purview of the AEC. It is really up to me as an individual to tell the AEC about my details and my environment. It really comes down to the individual to talk to the AEC about enrolling and maintaining the address they have or when they have to change the address.
The reliability of data sources has been mentioned repeatedly by my colleagues, and I do not think we should underestimate where the information comes from. We heard previously from the member for Aston, who touched on the reliability of the potential sources of information for the rolls. We have heard that there were 3.2 million more tax file numbers than people, if that was the source of information and data. An ANAO audit report of Medicare found that up to half a million—we are not talking about enough votes or enough integrity. We are talking about using potentially incorrect information and data from whatever source the AEC chooses to use and the fact that it could have a major impact on the outcome of an election.
The other thing that we as coalition members are majorly committed to and have great concerns about is that the right to vote is one of the highest held tenets of democracy. The right of the average citizen to play an individual part in deciding who will lead them into the future and who their government will be is basically essential to democracy and good governance in our world. It is a privilege. I do not think that any of us on this side of the House see the right to vote as anything other than a right and a privilege in this country. We do not take it for granted, and I am hoping that the majority of Australians do not take it for granted either. Just talk to the people in Syria, perhaps, or talk to the people in Egypt. People fight and die for the right to vote on a regular basis.
I was privileged to go to Cambodia as an Australian delegate to the United Nations to look at the election process there. One of the most profound experiences I had as part of that visit was the absolute excitement of the Cambodian people at having the right to vote. In that system, one of the ways they tested whether someone had voted only once was by the use of indelible ink. They would dip their finger into the ink as a sign that they had voted. They knew who I was; I had the vest on. They knew what I was there for and, when they came out of the polling booth, they would come up to me with great excitement, showing me their finger. They were absolutely elated at the right to vote.
It is something that we in Australia see—we can sometimes—because we have all grown up with it. It is what we expect, know and love, but we also need to protect it. That is what the integrity of the electoral roll does: it protects the right to vote, the eligibility of the individual elector, and that is critical to what we do as a nation. As I said, when I met those people in Cambodia, it made me look at the things I value about being fortunate enough to be raised in this fantastic country, where democracy and the democratic process is something that we expect. But with this legislation I see that that expectation may be compromised, and I am not prepared to sit back and say, 'That's fine,' because I do not believe that it is.
We have had constant battles for representation and referenda. What I am trying to get to is that in Australia we should not take this right, this privilege, for granted. It has been hard won. Over many years around the world countless lives have been lost in the pursuit of the right to have a say in who your elected representatives are and in the form of governance and government in your country. In the same way that it is a right it should, because of respect for that right, carry an inherent responsibility. It is the responsibility side that is often forgotten, especially in this country that is so blessed by a stable democracy, probably for longer than almost any in living memory.
What is it that we ask of our fellow Australians who want to inherit and should inherit their share of Australian democracy? What is it that we are asking them to do? We simply ask them to register to vote and to come along on election day, and let the AEC know if they change their address. I really do not think that is too much to ask. In fact I think it underpins how important our democracy is and underpins the need to fight for and protect that right. If we gave that opportunity to people who live in other countries who do not have the right to vote, I wonder if they would say, 'You know, maintaining my address is just too hard.' I think that, like those people in Cambodia, they would say, 'I am absolutely beside myself with the right to vote. I've got the finger that I have dipped in the indelible ink to prove the fact that I had the right to vote and I am so excited about having the right to vote.' In fact, some of those people have not been able to vote many times in their lives. That is why we need to protect the integrity of our electoral roll.
I am concerned that we are debating legislation that basically thumbs its nose at our proud history of democracy and our entitlement to vote and leaves it open to fraud and abuse. I am appalled that our electoral roll, as a result of these bills, could be subject to fraud and abuse. I think anybody who, like me, absolutely values the right to vote and our democracy and is prepared to stand up for that would feel the same and should feel the same. We do not take it for granted. The government is suggesting that the effort of maintaining their addresses and maintaining their registration to vote is too much for Australians and that the government has to do it for them. I think we need to take responsibility and we need to constantly reaffirm the fact that we value this democracy and we do not take our rights and our democracy for granted. I do not believe that it is too much to ask for us to maintain our addresses. I just do not think that we should be taking it that lightly.
It is our freedom and democracy here that are part of this legislation and part of what is potentially eroded by these bills before the House. We know that Australians before us have fought and died to build and protect the democracy that we now enjoy. I encourage all Australians never to take that for granted and never to take for granted the integrity of the electoral roll and how important it is to our democratic process.
But it appears that the government does not understand that sacrifice and thinks that perhaps getting to a post office to get an enrolment form or seeking it from an elected representative or from the AEC and putting it in a postage paid envelope is too hard for Australians. Strangely enough, millions of us have managed to do so. We have been able to quickly and simply have our democratic say.
I see the legislation before the House as an insult to those who have made the effort to enrol, to those who fought and died for the democracy we have built and to those over centuries who have fought for democracy. I urge all Australians to see this and to see the right to vote—your eligibility to vote—as a reinforcement of our democratic process. We all, as members, talk to young people in schools. We go along and present flags, and we talk about the rule of law. We talk about what our flag represents. I think our electoral roll and the integrity of it fit into the same category.
The Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012 amends the Commonwealth Electoral Act to allow the Australian Electoral Commission to directly enrol new electors on the electoral roll when it is satisfied that an individual has been living at a particular address for one month and is eligible to be on the roll. This bill follows on from the Electoral and Referendum Amendment (Maintaining Address) Bill 2011, which will give the AEC the authority to change the address of electors when it believes they have changed their residential address. As with the previous bill, the coalition opposes this legislation because it will greatly reduce the integrity of the electoral roll, infringe on the role of the individual to keep their details up to date and reduce the privacy of Australians who may not wish to be publicly registered.
The Parliamentary Joint Standing Committee on Electoral Matters recently conducted an inquiry into the 2010 federal election, reporting in July 2011. One of the recommendations of the Labor and Greens committee members was to introduce automatic enrolment, a process by which an individual elector is put directly onto the electoral roll without ever filling out an enrolment form, based on information from other government sources. This bill seeks to implement that recommendation.
The coalition is concerned about how this will impact on the integrity of the roll. As Professor Graeme Orr notes in his publication The Law of Politics:
Like other official public registers, such as land registers, a chief feature of electoral rolls is their finality. The purpose of a roll is to be a definitive statement of the entitlement to vote … Thus there is a rule that the roll is conclusive evidence of the entitlement to vote.
He goes on to say:
Reinforcing this is the secondary rule … that a court of disputed returns is not to inquire into the correctness of the roll.
Given our experience at the 2010 federal election, where no political party won a majority of seats in the House of Representatives and results in some electorates came down to just a few hundred votes, it is imperative that the roll which is used to elect our parliamentarians is accurate and reliable. We must not allow this very important document to be shrouded in concerns or doubts about its legal standing and validity. It is also the responsibility of the individual in our democratic society to maintain their enrolment details when they change addresses.
As outlined in the coalition's dissenting report, it is the duty of each Australian citizen to enrol to vote, to accurately maintain their enrolment at their permanent place of residence, to cast a vote when an election is called and to fully extend preferences to all candidates contesting election for the House of Representatives in their local electorate. This responsibility is far from onerous, and moves to water down this process only detract from each Australian's right as a democratic citizen. As Dr Roger Clarke of the Australian Privacy Foundation notes:
The notion of the vote is a right—it is an entitlement—and turning it into an obligation, which is what that entails, I just do not believe is appropriate in a democratic process.
This legislation allows changes to due process that will ultimately lead to a high number of potential irregularities with little or no benefit to the democratic process. It also opens up the roll to fraud.
As with the electoral and referendum amendment bill 2012, the 2011 bill gives the AEC the discretion to determine what 'reliable and current data sources' are from which information about elector addresses can be obtained. This is far beyond the scope of the AEC. Surely only individual electors should supply details about their enrolment, rather than a mish-mash of data from various government departments. Indeed, what about people who, for instance, own holiday homes? Potentially their information could be taken out twice from these various sources to put them on the voters roll twice. I seriously question the reliability of these other data sources. As coalition members on the Joint Standing Committee on Electoral Matters noted in their dissenting report:
The reliance on external data sources that have been collated and that are utilised for other purposes does not make them fit for use in forming the electoral roll.
As outlined in the previous report into these proposals, a 1999 report by the House of Representatives Standing Committee on Economics, Finance and Public Administration titled Numbers on the run found that there were 3.2 million more tax file numbers than people in Australia at the last census, that there were 185,000 potential duplicate tax records for individuals and that 62 per cent of deceased clients were not recorded as deceased in a sample match. Similarly, an ANAO audit report stated:
ANAO found that up to half a million active Medicare enrolment records were probably for people who are deceased.
Neither this bill nor the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 specifies what data sources constitute reliable data, nor are there any restrictions on which data sources the AEC can use to enrol an elector. There is no provision specifying the standard of proof that the AEC needs to enrol an elector. Nor is there any legislative requirement for the AEC to check whether a person is over 18 or is an Australian citizen before they are added to the roll. This bill will give the AEC full discretion in these matters:
… to directly enrol eligible electors on the basis of data or information provided by an elector or electors to an agency approved by the AEC, as an agency which performs adequate proof of identity checks, where that information is subsequently provided by that agency to the AEC for the purposes of updating the electoral roll.
I believe that this is far beyond the jurisdiction of the AEC. Individuals who are not entitled to vote may also be added to the roll because of this bill. Members of the community who are not Australian citizens, who are under 18, who are not living at the address the AEC believes or are otherwise ineligible to vote may be incorrectly added to the electoral roll under this bill. Even without any contact from the individual, the so-called eligible voter will still be added to the electoral roll. The AEC submission to the inquiry by the Joint Standing Committee on Electoral Matters into the bill stated:
… the AEC would receive data from a third party data source, conduct a data matching process including a check of the eligibility of individuals to enrol, notify eligible individuals and, after a period of 28 days, make additions to the electoral roll and inform electors of the AEC’s action.
In reality, the AEC could use any data source it likes, including records from the Taxation Office or Medicare which, as I have said before, have been demonstrated to be problematic.
In that light, I draw the attention of the House to the difficulties experienced in New South Wales state elections. Former Labor governments in both New South Wales and Victoria have introduced automatic enrolment for their recent state elections, which means that a number of electors in these states are only enrolled for state, and not federal, elections due to the differences in state and federal legislation. As such, when an elector has their details changed or they are added to the state electoral roll in New South Wales or Victoria, they are then sent an enrolment form by the AEC to complete for the federal jurisdiction.
Commentator Antony Green noted in an article on 16 July 2011 that only 64.3 per cent of those automatically enrolled for the first time at the 2011 New South Wales state election actually turned out to vote. Surely, this high non-participation rate is indicative of the unreliable nature of the information used to put new electors on the roll. Electors either did not know of their eligibility to vote or had no intention of voting anyway. This bill will only lead to electors being issued with a fine for not voting when there is no entitlement for them to be on the roll in the first place or because their address details are in fact incorrect through no fault of their own.
Most importantly, there are also significant privacy implications that this legislation raises—an issue that is glossed over by Labor and the Greens. Dr Roger Clarke of the Australian Privacy Foundation submitted valuable information to the joint standing committee about the individual privacy concerns that this bill raises. He stated:
We are not aware of any risk assessment having been performed. We were not aware of any privacy impact assessment having been performed … We are not aware of the APF or any of the civil liberties organisations being involved in any of those.
The coalition and I have very valid concerns about electors having their details published on the electoral roll without their knowledge and without the opportunity to apply for silent elector status. This is of particular concern to those who are victims of domestic violence, those involved in custody disputes or those Australians who may want their address suppressed because of safety fears or other reasons.
The coalition has long opposed moves by the Labor Party and the Greens to introduce automatic enrolment and notes that this bill is being introduced solely to improve the electoral prospects of both Labor and the Greens. The first obligation of the AEC is to uphold the integrity of the roll. The AEC has instead focused on maximising the number of people on the electoral roll at the expense of that obligation. This bill gives the Australian Electoral Commission a blank cheque to decide what information sources it uses to add people to the electoral roll. This legislation does not require the AEC to justify the use of a particular data source or the potential for parliament to disallow the use of particular data sources. Nor does it state the level of proof required for the AEC to add a person to the electoral roll. I do not believe this legislation is in the best interests of Australia. The responsibility of enrolling to vote should remain with the individual Australian citizen and should not be given to the bureaucracy.
There is nothing more important than maintaining the integrity of the electoral roll. All of us in this House are very aware of its importance and very aware that far too often people are excluded from voting when they should be able to vote and, regrettably, people vote when they are not entitled to vote.
I want to share with the House an experience I had when I was running for parliament in the 2004 election. I was standing in the shopping mall at Bondi Junction—interfering with people's commercial activities as we all do when we are running for parliament—and I met a young woman and urged her to vote for me. She said, 'I will be away on polling day.' I said, 'Well, madam, you could get a postal vote or you could vote pre-poll.' She said, 'Don't worry about that; I will get my girlfriend to vote for me.' I nearly fainted—I was absolutely appalled. I impressed on her the seriousness of the offence she and her girlfriend were contemplating committing and I said, 'You can't do that.' She said, 'Everybody does that.' I hope I persuaded her that everybody should not do that. I had a similar experience on three or four occasions over the course of that election campaign and it impressed on me that not everybody takes the integrity of the electoral roll as seriously as they should.
When I came to this place after the 2004 elections, I regret to say that I was unable to persuade the distinguished Prime Minister of the day, the Hon. John Howard, that one of the reforms we should make to the Electoral Act was to require people to produce proof of identity when they go to vote. This was regarded by others much wiser and more experienced than me—not least of whom the Prime Minister—as being a bridge too far. But I still hold to that view. I am open to being persuaded that I am wrong of course—I am open-minded about this.
The more rigour and integrity we can put into the electoral roll the better. It is a remarkable thing that in this country you need 100 points of ID to open a bank account—you need to produce ID to do practically anything nowadays and almost everybody has multiple sources of identification, even multiple sources of photo identification—but you can go and vote and change the government of the nation, indeed the destiny of the nation, without ever having to identify yourself.
The Electoral and Referendum Amendment (Maintaining Address) Bill 2011 does not deal with the question of producing identification at the polling booth, but what it does do is allow the Electoral Commissioner to directly update an elector's enrolled address following the receipt of information about the address that elector is at—without any discussion with, consent from or engagement with the elector in person. We all say that we have compulsory voting in Australia. In fact, we do not have compulsory voting—
It is attendance.
As the honourable member for Melbourne Ports interjects, it is attendance which is compulsory. But the idea that somebody can be enrolled at a particular address simply because the Electoral Commissioner has found their name, with that address, on some other database or some other accounting system is profoundly wrong. Electors should be enrolled at the address they provide. If it turns out that they are no longer at that address, the Electoral Commissioner should do his or her duty and chase them up. Then it is up to the elector to put themselves back on the roll. But the idea of people being automatically enrolled is only calculated to make the electoral roll even less reliable than it is today.
I am not going to speak for very long on this because my colleagues have spoken so well and comprehensively on it. But I will just make this one point in closing, because it is a point I did not hear made by my colleagues earlier in this debate: the most insidious thing this amendment does is undermine the sense of personal responsibility. I gave the example of the woman I met who said she was going to get a girlfriend to vote for her. She had, in my view—and I hope I persuaded her that she was mistaken—a quite inadequate, improper and indeed unlawful view of her responsibility as an elector. She thought she could delegate that to somebody else who could walk in there and impersonate her. Since ID is not called for, in all probability that sort of impersonation would generally be successful.
There is nothing more important that we all do as citizens than vote. All of us have the very important civic obligation of attending a polling place and, if we choose to—and of course almost everyone does—voting. Our engagement with the electoral office is a personal obligation; our engagement with our democracy is a personal obligation. The idea that you can be put on the roll at an address without any action by yourself undermines that sense of personal responsibility. It debases the electoral roll and it will make the electoral roll, which is, as of today, insufficiently reliable, potentially much less reliable in the future. The member for Tangney and other speakers on our side, as well as my colleagues in the dissenting report of the Joint Select Committee on Electoral Matters, have described all the defects of the various databases that can be accessed. There is no substitute for an elector taking his or her own responsibility for saying, 'This is where I live, and I know that if I make an untrue statement I am committing an offence.' The responsibility should be on the electors, on citizens—after all, this parliament, this democracy, belongs to them. Their engagement with the electoral process should involve a decision by them to put themselves on the roll or to correct and change their address when they move house. It should not be imposed on them by some computerised exercise of pulling their name and address out of a third-party database. For that reason we are opposing this legislation.
The Electoral and Referendum Amendment (Maintaining Address) Bill 2012 allows the Electoral Commissioner to update the address details of an elector on the electoral roll if the commissioner is satisfied that the elector lives at the address. The bill does not propose to provide the capacity for the Electoral Commissioner to directly enrol electors who are not on the electoral roll.
The Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012 provides the Electoral Commissioner with the capacity to directly enrol an eligible person who is not on the electoral roll if the commissioner is satisfied that the person is entitled to enrolment, has lived at an address for at least one month and is not enrolled. It also allows the Electoral Commissioner to enrol certain persons who have been removed from the electoral roll and admit their declaration votes. This bill will corrupt the integrity of the electoral roll, with electors potentially being put on the electoral roll without their knowledge, leading to a high number of potential irregularities.
This bill package gives the AEC the discretion to determine what are 'reliable and current data sources' where information about elector addresses can be obtained. The coalition believes this is far beyond the purview of the AEC and that only individual electors should supply details about their enrolment. Voting in Australian local, state and federal elections is one of the most paramount rights possessed by all Australian citizens. Like the member for Forrest, who witnessed the Cambodian elections, I witnessed the first ever democratic election in Iraq. I saw the joy of its residents in being able to vote freely, like the member for Forrest saw, with them putting their finger in the ink well denoting they had voted. This reinforces how precious our right to vote is here in Australia.
These bills take the responsibility for enrolment from citizens and give it to just another government department. It is almost as if the government wants to run our total lives. I remind the government that not all Australians are puppets—we do know how to do things. We know it is the constitutional responsibility of every Australian citizen of age to be on the electoral roll. This bill passes this constitutional onus from citizens to the bureaucracy. Whatever happened to personal responsibility? Electors should be in charge of enrolling and maintaining their address details when they change addresses. Only a nanny state would give itself the responsibility of doing it for them. This government is taking over control of people's lives. Surely Australians are capable of deciding to put their name on the roll. I guess this obsession with the nanny state is not surprising from, to quote Labor's 46th National Conference platform document:
The Australian Labor Party is a democratic socialist party …
I am also worried about how reliable the AEC's data sources might be. Coalition members on the Joint Standing Committee on Electoral Matters noted in July 2011 in their dissenting report:
The reliance on external data sources that have been collated and that are utilised for other purposes does not make them fit for use in forming the electoral roll.
A 1999 report by the House of Representatives Standing Committee on Economics, Finance and Public Administration entitled Numbers on the run—Review of ANAO Report No.37 1998-99 on the management of tax file numbers found that there were 3.2 million more tax file numbers than people in Australia at the last census; there were 185,000 potential duplicate tax records for individuals; and 62 per cent of deceased clients were not recorded as deceased in a sample match. Similarly, ANAO audit report No.24 of 2004-05 on the integrity of Medicare enrolment data stated :
ANAO found that up to half a million active Medicare enrolment records were probably for people who are deceased.
Under our constitution, the integrity of our electoral roll is paramount to accountable, stable and democratic government and society. It is our constitutional responsibility to be on the electoral roll, to update our enrolment details when we change our address and to vote in every local, state and federal election. One of the things that make Australia great is our constitutional commitment to democracy in every element of our lives. This legislation takes your democratic rights away and gives your constitutional responsibilities to a faceless bureaucrat deep in the bowels of Canberra. Those opposite should hang their heads in shame.
This is a democratic country and we are able to make our own decisions, but in some cases we need more education. We have a large turnover of residents in Gilmore, being a coastal area, and as a local member I always advise those arriving to change their address and if they are new voters to enrol. Instead of just forcing automatic enrolment and government datamatching of Australians, why do those opposite not try actual education initiatives to let Australians know that they need to both enrol and keep their details up to date? An idea I have advocated for quite a while is the introduction of electoral education classes in high schools, facilitated by the AEC. As outlined in the 2010-11 portfolio budget statements, the AEC is funded for one primary outcome, and that is to:
Maintain an impartial and independent electoral system for eligible voters through active electoral roll management, efficient delivery of polling services and targeted education and public awareness programs.
So, arguably, our most impartial government department would have to be the Australian Electoral Commission. This is why the AEC would be the perfect provider to come into schools and teach high school students about our electoral system, their rights and responsibilities as citizens, and how to enrol early once they turn 17. The process would be simple: allow experts from the AEC to visit the local high schools in their region just once or twice a year to talk to students in years 10 to 12. In most high schools, it would be practical to hold a meeting of roughly an hour with an entire year group, with two or three representatives from the AEC briefly explaining how voting works, what every citizen's obligations are when it comes to voting and then allowing those 17- and 18-year-olds in their audience to enrol there and then at their school. This would not be a costly program to implement, with the distribution of electoral enrolment forms already in place in most high schools. If those opposite view enrolment levels as an issue then they need to look at educational options. The problem is lack of electoral education, and therein lies the solution.
I now turn to the Joint Standing Committee on Electoral Matters dissenting report and remind the House where it was stated that the coalition strongly disagrees with this bill. It is our belief that this bill is being introduced solely to improve the electoral prospects of both Labor and the Greens. It follows similar moves by the former Labor governments in New South Wales and Victoria prior to their last state elections.
Finally, it is important that the integrity of the electoral roll remains. It is imperative that the roll which is used to elect our parliamentarians is accurate and reliable, particularly in the wake of the 2010 federal election where no political party won a majority of seats in the House of Representatives and results in a number of individual electorates came down to only a few hundred votes. Where the responsibility for enrolling and updating individual electoral details is taken from the individual and given to the AEC, as this bill will do, the potential for errors to occur is significant. It also opens up the roll to fraud.
Essentially, individuals are put on the roll if the AEC believes they are eligible after consulting various data sources. Neither this bill nor the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 specifies what data sources are required for the AEC to consider what constitutes 'reliable'. There are also no restrictions on which data sources the AEC can use to enrol an elector. There is no provision specifying the standard of proof that the AEC needs to be able to enrol an elector. This bill leaves all these decisions to the AEC, and coalition members and senators believe this is far beyond their jurisdiction. As I said earlier in my comments, there are 3.2 million more tax file numbers than people in Australia. How can this government introduce something so sloppy and so undemocratic to do something that we, the Australian people, are proud to do in our own name?
I find myself agreeing with the member for Wentworth and the member for Gilmore and would like to follow their themes as I indicate my opposition to the Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012. Firstly, I would like to describe my own experience and then make some useful suggestions about the real challenges that confront us in maintaining the integrity of the electoral roll.
I spend a lot of time out of my office working with my Electoral Commission officer in cleansing the roll. I am also a regular 'corresponder'. It alarms me that especially new enrolees—the younger group; the 18-year-olds—are so mobile. From the time that I am alerted about a new enrolee to the time that I write them a welcome letter—welcoming them to Mallee and telling them a little bit about the democratic process—it astounds me the number of letters I get back with 'Not known at this address'. In general correspondence, where I might want to communicate with my constituency, I send out a broadcast letter. Again, the number of responses that come back to me with 'Not known at this address' is astounding. We then forward that information on to the Electoral Commission in an attempt to cleanse the roll. I work very closely with the electoral office based in Mildura.
We try to reinforce the real value of our democracy on the younger generation. When schools visit Parliament House, we entertain them in area of the building where they can see the War Memorial. Walter Burley Griffin has done us an enormous favour, I think, in that Parliament House can be seen from the War Memorial and vice versa. The War Memorial reminds us that our democracy has not come cheap. It was very expensive in that men and women had to be prepared to defend it and fight to keep it. I sometimes worry that the importance of being able to vote is not generally understood by the Australian populace because they are so busy trying to make ends meet. They have very busy lives.
A considerable number of my constituents are exempt from having to vote. Their objection to voting is for religious reasons. If they come into my office to complain about something, I will often say to them, 'If you don't vote, you can't come into my office and complain,' which is my way of trying to encourage them to be part of the process. The roll is so important. We all need to do what we can to make sure that it has absolute integrity.
The number of letters that I send on to the Electoral Commission to make sure that the roll does have that integrity alarms me. So I am with the member for Gilmore, who argues that strong case to get in early with the younger generation and get the Electoral Commission to visit the schools. That is being done in my electorate. I encourage it. I do what I can to make sure that youngsters in particular understand the value of voting and that it is their individual responsibility, not somebody else's responsibility. It is such a precious right for them to have and they need it to be their responsibility to make sure that they are recorded on the electoral roll. I was alarmed when I first read what these bills contain—an automatic enrolment!—and what information may be relied upon to make this enrolment. I am, frankly, alarmed. My constituency is based along the Murray River, where there is a huge amount of horticulture that has an enormous demand for labour—people come from everywhere—and the populations of my small Murray River towns grow enormously during the harvest season. One of the most substantial complaints from—
I move:
That the question be now put.
The question before the chair is that the question be now put.
The question is that this bill be now read a second time.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
The Electoral and Referendum Amendment (Maintaining Address) Bill 2011 results probably from the deliberations of the Joint Standing Committee on Electoral Matters. One of the things that was a condition of advising that automatic enrolment and automatic changing of addresses would be agreed to was that the lists the Australian Electoral Commission was able to draw on—and the discretion remains entirely the Electoral Commissioner's—should be subject to tabling and disallowance. This bill does not provide for tabling and disallowance, and I ask the minister why that decision was made.
The Electoral and Referendum Amendment (Maintaining Address) Bill 2011 and the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012 grow from recommendations of the Joint Standing Committee on Electoral Matters which cover a number of deliberations by that committee following the 2007 and 2010 elections. The bills respond to the need to ensure that 1.5 million Australians who are not on the electoral roll are given the opportunity of getting onto the electoral roll. That is 10,000 people, on average, in every federal division across our nation.
The Australian Electoral Commission itself feels that the need to move to modern technology to ensure an electoral roll that better represents our voting population—or our potential voting population—is an appropriate thing to do. These two bills necessarily harmonise the Commonwealth electoral roll with the rolls that are now being developed in our two most populous states. It is important to be aware that the act of harmonising the Commonwealth roll with the rolls in our two most populous states, creating a high-integrity system for ensuring that the roll itself is as accurate as it can possibly be and ensuring a direct enrolment system, is not—as has been characterised repeatedly in this place—an automatic enrolment system. It is a direct enrolment system that in many ways adds to the integrity of the roll itself. These measures respond to identified needs in our community to ensure that our roll provides the service it is meant to provide to the electoral process: to be as accurate a roll of electors as it can possibly be. It allows for technology to be used to ensure that the roll is accurate. It creates contestability for electors whose electoral details may be subject to these updating processes to challenge, via the Administrative Appeals Tribunal, decisions made by the electoral commissioner.
These bills represent a modernisation of the roll maintenance process that is long overdue, that responds to the needs of our community and that also responds to the Australian Electoral Commission's accurate identification of the weakness in our electoral roll and the ways in which we can attend to that.
I remind the House that under normal circumstances when we are considering bills in detail we will be referring to amendments. We do not have amendments before the chair, so the question is that the bill be agreed to as a whole.
The bills were referred to the Joint Standing Committee on Electoral Matters for consideration and investigation, and during that process the Electoral Commissioner gave evidence, in answer to a question of mine, that it was quite possible, as the Electoral Commission only writes to the new address and not to the address that is currently on the electoral roll, that indeed someone's address could be wrongly altered and when they turned up to vote at their normal place they would be unable to vote. Yet if somebody else was aware that the Electoral Commission had changed their address, they could go and vote for them in that different address. That means that the electoral roll is opened up to fraud. The answer to my question by the Electoral Commissioner was, 'Yes, that is factually true.' He wondered why people would have two addresses but he admitted that it was quite possible and that what I had said would result would. I ask the minister why he has not provided in this bill that the Electoral Commissioner is required to write to both the old address, which is the one that is existing on the electoral roll, as well as the new one which results from his consulting databases, which can come from any source, as the option is the Electoral Commissioner's to use any list he chooses. Why is he not required to write to both addresses?
The question is that the bill be agreed to.
In another chamber earlier today we had a similar situation where the minister was not able to answer any of my questions.
The member for Mackellar must realise that this is not question time. We have had this debate before and there is no need for the minister to respond. This is consideration in detail. You can put the question but this is not question time.
There was an agreement.
I had no agreement.
The opposition whip did.
The member for Mackellar has the call. The Leader of the House is not assisting.
During the scrutiny that took place when the bill was referred to the Joint Standing Committee on Electoral Matters, it was pointed out that there was no provision in the legislation for the privacy of individuals to be protected. Under the current law, if someone has an appropriate reason to be left off the electoral roll and they make a submission to the Electoral Commissioner, they are entitled not to be put on the roll. It could be because of domestic violence; it could be for a whole range of issues. Yet under this legislation someone who is in that position who has not had the opportunity to request that they be omitted from the roll can be automatically placed on the roll. That evidence was given and I ask the minister why no amendment was brought in to protect the rights of those individuals.
The question is that the bill be agreed to.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
The Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 is part of the government's Stronger Super reforms package. The bill amends the Superannuation Industry (Supervision) Act 1993 and the Superannuation Guarantee (Administration) Act 1992. The bill was referred to the Joint Standing Committee on Corporations and Financial Services on 3 November and the committee report was handed down on 19 March. The coalition members of the committee concluded there were several significant deficiencies in the bill which I will detail later in the speech.
The bill defines a MySuper product and provides a framework to allow registrable superannuation entity licensees to apply to the Australian Prudential Regulation Authority for authorisation to offer a MySuper product. The bill prohibits a regulated superannuation fund from offering more than one MySuper product except, in limited circumstances, to large employers. Large employers are defined as those having more than 500 members of a particular fund. The bill sets out rules on the payment of contributions and account transfers for MySuper products. The bill also sets out the nature and type of fees that can be charged by a MySuper product and the basis on which those fees can be charged to members. The bill provides that MySuper products will be offered from 1 July 2013 and that, from 1 October 2013, employers must make default superannuation contributions to a fund that offers a MySuper product for employees who have not chosen a fund.
A big deficiency in this bill is that it does not make any alterations to the existing contentious closed shop, anticompetitive arrangements for the selection of default funds under modern awards. The MySuper initiative was one of the key recommendations of the Cooper review into Australia's superannuation system. It was incorporated into the government's package of reforms which are called Stronger Super. The government describes MySuper, in typical spin, as:
MySuper is a new, simple and cost-effective superannuation product that will replace existing default products. MySuper products will have a simple set of product features, irrespective of who provides them. This will enable members, employers and market analysts to compare funds more easily based on a few key differences. It will also ensure members do not pay for any unnecessary 'bells and whistles' they do not need or use.
The coalition supports the intent of the MySuper products. However, there is a disconnect between the aims of the reforms and their implementation by this Labor government. The coalition has consistently supported any changes which make our superannuation system more efficient, transparent and competitive and which improve value for fund members. But, because of its compulsory nature, the coalition is acutely aware our superannuation system needs to be accountable, accessible and transparent. Australians must have confidence in their superannuation fund. The coalition members of the PJC have a number of concerns. Chief among these is the treatment of default funds—specifically, how choice for consumers could be improved. The coalition members are also concerned that charging members for intrafund advice is allowed as part of MySuper—which is seemingly at odds with the Future of Financial Advice reforms currently before the House.
Coalition members made a number of well-considered recommendations to improve the MySuper bills and these include, firstly, changing the definition of 'large employer' to be any employer with 500 or more employees; secondly, removing the need for individual registration for each tailored MySuper plan; thirdly, calling on APRA to release standards and forms required for the MySuper registration process at least 12 months prior to commencement; and, finally, providing a comprehensive definition of intrafund advice in the MySuper and FoFA legislation to ensure such advice is general only, and that any personal or financial advice provided through a super fund is paid for by the person accessing this advice with transparency of fees and without forcing fund members to pay for the personal advice of others for which they have no need.
The MySuper proposal has already been through a number of changes. The initial MySuper proposal, to design a basic superannuation product and to impose uniform pricing through legislation, would have created unnecessary inefficiencies and left many consumers worse off. Research into the initial proposal by Chant West found that under a one-fee, government mandated model over 750,000 Australians would be forced to pay higher fees than they are currently paying. In other research, Chant West concluded that a small reduction in fund performance on the back of a lower performance by MySuper funds would very quickly wipe out any gain from lower fees. There has been extensive debate in the sector around these issues in the past 12 months and the government has now backed down from its original proposal to impose a uniform fee structure as part of MySuper. The government's proposal under consideration today is to allow MySuper funds to offer differentiated fee structures.
We are still concerned that the creation of a MySuper product through legislation is an unnecessary interference with an existing, highly competitive market for low-fee, no-frills superannuation products. However, what is proposed now is certainly better than where we started out a year ago. The coalition have three outstanding issues with this bill. The first outstanding issue relates to default funds. The bill mandates that, from 1 October 2013, only MySuper products can be used by employers to make default superannuation contributions for employees who do not have a chosen fund. In doing this, the government has made no attempt to address the current closed shop, secretive, anticompetitive arrangements for the selection of default funds under modern awards. Whilst every default fund has to be a MySuper product, not every MySuper product will be available as a default superannuation fund. The decision on which funds are selected as default funds remains with that august body Fair Work Australia, through a secretive, non-transparent and non-competitive process. Nontransparent—similar to the investigation into the member for Dobell.
I was just going to commend the member for North Sydney for being relevant up until that point.
This is at odds with the government's own Cooper review into superannuation. Recommendation 1.2 of the Cooper review in relation to MySuper and modern awards states:
The SG Act should be amended so only a MySuper product is eligible to be a ‘default’ fund nominated by an employer.
In recommending universal eligibility of default funds for industrial purposes, recommendation 1.3 states:
(b) all MySuper products are able to be nominated,
for ‘default fund’ purposes in awards approved by Fair Work Australia.
The coalition is of the view that, in creating this new default superannuation product, all MySuper funds should be allowed to be an eligible default fund for any workplace and should be able to compete freely. Not allowing MySuper funds to compete on a level playing field fails to address the existing competition issues in the default super industry and undermines these reforms. Even the government had to recognise before the last election that the current process, which heavily favours industry superannuation funds, is not open, transparent or competitive.
In August 2010, the government promised that a re-elected Gillard government would ask the Productivity Commission to design a transparent, evidence based and competitive process for the selection of default funds under modern awards. Finally, in January 2012, Labor made good on its promise—that was a rare moment—and sent a suitable request to the Productivity Commission. This is too little too late, independent Madam Deputy Speaker.
The second issue concerns intrafund advice. The explanatory memorandum indicates that superannuation funds will be able to charge for expenses incurred in the provision of intrafund advice as part of their overall administration fees charged to all fund members of a product. Intrafund advice is clearly a type of financial advice yet there is no precise definition of intrafund advice inside this bill, nor is there a definition in the government's FoFA legislation. There is no limitation on what may constitute intrafund advice and there are no provisions determining who should pay for such advice in any of the proposed legislation.
The coalition considers that the lack of definition and lack of restriction on charging for intrafund advice within both the MySuper and the FoFA legislation is a mistake that must be rectified. In order to address these concerns, the coalition will propose an amendment to the bill to ensure that the purposes of the MySuper product— no financial advice fees—can be bundled into an administrative fee and automatically charged to all fund members. Specifically, this amendment will call on the government to, firstly, provide a comprehensive definition of the term 'intrafund advice'; secondly, ensure that intrafund advice is general in nature only; thirdly, ensure that any financial advice accessed within a superannuation fund beyond such general advice will be expressly subject to the best interests duty contained in the proposed FoFA legislation; fourthly, ensure that any financial advice accessed within a superannuation fund beyond general advice will be paid for by the person accessing this advice without any cross-subsidy from other fund members; and, fifthly, repeal the existing ASIC class order exemption as it would be superfluous once intrafund advice is properly defined in legislation.
The third issue of concern relates to the benchmark set for the tailoring of MySuper funds for large employers and the process to obtain a tailored large employer super fund plan. When an employer contributes to a fund on behalf of 500 or more members, the MySuper plan can be tailored to the needs of the employer and employee. Tailoring of MySuper plans makes sense. However, the coalition believes the benchmark requiring a minimum of 500 members per fund is too high and will create confusion among business. The coalition favours a simpler system, whereby a firm is classified as a large employer if it has 500 or more employees as opposed to members. This will provide certainty for business and for consumers. It will mean that MySuper plans tailored to the needs of employees are more readily available.
The process of tailoring MySuper plans for large employers is also problematic. The provision in the core provisions bill require prior authorisation of each tailored MySuper employer plan, rather than simply providing a reporting mechanism. The process of yearly reporting of compliance with MySuper licensing conditions for large employers makes much more sense. A solution proposed by the Financial Services Council suggested that MySuper plans could be reported to APRA on an annual basis. APRA would within 30 days be able to disallow a tailored plan where the tailored plan is not compliant with the licence conditions. This compromise will ensure that MySuper plans will be compliant with their obligations at law and would allow the regulator, APRA, to disallow a non-compliant fund. It would improve the ability of employers to tailor plans to the requirements of employees.
In conclusion, Madam Deputy Speaker, and I am grateful for your close attention to my speech, I can say that the coalition supports the introduction of a MySuper product in principle but believes the bill before the House can be improved. I indicate to the House that I will be moving a number of amendments to the bill when we come to the consideration in detail stage.
I thank the member for North Sydney and those who may have helped in his speech for being relevant to the bill before us.
I rise to support the Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011. The bill amends the Superannuation Guarantee (Administration) Act 1992 and the Superannuation Industry (Supervision) Act 1993. The main purpose of the bill is to introduce a new, simple and low-cost superannuation product—that is, MySuper. The main purpose of this reform is to promote lower fees and a more efficient superannuation system, with the members of the fund in mind. MySuper will ensure that Australians have a fair system of accumulating superannuation. The standard will be required by regulation and will set the types of fees that may be charged. In fact, there are only six types of fees which will exist under the MySuper product, compared to the variety of fee scales that apply in the superannuation market at the moment.
The bill will make it mandatory for employers to make contributions into a superannuation fund that offers this product. This is part of a large-scale revolution for the Australian superannuation system and it complements this week's historic passage through the parliament of the minerals resource rent tax, which is intended to spread the benefits of the mining boom across the nation. In addition to tax breaks for small business and funding the development of critical infrastructure, the mining tax paves the way to building on the superannuation guarantee and increasing superannuation from nine per cent to 12 per cent. This is where MySuper becomes very important.
The increase will be transitioned over the next decade, increasing the nation's $1.3 trillion superannuation savings pool by another $550 billion to the year 2035. Those national savings will be able to be invested in capital-intensive and social infrastructure which will go to the benefit of all Australians. The minerals resource rent tax will certainly increase superannuation savings for almost 8.5 million Australian workers, who are seeking better opportunities in their retirement. There is no doubt that this is a historic move that will enable more Australians to enjoy a better retirement income in their senior years. People who have worked hard all their lives to build this nation will have certainty and will be able to live with respect, dignity and comfort on their contributions to their superannuation savings, when they retire.
For those Australians on a low income, below the tax-free threshold, many of whom I represent in my own electorate, this will also enable a superannuation contribution to be made, effectively on a tax-free basis. They will therefore not be required to provide the 15 per cent entry fee for superannuation contributions. This will ensure a much fairer taxation of their superannuation and will be an encouragement for people of low income to use superannuation as a preferred saving model.
We on this side of the House are very proud to be further enhancing superannuation through MySuper. After all, it was a Labor government back in 1986 that took the first steps to allow award based superannuation to be developed. Many may recall the government's Prices and Incomes Accord with the ACTU at that stage. Those of us of a certain age and above will no doubt recall that the union movement sacrificed wage increases at that stage to offset a three per cent compulsory award based contribution to retirement income through the development of award based superannuation. For many blue-collar people, that represented their first opportunity to experience superannuation.
According to the Australian Bureau of Statistics in its first national survey of superannuation coverage, in 1974 only 32 per cent of the workforce was covered by superannuation. Madam Deputy Speaker Burke, you will not be surprised to learn that that was made up of mainly white-collar employees, managerial staff and particularly state and Commonwealth public servants.
Following those reforms of the Accord process of 1986, in 1988 the superannuation guarantee came into effect and applied to all Australian workers. That is something that we on this side of the House are particularly proud of. It ensured that all workers, regardless of whether they were covered by an award or not, were subject at that stage to a three per cent superannuation guarantee. Apart from establishing a system for every Australian worker to benefit from superannuation in their retirement, it also set the platform for an enhanced national savings regime for all Australians. I have already indicated that the pool of national savings through superannuation currently stands at $1.3 trillion.
This bill addresses the challenge of Australia's ageing population. The fact is that, as baby boomers are growing old gracefully, they are nevertheless living longer than ever before. In fact, the ABS indicates that, by 2050, 25 per cent of Australians will be at retirement age. So it is paramount for our nation's future and long-term sustainability to plan ahead to ensure that we are prepared for those days and to make appropriate plans for the ageing population and to be able to sustain people through their retirement years.
It is in the interests of all of us, including the generations yet to come, to encourage working Australians to plan for and save for their retirement. Because it is in our national interest to secure the retirement income of our ageing population, it is only right that individuals should be given a hand in looking after their retirement savings. As a nation, we should make the job easier, and that is why the government, through this bill, through MySuper, intends to minimise the unnecessary and unfair fees and charges which often make significant deductions from the savings pool of people who, quite frankly, work all their lives with a view to accumulating their retirement fund.
Australians on average pay $85 a month in superannuation fees. Those on low incomes, including a large number of the people, as I indicated, in my electorate of Fowler—
Debate interrupted.
I rise to speak on the release by the South Australian state government of the Tonsley Park master plan yesterday. The intention of the master plan is to remediate and redevelop the Tonsley Mitsubishi manufacturing plant site, which is in my electorate at Tonsley Park. The area of land equates to approximately 62 hectares, which is more than one-sixth the size of the Adelaide CBD.
The Mitsubishi manufacturing plant was closed in early 2008, at the expense of almost 1,000 local jobs. The facility had been an automotive manufacturing plant since 1964, originally opened by Sir Robert Menzies in October 1964 as a Chrysler Australia plant. Since the plant's closure, this 62-hectare facility at the centre of my electorate has sat largely empty and unused. It was purchased by the South Australian government in 2009 for $32.5 million. The original intention was to develop the site for new industries, including high-end manufacturing, research and new technologies. Yesterday, the state government released their 220-page master plan for the site, and I cautiously welcome that announcement. The master plan proposes to develop the site for a combination of residential, retail, hospitality and industry uses. These will be focused around a town square that is integrated with the re-use of the main assembly plant's shell.
In addition, the redevelopment will also include the TAFE SA Sustainable Industries Education Centre. The proposal will provide some certainty for investors, and I welcome the new local jobs that this plan will create. If the plan is realised, the proposal will create 6,300 jobs over 20 years and $1 billion in private investment. However, the caution I highlight here is that the state government has so far only attracted one investor to this site and, like so many other announcements that the South Australian government has made, the devil is in the 220 pages of detail. In 2010 their promise was for a development that would create 8,600 jobs; now it is 6,300 jobs—2,300 jobs have gone missing. In 2010 the deadline for completion was 2026; now it is 2032. In 2010 they were not subdividing and selling off residential property. But now they are, in the interest of reducing the state government's contribution.
In relation to the concern the state government had about purchasing the site to prevent it becoming a storage depot: when you read the plan, you realise that this is exactly what they plan to do. According to the master plan, for the sustainable light industry they plan to include as part of the redevelopment, their proposal is that 70 per cent of it be warehousing. In terms of the residential development, I welcome the fact they are looking at Subiaco Docklands and East Perth. I think they are excellent examples of successful developments.
Lastly, in terms of having a hub or a cluster, it is important that we back our strengths. Industry clusters are only successful when they are industries that we are already strong in. The Waite Campus in my electorate is a perfect example of this—a co-location of university, research and industry, all together in areas that we are traditionally strong in, including viticulture and agriculture. 'Clean tech', 'sustainable light industry' and 'advanced manufacturing' are all buzzwords, but buzzwords will not make this industry cluster successful.
I have been around long enough to see the South Australian government make these grand announcements and release fantastic flyover videos but then scale back the project to the point where it just does not exist. It would be a great thing for some enterprising person to come up with a mash up of all of these flyover videos which the state government have produced. They look fantastic, but ultimately what we end up with is nothing like these videos.
So, I am a bit sceptical about it. I cautiously welcome it. If it does come to be, it will be good news for local people. I sincerely hope it is not another multifunction polis. It still remains to be seen whether the vision of the plan of Parisian boulevards, urban chic and French industrial design is ever realised at this site, but I do hope that the state government can move forward with this and actually make it happen.
In private members' business on Monday night in the Federation Chamber, members debated a motion that was put forward by the member for Flinders marking World Plumbing Day, which was on 11 March. I missed my opportunity to speak on that debate because time had expired. But in my preparation for that speech, it seemed to me that it was very worthwhile spending my time during the adjournment debate tonight acknowledging that particular event. I can understand that, at first glance, other members and those listening might ask themselves why the House might have spent that time on Monday night recognising a particular trade or profession with a motion such as that about World Plumbing Day. But those same members and listeners would not think twice about the House debating a motion about the Millennium Development Goals, which happens quite regularly. We do that here in the Australian parliament because we take very seriously our obligation to work with the international community to reduce poverty and disease in the world. I note that the member for Corio has just left the chamber. In his role as the Parliamentary Secretary for Pacific Island Affairs he is at the forefront of advocacy about Australia's responsibility for improving the living standards of our Pacific neighbours. The plumbers of the world, as represented by the World Plumbing Council, take those obligations very seriously too. They are out there every day providing the clean water and sanitation essential to good health and human development. Clean water and sanitation are explicitly included in Millennium Development Goal No. 10, with the aim being to halve the proportion of people without sustainable access to safe drinking water and basic sanitation by 2015. Furthermore it has been recognised by the United Nations Secretary-General Ban Ki-Moon that in fact few of the Millennium Development Goals are achievable without those basic needs being met. He has said:
… access to sanitation is deeply connected to virtually all the MDG in particular those involving the environment, gender equality and the reduction of child mortality and poverty.
Given those words, you can see that the World Plumbing Council is to be commended for keeping us focused on this important aspect of the Millennium Development Goals and for championing the role of plumbers in supporting the health of people today and helping us to manage our water resources sustainably.
Progress is being made around the world, but yet again this year's World Plumbing Day on 11 March was a chance for all of us to reflect on how much still needs to be done and the enormous human cost of inaction on clean water and sanitation. One in five or around half a billion people in the world have no source of clean drinking water. Some 40 per cent of the world's population do not have access to a hygienic means of personal sanitation—in other words, not even access to something as basic as a pit latrine.
The consequences of dirty water and lack of hygiene are incredibly serious. According to the World Health Organisation, each and every day 3,900 children die because of dirty water or poor hygiene. In fact disease transmitted through dirty water or human excrement is the second leading cause of death among children worldwide.
The Australian government has been part of global efforts to improve access to clean water and sanitation in developing countries. One example is the series of projects in Indonesia where 77,000 homes were connected to safe piped water and 5,000 households were connected to sewers. In the last budget we added another $433 million for the water, sanitation and hygiene sector to Australia's aid program, doubling spending in this area to $870 million over the period from 2011-12 to 2014-15. This additional funding will help to provide over 2.5 million people in Africa, South Asia and East Asia with access to clean water and two million people globally with access to basic sanitation and improved hygiene.
Governments can and are providing leadership and funding towards meeting the Millennium Development Goals with respect to sanitation and water. It is plumbers, however, who bring their expertise to the task of designing practical systems for providing water and sanitation and installing them in the most efficient way. That is why there has been widespread and deserved recognition of the role of plumbers as we mark World Plumbing Day. Here in Australia, we cannot be accused of taking water for granted and we do not take our plumbers for granted either. We know that plumbers are a key part of transforming our homes and cities to be capable of conserving and recycling water. We have learnt to appreciate the true value of water and the motion was all about showing that we appreciate our plumbers as well. (Time expired)
This Friday, 23 March 2012, I will be commencing my Canning Walk for Autism with an official launch at the Mandurah foreshore at 8 am. This event will see me walk through the electorate of Canning over 10 days. I will walk more than 100 kilometres, visiting 43 schools along the way, to raise awareness and much needed funding to support families of children with autism.
This event was inspired by my relationship with 13-year old Dermott Barnard, who has autism, and l am honoured to have Dermott as the face of my fundraising campaign. I have known Dermott since 2005 when he adopted me through the Adopt a Politician campaign. Since that time, I have seen Dermott grow and succeed despite his battle with autism. I have been so touched by Dermott's passion for life, including his passion for the Dockers AFL team, although I cannot say I agree with him on that because I am a member of the Eagles. He and I quite often joust over that issue.
I have initiated this 10-day, 100-kilometre walk to do what I can so that other people with autism have a chance to become champions, the way Dermott Barnard has. This event is being supported by the Autism Association of WA and their insurer, Zenith Insurance. All money raised will go straight to Autism WA, as they are best placed to ensure the money is used appropriately. Autism Awareness in Canberra has also been most supportive, helping to promote this event through its social media network.
During the walk, on Tuesday, 27 March, I will be visiting INKA Respite in Lake Clifton, which is also in my electorate. It is a not-for-profit farm-style respite stay for teenagers and adults with autism spectrum disorder and Down syndrome. I will be able to join the staff and residents at INKA for lunch and will, I am sure, learn much more about autism and ways people can help.
Joining me on the walk will be some of my parliamentary colleagues, members of local government, business people and people from community groups and other support networks. Both state and federal members are joining me and I am very pleased to say that the Deputy Leader of the Opposition, Julie Bishop, and the WA Minister for Health, Kim Hames, are among them. I would like to thank all of these people for the support they are giving me during what I expect will be a somewhat gruelling event, although not as gruelling as the challenges faced by those with autism and their families. I would also like to thank those generous people who have donated through my fundraising webpage. Those who wish to donate, please visit www.everydayhero.com.au/don_randall.
I would now like to take this opportunity to tell you more about autism and its effects. Autism spectrum disorder, or ASD, describes a group of related disorders belonging to the same diagnostic category and sharing the same core symptoms. These include autism, Asperger's syndrome and pervasive developmental disorder. Autism is a complex developmental disorder where a person's ability to communicate and develop social relationships is inhibited. Autism is a lifelong disorder and is the most common developmental disorder in Australia. Today, one in 110 Australian children are diagnosed with ASD.
Early signs that can alert a parent to the concern that their child may not be developing as they should are in the manner in which their child responds to them. This is the key to dealing with autism. No-one has found a cure, but early intervention is the key. The child may have limited speech or may not learn to speak at all. The child may also have difficulty in understanding others or perhaps the child does not seem interested in playing with other children, even though the child has developed good spoken language skills. Distress with change of routine is another common feature. They love to be in the same routine and they feel uncomfortable if they are taken out of it. The good news is that with intervention, particularly early intervention, children with autism can be supported and they can go on to gain many of the skills that most of us enjoy. My good friend Dermott Barnard is a great example of this, and credit must go to his mother, Lyn, who has spent so much time making sure that Dermott gets the opportunities and the one-on-one care that he deserves.
There are programs in place so that children are able to receive the help and education they need to be able to actively participate in everyday life. Unfortunately, the cause of autism is still unknown, despite ongoing worldwide research.
It is for these reasons that I am throwing my support behind this cause. The research is ongoing and support services are still needed. I welcome everyone to join me on the walk, and I look forward to seeing those people who are already joining me out in Canning.
As well as being my mother's birthday, 21 March is a significant day for all Australians. Today we celebrate our unique diversity and our harmonious community. This is Harmony Day. Today we recognise that the country we call home was built by generations of people who left their homelands in search of a better life. Other than Aboriginal people, all of us are either migrants or descended from migrants.
I proudly represent the most multicultural community in the whole of Australia. In fact, according to the ABS, 50 per cent of my electorate of Fowler were born overseas. Becoming the member for Fowler certainly allowed me to see firsthand the wonderful contributions that members of various cultural groups make not only to their respective communities but also to the general fabric of Australia itself. The contributions are widespread, ranging from economic in various fields, particularly in small business in my community, as well as a social and cultural diversity. Members of different cultural groups have introduced Australia to new cuisines as well as to vibrant and colourful customs and celebratory events, among other things.
I currently have in my office an intern from the Australian National University, Ms Amanda Pashley. I have asked her to conduct a research project that will explore the many benefits of migration to Australian society. Amanda will compare the experiences of the Vietnamese groups who migrated to Australia following the Vietnam War in the late seventies to the experiences of more recently arrived refugees. There is undoubtedly a stigma in some sections of Australian society that refugees represent a substantial cost to the host community. We rarely acknowledge the many positive contributions they make to our society.
I would like to also praise the valuable work of the migrant resource centres, including the Liverpool and Fairfield migrant resource centres in my electorate. They do a very good job in regard to the community in ensuring that people are properly settled, enabling them to become part of the general fabric of the Australian way of life.
The Fairfield MRC is led by my friend Julio Gruttulini and the coordinator Ricci Bartels. The Liverpool MRC is led by chairperson Dr Amad Mtashar and manager Kamalle Dabboussy. They work very hard with their teams to ensure that the community is aware of the many positive aspects of cultural diversity and how that can be included in our normal way of life.
As the member for Fowler, I have been able to witness firsthand these benefits. I have been privileged to attend a number of vibrant celebrations, including the Lunar New Year Festival, Tet Festival, Chinese Moon Festival—which draws in outsiders from all over Sydney into the vibrant suburb of Cabramatta—as well as the Serbian Folkloric Festival in Bonnyrigg, and many others. During these events, the various groups put on display the sounds, the tastes, the colours and the vibrancy of their homelands, while keeping in mind that they are Australian.
I have also had the opportunity to meet some extraordinary individuals who work very hard to represent their fellow countrymen in the best possible way and to make the best of their contributions to the Australian community. One such individual is James Chan, a local businessman. James is a respected and hardworking member of the business community and a member of the Australian-Chinese community. In fact he is the President of the Australian-Chinese Buddhist Society. He works very hard, together with his wife, Jenny. Supported by their family, they make a tremendous contribution not only to local business but through what they do for our community generally.
Amongst many other contributions, James and his army of volunteers—including Jensen Tran and Vinh Trang—work very hard with the Mingyue Lay Buddhist Temple in Bonnyrigg. The temple was established 25 years ago and draws thousands of people to the area. James is one of a number of people in my diverse electorate who do everything possible to ensure that we live in a harmonious and inclusive society. (Time expired)
'If rural practice was a patient, I would say that its condition would be critical.' Those were the words of Dr Maxine Percival as she addressed the third annual Rural Doctors Association of Australia parliamentary breakfast on 29 February.
Rural practice, Dr Percival maintains, 'needs urgent resuscitation with appropriate funding'. Dr Percival would know better than most the seriousness of the situation. From Moree in northern NSW, Dr Percival has spent more than 25 years working hard specialising in rural birthing services and Indigenous health. A general practitioner and obstetrician, she was recognised for her dedication and skill in 2009 when she was deservedly named National Rural Doctor of the Year.
Dr Percival gave an impassioned and informed speech to the breakfast which was attended by rural doctors from across the nation as well as, for the first time, a health minister—and I appreciate the fact Tanya Plibersek turned up, at least for the first part of the event. It is important the new health minister, as part of her brief, appreciates and understands the unique challenges faced by rural doctors and the strains of regional health in general. There is no better way of getting a handle on the demands and expectations of a GP than by hearing about it firsthand, particularly from someone with the experience of Dr Percival or the President of the Rural Doctors Association of Australia, Dr Paul Mara, from Gundagai in my Riverina electorate. Dr Mara has headed the national rural doctors' body for two years and is an outstanding advocate for country doctors and country health services. He cleverly and appropriately took the opportunity at the recent breakfast to include among the handout material a photocopy of the front page of his local newspaper, the Gundagai Independent, from 6 February 2012. In doing this, Dr Mara brought a Riverina perspective to a frustrating problem which is a burden on the provision of decent health services in regional areas. The article was headed 'Hurdles keep doctors away from bush'. It told of how technicalities in the way doctors are counted mean areas such as Gundagai do not qualify for the medical support they both deserve and need.
The text was accompanied by a photograph of Dr Barb Cameron, who is passionate about regional health yet might not be able to use up her bond in many small country towns due to the rules of her bonded position. Bonded students have to work off their bonds in an area which is counted as a district with a workforce shortage. This system has some merit and I am the first to argue that there must be rules in place, and enforced, to ensure places where doctors are difficult to come by receive the resourcing and personnel they so desperately require.
There is an argument for all small country towns with a population of under 15,000 to be automatically classified as a district of workforce shortage. The market will set the limit. However, as Dr Cameron said: 'Because of the way they count things, Gundagai isn't classed as district workforce shortage—but it clearly is.' That is notwithstanding the fact that Gundagai has only two fully qualified doctors providing services 24/7. I am pleased the member for Bowman, the shadow parliamentary secretary for regional health services and Indigenous health, Dr Andrew Laming, is at the table. He knows all too well the health challenges of the Riverina, having practised at Gundagai in 1992.
Dr Cameron continued: 'It is a major problem. There is not just a shortage of doctors; there is a distribution problem. Just because we have all these medical graduates doesn't mean we can get them in the country, which is where we need them.' An area is considered a district of workforce shortage if it falls below the national average for the provision of medical services for the speciality, based on the latest Medicare billing statistics, but the portrayal of this is less than transparent. Dr Cameron said the problem with the statistics is that they class junior doctors, such as herself and the Gundagai registrar, as full doctors, but they both still require the supervision of trained specialists. When these junior doctors do the rounds of the hospital they require supervision, as per the rules. This places some pressure and commitment requirements on the town's husband and wife doctor duo, Paul Mara and Virginia Wrice, who are already run off their feet and it limits where a doctor such as Dr Cameron can go to work off her bond.
Dr Cameron said, 'The fact is that GPs, especially in rural areas, are getting older and they're going to retire. In 10 or 15 years, Dr Mara and my father's generation will retire and country areas will be in real trouble.' Dr Cameron's father, Dr Ian Cameron, is the long-serving chief executive officer of the New South Wales Rural Doctors Network based at Newcastle which, in conjunction with the Rural Doctors Association of Australia, is lobbying hard to get the situation rectified. There could be no better organisations working to make things happen. Both are representative groups of some of Australia's finest professionals: country doctors.
This year marks the 25th anniversary of the Rural Doctors Association movement. It is a quarter of a century since the New South Wales rural doctors' dispute, which was the catalyst for the formation of the state rural doctors associations and the RDAA itself. According to Dr Percival, back at that time seeing a patient went from $22 to $13.85 per consultation, regardless of the time of day or length of consultation. This obviously left doctors demoralised and undervalued and many wanted to leave the rural doctors' practices. I congratulate all rural doctors for their perseverance and the wonderful care they provide and wish the Rural Doctors Association of Australia all the very best in all of its future endeavours. (Time expired)
Today is Harmony Day and I am proud to be celebrating it with many people. I am sorry I am not back in my electorate, where I know many events are happening today. The continuing message for Harmony Day in 2012 is that everyone belongs, which means all Australians are welcome to be part of our country, regardless of their background. It is time to reflect on where Australia has come from and to recognise traditional owners of its land, and it is about community participation, inclusiveness and respect. That is one of the wonderful things about the country we live in and my electorate of Chisholm.
I have two municipalities within my electorate: Monash and Whitehorse. In Monash about 40 per cent of its residents were born overseas and in Whitehorse 30 per cent. This is a very high proportion of people born overseas. It is made up of many different community groups and many different nationalities. It makes Chisholm a vibrant place to live. The place is made up of many phenomenal individuals, like Halina Wagowska.
Halina has just put out a book. She demonstrates the story of what it was like to come to Australia, to make it a home, and also to contribute back to the country that has nurtured her. Halina says:
These short stories are autobiographical but I am not their main subject. Some pay homage to the people I have known and loved. Some describe unusual places and events and are a kind of testimony.
It has been said:
But contrary to what Halina says—
and knowing her well I would testify to this—
none are 'commonplace', whether her stories tell of the gentile nanny who followed Halina's family into the ghetto, the Russian soldier who saved her at the end of the war and nursed her back to health or the char ladies of Collins Street who first called the new immigrant a 'refo' before taking her into their hearts.
And:
Adopted mother, Frieda, keeps telling the young Halina that if they survive the camps they shall have to testify until they die, but The Testimony is also a record of what comes next for the young Halina: love, a career in pathology, and 'her life's work' in human rights—pouring her energy into everything from bursaries for Aboriginal education and books for the victims of the Black Saturday bushfires to bioethics and gay marriage.
Described by the author as her last testimony before she drops off the twig—
and I say to Halina: 'Don't do that anytime soon'—
this carefully crafted work is no straightforward autobiography but one in which the people and places Halina has known take centre stage. The thematic pieces provide jewels of wisdom from a woman who has lived a truly full—richly rewarding but also horrifically harrowing—life.
Eighty-one-year-old human rights activist Halina Wagowska survived the Auschwitz and Stutthof concentration camps in her early teens before immigrating to Australia. Over the years she has frequently testified to the consequences of prejudice she witnessed. Halina is the fabric of my community and she is an amazing human being. Her story is like many of those who have come and made Australia home. In fact, it is probably not like many—it is far more remarkable.
Then there is Ayen's story. Ayen attends the Blackburn English Language School, which is in my electorate. It is a phenomenal institution that provides children, predominantly migrants and refugees, with 20 weeks of language experience. This ensures that when they go to school they will be able to get right into the curriculum, with their English way up to speed. I had the honour of recently visiting the English language school, with Minister Kate Lundy and my colleague the member for Deakin. It was a great day. Ayen's story says:
I came to Australia in October 2006 with with my mum, dad, baby sister and little cousin. My cousin's name is Adur and we brought her to Australia to be with her mum, dad, brother. She was too young to travel with them when they arrived.
When we arrived my aunt and uncle had a party for everyone because they were so happy to have Adur reunited with them.
… … …
My house in Sudan was made of mud. We had sticks at the windows but no curtains. Our beds were made from trees but they were comfortable. One bad thing was that the water would come in the house every day and it was smelly.
… … …
Sometimes I was scared when the animals came into our village. Many donkeys would come into the house to look for food. One day a rhinoceros tried to attack my mother but our dog stopped the rhinoceros. Mum got everyone into the house quickly. We had to keep the village gates closed to stop the elephants from coming in. But one day a big elephant broke the big gate to drink water from the tap.
… … …
One day I was very scared because some people broke the village gate and killed some people. Everyone was yelling and screaming and crying. My family was running with other people—we ran for two nights and one day.
They finally arrived in Australia. She says:
In Australia I really like my school. At home I watch television and my favourite show is The Simpsons.
… … …
In the future I want to be a teacher because I want to 'know everything'—just like my mum.
Ayen's mother is a teacher, and she has great respect for her. This is what our community is made up of: people from all walks of life who have amazing stories and then come and make Australia home. We should remember that these people have embraced us. It is not just us embracing them, they have embraced us. Harmony Day is a great day to recall all those fantastic stories and to recall what a great place Australia is to live in.
Many here will be familiar with my story. The Pinklands Sporting Complex is a 22-hectare reserve in my electorate of Bowman, nestled against Moreton Bay, encircled by the beautiful Eprapah Reserve, the southern expansion of Thornlands, which after all is a part of outer metropolitan Brisbane meeting Moreton Bay.
On any morning you will find koalas, natural wildlife, the sound of Australian bushland punctuated only by the squeals of delight of young children playing netball or practising rugby league or the silent exhilaration of riding a pony at the pony club for the first time. Perhaps those at Yurara Art Society are indulging in their great passion for painting or possibly people are pulling up to play a day of bridge.
It is so typically Australian, yet entering the Pinklands Sporting Complex is increasingly becoming a dangerous proposition. This was highlighted just this weekend with an appalling three-vehicle collision in very, very bad weather when a young resident was attempting to turn right into oncoming traffic and was hit from behind. Luckily, no-one was hurt but that was only through fate and incredible luck, because these three vehicles were strewn across the road. A power pole fell onto one of the vehicle's bonnets and, for a long period, traffic had to be diverted.
This is the most recent example of what has been a 10-year struggle to improve entrance to the Pinklands sporting facility for young families who drive their children to their pursuits and passions. They should be able to do that with a set of traffic lights that allows them to do so safely. This has been for me a six-year campaign, going back to the year after I was elected. In that era, we worked to expand the initial exit to two lanes to allow vehicles to turn left without being impeded.
What has happened in the last 12 months is most disappointing. Finally, a state government agreed to duplicate Cleveland-Redland Bay Road, which runs past Pinklands. It put in place and installed the traffic lights that we needed, only for our local Redland City Council to fail to do its part of the bargain: connect up the Pinklands sporting facility to the set of traffic lights that have been installed.
We have the appalling situation of a road closed sign into the Pinklands Sporting Complex and local families in their thousands every weekend using the ancient and extremely dangerous exit as a result. I honestly asked a very simple question as any elected member would: why was this bungle—this debacle—last year not fixed with the appropriate council works being synchronised with the state government duplication of the road? There has been no satisfactory answer. The second question I asked was: when will it be fixed? Similarly, no answer has been forthcoming.
At this moment, many people in Redlands would say, 'We admire the campaign but why should a federal member of parliament be taking the lead?' I make a very, very simple pledge and undertaking to the people of Redlands: if any level of government, even my own, does not deliver for you, you are completely within your rights, having given that jurisdiction the chance to fix the problem, to go to other levels and seek their support, mobilise the community and ensure resources are directed to get a solution that is best for the people. That is all I am asking for here in Pinklands.
Redland council have had their chance. They have had their meetings and delivered nothing. They have written meaningless correspondence on the issue but given no comfort to the people who brave that intersection every weekend. I was disappointed to see that it finally became personal when last week the local councillor, whose identity I will protect by not naming her in this chamber, said:
Mr Laming has long touted that he "fixed Pinklands" access in the past, and that he's undertaken a decade-long campaign for a safe Pinklands entrance.
Yet, a search revealed that from 2004 to today's date there has only been one letter from Mr Laming to council relating to roads, safety or Pinklands. It's dated February this year and sent to the council's CEO … one letter in seven years, some campaign!
I would like to seek leave at the end of the speech to table the nine pieces of correspondence in seven months that actually led to the intersection being fixed in the first place, which was correspondence between me, a state member and the mayor. The fact that those documents are not on the council record in should no way impugn the community effort to get this intersection fixed.
It is quite simple: we want to work together to get this fixed to make it safe for people to drive into and out of Pinklands every day of our lives, but I am disappointed to see the response from this councillor who said the following, which I can only regard as a hysterical rant in the paper:
Do we want petty, party political squabbling in council as well? Do we really want a factionalised council run by faceless people at party headquarters? Do we want councillors who are lap dogs for the federal member? The questions are rhetorical - of course we don't.
Let's fix this intersection. (Time expired)
I bring to the House today an issue that I think is very important—the importance of clean water and sanitation ensuring safety and that the Millennium Development Goals are met. Water is the very lifeblood. Without it, there is no life. It is a basic human need; however, access to clean and abundant water remains a dream for millions of people around the world.
World Water Day is tomorrow, 22 March, and there will be badges available for all members to wear tomorrow. It is to raise awareness that the lack of clean water and sanitation is the biggest cause of death and disease in developing countries. We also recently celebrated World Plumbing Day, on 11 March, and there was a private member's motion in this parliament recognising the importance of plumbing for the health and safety of our communities.
There is cause for celebration. We have just achieved the Millennium Development Goal target for drinking water. Around two billion people have gained access to clean drinking water since 1990. There are 884 million people around the world who still have no clean drinking water and 2.5 billion people have nowhere to go to the toilet. While access to water has increased, sanitation has not received the same priority. Progress on sanitation has been much slower, and we are behind in meeting that Millennium Development Goal.
Access to water and sanitation saves lives. Diarrhoea is the biggest killer of children in Africa. It is the second most common death amongst all children under five. It kills more children than AIDS, malaria and measles combined, so it is an issue that really needs to be addressed. Ninety per cent of cases of diarrhoea are due to poor water quality and sanitation. Water is one of our most precious, simple needs yet it is so powerful. Clean water and sanitation can transform lives and bring dignity to and empower so many people and communities.
Access to clean water and sanitation promotes gender equity and empowers women and girls. Girls miss school because they spend hours every day fetching water for their families and, with the onset of puberty, unisex toilets and lack of menstrual hygiene facilities in schools deter attendance. Water provides a safe and hygienic environment for childbirth and postnatal care to increase chances of survival for mothers and newborns. Not all children born in the world will live. It is a devastating and tragic fact that so many lives are still taken by preventable disease because of the lack of access to the most basic of resources—clean water.
Aid programs focused on clinical response will be of questionable benefit if the medicines are taken with water contaminated by human faeces. We need to prioritise water and sanitation in aid budgets. Across the OECD over the last 10 years, aid to help the HIV-AIDS in sub-Saharan Africa has increased by nearly 500 per cent while aid for water and sanitation has increased by only 79 per cent. Given the impact that increasing money spent on clean water and sanitation can have, there is no argument that more needs to be invested in clean water and sanitation. For every dollar invested in water and sanitation, on average, eight dollars are returned in better health and increased productivity.
World Water Day is the time to bring to the attention of the government and all of us in this parliament the need to focus our aid budget on these areas, on these life-saving measures. A report by the World Health Organisation and UNICEF showed that more people in the Pacific are at risk from sanitation related disease now than in 1990. Poor rural communities in Papua New Guinea, Indonesia and other countries in our region still lack access to clean water and toilets, which makes them vulnerable to cholera outbreaks. I call on all members of this parliament to join together with me in this campaign. (Time expired)
I rise to place on the Hansard record a tribute to a great Australian, certainly a great Queenslander, and the former member for Gregory in the Queensland parliament, the Hon. William Glasson, who was known to all of us as Bill Glasson. Bill passed away last evening. He was born on 23 February 1925. There was no fiercer advocate for the people of outback Queensland or the bush than Bill Glasson, not only in his public life prior to parliament but of course in his time as a minister in the National and Liberal Party governments in Queensland.
Not only was he a great lover of the bush; the bush loved him. Why? Because he grew up in the bush and understood the bush. A part of his early education was through correspondence. He went to state schools and then on to boarding school in Brisbane. He put his career down as jackaroo. I can relate to that having been one myself. He was a station manager and did some droving of livestock between towns way before the modern transport modes were as plentiful as they are today. It was the way livestock was moved from property to property, town to town and so often to market. He was a grazier and a pastoralist and owned land in western Queensland.
He gave generously of his time in public life as well. He served as a councillor on the Winton Shire Council from 1955 to 1957. Winton is that wonderful town in western Queensland, which was in the state seat of Gregory but is now in the state seat of Mt Isa and the federal seat of Maranoa, that gave birth to Banjo Paterson's Waltzing Matilda, the song that we identify as our unofficial national anthem. It was in Winton that the tune to Waltzing Matilda was first played, by Christina Macpherson on a piano. From there Waltzing Matilda has become legendary across Australia.
During the Second World War, Bill Glasson served in the Royal Australian Air Force between 1943 and 1945 as a Flying Officer. His interests included horse sports such as campdrafting and racing. In many parts of outback of Australia campdrafts, rodeos and bush races are the sorts of things people like to participate in on the weekend and they perform a great social function. He was a great supporter of country racing and shows. He was also very supportive of the young and youth organisations. He was the president of the Gregory Turf Club and the Winton Rodeo Association.
There is also a Legacy broadcast, and in my own home town that is quite often on radios during Easter and Good Friday. I am not quite sure whether that is the case out where Bill came from in Longreach. Money would be raised for Legacy on Good Friday to support the great work that Legacy does. Bill always made himself available to help others. He was elected in 1974 as part of that huge swing against the Labor Party in Queensland when the Labor Party was reduced to a cricket team of 11 members.
The other thing I note about Bill, and I knew him quite well as I grew up, is that as Minister for Lands and Forestry in that period he gave people certainty of tenure of their land title. He also oversaw the breakup of some of the large pastoral holdings into ballots that gave other people a start in life when those ballots were determined. It also gave people additional areas of land from large pastoral holdings into smaller holdings.
He oversaw the building of hospitals and schools. He was a great supporter of the decentralisation of Queensland and the legacy he leaves is still to be seen in western Queensland—the base hospitals in Longreach and in Barcaldine. The main roads department has got a base in Barcaldine. These are legacies of Bill Glasson, as the member for Gregory at the time. Of course, Bill is one of those great people who has left a great legacy of building a better place in western Queensland. He will be missed. I pass on my condolences to his family, including Dr Bill Glasson, ophthalmologist. (Time expired)
I associate myself with the sentiments expressed by the honourable member for Maranoa. I knew Bill Glasson well and had a very high regard for him.
Last Monday the Senate approved and passed the government's minerals resource rent tax. It, together with the petroleum resource rent tax, will be assisting Australia's businesses and workers by funding national taxation and superannuation reforms, including a cut to company tax to 29 per cent, a new break for small business from 1 July 2012 and, most importantly, incredible superannuation savings for 8.4 million Australians. The opposition oppose that tax relief for 2.7 million small businesses. They oppose that superannuation reform that will allow a 30-year-old worker on an average income to retire with an extra $100,000 in savings. Amazingly, they oppose our investment in much-needed upgrades to infrastructure across both rural and urban Australia. The Liberals do this because they are being squeezed by some of the iron and coal plutocrats. That was very clear today. Why?
Mr Speaker, I rise on a point of order. Standing order 90 is about reflections on members. The member for Melbourne Ports is imputing an improper motive—
In future the honourable member will not abuse the process of the House; otherwise, I will deal with him.
I am making a political criticism, not of individuals but of the political decisions of the Liberal Party to accept such extravagant support from people like Mr Clive Palmer—the $4 million man—whose donations to the Liberal Party are obviously changing their policies. There is a brutal Polish saying that says, 'You pay and you get.' As we have heard from the Special Minister of State, Clive Palmer has donated $4 million to the coalition—you pay and you get. Nothing shows the opposition are more interested in protecting their iron and coal plutocrat mates than their relationship with Mr Twiggy Forrest.
Mr Forrest has contributed much to this country and he has certainly done well out of Australia. He claimed, when he came to Canberra, that he is standing up for the little Aussie battler. Presumably, they all have private jets. This MRRT, as it affects him, is much more like the Wall Street executive complaining about obscene bonuses while being reduced to merely outrageous bonuses. Mr Forrest came to Canberra to speak of the suffering the government will place on his company. Laura Tingle, in her article in the Financial Review on 17 June 2011 entitled 'Taxpayer Twiggy goes out on a limb', explained that the concerns he had raised with the government—the retrospective nature of tax doubling the value of spent capital, an immediate write-off in new capital and the full transferability of super mining viability across projects—were all addressed by the government. Mr Forrest came here in his private jet to modify the tax and we met his concerns. Mr Forrest admitted that on Lateline. He said:
I can assure all of Australia this: under this new tax regime Fortescue will pay much less tax.
However, as Laura Tingle points out, according to his own records he will be paying less than nothing because Fortescue has not paid any tax as a company so far. So he comes to Canberra to rail against a tax he has helped modify to meet his concerns, and he wants to pay less tax. Does he want to pay less than nothing? That is the question that I have to ask him.
The Treasurer rightly pointed out in his article in the Monthly:
Despite the howling of a small minority … The vast majority of our miners accept that they have a social obligation to pay their fair share of tax on the resources Australians own.
What is even more confusing is that Mr Forrest remained quite silent when the Premier of New South Wales and the Western Australian Premier, who wail about the ruination of the MRRT, introduced increased state royalties. When the Western Australian Liberal Premier, Colin Barnett, announced he would lift royalties on iron ore production, Mr Forrest and other Liberals claimed that the money raised by the royalties would fund hospitals and nurses. Funny, I thought the opposition would, along with the rest of Australia, be all for investment on roads, bridges and infrastructure in mining regions, which is precisely what the minerals resource rent tax will do along with the other good that it will achieve. So the coalition is joined by a man who has professed his business will pay less tax under the MRRT and a man who launched the most extraordinary attack, as the Attorney-General pointed out, on the CIA. I was there on the grassy knoll with him. I must confess, we both— (Time expired)
Five years ago precisely, on 21 March 2007, the then Labor opposition announced its broadband policy. Five years later, Australia's broadband penetration ranking has dropped and Labor's policy has made zero difference to the broadband service received by 99.9 per cent of Australians. According to then opposition communications spokesman Stephen Conroy back in 2007, the coalition had done a terrible job. He said that the Howard government had 'comprehensively bungled its responsibilities' to facilitate the rollout of a fibre-to-the-node network. Labor apparently had a much better plan and Stephen Conroy was there to announce it, together with two people who have now disappeared from Labor's frontbench—Kevin Rudd and Lindsay Tanner.
The plan was to build a fixed broadband network to 98 per cent of the population in five years. Five years on, what has been achieved by Minister Conroy? He has certainly splashed a lot of taxpayers' money up against the wall. The government owned National Broadband Network Company has been a financial black hole. Its latest annual report says it has received $1.36 billion in equity, funded entirely by taxpayers, and racked up losses exceeding $400 million. Yet according to the company's most recent disclosure in January this year, a grand total of 2,315 homes are receiving a service on its fixed broadband network—less than one tenth of one per cent of the 10 million premises the network is supposed to serve. So there is a stark contrast between what Senator Conroy promised and what he has delivered.
He promised the new network would be substantially private sector funded, with public funding capped at $4.7 billion. He is now building a 100 per cent taxpayer funded and government owned network, the total cost of which looks likely to balloon to well in excess of $50 billion. He promised a competitive selection process, but hopelessly mismanaged it before abandoning it in early 2009. He promised a fixed network to 98 per cent of the population, but NBN is now rolling out wireless and satellite in rural and remote areas, with only a smaller percentage to get a fixed connection. And he told us that his network would end Australia's 'broadband backwater' status. In October 2006, for example, Senator Conroy in a media release fulminated that:
The latest OECD broadband statistics show Australia's ranking in the use of broadband remains mired at 17th out of 30 surveyed countries.
Yet in June 2011, in the most recently published version of the OECD survey, where does Australia now rank in fixed broadband penetration? Twenty-first—on the very metric which Stephen Conroy said was the one against which his fixed broadband plan should be judged, Australia has dropped in the broadband penetration ranking. At the same time there have been very nasty anticompetitive side effects as the minister has tried to shore up NBN Co.'s hopeless business case. He has legislated to ban any new entrant from building a new high-speed broadband network to serve the consumer and small business market unless the operator adopts NBN Co.'s wholesale-only business model. This is a restriction on competitive entry the likes of which has not existed since telecommunications was deregulated in Australia in 1997. He has also legislated to sanction anticompetitive deals between NBN Co. and Telstra on the one hand, under with Telstra will receive $11 billion, and NBN Co. and Optus on the other, under which Optus will receive $880 million in exchange for those two companies agreeing to cease serving consumers and small businesses over their existing fixed line broadband networks, many of which, in the case of the hybrid fibre coax networks, are already capable, either today or with a modest upgrade, of delivering speeds of 100 megabits per second. These deals would be illegal under Australian competition law as agreements between competitors to reduce competition were they not specifically sanctioned by the legislation introduced by Minister Conroy.
In 2007, Labor's broadband policy document promised that the party would 'turn around Australia's broadband performance and put Australia back into the fast lane of the information superhighway'. Labor has fallen very far short of meeting this lofty ambition. For all the money it has spent, fixed broadband development and take-up has stalled and the private sector has largely halted fixed broadband investment. It is hard to avoid any conclusion but the obvious: Stephen Conroy has delivered five wasted years in Australian broadband policy.
I am very pleased to speak to the House today about the nation-building project PortLink Inland Freight Corridor Plan in my electorate. This project is a significant infrastructure development for regional Western Australia and is set to have significant national benefits. PortLink has come about after more than 25 years of consideration. At first the project was envisaged as a transport hub in Kalgoorlie-Boulder and in more recent years it has progressed into the full PortLink project linking the major ports in Western Australia—Esperance, Port Hedland, Karratha, Fremantle and, in the future, the Oakajee Industrial Port—with Kalgoorlie, as a gateway to the eastern states. It is a visionary project and I congratulate those that have kept it on the agenda over many years. In particular, I would like to congratulate and thank Graham Thomson, the former chairman of the Goldfields-Esperance Development Commission, for his leadership in developing this project.
PortLink will have many advantages for the nation. From a local member perspective, it will create jobs and improve industry within my electorate. On a state level, it will create safer roads, more connected regional communities and reduce heavy vehicle traffic around the metropolitan area. At a national level, PortLink will create a more effective transport network for the nation and will allow the resources industry to have greater access to the ports they need to export the minerals and resources that drive this nation's economy.
In recent times, I have hosted the Prime Minister and Minister Albanese in Esperance to look at the project. As recently as last weekend Mr Albanese announced $2 million of federal funding to be put towards the next stage of the project. He also attended the Over the Horizon industry forum, facilitated by the Esperance Chamber of Commerce and Industry and the Goldfields-Esperance Development Commission. There were some 230 participants, including local government, businesses and industry from across the Goldfields-Esperance region, as they discussed upcoming projects and plans for future developments. This was a very appropriate event at which to announce the PortLink funding. As part of the minister's visit, I also took the opportunity to showcase many future projects in the Esperance area.
I would also like to thank the Western Australian Minister for Regional Development, my Nationals WA colleague Brendon Grylls, for his ongoing support for this project. Minister Grylls has also been a strong supporter of the PortLink project. Through Royalties for Regions, Minister Grylls and the WA state government have committed $5 million towards the planning and development of PortLink. I would also like to acknowledge MLC Wendy Duncan, who lives in Esperance, for her commitment to the PortLink project. I would like to thank all of the Esperance leaders who made the day a success. In particular, I would like to thank the CEO of the Shire of Esperance, Mal Osborne, and Shire President Mal Heasman, Esperance Port CEO Shayne Flanagan, Grant Shipp from the Esperance Chamber of Commerce and Industry, Matt Dukes from Cliffs Natural Resources and Robert Hicks from the Goldfields-Esperance Development Commission. All of these leaders have shown tireless, unwavering support to their community and to the PortLink project. PortLink has now been given the initial support needed to enter the planning and development stage and I look forward to seeing this project progress in coming years.
Order! It being 8 pm, the debate is interrupted.
House adjourned at 20:00
I rise this morning to honour a group of courageous, formidable and extraordinary women whose stories have not often been recorded in our history books, but who nonetheless played an important role in Australia's war history. The nurses of the RAAF Medical Air Evacuation Transport Units, known as 'the Flying Sisters' were an incredible group of young women who volunteered their services, and in some cases gave their lives, to ensure our young soldiers injured in combat or held as prisoners of war during World War II were evacuated from the front line and brought home. The 25 courageous young nurses recruited to the special RAAF unit flew into remote areas of the Pacific which were defended by Japanese troops.
The Flying Sisters were responsible for the loading of C-47s from ambulances on the ground amongst the rugged terrain and in a major theatre of war. Exposed to scenes experienced by our men fighting on the front line, the Flying Sisters performed their duties with tenacity, valour and resourcefulness. The mother of Jennifer Ballard, a resident of Winmalee, was one of these extraordinary Australian women. At just 20 years of age, Joan Loutit volunteered as a Flying Sister, serving in the New Guinea campaign. Stationed at Morotai from 1942, Joan and several sisters flew nonstop until after the war was over in 1945 to evacuate 'their boys' from battlefields in New Guinea so that they could access medical attention back in Darwin.
Now 90, Joan recently reflected on her time as a Flying Sister with her daughter. She remembers:
A typical working day for an air evacuation sister began at 3 am. Breakfast at 3.30 am. First flight was at first light over New Guinea before the heat of the day. Two hundred and fifty thousand POWs, servicemen and civilians were evacuated.
It is incredible. And she states:
I was very proud to be a member of the RAAF Nursing Service Flying Unit.
Joan, Australia is extremely proud of you and we are grateful for your service and for the service of all of the Flying Sisters.
In the lead-up to Anzac Day this year and the commemorations of the centenary of Anzac in 2015, it is so important that we share stories like Joan's and the Flying Sisters so that we may honour and recognise the service of outstanding Australians. The young men wounded in action identified the Flying Sisters uniform as a symbol of safety. Today, we recognise the Flying Sisters with unrelenting gratitude. Their service saved the lives of thousands of Australians. Though not formally recognised with wings or a flying badge of their own, I take this opportunity today to formally recognise the service and acknowledge the uniqueness of the Flying Sisters and honour them and their legacy. (Time expired)
In my capacity as the member for Perth, it is my sad duty to make some remarks today about the recent passing of three stalwart members of the Western Australian branch of the Australian Labor Party. In recent weeks, Western Australia has lost three fine citizens and the Western Australian branch of the Labor Party has lost three great contributors: Sean Walsh, John Crouch and Jaye Radisich. I take this opportunity to extend my condolences to families and friends on the tragic passing of these three colleagues. They were all of different ages but all of them died way too young. They all made a substantial contribution to the Western Australian branch of the Australian Labor Party. I have known them variously over the years as the Principal Private Secretary of the Attorney-General of the state of Western Australia, as the State Secretary of the Western Australian branch of the Australian Labor Party and subsequently as the member for Perth.
I have known Sean Walsh since 1984. We were both ministerial officers together in successive state Labor governments. He made a substantial contribution to government in Western Australia and a substantial contribution to the Western Australian Labor Party. He finished his career in government, and with the Labor Party, as Chief of Staff to the Premier, Geoff Gallop. There could be no greater commendation or greater recommendation of Sean's contribution, his integrity as a person or his standing, than the regard with which Geoff Gallop held him, and Geoff made a fine eulogy at Sean's recent funeral.
I have known John Crouch since 1976. He was a longstanding, devoted servant of the Australian Labor Party in Western Australia. He had aspirations to ensure that Western Australia, and Australia generally, became a better society. He was interested in renewable energy and climate change long before it was fashionable to do so. He was a longstanding delegate to the state executive of the Western Australian branch of the Australian Labor Party, and also served with me as a member of the party's administrative committee. He completed his contribution as a longstanding electorate officer to Ed Dermer, one of our upper house MPs. My condolences go to his family and to his longstanding friends: Sue Neacy, Graham Connell and John Cowdell.
Finally, Jaye Radisich was a former member of the state parliament, of whom a lot has been said publicly. I will make a couple of remarks about Jaye. She was born in 1976, the year that I met John Crouch. She died tragically at the age of 35. She was the youngest woman MP of the state parliament of Western Australia. She won her seat on two occasions quite miraculously—with swings of 11 per cent and then three per cent. She was a woman of great courage and she has the eternal admiration of all of her state parliamentary colleagues and Western Australian federal parliamentary colleagues. Again, my condolences to the family and friends of the three concerned.
Next week marks the 100th anniversary of the establishment of the forerunner of the Nationals: a Farmers and Settlers Association was formed on 28 March 1912 in Perth. A year later the association carried a resolution to establish a political party, to be called the Country Party. In 1914, the Country Party contested the Western Australian election, winning two seats in the Legislative Council and eight in the Legislative Assembly. That the Country Party, which became the Nationals, has for 100 years played a pivotal role in ensuring that the voice of people living in regional, rural and remote areas of Australia is heard in parliaments of Australia, is remarkable.
This party, which I now have the honour of leading, has served on federal government benches for longer than any other political party in Australia's history. It is a tradition and legacy not lost or forgotten by myself or any of the 17 Nationals that currently take up the cause of regional people every day in this place. Over these long years, the Nationals have produced three Prime Ministers: Sir Earl Page, Sir Arthur Fadden and Sir John McEwen, all towering figures within the Nationals. Like them, our philosophy is country-mindedness. It is just as important today as it has been at any point in our history.
Farmers across Australia began promoting themselves in loose associations from the late 1800s to promote their interests and combat the growing strength of the unions of rural workers. One of the first was the Amalgamated Farmers Union formed at Wagga Wagga in New South Wales in 1890. Many of these groups developed a pledge to work together for greater recognition of farmers' interests by governments, politicians and the wider community. For instance, in Queensland in 1895, 12 country members of parliament met and agreed 'to watch over, encourage and endeavour to develop agricultural interests generally.' Farm organisations elsewhere soon followed the Western Australian example. They sponsored country parties in Victoria, Queensland and South Australia, and in New South Wales in the form of the Progressive Party.
Almost universally, these parties were derided by their opponents, with predictions they would quickly become extinct. In fact, Melbourne's Argus famously predicted the demise of the Country Party in 1922. Well, we are still here, but the Argus, I note, closed its doors in 1957. The voters responded. They recognised that it was important that there be people who would stand up for those who live in regional Australia and we have succeeded because we have delivered over these 100 years.
Today, we mark with pride the formation 100 years ago of the Western Australian Farmers and Settlers Association as the nucleus from which the Country and National parties have developed, and we commit ourselves to continuing to effectively represent the people who live outside the capital cities.
I rise today to acknowledge that today is World Down Syndrome Day. The reason that 21 March is World Down Syndrome Day is that 21/3 represents the three copies of chromosome 21, which is unique to people with Down Syndrome. It is estimated that there are seven million people with Down Syndrome worldwide, and it is the most common and recognised form of learning disability in the world.
This day in 2012 marks the seventh anniversary of World Down Syndrome Day and it is the first year that World Down Syndrome Day will be officially observed by the UN, following the adoption of a resolution by the UN General Assembly in New York in December 2011. The Australian government co-sponsored this very important resolution. On this day, Down Syndrome International encourages supporters and friends all over the world to choose their own themes, activities and events to help raise awareness of what Down Syndrome is, what it means to have Down Syndrome and how people with Down Syndrome play a vital role in our lives and our communities.
I would like to speak about a young woman in my electorate who plays a very vital role within our community. Her name is Shona Robertson, and she is actually in New York at the moment. Shona has Down Syndrome and she is one of the very few advocates from around the world who have been chosen to address the United Nations. We are very proud of Shona. She said that her message will be: 'Everyone deserves their own rights and opportunities. It's about people with Downs living in a real community. It's a free country, people should be able to do anything they like.' Shona is truly an inspiration. She volunteers in my office and she is a wonderful addition to the office. She also works for the Gold Coast City Council. She comes into my office one day a week. She has a really strong work ethic and a strong commitment. She brings a lot of humour to the office and a lot of political advice as well, which we greatly appreciate. We love having Shona in the office. My staff and I find that she is a great addition and a great help to us.
Shona lives independently in her own home. She is engaged to Andrius, which is very exciting; they are getting married soon. Her strong independence is attributed in part to the commitment of her parents, Derek and Penny Robertson. Penny is the chairwoman of the London-based Down Syndrome International. They both provide great support to Shona, which is fantastic. I would like to finish by quoting them. They provided a description about Shona and her life, and they said:
Shona is happy with her achievements to date and considers a house, a dog, a paying job and a fiance as the right of any young woman of her age.
How true that is. Congratulations to Shona on her remarkable achievement in going to New York, being able to speak about all of the great opportunities she has, and her achievements today on World Down Syndrome Day.
I am proud to announce that my electorate of Forrest is home to Western Australia's newest city. The future of the city of Busselton shines very brightly. When Busselton officially celebrated its milestone on 21 January this year, I was very proud to attend that proclamation. The south-west is one of Australia's fastest-growing regions, and Busselton's city status is indicative of this. Located 220 kilometres south of Perth, new residents are attracted to Busselton by the magnetic pull of diverse employment opportunities, a family-friendly lifestyle, and one of the best coastal settings in the nation. As a destination for any sort of change—sea change, life change—that is what Busselton is.
The city approved 522 new residential buildings in the last financial year, worth $170.7 million. A population prediction for Busselton released by the state government last month estimated that its current population of about 32,000 will swell to more than 55,000 in 15 years time. So people are going to keep coming. The city has not and will not rest on its laurels and is actively pursuing the title 'events capital of regional Western Australia'. City leaders and the community should be commended for making the city a cultural hub of sports, music and the arts. Residents and thousands of tourists enjoyed 82 events on the calendar last year, several of which I am very proud to support, including one called Art in the Park.
Among the major events which draw thousands of participants are the WA Iron Man, which now attracts an international field, the Southbound two-day music festival, the CinefestOz film festival and the Busselton Jetty Swim around our iconic jetty. At 1,841 metres, the jetty is said to be the longest wooden structure in the Southern Hemisphere and the third-longest wooden structure in the world. The first section was opened in 1865 and it is a marvel that is still standing. It has been restored and now has an underwater observatory and an interpretive centre. It amazes me to think of what John Garret Bussel and his pioneering family would think of what their settlement has become since they opened up the Vasse region in 1832, only three years after the Swan colony was established. Bussel had seen the potential of the region, which has now come of age. Local industries now include tourism, viticulture, dairying, market gardening, manufacturing and creative industries. It also boasts a growing regional airport with the capacity for jet aircraft.
Busselton is one of the oldest settlements in my state but it is also a youthful town with an average age of only 38 years. I hope that its current and future residents build on the wonderful success of the pioneers and thousands of others who have made it the attractive, vibrant city it has now become with a great future ahead of it.
Thanks to more money going to regional and rural hospitals in this 43rd Parliament than ever before from the Commonwealth, lobbying is now in full swing within the mid-North Coast local health district for funding related to Kempsey District Hospital. It is technically outside the seat of Lyne but is one of a range of hospitals that service many people within the Lyne electorate and the mid-North Coast community. It is very much a partner in the hospital network between Port Macquarie, Wauchope and Kempsey in particular.
This is an opportunity to advocate for funding support through the next round of the Health and Hospitals Fund for Kempsey District Hospital, which is a major contributor to community life within the Macleay and, as I have said previously, an integral part of the concept of one hospital on three sites—the relationship between hospitals at Wauchope, Kempsey and Port Macquarie; all within 40 to 45 minutes of each other. This is the only submission that has been put forward by the local health district to the Health and Hospitals Fund on behalf of these mid-North Coast hospitals. It has been submitted for an expanded redevelopment of Kempsey hospital. The money is going to include building costs, furniture and fittings, consultancy, surveying and engineering.
The Health and Hospitals Fund was established in 2009 by the Australian government as part of its Nation Building Program and in this 43rd Parliament specific rounds for recognition of regional and rural capital works for hospitals have been an important part of this parliament with one more round to go.
This is an application that is relatively unique. Normally communities fight each other town by town in communities on the mid-North Coast and North Coast of New South Wales—in fact, everywhere; everyone seems to hate the next biggest town—but this is an application strongly supported by key stakeholders from Coffs Harbour through to Port Macquarie. Up to 60 key letters of support from stakeholders, who all agree that the redevelopment of Kempsey hospital is the No. 1 capital priority, have been received.
I strongly support this application. It is needed for the broader health network, and I will do what I can to lobby and advocate for this successful application. I understand the round is being assessed now. Whether in the May budget or before, I hope there is success with the Kempsey District Hospital application.
I am very pleased to speak today about the McPherson Community Achiever Awards which I hosted last year and am hosting again this year. It was one of my top priorities upon my election to each year acknowledge those exceptional locals on the southern Gold Coast who have selflessly given their time, energy and so much more to our community.
These community achievers are individuals who contribute to the local area by giving up their own time to charities, churches, veterans' groups, sports clubs, surf clubs and various volunteer organisations. It is a great experience to have the chance to read the stories of our nominees and winners of these awards and understand exactly what they have achieved and done for others.
Last year the McPherson Community Achiever Awards ceremony was held at the southern end of my electorate at the Currumbin RSL. At this ceremony I had the great pleasure of presenting 23 outstanding individuals with an award for their wide-ranging efforts in supporting the community in the areas of neighbourhood watch, surf lifesaving, Lions, veterans support, schools, supporting at-risk youth, sports, helping the homeless; seniors and aged care, as well as medicine. Each recipient of these awards received a certificate and a special medallion recognising their contributions to our community. I would like to acknowledge again each of those recipients: Merve Rose, Reverend Colin Batt, Joe Gates, Mark Goodwin, Les Brodie, Natalie Tree, David Smith, Aruni Abeywardena, Bobbie Matheson, Ian Grace, Katrina Casaclang, Marea Ryan, Ron Martinenko, Ena Slyp, Toula Singer, Cynthia Munro, Neville and Dulcie Free, Norma Wright, Violet Langan, Antoinette Badenoch and Phil and Doreen Barnes.
This year, on 18 April, the awards ceremony will be held at the northern end of the electorate, at the Burleigh Waters Community Centre. Already there have been many nominations—they have been coming in thick and fast—and I have no doubt that the 2012 McPherson Community Achiever Awards will have more nominations and more recipients than we had last year.
The nominees this year are again being nominated for a diverse range of community contributions and, to name several just briefly, these include volunteer work for Crime Stoppers Queensland, assistance with local Anzac Day ceremonies, special needs education and, once again, surf lifesaving. Recognising the achievements of exceptional locals should not go unnoticed and I believe that, through the McPherson Community Achiever Awards, many of these individuals will receive the accolades that they well deserve.
I would like to talk about an opening that I attended in my electorate last Friday with our Premier, Lara Giddings. It was the opening of the new child and family centre in Clarence Plains, in Clarendon Vale. This wonderful project has been jointly funded by the Tasmanian and Australian governments. It is a $5.5 million project, with $1.5 million from the federal government and with the remaining amount from the state government, and it will provide parental support along with health and education services for young children. It is actually located in a hub next to the neighbourhood house and the primary school, so there is all this hub of activity for families and community members in the centre of what was previously broadacre public housing estates. It is a fantastic new facility providing some essential support services to local families, particularly early support systems. For instance, a mum who has a new baby that cannot sleep at night can go into the centre and can get some support during the evening and the night as they try to help their baby to sleep and get into a routine or pattern of sleeping. So it is important that these services are provided in local communities, such as this one, where transport to other services is normally a big issue, particularly and obviously at that time of night. It is a really important part of community infrastructure. Part of the funds also went to the refurbishment and relocation of the neighbourhood house, which I have had the real privilege of having an association with over many years of being a federal member.
I am constantly impressed by the resilience and local community spirit of people in local communities and the work that they do, mostly on a voluntary basis, in trying to get some support for their communities and in trying to instil some pride in their local communities, which have traditionally really been up against it when it has come to other community attitudes outside of their local area. It is so wonderful to see these brand new facilities and to have a tour around them to see the cots and the children's play areas. It has just been fantastic. I am really proud to be part of a government that has committed this money to this wonderful project.
As part of our commitment to that suburb and that area, we have also committed $3.5 million to an urban renewal program for the area which is about affordable housing lots for private people to buy into the local area at a reduced cost. All of the works are being done with federal government money and then the land is being sold to private people to build on. So it is great to see that mix of all that public and private and social housing that is now in that community and the wonderful local facilities. It is all making a real difference to the way the community feels about itself and, more importantly, the way that people outside of the community view that local community. It is really terrific to see. I want to really congratulate the local council, the state government and those volunteers that have been working so long and so hard on the consultation process to make sure that they got the right facilities in their local community. (Time expired)
I rise to speak about a great Australian charity event, sponsored by a great Bennelong business. The annual Pollie Pedal is a cycling event started in 1998 by several federal and state politicians, led by the Leader of the Opposition, Tony Abbott. The purpose of Pollie Pedal is to raise money for a variety of charities whilst at the same time providing the opportunity for many small regional communities to meet with members of parliament. The Pollie Pedal has raised nearly $2 million for organisations such as the Poche Centre for Indigenous Health, the Royal Flying Doctor Service, Ronald McDonald House, Youth Insearch and the Paralympic Games, as well as funding towards medical research into childhood leukaemia, diabetes, breast cancer and prostate cancer.
Pollie Pedal 2012 will commence this Sunday in Geelong and conclude in Canberra one week later. Funds will be raised for Carers Australia, the national peak body representing Australia's 2.6 million carers. In the Bennelong electorate there are 2,300 recipients of carers allowance, yet thousands more provide care to the people they love without recognition or financial support.
The primary sponsor of Pollie Pedal is Amgen, the multinational biotechnology company that has its Australian headquarters in North Ryde. I congratulate Amgen's Managing Director, Ian Thompson, and Executive Medical Director, Dr Mark Tennyson, for their unflinching generosity and support for these great causes, and also the many community programs they run in and around Bennelong. I will be delighted to visit Amgen on Friday to launch the Pollie Pedal coinciding with the National Ride to School Day. I will also be visiting Meadowbank Primary School to celebrate these two events and promote messages of health, fitness and preventative medicine.
Amgen employ approximately 17,000 people worldwide, including 160 people in Australia, marketing eight products and generating domestic revenue of around $210 million. Amgen Australia invests between $30 million and $35 million in local research and development each year, which is amongst the highest contributing countries to clinical trial activity across Amgen's divisions worldwide. Just last year Amgen Australia conducted 74 different clinical studies at over 390 sites involving about 1,200 patients trialling their innovative medicines.
With a nod towards yesterday's condolence motion for Jim Stynes, Amgen has currently announced a world's first clinical trial to treat a form of brain cancer known as AMG 595. Approximately 1,400 Australians are diagnosed with malignant primary brain tumours each year, a statistic that brings us back to the dire need for carers in our society and the generous commitment from both Amgen and the Pollie Pedal to raise money and awareness for this great issue.
I rise today to congratulate the students and teachers of Southern Cross Catholic College at Scarborough, who on Friday joined with me in standing up and saying 'No way!' to bullying in our schools. On Friday 740 students and 55 teachers of Southern Cross Catholic College, along with Bracken Ridge McDonald's owner Ron Chiapello and I, dressed in orange T-shirts to represent ending bullying in our schools and took to the sporting fields of Southern Cross Catholic College to support the National Day of Action against Bullying and Violence.
This national day, implemented by the Labor government, is about raising awareness of the impact that bullying has on kids and taking a stand against it. Friday was an important opportunity for schools, parents and local communities to come together and say, 'We will not tolerate bullying in our schools, online or in our community.' Too many of us know the serious impact bullying has on the safety and happiness of our kids and the lasting impact it can have on them well into adulthood. We know that one in six students is bullied weekly and one in four students is bullied at least once over a period of a few weeks. Furthermore, research by Edith Cowan University, which looked at students between year 4 and year 9, revealed that around 10 per cent of school students are bullied most days.
These statistics are horrifying. As adults we would not tolerate this sort of behaviour in the workplace, and I believe strongly as a parent and in my role as the federal member for Petrie that our kids should not have to go to school every day, every week, afraid of what is waiting for them when they get to the bus stop or when those lunch bells ring. I would like to read a quote from a student leader of Southern Cross Catholic College, Captain Brittney Govender, who, when asked about bullying at her school, said this:
It would be naive to say bullying does not happen at our school, but we wanted everyone to be reminded that everyone deserves to be treated with dignity and respect, no matter what our differences are.
Brittney is right. Our kids should not have to tolerate bullying in the playground, online or anywhere else because everyone deserves to be treated with dignity and respect. As a government, Labor has worked hard to address these issues that go to the core of who we are and who we want to be as a nation. I believe Australia is a nation of tolerance, acceptance and diversity, and these core values begin in the home and in our schools, where the experiences of our kids shape the adults and leaders they become.
Labor is working with the states and territories to implement the National State Schools Framework, which will support schools to take a proactive approach to developing safety and wellbeing policies such as addressing bullying and cybersafety. We have already launched the Cybersafety Help Button—a free desktop application for kids which provides information about counselling services, reporting abuse and dealing with online risks such as cyber bullying—on top of committing $125.8 million over four years to develop the cybersafety plan.
In closing, I would like to especially thank Southern Cross Catholic College principal Greg Myers; Majella Thompson, from Southern Cross Catholic College, for her outstanding support and assistance in bringing the event together on the day; Bracken Ridge McDonald's owner Rod Chiapello, who always goes above and beyond in the fantastic work he does; and school captains Ravneel Sharma and Brittney Govender. I would like to say a special thank you to Daniel Szabo, a year 12 student who approached me a week and a half ago wanting to take action on bullying. (Time expired)
Order! In accordance with standing order 193, the time for members' constituency statements has concluded.
As I was saying, there is flexibility as to when and how advisers obtain the renewal notice in relation to their ongoing financial advice. The bill also provides additional grace periods if a client inadvertently opts out by not responding to the renewal notice. The disclosure notice is an important supplement to the renewal requirement and supports fee transparency. It includes fee and service information about the previous and forthcoming 12 months and assists clients to understand whether they are receiving a service from their adviser that is commensurate with the ongoing fee that they are paying. The measure is about the focus being on the client and what is in the client's best interest. Advisers need to ensure that they are in regular contact with their clients if they are charging them regular fees—not unreasonable. Not only is this a fair thing for the client but it is also professional best practice. There has been a lot said about the cost that this measure will impose on financial advisers and, with this, a variety of estimates of the cost. For advisers, on a pure fee-for-service basis—that is, per hour or piece of advice—the renewal measure will impose no cost whatsoever.
Secondly, the bill enhances the capacity of ASIC to supervise the financial services industry and protect investors. Providers of financial services must be licensed by ASIC as part of facilitating investor confidence that those persons are competent and of good fame and character. Licensees also have representatives who act on their behalf. ASIC has powers to protect the public, including applying a variety of administrative remedies against a licensee or its representatives that breach the law.
During the PJC inquiry, ASIC raised concerns about its ability to protect investors by restricting or removing unscrupulous operators from the industry. A number of factors were impacting on the exercise of ASIC's powers, including decisions of the Administrative Appeals Tribunal relating to when someone will breach the law; the difficulty with removing individuals, given the focus on licensees in the Corporations Act; and the lack of scope for ASIC to remove licensees in certain circumstances such as where they are not of good fame and character.
The changes include the PJC's recommendations and will strengthen the gatekeeping function of the licensing regime and extend ASIC's power to remove unsatisfactory persons from the industry. The changes to the licensing and banning thresholds include that ASIC can reduce or cancel a licence or ban a person where that person is likely to contravene—rather than 'will breach'—the law. ASIC may also remove representatives if they are not competent and of good fame and character or if they are involved in the licensee's breach of the law. The changes generally align the thresholds for licensing and banning with similar provisions under the National Consumer Credit Protection Act, which ASIC also administers.
As with the exercise of any administrative powers, an ASIC decision will be based on the individual circumstances of each case but would generally take account of factors such as the nature and seriousness of the misconduct, the internal controls on the licensee or the person and the previous regulatory record of the person.
Existing review rights in relation to ASIC decisions about licensing and banning continue to apply, including to the AAT. These changes should result in ASIC exercising its administrative powers more efficiently and effectively to protect investors.
In summary, the measures in this bill support the key public policy objectives of FoFA to improve consumer trust and confidence in the financial advice they receive, and to improve professional standards.
As I said at the outset, it is not unreasonable, in my view, that if you are going to charge a fee for a service then you get permission for charging that fee. If you have conflicts of interest then you should disclose those conflicts to those people to whom you are providing a service.
Finally, if a person's life savings are at stake then the government and the advisers should tread with great care. On these principles the proposed bill succeeds and I commend the legislation to the House.
I rise to speak on the Corporations Amendment (Future of Financial Advice) Bill and the Corporations Amendment (Further Future of Financial Advice Measures) Bill of 2011. These are important bills because they go to an issue that affects the community at large: the ability of people to provide for their retirement.
There is no doubt that one of the principal channels that enable people to provide for their retirement is well-informed advice over a long time about what they should be doing with their money to best equip them to live as comfortably as possible for as long as possible. In that respect, financial advice and the responsibility that financial planners have to their clients is tantamount. Good government policy should create an environment that maximises the opportunity for people to obtain good advice and that ensures there is in place a legislative framework with appropriate safeguards to ensure that consumers—the clients of financial planners—are not adversely affected by, for example, conflicted remuneration.
In this respect I think it is important to deal with the fact that historically in large this has been an issue with in many respects bipartisan support, with the bona fides of all sides of government and opposition to deal with the issue. In 2011 the former coalition government made a whole host of reforms with respect to financial planners and financial advice.
I had the good fortune, as a very new member, of sitting on the Joint Standing Committee on Corporations and Financial Services in the latter stages of that round of reforms, and hearing from an array of different stakeholders in the industry who provided their input about the reforms that the coalition was undertaking then.
There has, of course, been much water under the bridge since then. One of the biggest issues that have afflicted the world since then is what is referred to as the global financial crisis, the GFC. There is no doubt that the GFC shook to their core very many people in Australia—literally millions—and around the world hundreds of millions of people, if not billions, who thought they were approaching an age when they would be well equipped and well established to live a life in retirement drawing down on the funds that they had set aside for exactly that purpose.
The GFC has seen significant erosion in asset values and in returns from financial investments. This has raised the level of anxiety, not only in the Australian community but globally, among people who thought that they were well equipped for their retirement but now find themselves hundreds of thousands of dollars short. This is coupled at the same time with a very real erosion of government ability to provide pensions to what is a growing, ageing population.
These two events have culminated, effectively reaching a crisis point in many countries, where there is an inability of the state on the one hand to provide for their citizens in a way that many citizens thought they would be and on the other hand an erosion of the very real balance that people had provided for their retirement. At that point it is little wonder that there has been a very high level of scrutiny on the financial planners who are working in the community and who are ideally partnering with their clients as they undertake life's journey by providing for their retirement funds.
Mindful that that is the context in which the community finds itself looking at the issue of the advice provided by financial planners and mindful that there is a requirement for financial planners to provide good advice—not conflicted advice, but bona fide advice—that does ensure that the clients' needs are met by the investment protocol that they take, there has been a further round of analyses, examinations and now recommendations to ensure that financial planners do the best things by their client.
In 2009 the member for Oxley, Bernie Ripoll, undertook as chair of the Joint Committee on Corporations and Financial Services an inquiry into what was happening in financial planning. It was commonly referred to as the Ripoll inquiry and it looked very closely at all the issues that I have just touched upon. It examined the best legislative way to ensure that clients had the best opportunity to match their investment profile with their particular needs. Obviously the needs of someone who is 55 years of age, has a paid down mortgage and has adult children who have left home would be radically different to a person who is 25 years of age and maybe recently married—someone who is at the very beginning of the journey of paying down their mortgage and someone who might be expecting to have children in the foreseeable future. The needs of both of those clients are very different stages of their lives, but ultimately they culminate at the point where they are hoping to be in a position at their retirement where they can live a comfortable and well-funded existence, one that ideally does not need to draw upon taxpayer support and one that ensures that those people can have an adequate retirement they are comfortable with.
Mindful of those differences, it is crucial that financial planners know their clients and are in a position to provide advice that accord with their respective needs. The Ripoll inquiry looked at this in great detail. Importantly—and this is perhaps the most significant point—the inquiry found there was not a legislative lacuna; there was not a problem with the regulations and the legislative framework that applied to financial planners, where there were examples of failure of financial advice for clients. Rather the Ripoll inquiry found that the problem was that there were financial planners who operated outside of the legislative parameters and did not do the right thing by their client. There was not a problem with the legislation or the regulation, rather there was a problem with those operating outside it—in other words, the issue of enforcement. That is not to say that the system was perfect, but just to say that there was no glaring or obvious example of widespread failure in regulatory oversight.
That notwithstanding, the bills before us today attempt to address some perceived shortcoming in the financial legislation and regulatory oversight such that a raft of new regulatory burdens will be imposed on the financial planning industry at the behest of this particular government, at the behest of this particular Labor minister and on the basis of the arguments put forward—that is, it is in clients' interests. It is the coalition's view, and I certainly subscribe to this, that this is simply not the case.
The Ripoll inquiry, I would remind the chamber, was headed by a Labor member. The Labor member in that particular example did not find a massive shortcoming in regulatory oversight. One of the principal and most contentious initiatives that the Minister for Financial Services and Superannuation is undertaking is the decision, through legislation, to enshrine an opt-in provision. This is an example of massive regulatory overreach. This is an example of bad practice when it comes to red tape and additional compliance burden on the industry. Opt-in will require clients, on a regular basis, to opt back in to obtain financial advice. In other words, financial planners will be required to constantly go back to their clients to encourage or ask them to sign back on with them for a further period.
Where did this idea come from? We know that opt-in does not apply anywhere else in the world. We know that opt-in was not a recommendation of the Ripoll inquiry. Perhaps a bulk of submissions to the Ripoll inquiry said that opt-in would be one of the panaceas to ensure good financial advice. The reality is that that is simply not the case. Only one submission dealt with opt-in—and that was from the Industry Super Network. The Industry Super Network was the only group that called for opt-in. And, lo and behold, the minister for trade unions, the minister with a strong background—
The member will refer to ministers appropriately. You will use his—
Madam Deputy Speaker, I would argue that it was appropriate. For protocol reasons—
No, you cannot argue that that was appropriate. I am still willing to use my 15-minute chuck from the chamber. Find his right title or we may sit you down.
For protocol reasons I will refer to the minister as the minister for financial services. He is the person who took the decision that opt-in was in the best interests of financial planners and their clients. It is, to say the least, farcical. This particular requirement will significantly add to the red-tape burden that financial planners face. This significant initiative will add a great deal of extra complexity and extra burden on financial planners. It is not just the financial planners; it is also their clients, who will now be constantly harassed to re-sign with financial planners.
But it is more than that. There is the implementation date that the government is attempting to roll out. This again underscores the shambolic and, I would argue, incompetent manner in which the government has approached these particular reforms. The minister seeks to have these reforms commence on 1 July this year. That is less than four months away. The notion that we could have such significant reform to a sector, commencing in four months, is ludicrous.
For some time the coalition has been calling for the reforms not to commence until 1 July 2013, which incidentally aligns with the introduction of MySuper, knowing full well that rolling those two out concurrently provides maximum opportunity for a more thorough approach to be adopted by industry and more time for systems to be put in place. But, again, the government has not listened. The government insists that 1 July this year will be the start date. I note that, because of the widespread angst in the financial planning community about the consequences of the government rushing headfirst into this and trying to do it within four months, the minister has now indicated that there will be, to use his words, a 'soft launch' of the reforms on 1 July—whatever that means! I believe that the minister has foreshadowed that there will in fact be, as part of this soft launch, further legislation that comes into the parliament in the winter sittings to deal with this issue.
An area on which we can agree—I will touch upon this and conclude on a good note—is the implementation of best interest duty. It is the view of the coalition—and we support the Labor Party on this—that the implementation of a fiduciary duty with respect to the relationship between financial planners and their clients is a positive step forward. We note that the financial planning community itself agrees with this point. It is good that we have consensus. It underscores the bona fides of the coalition in arguing the case that, where good policy is rolled out, we will support it. Where good policy can be implemented, we will not stand in the way; we will do what we can to assist. For that reason, we think decisions to implement the best interest duty is a step in the right direction. That said, of course the devil is always in the detail. In that respect, the first exposure draft that outlined the provisions that would apply to the best interest duty were convoluted and it was not clear to industry or to consumer advocates how it would work.
There will be impacts as well with respect to the opportunity for scalable advice—that is, a need for clients to not have to adopt a whole-of-life plan if a client does not want that. If a client goes to a financial planner and seeks only to have financial advice on one discrete area, the coalition's view is that it is ludicrous to argue that that should not be available. We think it is without basis to say no, that it should only be on a whole-of-life basis, on a know-your-client basis, to such an extent that effectively you achieve overservicing as a consequence of the government's reforms.
My final point is with respect to regulatory impact assessment. We know the government's Office of Best Practice Regulation said that they did not have adequate information to determine whether the FoFA changes and their impact on business and consumers were appropriate. We think that is a great shame. We are committed to less red tape. We are committed to less complexity. The reality is that the amendments the coalition have put on the table are good amendments that should be supported by the government, recognising not only that these are going to be appropriate safeguards for consumers but also that the sector should not be unduly and inappropriately burdened with additional compliance costs.
Following the contribution from the member for Moncrieff, I also rise to stand up for my constituents in Brisbane and speak on the Corporations Amendment (Future of Financial Advice) Bill 2011 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011. These bills are the latest exhibits in the 'how to totally destroy the process of reform' presentation being put on by the Gillard government. I have many financial services practices in my electorate that employ many thousands of people. Many of them are small and medium financial businesses. I have received an enormous amount of correspondence about these bills. Overwhelmingly, the feedback from the industry has been hugely critical of these bills. An email I got from Mr Brian Mallon, a financial planner in Ascot, says:
This bill, as currently drafted, will have a catastrophic impact on my business and that of many, small, independently owned, financial planning firms like mine, that cannot afford the additional and unnecessary administrative burden this legislation will demand and will place the cost of obtaining professional and objective advice from an independently owned adviser, out of reach of the average Australian family.
Another email from a planner in the CBD states:
After advising for 30 years can I say, the proposed reforms will remove financial planning advice away from ordinary Australians and make it unaffordable.
I can advise the House that to date I have not received one positive piece of correspondence supporting these bills—not a single, solitary positive letter supporting these bills.
Ms Hall interjecting—
The member opposite can argue with me all she likes, but the coalition believe in a strong and vibrant financial services industry—
The member cannot argue all she wants; she will be silent.
Ms Hall interjecting—
This is hurting them. They know that these bills are flawed. They know that these bills—
The member for Brisbane should stick to the script.
I am happy to stick to the script. These bills are a shambolic set of bills. The coalition believe in a strong and vibrant financial services industry and we made improvements to ensure this when were in government. However, we recognise that in any industry and in any regulatory structure there is always room for improvement. But the way the government have gone about trying to reform the financial services and financial planning industries leaves a lot to be desired. If implemented in their current form, these changes will hurt industry, jobs and consumers in my electorate of Brisbane and across the nation. In particular, the small and medium financial services and financial planning businesses will suffer the most. As a consequence, we can only support these bills if they are amended appropriately by the government accepting the coalition amendments.
Australia is renowned for a number of things. One of the things it is really renowned for is having one of the best financial services industries in the world. A lot of credit must go to the former Howard government for this. According to analysis—not by me but by the Parliamentary Library—the financial and insurance services industry accounts for 9.7 per cent of GDP and employs about 418,000 people nationwide. In Queensland alone, 66,600 people are employed in this very vital industry, and I believe a large majority of them would live or work in my electorate of Brisbane.
The genesis of these bills stems from the Storm Financial collapse and the desire to find out what went wrong and find ways to prevent the terrible catastrophe. The parliament then asked the Parliamentary Joint Committee on Corporations and Financial Services to conduct an enquiry, which was chaired by the member for Oxley, Bernie Ripoll. This became known as the Ripoll inquiry, which reported back to the parliament in November 2009. This report made some very, very sensible recommendations and provided a plan for reform which the government could have implemented—again, with bipartisan support. It is interesting to note that one of the findings of the report was:
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations, rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.
However, as per usual, the government allowed the FoFA reform package to get hijacked by vested interests and instead decided to introduce new regulations as opposed to enforcing existing ones, as the Ripoll inquiry stated.
These bills were introduced into the House and referred to the Joint Committee for Corporations and Financial Services which received submissions, held hearings and handed down its report. The coalition members on the committee handed down a dissenting report. I must commend all the coalition members of that committee, and in particular the shadow minister, Senator Cormann, for the superb job they did on that committee and the comprehensive report that they produced.
One of the key outcomes of the inquiry was the concern from many, many stakeholders regarding the excessive regulation that these bills would impose on the industry. They will make Australia the world champions in red tape for the financial sector. Through the opt-in, best practice and fee disclosure requirements in these bills the regulatory costs to industry have been conservatively estimated at hundreds of millions of dollars. What Labor members have never understood is that more regulation on business means that those costs are ultimately passed on and borne by the end users, the consumers.
In fact, the Office of Best Practise Regulation noted to the committee that an adequate regulatory impact statement, or RIS, was only provided for one of the proposed FoFA changes. At one of the committee hearings Mr Jason McNamara from the OBPR stated:
Mr McNamara: Treasury provided a number of RISs in that area. I think that there were six separate RISs in that area. But we found those RISs not yet adequate. They had not met the best practice requirements.
Senator CORMANN: … My question is: why?
Mr McNamara: In regard to those RISs, essentially the impact analysis was not at a standard that we would pass.
So here have these expert witnesses providing this incredible evidence to this committee. But what happens? That is unacceptable, and the government should ensure that regulatory changes of this magnitude go through the proper process and comply with the requirements of its own Office of Best Practice Regulation. But it is not doing that.
Now I turn to the opt-in provisions of these bills. The opt-in requires all clients and financial planners and advisers to re-sign their contracts and engagement paperwork every two years. Given the amount of paperwork and documentation required in this process it is a huge regulatory burden on the industry. This measure alone is estimated to cost between 100 and $120 per client per annum. So a very small financial planning firm in my electorate, which might have, say, 500 clients, will bear an extra $50,000, some of which—or most of which—will be borne by the consumers. There are also penalties that apply if a payment is received after 60 days if the re-signing has not occurred. The much better option would have been the opt-out model, where it would mean the clients take the proactive step to terminate the relationship with the advisor and would eliminate the possibility of a client not responding to requests to re-sign because they are too busy and therefore accidentally terminating the relationship.
It is very interesting to note that there is only one submission to the Ripoll inquiry that advocated for opt-in, and that was the Industry Super Network, ISN. It is not a recommendation from the Ripoll inquiry and was rejected by almost every other stakeholder. It is quite ridiculous that this massive increase in red tape should then be included in the FoFA reforms. But we know that the ISN is a resting ground for former union officials, so I guess this demonstrates once again how the relationship between the Labor government and the union movement can adversely affect government policy. Compounding this is the fact that there is not one other country around the world that has this sort of requirement. There were repeated requests put to Treasury during the inquiry into these bills and they could not point to any other example were opt-in has been successfully introduced. All it does is create unnecessary regulation that will not add one iota to the quality of the advice received by consumers.
These bills also put in place a requirement for advisors to produce an annual fee disclosure for clients every year. We support this in principle; however, we do not support the making of annual fee disclosure retrospective. A practical example of this is a constituent of mine who runs a very small financial planning business out of his home in Clayfield. He has approximately 350 clients. He has advised me that with the opt-in requirements and the annual fee disclosure requirements he will have to employ another person to deal with the extra administration that this bill will impose on his business. So that is an extra $60,000 a year that this small business in my electorate is going to have to cop. And of course he is going to have to pass that extra burden onto his clients.
The second concerning area of these pieces of legislation is the definition surrounding the 'best interest duty requirement'. The coalition supports the introduction of a statutory best interest duty for financial advisers; however, it is really important to get the drafting and the definitions right. It is very clear that the government has failed to come up with an appropriate definition for what is 'best interest duty'. One wonders how it will in fact police this. The coalition also have serious concerns around the catch-all provision contained in section 961B(2)(g). The Law Council of Australia has also raised serious concern about this clause. We believe that the best interest duty should be amended to permit clients and their advisers to agree to limit the scope and subject matter of the advice.
These bills also ban what is known as the 'conflicted remuneration'. The coalition supports the banning of conflicted remuneration structures such as product commissions, and we commend the industry for taking proactive steps to abolish such structures. However, I do wonder what the point of it is when the best interest duty and the annual fee disclosures already ensure the appropriate and ethical conduct of financial advisers. I am not sure how conflicted remuneration will impact that best interest requirement and vice versa.
These bills also put a cap on the amount of non-monetary benefit that can be received by an adviser from a product provider. An example of this might be the product provider taking an adviser to the rugby, to dinner or to the races et cetera. The current drafting and the explanatory memorandum indicate that this limit is an aggregated amount of $300 per company, but we believe it should be $300 per adviser. The bill and the explanations should reflect this.
I also note the concerns by the tourism industry, the timeshare industry, which will be caught under the conflicted remuneration provisions of these bills. I hope that the government will adopt the recommendation contained in the main report of the committee to exempt or carve out this industry from the requirement.
In conclusion, these bills are an exercise in reregulation. The way to keep an industry strong is not to regulate the life out of it. Our financial sector did not become one of the best in the world by bearing the burdens of excessive red tape. The industry and many constituents in Brisbane will be hurt by this bungled reform. The government need to go away and start again or, at the very least, amend these bills, addressing the points I have just mentioned.
I am pleased to speak on the Corporations Amendment (Future of Financial Advice) Bill 2011 as well as on part 2 of this compendium, the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011. These bills are intended to be the culmination of the reform process, kicked off following the Ripoll inquiry into financial products and services. They deal with such matters as introducing a requirement for advisers to act in the best interests of clients; banning conflicted remuneration such as commissions, volume payments and soft-dollar benefits; requiring advisers to obtain client agreement to ongoing advice fees; mandating greater disclosure of fees; and giving ASIC greater powers.
In the time that is available to me, I want to make three points. Firstly, the key recommendations of the Ripoll report are uncontentious. To the extent that the bill adopts the uncontentious recommendations, we welcome them. Secondly, this bill, somewhat surprisingly, includes many changes which were not canvassed in the Ripoll report and they appear to be there largely because they were asked for by the Industry Super Network. Given the very cosy relationship between the parliamentary Labor Party and the industry super fund sector, the minister appears to have been very eager to respond to the policy agenda of the Industry Super Network. Thirdly, the implementation arrangements for this substantial package of reforms are hopelessly impractical and, once again, reveal that we have a government which has, amongst its key figures, people with virtually no experience of the practical complexities of running a business.
Let me turn firstly to the point that the key recommendations of the Ripoll inquiry are uncontentious. We are all agreed that the financial services and advice industry provides a very important service, helping Australians with their financial health and wellbeing. We also know that there have been some very unhappy episodes in recent years with the collapses of companies like Storm Financial, Trio and Westpoint. Emerging from these collapses, the Parliamentary Joint Committee on Corporations and Financial Services was asked to conduct a comprehensive inquiry into Australian financial products and services. The inquiry reported in November 2009. In the view of the coalition, the recommendations of the inquiry, in the main, were well considered and are sensible. The key recommendation, the centrepiece recommendation, is to introduce as a matter of law a fiduciary duty for financial advisers, requiring them to place the interests of their clients ahead of their own. It is very interesting to note that the inquiry did not recommend the introduction of a large and detailed set of complex new regulatory measures. Quite the contrary, the inquiry in its final report specifically noted that it was not an absence of regulation that was the problem, rather an absence of enforcement. Let me quote:
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations, rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.
There was a very clear direction from the Ripoll inquiry that the solution to the problem was not the introduction of a complex new superstructure of detailed, prescriptive microregulation.
This brings me to the second point I wish to make to the chamber. There are very detailed regulatory changes contained in the bill which were not canvassed by the Ripoll inquiry at all. Let me mention three of them: retrospective fee disclosure, banning of commissions for insurance inside superannuation and what are colloquially known as the opt-in provisions. The retrospective fee disclosure provisions impose a requirement to introduce additional annual fee disclosure. The important point to note is that clients already receive regular statements provided by financial services product providers. There is now to be an additional requirement to produce an annual statement. It was initially understood that this would apply to new clients, those who became clients of the financial services adviser or provider post the implementation of the legislation. But at a late stage it emerged that the intention was that this requirement would apply to all clients. This greatly increases the cost and complexity of implementation.
If a product is 10, 15 or more years old, the consequence of this measure is that there will be a need to open up the legacy IT system which supports that product. As anybody who has had any exposure to IT systems in large corporates would know, that is always a risky, expensive and deeply fraught process. This is a regulatory measure which imposes substantial costs for very little public benefit. It is entirely typical of the kind of thing this government does again and again, because this government, the Rudd-Gillard government, is composed of people with zero practical private-sector experience. Naturally the last thing it would ever think about is the complexities of implementing updates to a sophisticated information technology system.
I turn to the question of the banning of commissions for insurance inside superannuation. Many people choose to obtain life and income insurance, and total and permanent disablement insurance, through their superannuation fund. It is a cost-effective way to obtain this important insurance because they are able to pay with pre-tax dollars. Typically they do this based upon advice from a financial adviser. The Parliamentary Joint Committee on Corporations and Financial Services, on which I serve, heard from the Corporate Super Specialist Alliance, which comprises financial advisers who specialise in this area. They had this to say:
Our major concern is that CSSA members will not be able to be remunerated for the work they perform once FoFA is implemented, as commissions are to be banned on both Superannuation investment and Group Insurance within Superannuation. There is no proposed model for fees to be charged for services provided on a group basis, and we believe that this needs to be addressed.
This measure will effectively discouraged the operation of an existing and proven distribution channel under which many people today are educated about the most cost-effective means to obtain insurance—that is, via their superannuation fund. Given that Australians are seriously underinsured, what is the possible policy logic for a measure which is likely to reduce rather than increase the number of people taking up insurance via superannuation?
The third area that I want to focus on is what is colloquially known as 'opt-in'—that is, the requirement contained in this legislation for every financial adviser to obtain written confirmation from a client every second year that he or she still wishes to retain that adviser. In substance, this is a restriction on all Australians, who are now to be barred by law from contracting with a financial adviser on terms that the contract stays in place until such time as the client determines otherwise. Instead, they will be prohibited by law from contracting for more than two years. This is an extraordinarily intrusive burden being placed upon both financial advisers and those wishing to retain financial advisers. It has been done at the request of only one organisation, the Industry Super Network, which is the lobby group for industry superannuation funds, the biggest of which is the $43 billion Australian Super. ISN provided to the original Ripoll inquiry the only submission arguing in favour of opt-in.
It is very interesting to reflect on the cosy ties between the parliamentary Labor Party, Australian Super and the Industry Super Network. The Minister for Financial Services and Superannuation, who has carriage of this legislation, is a former director of a predecessor organisation of Australian Super. So are two other current members of the Labor Party, Minister Combet and Senator Cameron, as well as the failed Labor candidate for Melbourne in the 2010 federal election, Cath Bowtell. So it is perhaps not surprising that this legislation is so responsive to the specific agenda of the big industry funds. But in so doing this legislation will bring substantial harm to financial advisers and their clients. Let me give two examples, provided to me by a financial planner in my own electorate. He told me of a client, in his mid-60s, who had just retired. When the adviser called his client for the annual review, the client said that his focus was on competing in the Bosphorus cross-continental swim between Asia and Europe. All his efforts would be going into training for that swim and that that would be his personal focus for a long period. He did not want to be distracted by his finances. He asked the adviser to manage his affairs, as he had been doing for some years. Only after the swim had been completed did the client want to come in for a more formal review. Perhaps unsurprisingly, this period of training, given the nature of the swim, extended to more than a year. As a consequence the adviser was essentially left with carriage of the client's affairs throughout that period. Under the proposed FoFA opt-in rules, contained in this draft legislation, the financial adviser would have been barred by law from doing this, even though it was his client's specific request, because the consequence would have been that he would have gone for more than two years without seeing the client.
Let me give a second example, provided to me by the same financial adviser. He has a client who is in her early 50s, who has recently been divorced, moved cities and changed her job. To compound her troubles she was then diagnosed with breast cancer. She called her financial adviser and gave him very clear instructions. She did not want to worry or even think about money for the foreseeable future as her only focus, which is perfectly understandable, was on dealing with her cancer and getting through it. In the end the cancer turned out to be a severe one. The surgery, chemotherapy, radiotherapy and then other complications took some two years to work through. If the opt-in rules had been in place the financial adviser—my constituent—would not have been able to respond to his client's specific request.
This is a disgraceful piece of policy. It is a transparent attempt by the big industry funds, on a competitive basis, to nobble independent financial advisers, and it is disgraceful that this government has agreed to it.
In the brief time that is available to me I wish to point out that yet again, as with just about everything this minister brings forward, the implementation arrangements are a complete mess. They are hopelessly impractical. The consistent theme from every stakeholder in the financial services sector to whom I have spoken over the last six months—and I have spoken to a very large number of them, because they come and see people who are members of the Parliamentary Joint Committee on Corporations and Financial Services—is that the implementation time frame proposed by Minister Shorten is wholly unrealistic and completely fails to understand the complexity of the task of refreshing and updating the very complex IT systems that are required to support products which may have several hundred thousand or even millions of customers. This is compounded by the fact that the FoFA changes were originally intended to take effect from 1 July 2012, and the MySuper changes, which affect the same group of stakeholders and involve another major round of IT changes, were due to take effect from 1 July 2013.
It is true that just last week the minister at last saw sense and announced that the implementation of the FoFA measures will be voluntary until 1 July 2013. But it is quite extraordinary that it took him until 15 March this year, slightly more than three months before the implementation date, to make this announcement. In the meantime, financial institutions have been facing huge pressures as they have tried to devise IT change programs without even knowing what their precise legal obligations are going to be. Even with this decision, the time frame that has been allowed is highly unrealistic.
In conclusion, the original recommendations in the Ripoll inquiry are widely accepted, but this bill expands greatly beyond those original recommendations and it is hard to avoid the suspicion that a key objective in this bill is to advance the agenda of one section of the superannuation industry. The interests of those seeking financial advice have come a distant second. (Time expired)
I associate myself wholeheartedly with the comments of the member for Bradfield, who obviously is in touch with his electorate on this matter. I welcome the opportunity to speak on the Corporations Amendment (Future of Financial Advice) Bill 2011. This bill has been widely anticipated by the industry but is considered with increasing concern. What should have been a considered approach to preventing potential financial disaster for this government has turned into nothing more than an attempt to destroy an entire industry while rewarding union mates for their support of the Labor Party. If this is the future of financial advice, then the future is pretty grim.
The original intent behind this bill was commendable. It was necessary. The Storm Financial collapse during the global financial crisis was a huge blow to the industry and an absolute financial catastrophe for the families who lost their life savings. In some cases, seniors lost all their life savings and their family home and are now in debt. What happened with Storm, with Trio and with Westpoint provided an opportunity to review the industry and an opportunity to create a regulatory framework to prevent the same thing happening again.
The unfortunate outcome we have is the result of a Labor government with absolutely no understanding of any business or any industry and which is completely out of touch with the real world. At least, I hope that is their excuse, because the alternative reason is that they have deliberately constructed legislation that will condemn an industry to the scrap heap and condemn low-paid Australian families to a poorer financial future. Under the pretence of preventing situations like Storm, the Labor Party have managed to throw the baby out with the bathwater. As baby boomers transition to retirement, the government have focused more and more on encouraging individuals to take responsibility for their own financial future and retirement. That being the case, we have millions of Australians in need of financial advice to ensure they get the best value out of their savings. They are not financial experts; they are plumbers, welders, receptionists, farmers, miners and perhaps even doctors and lawyers. Any regulations introduced today will deny these people access to expert financial advice or make it unaffordable, or even less affordable. It is a direct hit on the hip-pocket of tomorrow's retirees.
There was originally some good intent behind this legislation, and I hope those opposite will appreciate the benefits to all Australians of the amendments to this bill that the opposition are proposing. If the government just come out and say no to those amendments, as is their custom, they are admitting that the damage they are doing to the industry and to the future of Australian workers is actually intentional. An attack on the financial advice industry is an attack on professional people who provide an important service. There has been considerable regulation of this industry already and what we are looking at with these amendments are regulations for the sake of regulation. They do not serve a purpose other than making life difficult for individuals and the industry.
I invite this government and any members considering supporting this bill, or planning to vote against the coalition's amendments, to ask themselves a question: what are we doing this for? If the bill does not make the industry better, if the bill does not protect people from disasters like Storm Financial, then why are we interfering? If we fail to identify what went wrong and if we fail to create regulations to prevent things like the Storm collapse happening again, all we are doing is killing off an industry. That is much worse than throwing the baby out with the bathwater.
As Martin Lambert, a local in my electorate from Stamford Financial in Mackay, says, 'The proposed changes would not have prevented things like Storm.' So this is actually throwing out the baby and keeping the bathwater. This situation arises because the government refuse to listen to advice from the industry. This is what happens when the government's actions are driven by their need to do anything but what is advised, what is needed and what is proven to work.
Why would the government take the recommendations of the Ripoll inquiry and throw them out the door? One of the key recommendations from the Ripoll inquiry was:
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulation, rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.
The Ripoll inquiry tells us that new regulations are not the answer. More red tape is not the answer. More onerous regulations that grind business to a halt and drive Australians away from getting expert financial advice is not the answer. We in this place find ourselves—and the Australian people generally—asking the same question, again and again: How do the government manage to get things so spectacularly wrong? It boils down to the same old thing: they refuse to listen. They have taken the recommendations of the Ripoll inquiry, which on their own were worthy of support, and they butchered the entire blueprint.
This government has deleted the good bits, changed what was left and then added some rubbish to produce the most negative outcome it could possibly contrive for the financial industry. One of my constituents, Nigel Thomas, from Avalon Financial Services in Mackay, likened the process to the transformation of Medusa in Greek mythology. Medusa was a beautiful maiden and priestess in Athena's temple. She attracted many suitors but her tryst with Poseidon caused the jealous Athena to transform Medusa's beautiful hair into a crown of snakes and made her face so ugly that onlookers would turn to stone. Mr Thomas points out that this is what is happening with financial planning. He writes:
Once a beautiful thing, which attracted many suitors (advisors) to the industry to assist with clients' needs, FoFA now seeks to transform the industry to something less attractive to advisers to practise and more difficult to access for most people, creating a generation with ill-informed financial understanding.
Unfortunately, the government has allowed this process to be hijacked by vested interests who stand to benefit from making the industry as ugly as possible. Part of this bill is designed to ban commission on risk insurance. I can understand imposing a ban on conflicted remuneration, such as product commissions in the financial services industry. But commission on advised risk insurance is a different kettle of fish. The Ripoll inquiry did not say to ban these. I wonder why there was an inquiry in the first place? This ban would increase costs and remove choice, making people worse off, especially small business owners who manage their own superannuation. This measure is nothing more than a means of distorting the market in favour of the superfunds and industry superfunds. In effect, this regulation encourages people to enter into risk insurance, inside superannuation, with no advice. This regulation discourages people from getting expert advice.
I received a letter from another financial adviser who points out the effect that the ban will have on the industry. Mark Dunsford writes:
The Labor Party is making a deliberate push to get money into union funds by deliberately legislating through ridiculous reforms. After advising for 30 years, can I say, the proposed reforms will remove financial planning advice away from ordinary Australians and make it unaffordable. The massive under-insurance problem we have in Australia will not be remedied by removing commission from the product. The is 99 per cent of our clients still want us to be paid via the product, rather than writing out an additional cheque.
Another financial adviser, Brian Mallon, put it a little more bluntly, saying the proposed legislation was:
… a thinly veiled corroboration between trade union controlled industry superannuation funds and the trade union controlled federal government to create, for the Industry Superannuation Network (ISN) a monopoly in the superannuation industry.
Similarly, Mark Kerr does not mince his words in telling how it is. He says:
It does absolutely nothing towards protecting investors but goes a long way in giving a 'free kick' to the Minister for Financial Services' buddies in the union movement and the industry super funds.
It is interesting to note just how much weight the Industry Super Network actually carries with this bill. The network provided the only submission to the original Ripoll inquiry that argued in favour of opting in, and that inquiry rejected the proposal—rejected it!
The government, despite being unable to cite an example anywhere in the world where this kind of regulation actually exists, went against the expert advice to introduce a mandatory requirement for consumers to re-sign contracts with their financial adviser on a regular basis. This move defies all logic and smacks of another grubby deal between a grubby government and the union grubs that they answer to. The union based super funds know that forcing this red tape down people's throats will encourage them not to opt in. The government knows red tape will encourage people not to opt in. The people know it also and they are desperately waiting for the opportunity not to opt into another term of this government. Mike Goggan from Australian Capital Financial in Mackay told me:
The opt-in is insane; in my opinion this will be the decline of the financial planner-adviser industry, which will cause a bigger under-insurance problem than exists now.
There are three more areas of this bill that I would like to focus on. The first is about implementation. The bill sets out an implementation date of 1 July 2012—that is about 100 days from now. Given that we are only now starting to debate this bill, and knowing that passage through this place and also the other place will take some time, we are looking at a very tight lead time.
I might provide some assistance to the government by pointing out what should be obvious—and this is why it keep stuffing things up: if you let a bad government implement bad policy, you can expect bad outcomes. When you do all this in a rush, you are destined for disaster. Poor government and rushed implementation is what gave us the pink batts debacle, with houses burning down; the school halls fiasco, where tuckshops cost a million dollars or more, and a long list of other spectacular failures. It is almost as if this government is in a hurry to see what it can stuff up next.
The people who work in the financial advice industry are the next ones who will pay the price of a bad government in a hurry to stuff things up. The working families who will be denied the benefit of expert financial advice are the ones who will pay the price of a government desperate to ignore sound, expert advice that it itself sought. If this government had the slightest bit of business nous it would move to delay the implementation by a year to align with the changes to MySuper.
Another point on timing is this bill's requirement for retrospective fee disclosure statements. There is no benefit to be derived from this whatsoever. It was not recommended by the Ripoll inquiry. It was not part of the consultation process. It was not even in the government's plans until the last minute. According to the Financial Services Council, the cost of fee disclosure statements will be $54 per new client and $98 for existing clients, for no benefit and on no-one's advice. What is the point of having a consultation process if the government is just going to make things up on the spot?
The final aspect of this bill that I would like to address is the introduction of a best interest duty for financial advisers into the Corporations Act. While I do believe that looking after the best interests of the client should be a matter of course for any service business, I have no problems with the concept being enshrined in legislation. Unlike other components of this legislation, the best interest duty can be introduced without a huge cost and without the introduction of huge amounts of red tape. However, there is some scope for improvement. The coalition is concerned about the uncertainty for clients and advisers that would be created by the catch-all provision in clause 961B(2)(g). Removal of the clause would improve the introduction of the best interest duty provisions.
I would like to make one further comment on how this bill could be altered to provide better outcomes for people. With reference to what happens in the real world—what real people with real financial situations actually need—financial advisers must be able to offer scaled advice. The current wording of the best interest duty does not allow financial advisers to offer a specific service that the client needs at an affordable price. It should not be necessary to provide a full financial plan if a client neither requires it nor can afford it. To avoid putting expert advice out of reach for many families this legislation should allow advisers to limit the scope of their advice to a series of discrete areas identified by the client.
These are concerns that have been raised with me by financial advisers, many in my electorate of Dawson. They include people such as James Wortley from Magnitude Financial Planning, Damien Arboit from Progressive Wealth Solutions, Kim Evetts from Whittaker Macnaught, Gareth Hall from Lifestyle Financial Services and Kerry Neyland from RBS Morgans. If the government were serious about genuine reform it would be listening to these people, it would be listening to the industry. If the government were serious about genuine reform it would address all of the participants in Storm, including ASIC, the banks, the insurance companies, the producers of investment products, the fund managers, the investment industry, accountants, auditors, the legal profession and research houses. This is the very advice that was given to the Minister for Financial Services but it simply was not taken. Perhaps the minister should have chosen to opt in on that advice, on what people were telling him, for the sake of this industry but also the sake of the government's own credibility.
I rise to speak on the Corporations Amendment (Future of Financial Advice) Bill 2011 and the related bill. When I first saw this bill I thought it was an oxymoron, or an interesting juxtaposition, for a Labor government, with its current handling of the economy, to be trying to give financial advice. Look at the financial advice given by our Treasurer when it comes to trying to forecast deficits and surpluses. You need look back no further than the MYEFO documents for 2010-11, when the Treasurer forecast a $12 billion deficit. And in the budget papers last year he forecast a $22 billion deficit for the same period, and that was recently adjusted to a $37 billion deficit. So, this government has no credibility to advise the financial services sector on how they should best be conducting their operations.
The coalition cannot support the future of financial services bill in its current form. However, the legislation can be significantly improved if the government accepts a series of amendments to be moved by the coalition. Only when those moments are supported will the legislation be worth supporting. As it currently stands, the bills are unnecessarily complicated. They are likely to cost about $700 million to implement and a further $350 million annually to comply with. Most significantly, they are likely to cause an increase in unemployment as the burden is put on the financial sector. For Australians seeking financial advice it will mean increased cost and decreased choice. Could anything be more Labor than that? You can see it in most of the bills that come through this House. It is about extra layers of bureaucracy and compliance. It normally has an associated price tag which at some time is going to come out of the pockets of mums and dads. This is just another example of how Labor does its business.
The coalition will be moving a series of amendments which will require: most importantly, that the government table in the parliament regulatory impact statements assessed as compliant by the government's Office of Best Practice Regulation; that the opt in be removed from FoFA; that the retrospective application of the additional annual fee disclosure requirement also be removed; that the drafting of best interest duty be improved; that the ban of commissions on risk insurance inside super be further refined; and that implementation of FoFA be delayed until 1 July 2013 to align it with MySuper. These are good and necessary reforms and I urge both the minister and the members of the crossbench to support them.
The financial services and advice industry provides an important service helping Australians with their financial health and wellbeing. In doing so, financial services providers deal with other people's money, which is why it is important to have an appropriate, robust regulatory framework in place. Quite obviously the goal of any legislation affecting this sector should be to balance effective consumer protection with access to high-quality financial services that are both accessible and affordable. Subjected to stress-testing of the global financial crisis, the Australian financial services industry performed well overall. While there is no doubt that Australian financial services reforms, legislated in 2001, provided a solid regulatory foundation for the industry there is always room for improvement. However, in pursuing regulatory change, the parliament needs to focus on making things better, not just making them more complex and more expensive. One of the things we must avoid is regulatory overreach, where additional red tape increases costs for both business and consumers while providing little or no additional consumer protection benefit.
In the wake of the global financial crisis there was a number of high profile collapses of financial services providers across Australia—the well-documented Storm Financial situation in North Queensland, Trio and Westpoint are cases in point. Following on from those collapses, it was important for policy makers to assess what went wrong and what we could do better in the future to prevent—or at least minimise the risk of—such collapses occurring in the future. This is why in February 2009 the parliament asked the Joint Committee on Corporations and Financial Services to conduct a comprehensive inquiry into Australia's financial products and services. That inquiry, known as the Ripoll inquiry, reported back in November 2009 and made a number of well-considered and reasonable reform recommendations.
The centrepiece of the Ripoll inquiry was the recommendation to introduce a fiduciary duty for financial advisers requiring them to place their clients' interests ahead of their own. The report's recommendations provided a blueprint the government could have adopted with bipartisan support. One of the key observations of the Ripoll inquiry was:
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations than being due to regulatory inadequacy.
Instead of implementing the recommendations of the Ripoll inquiry, the Labor Party allowed its Future of Financial Advice reform package to be hijacked by vested interests. Over the past two years there have been constant and completely unexpected changes to the proposed regulatory arrangements under FoFA, right up until the introduction of the current legislation. Invariably, this was done without proper appreciation or assessment of the costs involved of any unintended consequences or of implications flowing from the proposed changes. Important reforms have been delayed by more than two years so the government can press ahead with a number of contentious issues.
In pursuing regulatory changes, government must rigorously assess increasing costs and red tape for both business and consumers. It is incumbent on the government to conduct a proper regulatory impact assessment to a standard which is consistent with its own best practice regulations requirements. According to the government's own Office of Best Practice Regulation, the government did not have adequate information to properly assess the impact of FoFA on business and consumers or to assess the cost benefit of the proposed changes. This is highly unsatisfactory, given the complexity and the costs associated with contentious parts of the proposed FoFA changes.
Furthermore, the current implementation time frame of 1 July 2012 is completely unrealistic, given that the proposed commencement date is less than four months away. It would make more sense to implement FoFA and MySuper simultaneously. These two major changes require significant changes to the same financial services provider of IT systems. It is symptomatic of the government's chaotic approach to this area and its lack of understanding of practical business realities that it seeks to impose two different implementation dates involving significant and costly system changes in relatively quick succession. The coalition believes that these bills, if amended, should not commence until 1 July 2013.
Opt-in imposes a mandatory requirement on consumers to re-sign contracts with their financial advisers on a regular basis. This is a significant increase in red tape and costs for both planners and consumers. It will make Australians world champions in financial services red tape. We will lead the world when it comes to red tape within the industry. Opt-in was not part of the initial Ripoll inquiry recommendations and it is important to note that the only submission to the Ripoll inquiry which argued in favour of opt-in came from—guess where—the Industry Super Network, which is top heavy with Labor's union mates. More often, we are seeing legislation put through this House that has union fingerprints all over it. It is also important to note that the Industry Super Network proposal for a mandatory opt-in requirement was not accepted by the inquiry. The government have been unable to point to another example anywhere in the world of a government that has sought to impose a mandatory requirement on consumers to re-sign contracts with their financial advisers on a regular basis. With the best interest duty in place, appropriate transparency of fees, charges and an ongoing capacity of clients' financial advisers to opt out of any service relationship at any stage, the coalition believe there is adequate consumer protection without the need to impose additional costs and red tape for both business and consumers.
The Ripoll inquiry made no recommendations to introduce an additional annual fee disclosure statement over and above the current regular statements provided by financial services product providers to their clients. Retrospective fee disclosure adds absolutely no additional consumer protection benefit and it will almost certainly cost. In the FoFA consultation session, it was the industry's clear understanding that the government's proposal to impose an additional annual fee disclosure statement would be prospective—that is, it would only apply to new and not existing clients. The Financial Services Council estimated that implementation of the fee disclosure requirement will cost approximately $54 per client prospectively for new clients and $98 retrospectively for existing clients. This is yet another example of a very poor and deeply flawed consultation process engaged in by the government in relation to FoFA. The government must be held to account for the commitment it made during the consultation process that these additional annual fee disclosure requirements would apply prospectively only.
The best interest duty is an important central part of the FoFA changes. The coalition support the introduction of a statutory best interest duty for financial advisers under the Corporations Act. However, to avoid confusion and minimise the risk of future disputes, it is important to get the drafting right. It is obvious that the government have struggled to come up with an appropriate definition of best interest duty. The version of best interest duty was included in the draft exposure of what became the Corporations Amendment (Future of Financial Advice) Bill 2011, but was hastily removed from that version of the bill when it was ultimately introduced into the parliament. The current version of the proposed best interest duty included the subsequent second FoFA bill and it is certainly an improvement to the version, including the exposure draft.
However, the coalition remain concerned that the catch-all provision contained in clause 961B(2)(g) will create uncertainty for both clients and their advisers. We therefore recommend that this clause be removed from the best interest duty. One of the ways to ensure that clients are able to access affordable financial advice would be to allow advisers and their clients to limit the scope of the advice to a series of discrete areas identified by the client rather than to mandate a full financial plan in everyone's case. This concept of focusing advice on areas specifically identified by clients has become widely known as a scalable service. Numerous submissions to the committee expressed concern that the wording of the best interest provisions in the proposed legislation does not allow for scaled advice to be provided. The legislation should allow the provision of scalable advice where the request for such limited or scalable advice is instigated by the client. This would allow many people to access advice more frequently and it would be a very good starting point for clients to seek financial advice for the first time without being required to undertake a costly and sometimes unnecessary complete financial plan.
The coalition will amend the best interest duty to explicitly allow for clients and advisers to contact for such scalable advice. The coalition committee members support the banning of conflicted remuneration structures such as product commissions within the financial services industry and commend the industry for moving proactively and effectively to abolish such conflicted remuneration structures. However, we do not consider that commissions paid on advice on risk insurance, they may be within policies or individual policies outside superannuation, are conflicted remuneration structures. We agree that the Australians who receive automatic risk insurance with their super fund without accessing any advice should not be required to pay commissions. However, those Australians who require and seek advice pursuing adequate risk cover, whether inside or outside of the super fund, should have the same opportunity to choose the most appropriate remuneration arrangements available to them.
I rise to support the very eloquent comments of my colleagues who have covered many of the issues that I will touch on. One of the reasons that I was keen to make a contribution to this debate is that, in my travels as the shadow minister for small business, financial advisory businesses right across the continent have expressed outrage at the nature of some of the changes proposed in the Corporations Amendment (Future of Financial Advice) Bill 2011 and related legislation. Their input in consultation processes has been ignored at best and, in some cases, the government has chosen a pathway that directly opposes the considered advice that the small business financial advising community has provided to government. Another point is that, wearing my hat as the shadow minister for consumer affairs, while these bills masquerade as being of advantage to consumers they actually provide a number of risks for consumers that the government has not properly considered or evaluated.
The idea about proper evaluation and assessment is an excellent starting point for a debate on this legislation. The government proclaims widely that it has outstanding regulatory impact processes. I have listened to and read carefully the accounts of world's best practice, which is the statement made by the department of finance and its officials involved in the Office of Best Practice Regulation. Some of the action steps that agencies and departments are expected to go through seek to address what the legitimate alternatives are for addressing that public policy problem, and evaluate how effective alternative courses of action would be and what the costs are in implementing those changes. That is a worthwhile decision support framework. It is such a shame that this whole package of measures has progressed without any great connection to that very worthwhile decision support framework.
At the heart of the coalition's objection to these bills is that there has not been a proper impact analysis, a regulatory impact statement, tabled for these bills. They have not been evaluated against the Office of Best Practice Regulation benchmarks and requirements as compliant. For those reasons alone this legislative package is poorly conceived. It has not been properly considered. It appears to many, me included, as a knee-jerk reaction to the very devastating impact of the collapse of particular investment vehicles—Storm and Opes Prime are some that are regularly referred to—where in reaction to the financial losses that many incurred the government seems to think it has carte blanche to do whatever it might think it wants to do.
What it thinks it wants to do seems to be overwhelmingly skewed to advance the interests of union controlled industry superannuation funds. There appears to be no other justification for some of the measures that are contained in this bill. Even, as my colleague the previous speaker referred to, in the consultation process absolutely nobody was advocating for some of the measures that are in this bill except for the MySuper industry superannuation group. Apparently, on the strength of just one self-interested advocacy group, the government thought that was a good enough reason to go with what they wanted and ignore all the other submissions about why some of the proposals they are contemplating are not well conceived and actually run against the interests not only of the consumers and investors but also many of the small business advisory firms that have established a very positive reputation amongst their clients and that know that, if they are not providing value for money, the clients will go somewhere else. So I do not know why we are here debating things such as the opt-in requirement, one of the most pointless bureaucratic interventions that no-one thinks is a good idea, save and except the superannuation industry network. Not even the government controlled Ripoll inquiry thought it was a good idea.
I hope Mr Ripoll, who is now the Parliamentary Secretary to the Treasurer, has some influence within Treasury over the direction of these changes and that the so-called future of financial advice is grounded in the considered work of his committee and the very sound recommendations that earned bipartisan support. I say that for a number of reasons. Firstly, they were well thought through. They were not contrived to advantage a particular sector of the financial advice industry—that is, the industry superannuation funds. They were also tested by a rigorous process of committee inquiry, of hearings, of evaluation, where the parliament as a whole could bring forward a bipartisan report that would give confidence to people involved in this industry that there was not going to be some unilateral change to the arrangements under which they operate.
By going down the pathway the government has with this legislation, they are far from building confidence and certainty in the financial services sector because they are actually pursuing changes that no-one else seems to think are a good idea. At some point down the track either Mr Ripoll in his new role within Treasury or, if there is a change of government, an enlightened, pragmatic, evidence based evaluation of these changes is likely to see them changed again because they are not well developed and they have not been properly evaluated.
Look at some of the things that have happened.. Let us look at the global financial crisis. There were some very high-profile cases of investment vehicles hitting the wall and that represented extreme financial hardship for those investors. A number of those investment vehicles were by their very nature more vulnerable to the changes in the global economy and the impacts of the GFC than others because they were offering returns at rates more attractive than other investment options and the risk-return ratios were understood by most. But when hardship arises that is a very difficult time for all involved. My heart goes out to those people who have seen their life savings and their investment nest eggs dissolve through the GFC.
Overwhelmingly, the Australian financial services and advice industry stood up very well during the GFC. It stood up very well because of the changes that the previous Howard government had put in place. So you look at the carnage in investment value and in wealth destruction that happened around the world and, whilst we had some setbacks, they were nothing of the scale experienced by virtually any developed Western market in the world.
They had nothing to do with the advice.
Those changes also had nothing to do with the advice that people were provided—as my twin brother and my friend and colleague interjects, and I thank him for that interjection—nothing to do with the quality of the advice. If you are going to handle or address these public policy concerns in a sober, evidence based way you should actually look at what the causal factors are of the hardship that you are hoping to avoid—what is the evil you are hoping to address? To understand what has caused it then gives you an insight into what action you might need to take.
This whole package is free of that analysis and instead we see some propositions that the government cannot even defend themselves because they are so incoherent. The coalition again puts forward the framework that was agreed through the Parliamentary Joint Committee on Corporations and Financial Services which said these things should not go ahead in their current form. It said that they lacked some key characteristics that would represent a positive step forward for the industry and for the investors that rely upon the advice that they are given. They represent a great deal of red tape and compliance imposition for no good reason.
I recall my travels to Gladstone. I had a nice flight up there to meet with all the financial advisers in Gladstone. There is a community providing quality financial advice to a number of people not only to the immediate Gladstone community but to quite a lot of fly-in fly-out people and other people earning quite staggering incomes in the mining sector. So the quality of their advice is very important in setting up those people for their future. They all came to me and said, 'Bruce, this opt-in idea: where on earth did that come from?' I was able to point to the industry superannuation funds. The collective groan in the room said to me: 'Well, that'd be right. Here's another regulatory and red tape imposition championed by a very narrow section of the financial services sector to advantage its own interests.' They described to me the example of someone who had been out on a mine for three or four weeks and would fly into Gladstone. They had some time to themselves or they might want to catch up with family and friends. They walk into their place of accommodation and find a mountain of mail you could not climb over. They described to me the things that person would be looking for. Imagine that you are that person: would you be looking for the bills you have to pay? Probably, so you can make sure the phone was not cut off and the power was there. You might look for one that has a sweet scent; that one might be a note from your sweetheart. But if you saw something from your financial adviser, would you know what it was? Given the relationship you have with your financial adviser, who is servicing your interests well in an open and transparent way, you might think this was probably another newsletter with the latest update on what the government is mangling in another area of the policy. That could be it, and you would probably think: 'Gee, I see enough of this dysfunctional and divided government. I'm back and I don't want to be depressed even more about government incompetence affecting my interest and the national interest.' So you put that to one side.
You might then have a lovely few days in Gladstone: you might do some fishing or you might catch up with your sweetheart. You might just go about your life and then fly out again without looking at the letter from your financial adviser. Under these changes, that would be: uh-oh, end of relationship, because you have not opted in again. You have not opted in again because you were bewildered by the burden imposed on you and your financial adviser, even though your relationship has served you well, is open and transparent on fees, the quality of advice and the frequency of engagement and makes sure that your interests as an investor align with the advice being provided by your adviser. Then suddenly, because you have not sorted out some bureaucratic renewal within a 30-day period, the relationship is over. What happens then? What happens with the advice that you hoped you might get while you are out at the mine site? What happens with your investments? This is just one very practical example where this is likely, according to some in the industry sector, to cost $120 per client. It will eat away at their investment nest egg for no good reason and to no demonstrable benefit.
If you look at other areas you will see that certain products with trailing fees and the like—even where they were entered into with full knowledge by the parties involved—will be prohibited under these changes. What will you do? You will have to change them, get out of them or have those arrangements restructured. I read an impassioned plea from a small business financial adviser who points out that not only is he 'being branded a hellraiser out to pillage their clientele because of events involving Storm and Opes Prime over which they had no influence whatsoever', he is 'somehow being victimised and used as a scapegoat for consequences that weren't any of their making'. That is how he starts his presentation to me, and I think he is right on the money. He goes on to talk about what would happen with the trusted relationship he has where, as the shadow Treasurer pointed out—the key tenet is 'no surprises', is how I would characterise it—the advisers are acting in the best interests of the client, there is transparency in the fees, there is an understanding of what support is being provided for those fees and the client can opt out whenever they choose. They can just go if they are not happy. What is wrong with that? Instead we have this very odd set of recommendations.
We also have an example where the government is failing to address the impact not only on small financial advice businesses, but also on consumers. On the trail ban that is being proposed: what happens if you have a client who is in such a product but now cannot be? You will have to go to that client and say, 'I'm sorry, even though you fully understood what you entered into and what the cost structures are, even though the product may be performing very well for you and regardless of what any industry superannuation fund advocate may be stating, you have to hop out of it.' What is the cost of exiting that product, of having it restructured or of trying to materialise the asset value, which you know has taken a hit through the GFC? You would do your money. So in this example, the recalibration that will be needed if you are a Centrelink client, the risk to your capital of materialising a gain or loss, the fact that there may be costs involved in shifting into another product, all seem to have not been taken into account by the government. This is why these bills should not proceed. The industry is not supportive of them and most fair-minded people looking at the measures cannot see a connection between then and what the government proclaims it is trying to do. The lead-up time frame is too short, there are too many uncertainties about the detail of these reforms and the financial services industry is wary of the government that has blamed them for plenty, even though it has not been their responsibility. They deserve to be taken more seriously. (Time expired)
I rise to speak on the Corporations Amendment (Future of Financial Advice) Bill 2011 and cognate bill. The financial services and advice industry is an essential service of the modern era, protecting and enhancing the financial health and wellbeing of millions of Australians. For people planning their retirement or supporting their children's future, good financial advice is often on a par with shelter and energy as a basic requirement. In this time of global economic volatility, this service has proved to be even more important to Australians seeking to better manage financial risks at the same time that they seek to maximise those financial opportunities.
Australia, as the member for Forde would be aware, may well be a physical island but it is definitely not a financial island. For instance, the instability in Europe in particular means that investors and financial advisers alike are watching the markets extremely closely so that they can provide that advice. Given that financial service providers effectively deal with other people's money, it is important that we have an appropriately robust regulatory framework in place to provide effective consumer protection—and we do have so. As we heard from the shadow minister, that is the case. It is because of the work done by the previous coalition government in 2001.
The dual purpose of protection and promotion comes with the need to ensure that financial advice is not only high quality but also readily available, accessible and affordable. We should not lower standards of service; however, it is important not to price it beyond the means of every day Australians—those who are struggling and working towards financial independence. The House should note that most of these investors are not, as the government seems to claim at times, billionaires—those who are so demonised by the government. Most investors are hard-working aspirational Australians. They could be individuals, they could be small to medium business owners from all walks of life and all backgrounds, including as I said those raising their families and needing to invest in safe but productive investments. In so many cases they are simply self-starting small business people not relying on superannuation alone to get them through. They can see clearly that average superannuation, given the time they entered the workforce, will not be enough to sustain them in later life. Investors are also retiring small business owners who have sold their businesses, be it a cafe, a retail store or a farm. People are prepared to live off those assets in their later life. And it does include that very important group that the government does not value, the self-funded retirees. It is these people who literally save the government millions in pensions and who save and work for their own future. They also need to be considered in this discussion today.
The shadow minister for finance, Senator Cormann, met a group of financial advisers in my electorate when we were discussing the implications of what the government was planning. They are extremely concerned. Like so many other financial advisers in the industry, they act in the best interests of the client. They provide long-term professional services. There may be some who do the wrong thing but what they do know is that trust is critical. Financial advisers in my electorate know that they are in a regional area where clients can vote with their feet any day of the week. If they do not like the quality or level of the advice, if they are not satisfied with it, they can literally walk out the door and find a new financial adviser. Clients do two things: they walk and they talk—and this is particularly relevant in rural and regional areas. I would say to any financial adviser: word of mouth circulates very quickly in regional communities. Financial advisers in my part of the world are very well aware of this, but they are determined to act in the best interests of their clients. Their clients often become their friends, people they care passionately about. So they want to provide quality, effective and affordable advice, and their service reflects this.
Under this legislation, if one of my constituents fails to complete a renewal notice in the 30-day period, they will now be left without financial advice. That is where they will find themselves. We have heard the shadow minister for small business talk about the fly-in fly-out workers and where they will find themselves. I have over 5,000 of those in my electorate. For these people and others—ordinary people, farmers, people in small business, people living in rural and remote areas and even just very busy individuals—that 30-day period carries extreme implications. For instance, if you happen to do your accounts once a month, where could you be left? For small to medium sized business owners, the 30-day period has some pretty significant implications.
One of the key observations of the Ripoll inquiry in 2009, which the coalition committee members continue to support, was:
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations—
that needs to be stipulated strongly in this House—
rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.
That is why I really support the concerns of the opposition.
The legislation in its current form is unnecessarily complex, and this has been articulated quite strongly in this place. In large parts, it is unclear. We have heard that articulated. Nobody knows what is ahead—how it is going to work. It is expected to cause increased unemployment in the sector and is legislating to enshrine an unlevel playing field amongst most advice providers, inappropriately favouring a government friendly business model—the big players. It is likely to cost about $700 million to implement and a further $350 million per annum to comply with, according to conservative industry estimates.
We have suggested some amendments, and I support those. They are sensible in trying to improve what the government has put before us. We will move that the government be required by parliament to table a regulatory impact statement, something that has not happened. It is just extraordinary that you would introduce a bill of this nature and yet there is no regulatory impact statement.
Mr Van Manen interjecting—
As the member for Forde says, it is a breach of the government's own requirements. It needs to be assessed by the government's Office of Best Practice Regulation. We will move that the 'opt in' be removed. We know the problems with opt in. We will move that the retrospective application of the additional annual fee disclosure requirement also be removed. We have heard from the shadow minister just what this is going to do in practical terms. We will also move that the drafting of the best interest duty be improved, that the ban of commissions on risk insurance inside super be further refined and that the implementation of FoFA be delayed to 1 July 2013 to align it with MySuper.
Should the government not agree to these amendments, I fear that it will be even more apparent that the primary consideration of the Labor government with this legislation is to increase the union management—the industry superannuation funds. Unfortunately it will be apparent that that is the driving force behind the government's agenda with this legislation. The parliament should note the current debate about openness and accountability in superannuation funds. I think we would all remember who said, 'Let the sun shine in.' That is not what we are seeing with this bill and it is certainly not what we are going to see with the failure to provide a regulatory impact statement. The Financial Services Council, which represents retail super funds, has proposed new policy which requires boards of super funds to appoint an independent chair—they are out there on the front foot—and to have a majority of independent directors defined as those not employed by the company or the fund. These are sensible proposals. The proposals would also require the disclosure of directors fees and wages of senior management and would prevent directors from holding multiple directorships in different super funds—very practical and sensible recommendations.
Retail funds will apply these rules, but I wonder whether industry funds will do the same. Will industry funds apply the same level of accountability and transparency? It may come as a shock to the many union officials supported by industry super funds, but it really should be a minimum standard for accountability, and we will see whether that prevails. I ask the House to note the recent case of the power struggle between the New South Wales and Victorian branches of the Electrical Trades Union. According to the Australian, the Victorian boss of the Electrical Trades Union, Dean Mighell, is suing ETU's New South Wales head, Bernie Riordan, to reclaim more than $1.8 million in fees Mr Riordan allegedly received while serving on four boards connected with their superannuation funds. It would appear that Mr Riordan's ETU annual wage of $133,000 plus super was allegedly supplemented with as much as $264,625 a year in board sitting fees. The dispute allegedly is that according to Mr Mighell the board sitting fees should be funnelled back into the union coffers instead of Mr Riordan's. That is what is happening with regard to some of the sitting fees, which does raise some questions about the content of the bill before us. We will see what the government genuinely intends.
The Australian financial system, including the value of financial advice, was tested, as we have heard, during the 2008 global financial crisis. In that time of extreme stress, the Australian financial services industry did perform overall very well. Quality advice and timely advice was provided to people at that time. That in no doubt was due in part to Australia's financial services reforms of 2001 that provided such a solid regulatory foundation for our financial services industry. I believe that was well recognised around the world. Not that we should be resting on this because there is more that can and should be done, and we are seeing the industry getting on the front foot and taking even greater responsibility. Our focus should be on improving the process not adding more complexity, more cost and more red tape, because this will amount to higher costs. We know that Australia is already overburdened by regulatory red tape and that results in increased costs for both businesses and consumers, and often for little or no additional consumer protection benefit.
As we know, these bills are supposed to be as a result of a number of high-profile collapses. As the member for Forde frequently says, it was not as a result of advice. I know that the reform recommendations from the Ripoll inquiry to introduce a fiduciary duty for financial advisers require them to place their clients' interests ahead of their own. Whilst the current bill seeks to address this, it does so in a clumsy and heavy-handed manner. Unfortunately, this seems to be a constant theme of this government: to find the wrong answer to whatever question and issue is before the parliament or the government. I note that the Ripoll inquiry observed that the committee was of the general view that a situation where investors lose their entire savings because of poor financial advice is more often a problem of enforcing existing regulations rather than regulatory inadequacy. This goes back to the heart of the issue: advice and regulation. I repeat: where financial advisers are operating outside regulatory parameters, the consequence of those actions should not necessarily be attributed to the content of the regulation. That was what was said in the Ripoll inquiry. The wider community, including financial advisers, agree with the principle of applying a best interest duty, and if those financial advisers whom I meet in my electorate are not doing so on a consistent basis then their clients can and do walk out of the door and go to an alternative source for that type of advice. (Time expired)
I am pleased to speak on the Corporations Amendment (Future of Financial Advice) Bill 2011 and the cognate Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011. I join with my colleagues in making it very clear that the coalition will not support the bill as it currently stands. My colleagues have gone into great detail as to the failings of this bill. Before I similarly do so, I think it is important to acknowledge what is really at the heart of these measures that are being put forward by the government.
The government and the Labor movement have always been interested in closed shops. The government have always sought to vilify those who have a difference of view—to vilify them in their statements, to demean their motives in the public view and to basically drive them out of being in any form in competition with their preferred business model. It is no surprise that the unofficial head of the union movement, the current minister responsible for industrial relations, decided—I suspect demanded—that he retain responsibility in his portfolio for these matters. There is an absolute, unequivocal linked agenda in the union motives of the Labor Party between superannuation and industrial relations more generally. This is an industrial issue for the union movement, being led by their key industrial advocate in this place, the Minister for Employment and Workplace Relations. This minister is pursuing the unions' agenda not only in his own portfolio of workplace relations but also in this matter, as he did previously when he was Assistant Treasurer.
The coalition has always seen through the government's motives. We have always seen what they are up to and I think the Australian public is also seeing this. What we are standing for here are some basic principles of choice, some basic issues of transparency and a lack of complexity which will enable Australians to make good choices and decisions about where they want to put their money for their retirement. We want to enable them to have the support and advice to do that in a way that helps them make those decisions, not to have the government impose those decisions on them by default and without any other alternative. Whether it is the government's decision to try to channel more money into industry funds, forcing businesses to pay for additional superannuation by increasing the levy, or whether it is at the other end by narrowing the funnel to ensure that all of those moneys flow into union-dominated funds, that is the agenda of this government. We need to bring that under the spotlight, it needs to be exposed and people need to know what the agenda is.
The package of future of financial advice bills before us today is yet another example of Labor's corner-cutting and heavy-handed regulation. The coalition will not support these bills in their current form. This legislation could be substantially improved if the government were to accept the coalition's amendments and were willing to listen. As the bills stand before us today the package is unnecessarily complicated and convoluted. At best, these bills are obstructive and unhelpful. At worst, they threaten jobs, businesses and consumer choice. The regulatory burden they seek to impose will not afford greater protection. All this legislation will do is tie businesses and consumers up in red tape, strangling competition and choice while driving up costs. It will upend the level playing field our financial advisers have previously had, tipping the balance in favour of a government-friendly business model: the union model. Financial advisers help hardworking people to better calculate and manage the risks they encounter and maximise their opportunities to provide for their own retirement. Advisers also play a very important role—as a business in my electorate has stressed to me—in helping the vulnerable, including the elderly and the ill, to make sound financial decisions.
I received a letter from a gentleman who lives in Sylvania Waters and works as a financial planner. He writes that 'our industry is based on trust and relationships—the trust is earned and then a relationship builds'. He makes the point that financial planners go above and beyond the call of duty to provide quality service and support to their customers, often investing additional hours of work that are not clocked. This is a fundamental issue that I think the government overlook. They overlook the bond of trust and the relationship and also the service that flows from that trust to the consumer. This is a value added service. It has a real value, it is valued in particular by those who demand it in their most significant time of need.
The financial advisers I know turn up for their clients and go above and beyond the call of duty, above considering any payment they may have ever received, to honour the commitment and trust they have formed in that very special relationship. That trust is tested at the most difficult and strenuous time in their clients' lives, whether it is through the loss of a lifetime partner, whether it is through some horrific event that has caused that loss or whether it is a debilitating and tragic illness or something of that nature. At your weakest time you need to rely on someone to look after you and your interests and to ensure that what you have invested in will be delivered to you. Your advocate in that case is not some backroom bureaucrat whom you do not know—thankfully, if you have a relationship such as this—but is the financial adviser who has advised you, supported you and counselled you in a decision and is there to turn up to be your advocate when things are really required.
I note the member for Forde at the table. In his professional life before coming to this place, I am sure the member for Forde could list any number of people—hundreds of people, if not more than that—with whom he has been able to establish that bond of trust. I know that is the same bond of trust that the member for Forde now has with his electors and constituents because he understands the issue of trust and I commend him for it.
One of the clients of the man from Sylvania Waters who wrote to me is a lady with advanced multiple sclerosis. She is fiercely independent and still lives on her own but has to budget carefully to meet the costs of medicines that are not covered in her treatment. Shrewd economic management is very important to enable this lady to maintain her independence. My constituent's financial advice assists her greatly in that capacity. He told me:
… the product will pay us—she can't afford to. We will be paid about $800. Currently I have spent six hours on this job and it will probably get to ten by the time I am finished—my accountant would charge $3000 for this job.
Of course, in these matters there are fundamental elements of trust involved. Advisers are paid to handle the hard-earned pennies of others and there must be transparency and accountability in all aspects of these processes. And it is critical that the industry continues to operate with a regulatory framework that is robust and accountable. But it is crucial that above all a level playing field is maintained for big and small businesses alike and for industry super funds and banks to ensure that competition can thrive, these important services can remain affordable and consumers can retain that all-important choice as to who they entrust with their money. I do not want to see the situation where someone who does not have the means to pay big fees upfront, to get the sort of advice they have been able to access for years, is denied that opportunity because of the passage of this bill. But I believe that will be the result. The bill before us today pretends to give consumers further protections by requiring advisers to act always in the best interests of their clients. Yet it falls short of achieving that very outcome. It is just another smokescreen for this government to cover yet another union agenda. Excessive red tape will only stifle business, driving up costs for operators, which will inevitably be passed on to customers. My constituent fears:
FoFA reform is going to sanitise our great industry. Australians are already under insured and FoFA in its current form will worsen that position and make the ever increasing social security burden even greater—
while at the same time, I note, driving up the value of the funds controlled by the unions. Another financial adviser in the shire agrees that without amendment:
FoFA will cause financial ruin to many advisers—
and individual Australians—
who have helped Australia survive to this point in tough global economic times, through their knowledge, skill and experience advising their clients to act rationally and not impetuously as the current Government has acted—
in the way it has spent taxpayers' dollars.
The dual goals of FoFA should be to improve transparency and improve access to advice for all. The bill before us will not achieve either. In 2009, the Ripoll inquiry was conducted in the wake of the collapse of Storm Financial, Westpoint and Trio to identify ways that risks could be better managed. At the heart of the Ripoll inquiry was the recommendation that a fiduciary duty be introduced to require advisers to place the interests of the client ahead of their own. However, the committee also noted that situations:
… where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations, rather than being due to regulatory inadequacy.
The report sketched out a comprehensive blueprint to enhance our financial services and the frameworks that govern them, a plan the government could have adopted with bipartisan support. But, instead, decisions on important reforms have been delayed by more than two years and hijacked by the union-dominated industry super funds. My constituent complained that the FoFA consultation process has been influenced by 'powerful institutions who only worry about this year's profit and their bonus'. The government has held off on sensible reform to bluster on with contentious changes like the Industry Super Network opt-in proposal. This treading water has only produced profound confusion, uncertainty and upheaval for our financial services. At the end of two years in the wilderness, the government has presented a cobbled-together package that manages to be both unnecessarily complex and vague.
Evidence before the parliamentary joint committee inquiry into FoFA has confirmed the legislation in its current form will be detrimental to consumers, devastating for financial advisers and damaging for the industry. The government's explanatory memorandum to the bill itself admits FoFA will drive the loss of almost 7,000 financial adviser jobs. There will be reduced choice, reduced competition and reduced diversity across the sector. I suppose they are the objectives that the government are seeking to meet—and it would seem they are right on track. Industry estimates suggest that FoFA has a price tag of $700 million to implement, plus $350 million per year for compliance. Worryingly, the government's own Office of Best Practice Regulation has given evidence before Senate estimates that the government has failed to properly assess the impact of the bills. Jason McNamara said the regulatory impact statements did not contain enough information about the potential impact and cost for the government to be able to make informed decisions, especially in relation to the opt-in proposal.
The coalition does not believe it is unreasonable that the parliament should insist on a proper impact statement. It is imperative that regulatory changes of this magnitude go through the proper process. If the government is not willing to follow best practice of its own volition, it should be incumbent upon this place to insist upon it. The coalition has no problem supporting sensible and considered reforms that would bolster trust and confidence in our financial services industries. We value initiatives that increase transparency and competition and allow consumers the greatest choice. Unfortunately, these bills do not meet those objectives.
I have met with financial planners in my own electorate of Cook to discuss this matter over the course of the government's process. They are understandably angry at the time it has taken since the Ripoll inquiry to make any headway, and even angrier with the tranches of bills that are before the House today. One said to me:
If passed without amendment, FoFA will adversely affect all Australians and their choice, as is their democratic right to quality advice … and create a monopoly for advice because only the large financial institutions (Banks and Fund Managers) and Industry Union controlled superannuation Funds will be able to afford the cost of compliance and cheap advice.
That is called creating a closed shop on these issues, something the Labor Party and the union movement have had at least a century of experience in doing. The concerns that advisers in the shire have raised with me centre around four components of these bills, and their fears have been echoed en masse by their colleagues across Australia. I will focus principally on one of them in the time remaining. The proposal of having to opt in every two years is troubling. There is no other country in the world where a government has sought to impose mandatory requirements on consumers to re-sign their contracts on a regular basis. They say there are two certainties in life: death and taxes. I would argue there is a third under this government, and that is increased compliance and paperwork. Ask anyone on the street; they will tell you the last thing they need is to have to wade through another mountain of paperwork every two years. We should not be turning small businesspeople into compliance officers for a regulation-hungry federal government. We should not be turning consumers into compliant drones of the Labor Party and their union dominated policies, which want to make their financial choices for them. That is why these bills should be opposed.
I rise to speak on the Corporations Amendment (Future of Financial Advice) Bill 2011 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011. These bills seek to introduce a framework for financial advisers to ensure they provide Australians with accessible and affordable financial services and advice. The purpose of these bills is to require those persons who are providing personal financial advice to retail clients to act in the best interests of their clients and to give priority to their clients' interests.
In addition, the bill applies existing regulatory mechanisms under the Corporations Act in a more direct manner to individual advisers as well as to licensees. Furthermore, the bill seeks to amend the Corporations Act to enact a ban on the payment and receipt of certain remuneration by those persons providing financial advice, where a potential to influence that advice exists resulting from certain financial products.
There are two bills making amendments to the Corporations Act to implement the FoFA reforms announced by the government in 2010. The first is the Corporations Amendment (FoFA) Bill 2011, which was introduced into the parliament in October 2011. Back in February 2009, the parliament asked the Parliamentary Joint Committee on Corporations and Financial Services to conduct a comprehensive inquiry into Australian financial products and services following a number of high-profile corporate collapses, such as Storm Financial, Trio and Opes Prime.
The first bill seeks to improve the disclosure requirements in respect of fees and services connected with the provision of ongoing financial advice. Additionally the bill seeks to strengthen the powers of ASIC pertaining to financial advisers. Furthermore, this bill seeks to put in place a new obligation on financial advisers, which is that they are to act in the best interests of their retail clients and to put a future ban on conflicted remuneration structures.
The Parliamentary Joint Committee on Corporations and Financial Services reported on these bills on 29 February 2012. In a dissenting report, coalition members of the committee discovered that Labor's FoFA proposals will unnecessarily increase red tape and the cost of financial advice and will reduce consumer choice and competition if passed in their current form. Coalition members of the parliamentary joint committee concluded that the FoFA bill in its current form is unnecessarily complex and unclear.
The financial and advice industry is the provider of valued products in terms of a service which helps Australians to manage their financial health and wellbeing. Financial advisers assist by helping Australians through the mire of financial risk and seek to maximise financial opportunities. In reality, they deal with other people's money, which is why any changes in the financial and advice industry must be supported by an appropriately robust regulatory framework. However, we the parliament must be mindful of the need for change—change to improve the existing landscape, not change which makes industry more complex and costly for all involved. The financial advice industry is in the Northern Territory no less than anywhere else in this wide brown land. More and more, the average Territorian is required to seek out the services of this sector, which are necessary to manage and obtain the very best long-term advantage for the management of their own futures. Home loans, insurance and super are all basic commodities in this day and age, which most of us just assume are provided with our best interests at heart. I am by no means full bottle on the products I use. I rely upon services of the financial services sector to steer me in the right direction and keep me on the correct path. I have a background in business and am familiar with financial systems. Sadly, I have learnt the hard way about conflicted remuneration structures. If, with some level of business acumen, I have difficulty, then how is the average person expected to understand without the assistance of exponents within the financial services industry?
The review undertaken by the Parliamentary Joint Committee on Corporations and Financial Services, the Ripoll inquiry, made a raft of well-considered and reasonable reform recommendations, providing a blueprint for the government to move forward. However, over the ensuing two years the value of these recommendations has been usurped and clear direction has been lost. As a result, we find the bills currently being debated today a piecemeal offering and, unless amended, untenable legislation which would seek to increase costs and red tape for both business and the consumer.
It is disappointing that such delays have occurred, particularly for an industry that has such an important function to perform within our society. This legislation has the potential to reduce consumer choice and competition if approved in its current form. The coalition cannot support the FoFA bills in their current form. Therefore the coalition will be moving a series of amendments with the express purpose of addressing some of the current flaws. Our initiatives include a recommendation that the parliament be resolute on the preparation of a proper regulatory impact statement that complies with the government's own best practice regulation requirements. The RIS must be compliant with the government's Office of Best Practice Regulation and be tabled in the parliament before the legislation could be further considered.
The coalition would also recommend removing the government's opt-in proposal. This addition is outside the recommendations of the Ripoll inquiry and proposes to impose a mandatory requirement for all consumers to re-sign contracts with their financial advisers on a regular basis—a measure that will have the likely result of significantly increasing red tape and costs for both planners and consumers.
The coalition is also recommending an amendment to the current draft of the bill relating to the best interest duty, to improve clarity and certainty about its application. Further, inclusion of this measure in the Corporations Act is supported, but this must occur following the correct drafting necessary to remove any confusion and ensure understanding.
Proposed section 961B(2) of the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 defines a set of comprehensive steps designed to provide guidance to advisers, yet its subclause (2)(g) allows for any other steps that would reasonably be regarded as being in the best interests of the client. We believe that, if other steps exist, then they should be included in the legislation, not left as a point of confusion or misinterpretation. Without change, this amendment creates uncertainty—uncertainty that will result in test cases before the courts. The coalition also recommends the removal of the retrospective fee disclosure statements. There was no reference to this in the Ripoll inquiry that recommends the introduction of an additional annual fee over and above the current regular statements already provided by the financial service providers to their clients. The coalition concludes that in this instance retrospective fee disclosure adds no additional consumer protection benefit and will introduce further increased costs, ultimately costs that will be passed onto the consumer.
It is estimated by the Financial Services Council that the implementation cost will be around $700 million; the council has suggested that the cost per client for fee disclosure would be halved if it involved only new clients and summary information. Inevitably, any costs associated with implementation of any amendments will be passed on to consumers. The current piecemeal approach is yet another example of the very poor consultation process engaged in by this government. What started out in such a positive manner has devolved to a point where, unless further amendments are made, this suite of proposed changes cannot be supported.
In terms of superannuation, the coalition recommends that, until further refinements are made, a ban of commissions on risk insurance inside super should be in place. Coalition committee members support the banning of conflicted remuneration structures—for example, product commissions within the financial services industry— and we praise the industry for taking a proactive stance to abolish such conflicted remuneration structures. However, it is our stance that commissions paid on advised risk insurance, be they group policies or individual policies, inside or outside superannuation, are conflicted remuneration structures. Banning commissions in this instance has the potential to increase costs for consumers, remove choice and leave many people worse off—especially small business people who self-manage their super.
We the coalition further recommend the implementation of FoFA be delayed from its current due date of 1 July 2012 to 1 July 2013. The existing time frame of now four months is manifestly inappropriate and untenable for industry. Projecting the commencement date of any changes to 1 July 2013 or at very least legislating an introductory time frame to give industry the opportunity to implement change over that comparable time frame is paramount. This date also aligns change with the proposed MySuper. It would make sense to implement FoFA and MySuper simultaneously. FoFA involves significant and expensive changes that would result in large changes to IT systems and adviser training. Rushing the implementation and putting pressure on the industry to act will result in mistakes and inefficiency, which longer term will result in extra costs that are ultimately borne by the customer. We therefore commend to the government that to overcome the potential difficulties with adhering to a manifestly inadequate time frame, this bill, once amended, should not commence until 1 July 2013.
Like many of my colleagues, I have received correspondence and calls from constituents who are practitioners within the financial advisory sector over the past few weeks. The calls from each and every one have been the same. This legislation has fundamental support in terms of intent; that is, to improve the level of transparency within this sector and to broaden access to financial services; however, those in the industry that have contacted me do not support this bill in its current form and without critical amendments. I have been reminded, as a result of these contacts, that the Prime Minister is on the record as saying a key priority for the government is to slash red tape. Need I say any more? We know she does not have a good track record with keeping her promises. This bill, however, will see added complexities, paperwork and red tape for the sector, ultimately resulting in increased cost which will be passed on to the consumer.
In conclusion, the coalition agrees to move amendments to the Corporations Amendment (Future of Financial Advice) Bill 2011 and the Corporations Amendment (Further Future of Financial Advice) Bill 2011 consistent with the 16 recommendations made in the dissenting report of the coalition members of the Parliamentary Joint Committee on Corporations and Financial Services. We will oppose the Corporations Amendment (Future of Financial Advice) Bill 2011 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 if these amendments are not carried.
We have a Prime Minister and a Treasurer who have said repeatedly that 'lifting productivity is essential to the nation's prosperity'. Yet in the Corporations Amendment (Future of Financial Advice) Bill 2011 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 we are debating yet another set of government bills that will increase administrative burdens, increase compliance costs and, consequently, decrease productivity.
You must always look at not only what the government says but what the government does through its actions. We on this side of the House, as has been so eloquently put by many of my colleagues, have some serious concerns about this legislation. There are five key areas in which we think the legislation is flawed. Firstly, the legislation is unnecessarily complex and, in many parts, unclear. This in and of itself leads to uncertainty and increased compliance costs. It contradicts the government's claims of a productivity agenda, because, in being so unclear, it will lead to many unintended consequences.
The Association of Financial Advisers have identified proposed sections 961B(2)(g) and 961E as creating uncertainty with respect to the best interest duty. They are concerned that the legislation is so unclear that it will inevitably have to be tested in the courts. This will lead to increases in professional indemnity premiums and, as they point out, 'lead to uncertainty in the application of the transitional agreements that will negatively impact on the value of advice practices'. Obviously, with any increase in professional indemnity premiums, any uncertainty will lead to increased costs for consumers who use the advice of financial advisers.
We think it is very important that Australians be given the very best financial advice. When we were in government, we believed very strongly that consumers needed a strong and transparent set of arrangements that would provide them with the information that they required to make decisions about their own financial future and the products that they purchased. Financial advisers are very important to the wellbeing of so many Australians who rely on their expertise to be able to make decisions about their future and the future of their families. We want to arm Australians with the ability to provide for themselves and for their families. So to put financial advisers out of reach of so many consumers by increasing the cost seems to make very little sense. Secondly, for a government that says it is all about jobs, jobs, jobs, it is pretty clear that the changes as a result of this legislation will lead to massive job losses in the financial services industry as firms try to adapt to the increased costs. The parliamentary joint committee heard testimony from Mr Craig Meller, Managing Director of AMP Financial Services, that these measures could result in as many as 25,000 job losses in the industry. Mr Richard Klipin, CEO of the Association of Financial Advisers, was even more pessimistic, estimating that up to 30,000 job losses would result. Yet this is not something we have heard about from those on the government benches. This does not seem to be a consideration for them.
We cannot forget that many people who are involved in the financial services industry are themselves small business men and women who have risked their own capital to set up a business, to use their expertise, to employ others and to provide advice. This legislation, as I have said, could result in many significant job losses, which does concern us on this side of the chamber.
Thirdly, the bill will legislate what many describe as an unlevel playing field amongst advice providers. As the dissenting coalition report suggests:
… the disproportionate increase in costs to the industry and consumers, the reduction in the number of financial advisers in Australia, the associated additional job losses and the further concentration of financial advice services providers will have detrimental impacts on the cost, availability and accessibility of financial advice across Australia.
Financial advisers have themselves said that they are concerned about the potential decrease in competition in the industry—and competition, as we all know, is incredibly important for consumers. It is through competition that consumers are able to get the best deal and it is through competition that many advisers have to ensure that they are providing the very best advice and service for those consumers.
The fourth point I would like to make today relates to the opt-in provision. We are concerned that the opt-in provision is seriously flawed and not based on any logical or empirical evidence. In the dissenting PJC report it was noted that there was only one submission to the Ripoll inquiry, from the Industry Super Network, arguing in favour of the opt-in provision. The Ripoll inquiry then refused to accept that recommendation, yet the government, in its infinite wisdom, decided that it would defy those findings and set a world-first precedent. This does concern us. I would like to directly read into my speech today a letter that was received by me from a financial provider in my electorate, who specifically notes these concerns. I will quote directly from him. He says: 'A particular concern to us is the direct cost that the opt-in obligations will have on our business. In April 2011 our business was unable to replace a departing employee due to the ongoing contribution of the GFC to our operations. With over 600 active clients, we are now faced with an annual cost to administer opt-in, which has been estimated at up to $120 per client per annum. This could potentially be an additional cost to our business of $72,000 per annum.' This drives up the cost of advice and reduces the opportunity for many within our community to access professional advice services which would otherwise enhance their years in retirement. Noting the increased cost, as I have said before, is something that concerns us and it is something that we think the government has not fully thought through. We think, like so many of the government's pieces of legislation, like so many of the announcements made by this government, they have a thought bubble which they then legislate on. This is no different.
Fifthly, this legislation will greatly increase compliance costs, with evidence given by the Financial Services Council that suggest it will cost up to $700 million to implement in the first year alone followed by $350 million in each additional year. This is, indeed, a massive increase and is completely in contrast to the Prime Minister's calls that she will be addressing red tape and regulation through her belated formation of the so-called deregulation forum, which I note follows a deregulation task force announced by Tony Abbott in December last year, of which I am a part and which is led by Senator Arthur Sinodinos AO.
I have some advice for the government: if you want to reduce red tape then it is very flawed to introduce bills such as this. It is yet another example of the government saying one thing and doing something completely different. This seriously flawed legislation needs immediate attention before it is put to a vote. The coalition, led by so capably by the shadow Assistant Treasurer, Senator Cormann, has outlined many vital recommendations that need to be adopted before the passage of this bill should be contemplated.
This bill must undergo a full regulatory impact statement that complies with the government's very own Office of Best Practice Regulation. According to the dissenting report:
According to the government's own Office of Best Practice Regulation, the government did not have adequate information before it to assess the impact of this bill on business and consumers or to assess the cost-benefit of the proposed changes.
This is a pattern that has formed with this government. It does not assess the impact of the changes that it is making and it is ultimately the consumer, the everyday Australian, who pays. When quizzed at a Senate estimates committee, the executive director of the OBPR, Jason McNamara, admitted that the government did not have an adequate regulatory impact statement in front of it when it made the changes.
We know that the minister, Bill Shorten, has admitted that the commencement date that he was trying to force the industry to meet was completely and utterly flawed and he has had to admit this failure and push it back. As we have argued consistently throughout, we believe the commencement should be at the same time as the My Super changes, and that the rushed introduction of the bill simply did not allow industry sufficient time to adjust to the changes—again, adding to administrative costs.
The opt-in provisions must be removed. There is no other marketplace in the world whereby an opt-in process is implemented. Forcing customers to consistently re-sign contracts is not only cumbersome to the customer but adds huge levels of administrative cost to financial providers. There is no doubt that the increased regulatory and financial burden of opt-in mechanisms far outweighs any supposed benefit it may provide. It simply cannot be explained why, if this is such a brilliant measure, we are the only country that is contemplating introducing it. We are also incredibly concerned about the retrospective nature of this bill. As it stands, the annual fee disclosure statements would be applied retrospectively, again adding huge administrative costs with very questionable consumer benefits as outcomes. As a principle, we on this side believe that an incredibly high threshold needs to be met to be able to apply legislation retrospectively. We think, as a matter of principle, or as a rule of thumb, this should not occur for fairly obvious and good reasons. Yet this is a very common occurrence with this government—that it seeks to impose retrospective legislation to implement its program.
I have much more to say about this bill, but let me simply conclude in the time remaining by saying we are very keen to ensure that consumers have appropriate financial advice provided to them. We are very keen to ensure they have appropriate transparency. We do not think that this bill will in fact assist without significant changes. We think it is inherently flawed and we think the minister himself is responsible for bringing forward a very flawed bill.
It is a pleasure to follow the member for Higgins's fine contribution about the flaws in the Corporations Amendment (Future of Financial Advice) Bill 2011 facing the chamber today. Fifteen minutes is certainly not enough time to go through the problems that the sector will face with the proposals the government has put forward today. It does, however, follow the precedent set by this government, as the member for Higgins pointed out, of not consulting and embracing the sector which they are seeking to regulate. The government is not listening to their suggestions, not taking account of their concerns and not providing a reasonable framework for the sector to be able to have input to the proposals of government. This is a dangerous way to do legislation. I have spoken about this in this place before. Sector after sector in the economy today is asking, 'Why won't the government speak to us about the legislation that they're proposing?'
Here, with these Future of Financial Advice bills we see before us, again the sector are saying that they are not satisfied in any way with the legislation, that the time frames are completely unreasonable, that the implementation of it will be unworkable and that it will have serious detrimental effects on the operation of their sector—par for the course, under this government. Whenever this government has the choice between overregulating or letting off more lightly, it overregulates. If the choice is between more complex or less complex, it says, 'Let's be more complex.' The complexity of this particular set of proposals before us is substantial. When smart financial advisers and operators tell us they cannot understand what the proposals mean, how they will operate and whether they will be effective or not, I take it very seriously.
In my electorate of Mitchell, in the Norwest Business Park, I have hundreds of financial service based businesses, mostly small and medium businesses advising small numbers of clients. These are the businesses coming to see me with great concern about how these proposals will not only threaten the viability of their business, potentially putting them out of business, but also favour the big players. It is another theme we see under this government. It is another narrative that is building—favouring big players in every sector, crunching small businesses and crunching the ability of a business to go from a small to a medium to a large business. It is very much what will happen under this legislation, which is complex and, in large part, unclear.
My colleagues have commented on many of the flaws in the proposals, but I would like to point to something that I have spoken about in this place before and that is the concept of financial literacy. Financial advisers have a key role in this domain of increasing and enhancing financial literacy in Australia today. We see from this government continued proposals that undermine the concept of making a person more financially literate and more responsible for their own finances from a younger age right through their lives to an older age following through to superannuation. This bill, which will remove the ability of an adviser to fairly operate, will lead to lower rates of financial literacy. People will seek less advice; people will be underinsured; there will be greater rates of underinsurance. The very things that a government should be seeking to enhance and expand, this bill undermines.
These broad themes are very important for the parliament to understand. That is the feedback we are getting from the sector. That is the feedback I am getting from the businesses in my electorate. We ought to be taking measures to enhance financial literacy and education and that should be a focus of this parliament, not overregulating and overburdening the sector with unnecessarily complex proposals and regulations. We know that these proposals come out of the 2009 Ripoll inquiry and report which followed a series of financial collapses, of which Storm and Westpoint are examples. We know that in 2009 a series of recommendations were made. What I think is a fine dissenting report was put together by the committee's coalition members. Indeed, Senator Sue Boyce, Senator Mathias Cormann, Mr Paul Fletcher and Mr Tony Smith are to be congratulated on what represents a very substantial dissemination of the flaws in the two bills that are before the chamber today.
It is not just a matter of the costs referred to in their report—the $700 million of implementation costs, the $350 million per annum compliance costs—although these increases are of course very substantial. It is the basic nuts and bolts of the proposals that the government has in these bills, including opt-in requirements, that I think are completely unworkable. An opt-in requirement is something that has not been tried in any other major market in the world today.
With the mining tax we have seen an experimental form of taxation that most tax experts said, 'This is a radical experiment, a departure from all normal forms of taxation'. Now once again we have the government experimenting with a radical model of opt in for the financial services sector that nobody is calling for and nobody is recommending. Indeed, it has the potential to lead to some very undesirable outcomes when customers who have not responded and who think they are covered by advice, after the 30-day period will no longer be covered under an opt-in requirement if they do not respond. So I do not see why we would proceed down such a radical and experimental path when there is no call from any major sector for us to be doing such a thing.
When you look at more than the nuts and bolts you will see other problems with these bills. The member for Higgins spoke eloquently about the retrospectivity aspect, requiring in essence all businesses in this space to go back and seek permission for things that they have already done and advice they have already issued. This is a bizarre notion. I have spoken here about the principle of retrospectivity in law where it is not to the benefit of people or industry sectors, and I think that we should not be requiring this sector or these customers to take retrospective action without a very good reason. Once again that principle appears to be missing from what the government is doing to justify this legislation. It goes back to what we have heard throughout this debate, in which the industry sector has said that there will be thousands of job losses from this legislation, that compliance costs will be immense. Why are we not listening to the very sector that we are seeking to make regulations about? Why are we being punitive and heavy-handed? Why, in relation to government legislation and the government's approach, are we using the stick all the time and not the carrot?
I have received a lot of correspondence from businesses in my electorate, from financial sector services around the country and from various associations, including the Association of Financial Advisers. Their comment is very interesting to note, and I want to read it into the record:
Our view is that FoFA, as it is currently drafted, delivers neither improved transparency or increased access to advice. Minister Shorten has stated on a number of occasions that FoFA is a growth strategy for the financial advice industry and also that there is broad industry support for FoFA. In fact, the financial service industry has many concerns with the current draft of this legislation, much of which has been recognised and addressed in the coalition's dissenting report.
That is from the Association of Financial Advisers, so is why Minister Shorten telling the public that he has broad industry support for this legislation when clearly he does not? Even listening just to the small and medium enterprises in the sector in my electorate, it is obvious there are real, justifiable and graphic concerns with the proposals that the government is outlining. They are concerns that should be addressed by the government and not by the constant Orwellian doublespeak from ministers that, 'Oh well, everything is going to be great, businesses will be better off and we have the support of the sector'—which clearly they do not. Another aspect of the FoFA legislation before us that was not recommended by the Ripoll inquiry, but which somehow has got in, is those retrospective fee disclosure statements that I have mentioned. I have a big concern with this because, when we were speaking about what the association and the industry expects, the government said specifically to the sector that they would not introduce retrospective disclosure statement requirements. It was a commitment, a promise, and we have heard much made of this in recent years. Again, this is why the opposition is so vehemently opposed to this legislation as currently drafted. You cannot provide business certainty when you tell the sector that you are not going to do something and then you go ahead and do it anyway, regardless of what you have said that you would do and regardless of what the sector wants.
In relation to retrospective fee disclosure requirements, the government gave their intention: they said they would not do it. It crept into this legislation, and before us today we have retrospective fee disclosure requirements. If you are operating a business in this sector, you do not have that certainty that you need to operate your business. You are facing now, I think, onerous and complex legislative burdens that will not only add to your compliance costs but also undermine the relationship between client and adviser which is so critical in this financial services space.
We have heard from many coalition speakers about that relationship. This is an enterprise that is built largely on trust between the financial adviser and client. The government's overregulation here is seeking to undermine that essential component of the success of these businesses. Why? We hear that there will be thousands of job losses. When you remove the concept of trust from these relationships, it is difficult to see why someone would take financial advice—when they have to continually opt in to a service, when they have to constantly be advised.
No-one is suggesting here that there should not be regulation in this space or that there should not be quality and valuable regulation. In fact the industry itself accepts it. But what we are saying is that this legislation, in the way it is drafted, is not adequate. I do not think it is unreasonable to say that when you see that the government's Office of Best Practice Regulation said that this was not adequate and not up to its own standards of compliance. That is the most damning feature of all. The Office of Best Practice Regulation said that it was concerned about the ability of this legislation to meet the government's own standards and rigorously assess increasing costs and red tape for both business and customers and that the government did not have adequate information before it when it drafted FoFA. That ought to be of concern for the government. They ought to pause there and say: 'We have already delayed the implementation of this legislation to date. We now have unrealistic time frames built into this legislation that the industry say cannot be met.' John Brogden said that it does not matter when the parliament passes this legislation; they cannot under any circumstance meet the 1 July 2012 deadline. The government ought to pause and re-examine this legislation and consider the opposition's amendments which Senator Cormann has put forward, I think very realistically, to improve the quality of this legislation and limit the damage to this vital sector for our economy.
We know that the 1 July 2012 time frame is completely unrealistic, and there is another issue that is related—that is the changes proposed here by the FoFA legislation and MySuper. It would make sense, you would think, when you are talking about businesses in a serious sector like this, to implement such massive technological changes and complex regulatory changes at once, to limit the amount of expenditure that businesses would have to make. It is symptomatic of this government's chaotic approach to legislation and to handling different sectors of the economy that they are seeking to ensure these dates are not together and that these very substantial implementation changes are not going to be done concurrently.
It is completely sensible that the coalition is calling for the implementation date of this legislation to be put forward to 1 July 2013, and we are seeking those amendments genuinely. Listening to the sector, that is only reasonable and rational. The industry cannot meet the deadlines imposed by this legislation, so it ought to be amended and redrafted. But what you tend to get from this government, as we have seen time and time again with its legislative approach, is that it does not matter if a piece of legislation is weak, if it is drafted inadequately or if it does something bad to the sector, it says: 'Let's just push it through parliament and we'll come back months or years later to try to fix it, add an amendment or do something later.' This is the stage at which the government should be listening to the industry. Any small or medium sized financial business in the country today would tell them this legislation is unworkable, complex, chaotic and unnecessary. It will deliver high regulatory costs to their business and limit their ability to provide financial advice to their customers and clients. If the government were serious it would look at these amendments seriously and adopt them. We know that the Minister for Employment and Workplace Relations is not serious about improving transparency and the quality of financial advice in Australia today. We know that he is the minister for unions and is acting in the interests of unions at the expense of small and medium sized enterprises around this country. Thousands of small businesses will tell you they will suffer increased costs and job losses under this retrograde legislation.
It is a pleasure to follow the member for Mitchell and what I thought was an outstanding contribution to this debate on the Corporations Amendment (Future of Financial Advice) Bill 2011 and cognate bill. Like him, I have had numerous small businesses—the people those on the other side do not like to hear about—contact me in the last little while to make the point that this is flawed legislation and should not go ahead in its current form. They have also made the point that the amendments proposed by the shadow Assistant Treasurer, Senator Mathias Cormann, should be considered by this parliament because, like much of the work Senator Cormann does, these recommendations are based on the reality of the situation, not just the political vested interests which the minister responsible for this is constantly and forever in pursuit of. The 'Minister for Vested Interests' is all about making sure that people in protected positions in this industry—namely, the industry super funds—are the best looked after. And the protections put in place by the minister in this legislation will increase the cost for consumers. It will be under the basis of 'being fair and protecting people'; it will be under the usual Labor Party pretence that they are trying to look after the small guy. But this legislation will make it much more expensive and difficult for consumers to get the advice they need.
The member for Mitchell eloquently outlined the importance of financial literacy in Australian society. Financial advisers, particularly those small businesses based in communities and accessible to the consumer, get access to that financial advice from people who are expert in the field and are able to provide that advice. What the Labor Party and this minister will have you believe is that somehow a piece of government legislation will protect people from making a bad financial decision. They will have you believe that you can create legislation which protects people always, that you can protect people against a bad employer, that you can protect people against a bad financial decision. This is the nanny state at its worst. Ultimately, the terrible examples that we have seen where people have lost money have occurred because they have been given inappropriate advice. The Ripoll inquiry in 2009 observed that:
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations, rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.
That is absolutely spot-on, because ultimately this legislation is based on the premise that a piece of legislation can stop people from making the wrong choices. Therefore we see this massive overregulation, which was outlined by the member for Mitchell quite well, on which even the government's Office of Best Practice Regulation, which is a bit of a joke term in itself, made the comment that in their view this was inappropriate legislation and far too great a regulatory burden. It is a regulatory burden particularly to those small businesses out there who are trying to help their local communities and their consumers understand their financial future better.
We need Australians to better look after their financial future. We have significant cost pressures coming at government services, which was so well outlined by the best Treasurer this country has ever had, Peter Costello, in the Intergenerational report, where he highlighted the details of how much extra spending will be required for the Commonwealth and the states to deal with the ageing population. He also made the point that the revenue implications of a reduced workforce as the baby boomers retire will make it harder for governments to meet what they should do and do well at a minimum. That is why ensuring that Australians have their best financial interests at heart and are planning properly so they can be sustainable in their retirement is such an important goal. There should not be legislation that makes that harder. There should not be legislation which operates under the premise of protecting people from themselves while making it more difficult for that to occur.
I mentioned at the beginning of my speech that this bill inevitably—and it is the case with so many of the superannuation bills before the parliament—is designed to favour people the minister is more particularly inclined to agree with when it comes to these matters. It is no coincidence that the Prime Minister ensured during the last ministerial reshuffle that she kept employment and workplace relations together with financial services and superannuation under the same portfolio. You might wonder what the connection is. It is unusual; it has not been done before. Financial services has usually been in a portfolio outside of workplace relations. This time they have been combined.
You can see that this bill, like two other bills before the House at the moment, is about ensuring that the protected and privileged position of industry super funds in this space continues. There are provisions in this bill which make it much better for the industry super funds at the expense of the small providers. We see it with other pieces of superannuation legislation before this parliament. And you know it is true because these issues were raised last week by the Leader of the Opposition—appropriately, because it is something we will be pursuing if we are fortunate enough to be elected to government. This close link between industry super funds, unions and the Australian Labor Party needs very close examination. There will be—
Ms Rishworth interjecting—
No, there is the old industrial club. There are employers organisations, absolutely.
Order! Member for Mayo, refer your remarks through the chair. The member for Kingston!
I make no deference in that respect. This is an issue we will continue to push because there is a sensitivity. You know there is a sensitivity because, on the very day that the Leader of the Opposition made some very calm comments, the President of the Australian Council of Trade Unions was out there trying to blow up the whole thing. It is a very sensitive issue when it comes to what these people are doing with other Australians' superannuation entitlements and how it will affect their financial security in the future. This bill makes it worse, it has to be said.
The provision which needs to be closely examined, and Senator Mathias Cormann has done some very good work in this respect, is the opt-in provision. This is where the favour is returned to the industry super fund network. We know that because the only people during the Ripoll inquiry who argued for opt-in were the industry super network. They were the only group of people who argued for it, but somehow they became a major base of the legislation. They became a major point in this legislative reform. Somehow this opt-in provision, which, of course, benefits big advisers to the detriment of small advisers, became part of this reform. This has to be changed, absolutely. This is one of the major reasons the coalition will oppose this bill, unless the Labor Party and this minister wise up and adopt our proposed amendments. Our amendments will make this bill workable. They will create a reasonable piece of legislation, which is what the industry wants. I am sure many members have received their small business financial advisers' views on this, and they are one and the same. They all say, 'Please, don't tie me up in this red tape. Please, don't drag me down and try to stop me from doing the job that I have been pursuing as an entrepreneur, as a small business person and as a skilled artisan in this field, helping fellow Australian consumers understand their financial obligations and opportunities better.' This piece of legislation does the exact opposite. It seeks to favour the big over the small. It seeks to favour friends over those who are not friends of the Australian Labor Party.
It is a real shame that this piece of legislation has come to this parliament in this way. That is why we oppose it. That is why we say there is a better way to deal with this in the future. But, as I said, this is so consistent with what the Australian Labor Party is doing in government. For instance, we see a start-up date, as the member for Mitchell and the member for Higgins so rightly outlined, which is far too quick. With the industry screaming and saying, 'We can't possibly do this. We can't possibly achieve this start-up date,' this legislation, at the very least, should be put off to take that into account so that the industry can deal appropriately with the red tape nightmare that is being thrown their way.
I say again that the coalition opposes these bills. I congratulate Senator Mathias Cormann on the great work that he has done in this area. I urge the minister, who has so many vested interests, to reconsider the pursuit of this and the pursuit of small business which is making it more expensive for Australian consumers and putting at risk their financial security in the future as it becomes harder for them to get advice. This is too important an area to play politics with, and that is what this minister is doing. It is a great shame. The bills should be opposed.
Debate adjourned.
Sitting suspended from 13 : 02 to 16 : 00
In rising to speak to the Judges and Governors-General Legislation Amendment (Family Law) Bill 2012 I do so foreshadowing that the coalition intends to send this to a Senate committee. We are in this chamber because there will be not an opposing vote in this chamber. However, there are many things of concern about this bill that I think we need to address. The first one is the constitutionality point—that is, it is provided in the Constitution that a judge—and that is federal, of course, because that is what it covers—cannot have their remuneration diminished during their continuance in office. The remuneration is a widely read term and refers to all financial emoluments associated with that office, including pension rights. In respect of the Governor-General, you could say it is in violation of section 3 of the Constitution, which prohibits alteration of the Governor-General's salary during his or her continuance in office.
Those points are serious points and need to be made right at the outset, but it is also just as important to draw attention to the precedent that this seeks to create by having a special family law provision for a separate class or, indeed, a subset of a class of individuals within our community. Many of us who have been involved in discussions over superannuation and the status that it should have in reference to family law were concerned that superannuation was left out for decades after the passage of the act and was not considered to be marital property. Therefore, it was outside the purview of the court and the act and was not dealt with.
Then whilst we were in office we brought in a provision which legislated for superannuation to become part of marital property and that is the situation for all citizens of Australia. This bill proposes to create special laws for judges who are federally appointed judges and the Governor-General. I suspect that the Governor-General has been thrown in to make it look good because it certainly did not come from that office that this bill be generated, nor am I aware that it came from particularly the Federal Court or the High Court. I do understand that it is almost a bill to meet an anomaly of a particular former Family Law Court judge and a dispute with his spouse. That is no way to make law.
I am very concerned that we could have a situation where the federal parliament would make a law specifically for federal judges. It would not cover state judges and I am reminded that, with regard to defined benefits, there is a qualifying period for judges just as there is for members of other defined schemes. I can cite examples of other people in defined benefit schemes who have been divorced prior to their becoming eligible to receive a pension and they had to raise sufficient money to pay out the spouse. Should they not in fact qualify for the pension it was in terms just 'bad luck'. So it is totally unfair that there is a carved-out niche for a particular group of people, whether it be judges or accountants or school teachers or policemen or any other category of people. I think it is important that these laws are universal laws and apply equally to people across the board. Even though there will be no voting against this bill in the House, I am flagging that we will seek to have a Senate inquiry into the bill so that some of these issues can be flushed out and evidence can be taken, and we can see properly perhaps what motivates the bill. I think the concerns of many need to be assuaged.
I speak in support of the Judges and Governors-General Legislation Amendment (Family Law) Bill 2012. The member for Mackellar has no idea what she is talking about on this issue. This is a case of making sure that governors-general and judges are treated the same way as every other citizen in this country with respect to section 79 and section 75(2) of the Family Law Act. That is what this legislation purports to do. The Constitution makes it very clear that the Commonwealth parliament has the power under section 51 to make laws in relation to matrimonial causes and divorce, and that is the basis upon which we have made laws under the Family Law Act—and it was a reforming Whitlam Labor that brought family law up to date in the mid-seventies with the Family Law Act.
In this legislation, we are making sure spouses and partners of judges and governors-general are treated in the same way as any other citizen of this country in the states and territories. The changes in this legislation go back a little way and I will explain that to the House. When someone separates in a marital relationship or a de facto relationship, or a same-sex relationship as a result of the laws we have passed, under part VIII of the Family Law Act they have the right to bring an application for property orders in the Family Court or the Federal Magistrates Court. The Family Court, in exercise of its power, can make a property order under section 79(1) of the Family Law Act and take into consideration the factors under section 79(4), which talk about the financial and non-financial contributions made to matrimonial or cohabitation type property. And the court looks at other factors under 75(2).
The situation with respect to superannuation has always been a vexed issue in family law. In fact, it was often the case that the courts engaged in quite unusual tactics to get around the situation that superannuation, whether a defined benefit scheme or an accumulation fund, was a source of income or an asset to a person's benefit. In the case of Coghlan v Coghlan of some years ago, judges referred to superannuation as another species of asset and not really a matrimonial asset. This has always been a vexed issue. It is often wives who are disadvantaged in these circumstances. If they have been together for a long time and the husband has a large amount of superannuation and there is a matrimonial house, a car, a bit of savings and property, it is often wives who have been disadvantaged by the non-treatment of superannuation whereby it is considered to be an asset.
Under this legislation, we are making sure that the partners and spouses of judges and governors-general are treated in the same way as every other Australian is treated if they separate, and avail themselves of the right to seek an order for property settlement under part VIII of the Family Law Act. The member for Mackellar raised the question of what the situation would be with a serving judge. If a judge is serving and is not yet qualified for a pension, at the time of the split the adjustment of the benefit would be based on the proportion that has accrued at the time of the split. With respect to property settlement, even if the person has not yet, say, qualified by reason of age for the superannuation, the trustees of the superannuation fund can adjust the superannuation by way of order or by way of a binding financial agreement. I have been involved in cases—
There is no fund; it's consolidated revenue!
Order! The member for Mackellar was heard in silence. She will extend the same courtesy to the member for Blair.
There are a plethora of superannuation arrangements, involving politicians, judges, military people, accumulation funds, defined benefit schemes. This legislation makes sure that everyone is treated equally. We want to make sure that the current arrangements happen as every Australian would expect them to happen. If the member for Mackellar has a look at the current arrangements for family law, she will see that, on that issue in relation to judges and governors-general, they are inconsistent with the idea that they should be treated in the same way as every other Australian. Does the member for Mackellar think that judges and governors-general should be treated in another way? That is not the case.
We want to make sure that, when this bill is passed, the former spouse will be able to receive his or her share of the superannuation benefit as a separate interest benefit. I have done thousands of these types of cases involving Australian citizens, and I have been involved in lots of cases involving very senior figures in this country. I am not going to start mentioning individual people that I have acted for or their spouses—
I should hope not.
I tell you what: I have acted for more Tory politicians than Labor politicians in relation to family law cases—or their spouses, including people in chambers all over the place. I am not going to start naming them. It is a long time since the member for Mackellar has practised in the area of family law. She should have a good look at the law and what we are doing in this regard. This is a necessary undertaking. The fact that the coalition cannot bring themselves to just get rid of this anomaly goes to show the extent to which they will say no to everything—even to good law that actually fixes up irregularities and eccentricities. This legislation does that. It is a sensible piece of legislation that will make sure the family law splitting arrangements on superannuation are the same for all Australians. We on this side of the House do not believe that Australians should be treated unequally, even if those opposite believe that that is the case.
I thank all speakers on the Judges and Governors-General Legislation Amendment (Family Law) Bill 2012 to date. The bill will implement new family law arrangements for the federal judiciary and governors-general by amending the Judges' Pensions Act 1968 and the Governor-General Act 1974. The new arrangements will allow for a former spouse of a judge or a Governor-General to receive his or her share of a superannuation benefit as a separate benefit at the time of a family law split. This is consistent with family law, which aims to provide separating parties with a clean break.
Under the Family Law Act 1975, superannuation interests for part of the property of a married or de facto partner can be split between separating parties at the time of a property settlement. However, the current family law arrangements for judges and governors-general are inconsistent with the family law policy of a clean break. The arrangements are also out of step with other Commonwealth defined benefit superannuation schemes, which have since 2004 provided separate interest benefits to former spouses of scheme members in a family law split.
For judges, the current percentage-only arrangements mean that any split of the pension of a judge in a family law settlement only occurs when pension payments are made to a retired judge. Payments to a former spouse do not commence until the judge retires and cease upon the judge's death. There is no certainty as to the overall quantum of the benefit that the former spouse is entitled to receive.
For governors-general, there are currently no scheme-specific separate interest arrangements in place to cover the splitting of superannuation pensions. The bill will address these issues by putting in place scheme-specific arrangements for judges and governors-general which provide a separate interest benefit in the event of a family law split of a superannuation benefit. As well as bringing the arrangements into line with the family law policy and with other Commonwealth superannuation schemes, the new arrangements will give the parties greater control over their respective individual benefits. The proposed changes do not mean that the Commonwealth will be determining property settlements. The Family Court or the separating parties will decide whether the superannuation benefit is to be split and, if so, the amount or percentage of the split.
The arrangements in the bill will operate when a splitting order or an agreement is made in relation to a superannuation interest in the scheme. The interest of a judge or Governor-General in the superannuation scheme will be valued at the time of the family law split and a separate interest for the former spouse will also be created at this time. If a pension is not payable to a judge or Governor-General at the time of the split, the pension of the former spouse will be deferred. The deferred pension will become payable when the former spouse reaches his or her retirement age or before this if he or she is certified as permanently incapacitated. Once the judge or Governor-General retires and commences a pension that pension will be adjusted to take account of the amount transferred from the former spouse. If at that time of the family law split, a pension is being paid in respect of the judge or Governor-General, the pension for the former spouse will be payable immediately and the pension of the judge or Governor-General will be adjusted to take account of the amount transferred to the former spouse.
The bill also includes transitional provisions to cover existing family law cases in the Judges' Pensions Scheme. The transitional arrangements provide the former spouse with a separate interest pension from the date the legislation comes into force, based on the splitting percentage in the court order or agreement. There are also safeguards to make sure that there would be no unintended consequences for the parties arising from the proposed new arrangements.
These reforms proposed by the bill are an important step to align the family law splitting arrangements for judges and Governors-General with family law principles and to bring consistency to the family law arrangements across the Commonwealth defined benefit superannuation schemes. I commend the bill to the chamber.
Question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
I note that the terminology used in all the clauses of the bill refers to judges but nowhere does the bill make it clear that we are talking only about federal judges. I would like to ask the minister just to confirm that this is not an attempt to cover the field, which I do not believe there would be power to do, but that this will leave state judges in a different situation to federal judges. I would just like confirmation of that.
I thank the member for Mackellar for her question. I will get back to the shadow minister on the detail of the answer. I do not have it available to me at the moment.
I refer to clause 39, which inserts proposed clauses 17AA to 17AJ into the Judges' Pensions Act, which creates a new associated pension for non-member spouses. I would like to ask the minister whether or not he is aware of any other provision in family law for the creation of such a pension.
Again, I would need to take that question on notice. I will get back to you when I can.
I would similarly like to ask about new proposed subsection 17AA(2), which provides for the operative time that the member's spouse is in receipt of the pension and creates something called an 'associate immediate pension'. I would like to ask the minister if he is aware of the existence of any other like pension applicable to any person in Australia other than this category of persons.
I appreciate the question and I appreciate the forensic process of going through this bill. But, again, I will get back to the shadow minister to answer the specific detail of that question.
I could continue to go through this bill for which the minister is responsible in great detail. The explanatory memorandum is 24 pages long in order to create this new category of family law which is applicable only to this special subclass of judges. I guess I am going to get the same answer every time—that the minister does not know the answer and that he will get back to me. I really do not think that is an acceptable way to deal with this sort of legislation, but I can see no point in going on through every clause of the bill, because I know I will get the same answer. So perhaps the minister could explain to us why this particular new arrangement has been created for this subset of people.
It is designed to accommodate current issues that are to be dealt with in the case of the splitting arrangements for judges and governors-general. In the current situation we do not have a law that covers that eventuality in sufficient detail. This bill attempts to deal with that. I do appreciate the detailed forensic consideration which the shadow minister is giving this bill. It is a consideration that the shadow minister brings to all of her interactions and gives all legislation. I appreciate the quality of the questions being asked, and I will get back to her with detailed answers to the specific questions that she has asked. I feel that is the best way to treat with respect and consideration the detailed questions that she is asking.
I thank the minister for his complimentary words about my concern about the actual workings of the bill. When something like this is occurring which is brand new—and I note the use of the word 'accommodation'—I find it of concern that it would be considered reasonable to accommodate the concerns of a subset of people when a different law applies to everybody else. That is why, if you look at the bill in particular and the explanatory memorandum, you will see page after page of new terms that simply do not exist in the rest of the Family Law Act. New terminology has had to be created for this specific category of people. I honestly do not see how in all conscience a government can accommodate the wish of a small group when a whole lot of other people are going to be excluded. It is not even all judges; it is only the three courts created in the federal jurisdiction—the High Court, the Federal Court and the Family Law Courts. As I understand it, it is to accommodate a problem that arose for a particular Family Law Court judge and his ex-spouse. That is not the way to make good legislation. I will not ask any more questions because I do not think I am going to get any specific answers, but perhaps this will add to the answers and information that will be made available to the Senate references committee should the reference be successfully made.
Bill agreed to.
Ordered that this bill be reported to the House without amendment.
The Corporations Amendment (Future of Financial Advice) Bill 2011 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 seek to address the obvious need for reform within the financial advice industry, as highlighted by the collapse of Storm Financial in 2009. Most financial advisers would agree—indeed, as ASIC found—that Storm Financial acted recklessly and not in the best interests of their clients. The fact that Storm Financial collapsed leaving thousands of clients destitute and bankrupt highlights a need for a stronger regulatory framework within the financial advice sector.
However, this legislation in its current form does nothing more than increase red tape and regulatory costs for businesses and in turn pushes financial advice products out of the reach of the ordinary consumer. This legislation will deliver little to no additional protection to consumers and will make the cost of providing quality financial advice to consumers more expensive and cumbersome.
The coalition members of the Parliamentary Joint Committee on Corporations and Financial Services made 16 recommendations in their dissenting report which address many of the shortfalls of this legislation. These recommendations have been positively received and supported by a number of key industry groups and associations. It astounds me that, despite going through a rigorous committee process, the Corporations Amendment (Future of Financial Advice) Bill 2011 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 are still unnecessarily complex and unclear in a number of parts.
It is of no surprise to me that the government's own Office of Best Practice Regulation, the OBPR, has issued a damning assessment of these FoFA proposals. I support, as do my colleagues in the coalition, sensible reforms to financial advice and the financial services industry. However, when these reforms create unnecessary complexity and produce unclear and convoluted regulations, the result is the creation of a barrier rather than an incentive to more consumers receiving quality financial advice. For the best interests of consumers and industry alike, the parliament should adopt the first recommendation of the dissenting report and defer consideration of the FoFA legislation until the government provides a full regulatory impact statement in relation to the legislation currently before the parliament.
Moreover, this regulatory impact statement must be compliant with the requirements of the government's own Office of Best Practice Regulation. Anything less is an insult to those thousands of professionals practising in the financial advice sector and will let down millions of Australians who seek professional and quality financial service.
The FoFA reforms are going to completely restructure the financial advice industry. It is only common sense that the government does its homework now on how these reforms will affect the industry and consumers. Specific industry concerns regarding the FoFA reforms include high implementation and compliance costs as well as a reform package that favours larger, concentrated financial advice service providers. Last year, industry bodies warned the government that the FoFA reforms in their current form would cost jobs. We are already seeing a watershed, with jobs going out of the financial advice sector as firms prepare for the pain of more red tape and the extra cost caused by these reforms. Conservative industry estimates place the cost to implement these reforms at around $700 million, with a further $35 million a year for compliance.
One of the most contentious aspects of the FoFA reforms is the mandatory opt-in requirement, under which consumers must re-sign contracts with their financial advisers every two years. This requirement removes from clients' control when and how they terminate their relationship with a financial adviser. This will significantly increase red tape and costs for financial planners and consumers involved in long-term financial advice relationships. The creation of the opt-in requirements also takes away key protection mechanisms for advice and dispute resolution schemes.
It is very important to remember that in 2009 the parliament asked the Parliamentary Joint Committee on Corporations and Financial Services to conduct a comprehensive inquiry into Australian financial products and services—the Ripoll inquiry. This very comprehensive inquiry received a vast number of submissions and made a number of recommendations. However, instead of implementing the recommendations made by the Ripoll inquiry, which would have resulted in bipartisan support as well as industry support and approval, this government has allowed its own self-interest and the vested interest of the Industry Super Network to hijack the FoFA reform package until it is almost unrecognisable.
As a number of my colleagues have noted, the Industry Super Network provided the only submission to the Ripoll inquiry that advocated a mandatory opt-in requirement. Its proposal was not even accepted as a recommendation by the Ripoll inquiry—that fact should be well noted. Yet now this unworkable provision is being thrust by a vested interest into an incredibly important reform agenda to the detriment of the industry, the consumer and the economy. I cannot even begin to express how frustrated and angry financial advisers are about the constant changes and last minute additions, along with the overt political interference and policy reversals that have occurred during the creation and passage of these FoFA reforms.
Financial advisers provide professional advice to Australians about how to better manage financial risks and maximise financial opportunities. This legislation sends the wrong message about the professionalism of financial advisers and presumes that clients are not in a position to make an educated decision about their relationship with their financial adviser.
Until this legislative reform package, payments for financial services have been flexible and accessible, especially fees paid by commission from a customer's superannuation. I have canvassed the views of a number of financial advisory companies in the Macarthur electorate about their thoughts on the proposed FoFA reforms, especially with regard to the practical workings of the legislation. The common theme that has arisen in my conversations is that this legislation will create a number of key problems for businesses and clients and will fail to deliver the intended protections and benefits to their clients. However well intended the FoFA reforms may be, making the financial advice industry over-compliant will push up fees and in turn make this important and valuable product unaffordable for many hardworking Australians. This is especially true in my electorate of Macarthur, which has a very high proportion of young families who are mortgaged to the hilt and who often do not have available finances for additional financial products, especially for risk insurance outside their superannuation.
The government clearly has not given enough thought to the complexity of, and costs associated with, many of the initiatives within the FoFA package. The government has already failed its own standards with this reform package and it is creating a legislative nightmare for smaller financial advice businesses. While the government has at least decided to adopt the coalition policy of allowing commission payments on risk insurance products outside of superannuation, it is still stubbornly pursuing a ban on commissions inside superannuation. That will increase costs for consumers, remove choice and leave many people worse off, particularly small business people who self-manage their super.
The government's decision to draw a line in the sand, and ban commissions on risk insurance inside superannuation, will cause pain to the consumer. It will limit consumers' choice and the flexibility of remuneration options. In fact, just two years ago the United Kingdom went through this same process of banning commissions on risk insurance. They have discovered that banning has not worked. The UK have learnt from their actions and they recently reversed that decision. That has hardly got a mention in this chamber. We should learn from that experience, as opposed to putting our financial advice industry through the wringer. Australians are already underinsured. This legislation will greatly exacerbate this significant problem.
Another failure of these bills is the last-minute addition by the government of the additional fee disclosure statements for both existing clients and new clients. These additions occurred after the minister assured industry groups that this last-minute addition would not be retrospective. This legislation will require financial advisers to report to each client, whether the adviser had a relationship with the client before the reforms or not, with a detailed outline of every service performed. While this may not seem onerous on paper, in practice it will result in financial advisers sending reams of paper to clients outlining every phone call, transaction, decision, meeting and inquiry made on the client's behalf. This is especially burdensome as fee disclosure obligations already exist for advisers and product advisers in disclosing to the client the fees paid.
The government's addition of overly prescriptive fee disclosure statements will dramatically increase administrative costs and red tape. I urge the government to accept recommendations 4 and 5 made by the coalition members of the Parliamentary Joint Committee on Corporations and Financial Services. In their dissenting report, they call for the government's prescriptive fee disclosure statements to require a summary of fees to be given to clients annually only and for these fee disclosure statements to not be applied retrospectively. These recommendations strike an effective balance between the need for transparency and accessible information of financial advice services by not placing an overly prescriptive legislative burden on the industry.
The last point I make about these two bills is with regard to the best interest duty that will be established by this legislation. The Ripoll inquiry made a number of recommendations regarding the duty of financial advisers to provide advice in the best interests of their clients rather than the adviser's own financial interests, including that of their providers and wholesalers. This is an important provision and one that I am glad the government has chosen to adopt. However, in its usual fashion, the government has failed to provide a robust and well thought out framework for this new duty. I urge the parliament to adopt the coalition's recommendations 6 and 7, which will resolve much uncertainty within the industry about the practical operation of duty and facilitate the provision of scalable advice.
One of the firms in my electorate, Macarthur Financial Planning, has expressed concerns about the future of scalable advice under the FoFA reforms in their current form. Change is good when it brings improvements, efficiencies, transparency and better value for consumers. With the recommended amendments to this legislation, the FoFA reforms could deliver a balanced result for the financial planning sector and their clients. However, this legislation in its current form is unnecessarily complicated and unclear. In particular, the opt-in renewal measures of the legislation create a number of significant barriers rather than incentives to people receiving quality financial advice at an affordable price.
Even on conservative industry estimates, the changes these bills seek to legislate will cause job losses in the financial services industry. They are likely to cost the industry around $700 million to implement and a further $350 million per annum for industry to comply with many of the onerous requirements. These amounts will surely be borne by the consumer. This legislation will enshrine an unlevel playing field amongst financial advice providers and will increase red tape, an additional cost for both businesses and consumers, with little to no additional benefits to protect the consumer.
Today, I urge the House to accept the coalition's amendments to this legislation. They will improve this legislation and turn around a good intention that has been poorly executed into a piece of legislation that will bring positive change to the industry. But it wants and needs real reform rather than pandering to the whims of the minister's mates.
The coalition has sensible and timely amendments to the Corporations Amendment (Future of Financial Advice) Bill 2011 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011. The shadow Assistant Treasurer and shadow minister for financial services and superannuation, Senator Mathias Cormann, is doing a terrific job on this. The words in the previous sentence are not mine, although I wholeheartedly agree. They are in a comment from highly regarded Wagga Wagga financial adviser, Australian Financial Services authorised representative and Australian Credit Licence credit representative Gary Langtry. I have known Mr Langtry for many years. He, like me, hails from the Marrar district, and is a straight talker. He will look you in the eye and tell it as it is. It is the best way to be, particularly in his line of work. Clients know where they stand. That is important, crucial, essential.
Mr Langtry was pleased Senator Cormann was holding the Minister for Financial Services and Superannuation to account on this issue. The bill as it stands 'feeds beautifully into the hands of the union controlled superannuation fund network', Mr Langtry observed. How very true. Mr Langtry sent me a paper compiled by the Association of Financial Advisers on the key recommended amendments and impacts of these bills, which have been described by the association as 'the biggest change to the industry in a generation'. Now that the Parliamentary Joint Committee on Corporations and Financial Services has put in a dissenting report, the association is correctly and understandably railing against the legislation, which includes elements that are anticonsumer, anti-adviser and anti small business. Its paper says:
The key test for FoFA, which the AFA has continued to support, has always been:
1. improved transparency and
2. increased access to advice.
Our view is that FoFA, as it is currently drafted, delivers neither. Minister Shorten has stated on a number of occasions that FoFA is a growth strategy for the financial advice industry and also that there is broad industry support for FoFA. In fact the financial services industry has many concerns with the current draft of this legislation, much of which has been recognised and addressed in the Coalition’s dissenting report.
Why is it that it seems everyone outside of the government can see what the Labor government is doing wrong and how it will affect Commonwealth coffers, businesses, regardless of size, families, farmers and everyday people juggling a household budget, yet those on that side of the chamber seem to be oblivious to it all? There are none so blind as those who will not see. The association's paper is a damning denunciation of the government's proposals.
It takes up five key issues related to the bills. First, retrospective fee disclosure is a huge cost burden to the financial services industry for information consumers already receive. The Financial Services Council has estimated implementation costs of $700 million. We heard the member for Macarthur just a few moments ago talk of the job losses that the financial services industry would have to endure. We on this side of the House do not want to see any further job losses in any industry, let alone the financial services industry, which plays such an important part in our economy and for small business, which, as the member for Macarthur would also know, is the engine driving our economy.
Further, the council has suggested the cost per client for fee disclosure will be halved if it only involves new clients and summary information. As with everything when a government introduces overbearing, onerous—and that was a word that the member for Macarthur used well too—and unnecessary legislation, someone has to pay. Invariably the cost is borne by those at the end of the line: the consumer, the customer, the client. Second, the opt-in obligation is an issue of concern because it will add costs of about $120 per client per year. Unintentional failure to opt in could result in a possible risk for consumers, as they could miss out on the receipt of adviser-initiated important advice, according to the association. Access to advice will, according to the association, reduce as advisers reposition their offer up-market. The association argues that it is better to strengthen opt-out provisions. As with so many of Labor's policies, the ones who will suffer most will be clients in the regions, clients in country areas of this great nation of ours.
Third, proposed section 961B(2)(g) creates uncertainty, and, if enacted, could well eventually need to be tested in the courts. Then we have the question of who pays for the court to decide what is right and what is wrong. Is it the government, aka the taxpayer? Is it the customer, the client, the consumer? Is it the financial adviser? Whichever way, someone is going to lose, and generally the person who loses will be the one who can least afford it, possibly the taxpayer. This uncertainty with respect to the best interest duty could lead, the association says, to a rise in professional indemnity premiums. The association wants to adequately ensure that the ban on conflicted remuneration is not applied retrospectively.
Fourth, the government has repeatedly pledged that its proposed legislation will not be applied retrospectively, yet the transitional arrangements fundamentally fail to ensure this. We have heard that word 'transition' used so often by the government. They are always transitioning something, and it is a transition from something that is decent and good and working to something that is not decent or good or working. The word is 'transition' or 'transformation'. That is the government's way. It is the Labor way of doing things—no thought whatsoever. Any change to the law should still allow an adviser to sell their business or a book of clients without triggering a retrospective loss of property rights. This will have an adverse effect on the value of advice practices, and again that is so crucial in regional Australia.
Finally, the association has called for a delay in the start of the legislation until the industry is adequately prepared—1 July 2013 has been mooted. FoFA involves expensive and lasting changes. This will require significant system alterations and adviser training. For these companies, particularly in regional Australia, adviser training is often an expensive and onerous thing. Sometimes they need to go to metropolitan areas, and that involves aeroplane fares, accommodation and people being away from the business at busy times. When these things are brought in, they always hit regional Australia in the neck. Rushed implementation will cause errors and inefficiency, which the industry does not need, given the fact that it is dealing with people's money—in some cases, people's lifetime investments. Given the ongoing legislative uncertainty, 1 July 2012 is an administrative impossibility. But we have seen so many things that the government are rushing through, so many things that they want to get done by 1 July 2012—
Absolutely, and you're trying to prevent democracy.
Well, I find that your government is all hypocrisy and no democracy, and I am sure a lot of members of the public agree. I will take that interjection.
The association's demands are not unreasonable. Any reforms in this area must find the right balance between suitable levels of consumer protection and the need to safeguard the ongoing accessibility, affordability and availability of high-quality financial advice. This needs to happen not just in metropolitan areas but also in regional Australia. Labor has failed to accomplish an appropriate balance with FoFA because it did not meet its own internal process requirements around best practice regulation. There is nothing surprising there. The government falls short in so many areas. It probably thinks, 'Why should financial reform be any different to any other policy area?'
Labor's mismanagement of this legislation was exposed by the damning assessment of the FoFA proposals by the government's own Office of Best Practice Regulation. How utterly embarrassing for this government. This government has been embarrassed so many times in recent weeks and months. The trouble is it is always the voters—the people who are paying this government's way with their hard-earned taxes—who are being caught out, being penalised. These Labor reforms are just another example of that. They are a sad and terrible indictment, given the complexity and associated costs of the proposed changes, especially the highly controversial and contentious aspects of these bills.
There is no precedent in the world for introducing the sort of additional red tape which will follow the government's opt-in proposal. There is no precedent in the whole wide world. But have we not heard that before? To my mind, it sounds similar to the Clean Energy Bill—the carbon tax—where Australia will set the benchmark and our citizens will be poorer because of it. We hear all the time that it is a carbon pricing mechanism. I beg to differ; it is a tax. The people out there know that it is a tax and Labor in here know it is a tax, but they refuse to call it what it is. It is not carbon pricing; it is a tax.
The coalition has made 16 recommendations—reasoned, well thought out, industry backed proposals—as to how the current FoFA amendments can be improved and strengthened. The 16 suggestions are consistent with those in the dissenting report of the Parliamentary Joint Committee on Corporations and Financial Services. They make good sense. They will help customers, Mr and Mrs Average, who use financial advisers to help them with their savings and investments in these challenging times. They will help the industry, which plays such an important role in Australian society today. The Labor government just needs to take them on board.
I rise to speak on the Corporations Amendment (Future of Financial Advice) Bill 2011 and the cognate Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011. The financial services and advice industry provides a very important service to many Australians. It helps Australians with their financial health and wellbeing. Financial advisers help Australians to manage financial risks and maximise the financial opportunities available in today's economy. But we must always remember that financial advice, like any other form of advice, is only an opinion or a recommendation offered as a guide. No financial opinion or recommendation can ever be perfect. For example, look at American economist Mr Alan Greenspan, who served as Chairman of the United States Federal Reserve Board from 1987 to 2006. He was a man credited with masterminding the postwar boom, who had a track record of demonstrating that there was hardly anyone else in the world more qualified to provide financial advice. But, following the GFC, Mr Greenspan admitted that he had been partially wrong. He said:
… I have found a flaw. I don't know how significant or permanent it is, but I have been very distressed by that fact.
When questioned further about his ideology and his opinion of the economy and economic advice, he said that his ideology was not working.
… that’s precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.
That reminds us that even the most qualified economists and financial advisers give just that—advice, which sometimes may not be in the best interests of their clients. The coalition recognises the role that financial advisers play in helping Australians to better manage the financial risks and to maximise the financial opportunities. In providing this service, financial advisers actually deal with other people's money. That is the reason why we must have an appropriate robust regulatory framework in place to ensure effective consumer protection and to ensure that high-quality services can be made available at a low cost and that they are accessible and affordable.
The financial services sector came through the GFC in reasonably good shape. But, like anything, there is always room for improvement. In pursuing any regulatory change, we must focus on making things better, not just more complex and not just creating more red tape and not just making it more costly for everyone. We must avoid any regulatory overreach where increased red tape increases costs for both business and consumers with no additional consumer protection or benefit. But, sadly, like so much we have seen from this government, this is flawed legislation, arising from a flawed process. The reform package was simply hijacked by vested interests after more than two years of unnecessary regulatory uncertainty and upheaval for our financial services industry. Confidence in our financial services industry requires that there be transparency, choice and competition. Unfortunately, these bills provide absolutely none of those three. We need to also make sure we are striking the right balance between appropriate levels of consumer protection—but again these bills fail.
I would like to quickly go through a few areas where the coalition believes that these bills fail. Firstly, they are unnecessarily complex and in large parts unclear. Secondly, they are expected to cause an actual increase in unemployment. Thirdly, they legislate to enshrine an unlevel playing field amongst advice providers, inappropriately favouring a government friendly business model against the interests of small business in the financial planning area. Fourthly, the reforms in this legislation are likely to cost about $700 million to implement and a further $350 million per annum to comply with, and they are conservative industry estimates.
I come to a few specifics about the impact of these bills on financial advice. Industry participants have expressed serious concerns about the detrimental effect that this legislation will have in its current form. The committee that investigated these bills received evidence from the Financial Services Council that the government's proposed changes would cost the industry $700 million to implement upfront and $350 million every year thereafter. I think the comments from Mr Richard Klipin, the chief executive officer of the Association of Financial Advisers, are worth reading. He suggests that the total job losses resulting from this legislation could exceed 30,000. He states:
In conclusion, FoFA, as it stands, will decimate the financial advice profession. Over 6,800 adviser jobs are at risk and over 30,000 jobs in total. This excludes the businesses they support in the communities they serve and the clients they service. A piece of legislation that inflicts this amount of damage is unacceptable.
He is exactly right. He continued:
FoFA as it stands will also increase the cost of advice to consumers.
He goes on to say:
This committee has already had evidence that FoFA will cost hundreds of millions of dollars to comply with—and this is just for the product providers at the big end of town. It will also decimate the provision of financial advice to clients in the bush and the regions. Advice will … become a service for the wealthy, and working families and lower- to middle-income Australians who really need advice will be priced out of the marketplace.
That comment alone shows why this legislation should at least be put on the backburner. I further offer some comments about financial advisers from AMP, who have expressed concern that these reforms would actually increase the concentration of players in the market and lessen competition. A representative of AMP stated:
… I think there is likely to be a migration of advisers to large players like AMP. So, despite the fact that we think there is some competitive advantage in the advice industry for this legislation to companies like my own, we do not believe it is in the broader interests of the financial advice industry that there should be what we think is likely, which would be a consolidation of advisers.
Further, Mr Grahame Evans, the Group General Manager of Professional Investment Services, stated:
Australia did not get to be the No. 1 financial services hub in the world and respected by everybody else because we were anticompetitive. I think this is an important aspect of FoFA. We have to make sure that, in our rush to protect the consumer, there is a balance between the objectives of being able to give the consumer appropriate protection and not reducing the competition that is out there in the marketplace.
We have seen the dangers of increasing market concentration in many sectors of our economy and we have learnt from the mistakes. We have seen the problems our supermarket sector and we have seen the problems in the trucking industry all relating to increasing market concentration. Unfortunately, that is what we see these bills doing. We see an increasing market concentration in the provision of financial advice whereby we risk creating financial planning services that are too big to fail.
Australia simply did not get to be the No. 1 financial services hub in the world and respected by everybody else because we were anticompetitive. I think this is an important aspect. We have to make sure that, in our rush to protect the consumer, we create a balance between the objectives of being able to give the consumer an appropriate level of protection and not reducing the competition that is out there in the marketplace, so not resulting in increasing market concentration. That is simply another reason why these bills in their current form should be opposed.
Another reason why these bills should be opposed is the unrealistic implementation time frame. As it stands, this legislation will actually become effective on 1 July this year, a little more than three months away. The current implementation time of a little more than three months is completely unrealistic, creating great uncertainty for the industry. Businesses will need to change processes, they will need to change software and they will need to train advisers—all before business has even seen the regulations. Three months is simply too short a period of time.
A few interesting comments concern the problem that it will all create. If we try and bring this legislation in and enforce this on our financial services industry in three months, we will create havoc. There will be mistakes made. It will all cost the industry likely even more than the $700 million estimate of implementation. What we should be actually doing, as the coalition has recommended, is this: even if the government thinks this legislation in its current form is the right way to go, its implementation should be postponed to 1 July 2013 so the changes are synchronised with the start of MySuper. In this way, it will make it much easier for the industry to work through these changes, to accept them and to make sure they are implemented on the lowest cost basis.
Another great problem with this legislation is the opt-in provisions. These opt-in provisions will add unnecessary additional costs and create red tape. The government's proposed two-yearly opt-in provisions will make it questionable whether they actually provide any consumer benefit. There is simply no precedent for these opt-in provisions and this increase in red tape anywhere else in the world, yet this is what this government is trying to do. Evidence received during the inquiry expressed concerns about the negative consequences which may flow to consumers who do not opt in within the required 30-day period. That is even though they may have intended to continue with their financial advice relationship and may even have assumed that the relationship was ongoing. Even where the lack of opt-in is inadvertent, clients are automatically deemed to have ended their financial advice relationship. In its submission, the Financial Planning Association expressed its concerns as follows:
Unfortunately, the legislation in its current form does not provide adequate protection to financial advice clients where 'the disclosure obligation' or 'renewal notice obligation' is not satisfied by the financial planner/licensee.
This is because, by virtue of the default, the client will no longer be considered to be an 'advice client' if the planner does not receive the client's opt-in renewal notice within the 30-day period. This may be completely contrary to what the client understands may be the relationship and could have significant ramifications at a later date when the client attempts to seek compensation from their planner for not advising them of changes to the law or market movements that may affect their financial position.
This also affects many of the small business financial planners out there. It affects the value of their business. They may have built up a business with customers, built up a personal relationship, but if this automatic opt-out provision is there, where another form needs to be sent out, it diminishes the value of their business, because those clients automatically fall away from being their clients if that customer fails to fill that form out.
I'm sure that we all know the number of forms that we get through the mail to fill out every day. If this legislation goes through, by simply failing to fill out one of those forms, which often a consumer would put aside and think was unnecessary, they are automatically be opted out of that financial planner's advice. This is simply another reason why this bill should be opposed.
Another problem is with the retrospective fee disclosure statements, because these were not part of the government's proposed changes until the very last minute. It was a last-minute throw-in that was done without any consultation with the industry, without any discussions of the ramifications or the unintended consequences that would result. Mr Richard Klipin, Chief Executive Officer of the AFA, told the committee investigating this bill:
Fee disclosure statements were never part of the conversation and never part of the consultation. They jumped in at the last minute and are retrospective. They are a redundant item and will just cost endless amounts of time and money and will be one of the reasons why a lot of advisers will focus on the higher value clients at the expense of low and middle income Australians.
This is why this bill is deeply flawed. Financial planning and advice is a very complex area. To throw in such late changes at the last minute, without proper consultation with the industry, without consideration for their consequences, simply is a reason why we have ended up with such a flawed bill.
There are many other problems with this bill. The coalition has put forward 16 recommendations. We ask the government to use common sense and reason and at least hold this bill off for another 12 months.
The Corporations Amendment (Future of Financial Advice) Bill 2011, which is before us and is being debated cognately with the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011, has been considered in the short time we have had to go through the bill as it stands. Whilst the bill has some merit, it definitely does need not tinkering but major changes to it. In fact, we have come up with 16 amendments that we wish the government would consider. If they were to consider these amendments, we would have no hesitation in supporting the bill through the House.
In its current form it is an extension from 2001, where the government of the day—John Howard's government—provided a solid regulatory foundation for our financial services industry. Since then a lot of things have changed. We admit that changes need to be made and there is always room for improvement. If the coalition's amendments go through and are adopted into the bill it would be great for the people in the industry. In my seat of Flynn there are many financial advisers. There have been many financial advisers living with the communities in the business world that have been there as a normal part of doing business. A lot of people rely on financial services because they do not have time to go through all sorts of legislation and investment advice. When you have been out mustering cattle all day or out branding you might be away from the homestead for many days. The last thing you want to do is come back to your home to do paperwork. That is what country folk have had to base their business on over the years. They have had to become more and more astute with government policies and legislation. People in the financial services sector are there to help them, and a lot of financial advisers are very concerned about what is in store if we were to disrupt this type of business. The bill was first mooted over two years ago and only came to the House's attention in February this year. That does not give anyone too much time to scrutinise the bill, to go through it to see what changes have to be made.
As the member for Hughes has just said, software staff have to be trained. As you know, Madam Deputy Speaker Livermore, we are flat out getting staff in the Central Queensland area. It is very difficult for these businesses to get new staff and to train them on updates to software packages. We strongly suggest that the whole bill not come into force until 1 July 2013 along with the MySuper policy. It makes sense to us on this side of the House that the two acts commence on 1 July 2013, not 1 July 2012.
We need to set up hotlines to help these people through the changes. March has nearly gone and that does not leave much time for industry as a whole to make these vast changes to the regulations. Reform is going to be bogged down in red tape and it is also going to be costly. It is estimated that the cost will be $700 million in the first year of these changes and $350 million each year after that. You can see it is not going to be expense-free for the government or for industry. If we could spread it out over a little further time and adopt these 16 amendments it will serve everyone in Australia much better.
We do not want to see what happened in the Storm Financial disaster—there were some other companies involved in that too. The company was based in Townsville and people from Cairns, Townsville, Mackay, Rockhampton and Gladstone took the brunt of that loss. I know many people in Rockhampton and Gladstone who were hit and lost their life savings. It was a very bad thing. Nonetheless, it has happened and we are still going through why it happened and what can stop it from happening again. That is why this bill is important and it is important that we get it right.
We will probably have to face job losses if the financial companies have to wind back. While those people in our area can soon get another job it is different for other people around Australia. They might find it hard to get jobs in the financial world if the banks cut back their services, as they are. The banks are starting to lay off people. If financial advisers start to lay off their staff, there could be a crisis in that particular area of employment. As the member for Hughes has said, will it favour the big companies and not the little guys? Under this bill, we think there will be inequities and the smaller players will be bowled over and will have to leave the market, and that the big guys will be favoured. We think that will be a tragedy for our area. There are not too many with the big corporate companies in our area. The playing field will be uneven, and I would not like to lose the smaller players from the financial services sector.
It is good to pick up the phone and call someone you know in your home town and have a good yarn about what is happening in the financial world, what is happening in the share market, what to invest or what to divest and so on. It is day to day for these guys. But with large corporations you do not have the ability to pick up the phone and say: 'Hello, Tom. How are you going? What should I be doing? Should I be investing in gold? Should I be investing in silver, the metals or the share market, or just keep the money in the bank?'
The trouble is even if you do not have any wealth, you still need them. For young people it is difficult to get finance for housing. Once upon a time, if you had a good bank account or good cash flow, you could get a bank loan. Now there is a more serious approach and you need a good job and you need to be investing in a good business or a good asset. The banks will no longer take just one of those; they need both. They require a good cash plan and good assets to back up the loan. This is where the financial adviser comes in. A young person might even have a good education, but they still need financial advisers and providers to help them through the maze to get finance for their new home or small business. At the moment, small business is on the nose with the banks. I would like to see this changed. The help of financial providers can point young people in the right direction.
The implementation time frame is 1 July 2012 and there is inadequate information available. It has not gone through the House yet, so the financial advisers will not be left with much time to make some very important decisions for themselves, their businesses and the people whom they service. Who knows when this bill will go through. We do not sit for another five or six weeks and that takes us another month or so closer to 1 July, when this legislation will take effect. That is why we say that we want to put it back at least 12 months to 1 July 2013. We oppose the opt-in section. It was not even a recommendation of the Ripoll inquiry, but the government wants to bring this opt-in clause into the act straightaway. We do not support that. It is one of the 16 things we want changed in the legislation. The retrospective application of the additional annual fee disclosure requirements is another thing we would like changed. We would also like to see improvement in the drafting of the best interest duty. The ban of commissions on risk insurance also has to be further refined. There needs to be much more clarity for financial providers. That is all I have to say, but I plead with the government to delay the implementation of this bill a further 12 months and to take up all 16 of our recommendations.
The objectives of the Corporations Amendment (Future of Financial Advice) Bill 2011 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 are sound. They aim to improve the quality of financial advice while building trust and confidence in the financial planning industry through enhanced standards which align the interests of the adviser with those of the client and reduce conflicts of interest. The bills aim to facilitate access to financial advice through the provision of simple or limited advice. They also aim to create a requirement for advisers to act in the best interests of clients and a ban on conflicted remuneration. Many of those are very sound principles.
Our concern is that the government, in putting forward a package to try to meet these objectives, has gone too far. As it currently stands, the legislation will lead to increased costs and reduced choice for Australians seeking financial advice. So we have put forward a number of amendments, and it is these amendments which we would like to discuss today. Our amendments seek to get the balance right, with a sensible regulatory framework providing appropriate levels of consumer protection while ensuring financial advice remains available, accessible and affordable. This is because we recognise the important service provided by financial advisers helping people to improve their financial health and wellbeing.
The reforms we are debating today have their origins in the 2009 Ripoll inquiry. This inquiry into financial products and services made a number of well-considered and reasonable reform recommendations. The pivotal point was to require financial advisers to put their clients' interests above their own—a very sensible point. Had the government proceeded in this direction and just agreed to the basic recommendations of the Ripoll inquiry, I think the bills would have received bipartisan support. Some of the recommendations of the Ripoll inquiry included making the cost of financial advice tax deductable for consumers; getting ASIC to work together with the industry to form a professional standards board that advisers would be required to join; giving additional powers to ASIC; and having the government investigate options for a last resort compensation scheme.
All the industry bodies supported the committee's recommendations in the Ripoll inquiry and, as I said, had the government limited its legislation to matters which were recommended in the Ripoll inquiry then this legislation would have received bipartisan support. But it did not do that and that is why we are here today putting forward a number of amendments which we believe will improve the legislation.
These include amendments for: the government to be required to table a regulatory impact statement; the opt-in to be removed from FoFA; the retrospective application of the additional annual fee disclosure requirement to be removed; the drafting of the best interest duty to be improved; the ban of commissions on risk insurance inside super to be further refined; and the implementation of FoFA to be deferred a year until 1 July 2013, to align it with MySuper. I do not want to go through every single one of the 16 amendments. I want to focus on three of the more important ones. The first is the amendment which requires the government to undertake a regulatory impact statement. We believe that is important, given the very heavy financial cost imposed on the industry by the proposed changes and the associated potential for job losses. As an absolute minimum, there should be a regulatory impact statement done on this, which would comply with the government's own best practice regulation requirements in other areas. The parliament should insist on a proper regulatory impact statement before dealing with any of these bills. Based on the evidence provided to the committee, the coalition committee members concluded that this legislation would lead to increased costs and reduced choice for Australians seeking financial advice. In pursuing regulatory changes, the government must rigorously assess increasing costs and red tape for both business and consumers.
The second issue is the opt-in provisions, which we believe should be removed, and one of our amendments would implement that. The coalition does not support the government's push to force people to re-sign contracts with their financial adviser every year through a so called opt-in process. This would add an unnecessary regulatory burden, imposing too much additional cost for both small business and consumers, for questionable additional benefit. It would create additional red tape. Financial advisers would have to spend an inordinate amount of time chasing up contract renewals. According to Treasury, there would be increased costs for the average financial advisory firm of about $100,000 every year if the opt-in provisions go ahead. It will be small businesses and individuals who pay the cost. The move will add to the Australia-wide problem of underinsurance, and a large proportion of people may well miss out on advice at a time when they need it most.
The third area is the proposed ban of commissions on risk insurance. We do not support the ban. Our view is borne out by the experience in the UK when they went down this path. They have since reversed the move. Like opt-in, banning commissions on risk insurance would make the problem of underinsurance in Australia worse, as access to risk insurance would become much more expensive upfront. I have been approached by a number of concerned constituents from the industry in relation to that provision in the draft bill. One of them, Garry, puts it well when he says:
When I provide advice to my clients or would be clients, they are not required to pay for the advice received. If they proceed with the insurance recommended, and an application for insurance is accepted, then we receive a commission. This covers my costs and provides my remuneration. In the service I provide, I do not discriminate, be it a large client with significant needs, or a smaller client whose needs and ability to pay premiums are modest, the service provided is the same. The bigger client has needs and if asked would be able to afford a fee for my time, the smaller clients whose needs are just as important to them, may struggle to obtain advice if a fee had to be paid.
Garry illustrates his point with an anecdote which, to my mind, characterises best practice with regard to fees and commissions. He reports:
Last year a client of mine died in tragic circumstances at work. We assisted his widow with all of the necessary paperwork for the claims process. This was made much longer than was reasonable as the coroner was delayed in handing down a final decision due to delays in obtaining toxicology results. Despite this, with constant and regular follow up by our office, we were able to obtain a release of the much needed life Insurance proceeds, enabling her to own her home and get on with her life and care for her young children.
The client paid no fees at all for our work and nor should she. It's our job. Being paid commissions for new sales and on renewals of existing insurance we are able to offer a high level of service to all our clients, and when assistance is needed we are able to do so.
I think that is a very good anecdote. It illustrates the type of service that would be at risk if were to go down this path of banning commissions on risk insurance.
There are a number of other issues which we have identified with the draft bill. We on this side have pointed out that it is unnecessarily complex and many parts remain unclear. We have pointed out the problem that it may lead to underinsurance in the industry. We have pointed out the problem that it may lead to further job losses, something that we do not need at this time of job insecurity. The amendments which we have put forward are sensible amendments. There are 16 in total. I have emphasised three of them today and other members on our side of the chamber have emphasised other amendments. We believe that they would make some sensible improvements to the draft bill. If those amendments were agreed to by the government, then we would support the bill. If those amendments, on the other hand, are not agreed to by the government, then it would be very difficult for the coalition to support the legislation as it is, due to the problems which I and my colleagues have outlined.
We are always prepared to consider sensible proposals to improve the regulatory framework for financial services. However, to get the coalition's support, proposed changes have to be focused on addressing genuine issues, be practical and make things better. We simply ask that the government put its legislation through the proper scrutiny and deal with the clear and obvious problems by taking on our sensible amendments. Then we will support this legislation, but in its current form we are unable to do so.
I have just read the second reading speech of the Minister for Financial Services and Superannuation for the Corporations Amendment (Future of Financial Advice Measures) Bill 2011. I have only one complaint, and that is about the English used. It says:
Platforms should be incentivised to put the most appropriate products on their menus.
'Incentivise' is not a word and never has been. As members have pointed out today, this is a really important issue. Mr Tudge has just said these are important issues for Australian people; they are important for people who are heading towards retirement and for people in the earlier years of their lives as well. When we use a word like 'incentivise' or 'incentivisation', we are bastardising the language to the point where it offends me greatly. Having got that off my chest, I will now talk about the legislation.
These issues are a matter of extreme importance to this parliament. They are a matter of importance to both sides of the House. The Parliamentary Joint Committee on Corporations and Financial Services' work and report were excellent. The opposition has put forward some very reasonable recommendations, not with the intent of opposing whatever the government is doing but with the intent of making in a bipartisan way this legislation better for all concerned, both for the financial advisers and their clients. That is what these amendments that the coalition is putting forward are all about. Having described that situation, it is important now that we discuss why this all came about in the first place. Every one of us knows somebody who has lost nearly all their savings after getting some inappropriate advice. Did they take that decision on their own? Yes, they did. Did they receive that advice and therefore take the risk? Did they perhaps go for a rather higher interest rate than was being offered by the banks or the general market? Yes, they did. Is it our own fault sometimes when we are greedy? Yes it is. Having said that, we genuinely want to go to people who have the knowledge and the ability to point us in the right direction as to how we can maximise our retirement benefits, our income at the time or our savings.
As parliamentarians, when something goes wrong, people say: 'What did you do about it? What are you doing about it? How could these people possibly lose this money in this country? How could the financial advisers do the things that they did without the knowledge of the client?'—as in the Storm collapse. As I understand it, even some of the Storm clients did not know they were reinvesting at that rate. I am not a financial expert, but I know that things went badly wrong to the point where people lost everything. They did not just lose their savings that they had invested; they lost the houses they had been put up as the basis for their loan.
The government and the parliament have responded through our processes. For those who are listening, the process is that there was an issue of concern about the prudential status of financial planners and the way they went about their work. That needed to be addressed in some way, so the parliament addressed it through a committee of inquiry. There was an extensive inquiry with submissions from all over the country and from everyone who had possibly been involved in the process. That is how parliament works. I note that there was a dissenting report by the coalition members on that inquiry, who thought there should be further emphasis on other areas around the issue. That is part of the process of what we do too. You can have a dissenting report by saying, 'I agree with most of what the committee has put up, but we are going to make a dissenting report on these areas,' which I may outline in a moment.
The coalition have said that we support the fact that we need to address some of the issues on behalf of the people and we need regulations therefore to protect the consumer. Yes, we must bring in regulations that protect the consumer, but they must not cost them in the long run and we should not put more red tape into the system, making it more difficult and more expensive for the provider of the service and the receiver of the service to go through the process.
We should never remove the flexibility from the client, not the service provider, to access part of the services and not the whole package. Under this legislation, I understand they have to go through a whole financial package. The client should be able to access just parts of the service, especially if it is the first time they have gone to a financial planner. Quite often people go to a financial planner and are overwhelmed by a need for a huge financial plan for their family when they only went there to get some advice on a specific investment. We should allow flexibility and I do not think this legislation allows enough flexibility.
There has to be a pathway for people who have not had this advice before to go to a financial adviser without any sort of commitment, get advice and pay upfront. It is clear and open, and they know what it is going to cost to get some advice or to have one or two hours with the financial adviser. We are concerned that it may be that the financial adviser pushes a product—and this has happened in the past—that may be beneficial to the financial adviser unbeknown to the client, where the client thinks they are getting the best advice. It does not matter whether we are looking at real estate agents or lawyers; we like to know and trust that those people are absolutely working on our behalf as the client. This parliament wants a focus on the consumer that says, 'To the best of our ability as a parliament—not necessarily as a government or as an opposition—we will try to give you the regulatory framework so that you can get the best advice in this country, and Australia then becomes a world leader in this process.' I think the emphasis behind what the government has done here is right. They are really trying hard to get this framework right for the benefit of the client and those who are providing the service. The opposition has said, 'We support your bill as long as you have a look at and address the amendments we have put forward.' That is not a big ask. Because this is such a complicated area, the amendments are listed as to what we would like considered. I am sure the minister would be prepared to consider those arrangements if he felt they were beneficial and improved the legislation. These amendments are not put in to make the legislation poorer or less safe; they are put in so that the system may work better on behalf of the clients represented here.
Remember, we are not talking about a few hundred people. We are talking about nearly everybody across the nation. People are always looking for advice on financial planning: 'How can we do this better? Where are there areas that I am not involved in that I could be involved in that may be beneficial for the existing wealth that we share now and perhaps the generations that I will be passing my wealth on to?' I do not want to say, ever, that there is not a group of people out there who do not need our support—our helping hand. They will always be there and we, as members of parliament, acknowledge that.
There are others who have worked very hard and have accumulated some wealth. They would like some advice as to how they might use that wealth. We recognise that too. From that point of view, if you drive anywhere in this country, especially up the far north, you see people who have done very, very well. In this last 10 to 15 years, wherever you go, you see beautiful developments and people doing quite well, as opposed to those who may be struggling. We recognise too that we have people who struggle and we do our best as a community to benefit them in ways such as through the taxation system and our welfare system. We look after them as best we can but we can do better.
But the nation's wealth overall has improved dramatically. I do not care where you go in this country, you will see that Australia—as compared with the rest of the world—is a very wealthy nation with individuals who are very wealthy. I would like to think that the government will look at these amendments from the opposition, takes them seriously, address itself to these issues and see if we can work together to get the best outcome on this legislation that we possibly can.
In the end, the bottom line is that we want to leave this place with legislation that is better than when we came in. Whoever is in government, there is an underlying intent that we do the best for the Australian people that we possibly can, and this is one of the best examples I have come across. If we can get this regulatory framework right, we can benefit family after family, generation after generation. It is not a big ask that we work together to get the best outcome here. We will never, ever, protect ourselves from a shyster but at least we can put together the best framework we can to stop the shysters. There are a lot of very good people across this nation working as financial advisers and they have benefited thousands upon thousands of people and their families.
All we ever hear of are the worst examples of advice. Even in the minister's second reading speech he says that we cannot stop every failing of the system. All we can ever do is to give it our best shot. He does not actually say that in those words, but he is virtually saying that we can give it our best shot. So I would like to see in this legislation that we give it our best shot to get the best arrangements we possibly can, and I would ask in that process that the government look at the opposition's amendments without threat and just ask 'Can these amendments be accommodated?' because it would be one piece of legislation that I would like to see go through the parliament with bipartisan support. I think that is all I need to say.
As stated by the government, the purpose of the Corporations Amendment (Future of Financial Advice) Bill 2011, which is being debated cognately with the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011, is to tackle conflicts of interest within the financial planning industry in an effort to restore the confidence and trust of retail investors following the fallout from Storm Financial, Opes Prime, Westpoint and the like. The key test for the success of FoFA, supported by the coalition and peak industry bodies, will be improved transparency and increased access to advice as a consequence of these reforms. In its current draft the first will be achieved but the bill will fail to deliver the second. Advice will come at a higher cost and be provided to fewer people. This legislation is unnecessarily complex and unclear, is expected to increase unemployment and legislates unfair advantage to certain service providers, inappropriately favouring a government-friendly business model. It would be incredible if fewer Australians received advice because of these reforms.
The Minister for Financial Services and Superannuation has stated on a number of occasions that FoFA has broad industry support. This is largely the case. However, the coalition, and indeed the financial services industry, hold many concerns, addressed comprehensively in the coalition's dissenting report. Evidence before the recent Parliamentary Joint Committee on Corporations and Financial Services in its inquiry into this legislation confirmed our view that the legislation in its current form would be bad for consumers, bad for small business, bad for small business financial advisers and bad for the industry as a whole. It would unnecessarily increase red tape and increase costs for business and consumers while reducing choice, as well as reducing competition and diversity across the financial services industry.
In February 2009 the Parliamentary Joint Committee on Corporations and Financial Services conducted a comprehensive inquiry into Australian financial products and services. The centrepiece of the Ripoll inquiry's report was the recommendation to introduce fiduciary duty for financial advisers, requiring them to place their clients interests ahead of their own.
The Financial Services Council of Australia welcomed this report and has welcomed the majority of the reforms these bills offer. The industry already strives for higher standards for financial advisers, embraces a best-interest duty and wants the end of remuneration structures that have the potential to distort advice. These elements of the FoFA bills are important for the customer but also significant for the future growth and stability of the industry. Very constructively, the coalition has made a series of recommendations on how FoFA can be improved and progressed from here.
The coalition will be moving a series of amendments, including that the government be required to table a regulatory impact statement on FoFA consistent with the government's own process requirements. This must be done before anything else. Given the magnitude of the changes and the costs involved, it is imperative that a proper regulatory impact statement with a proper cost-benefit analysis be completed.
According to the government's own Office of Best Practice Regulation the government did not have before it adequate information to assess the impact of FoFA on business and customers—or, indeed, adequate information to assess the cost-benefit of the proposed changes. This simply is not satisfactory, given the complexity and costs associated with the contentious parts of the proposed changes. The minister must remove the contentious elements of this legislation and proceed with the important and widely supported FoFA reforms. The minister must remove the opt-in obligation, as it imposes unnecessary additional red tape and costs that are not reflected in any other industry or country. The imposition of a mandatory requirement on customers to re-sign contracts with their financial advisers on a regular basis is unreasonable and incurs costs for both planners and consumers. Remember, opt-in was never a part of the initial Ripoll inquiry recommendations. And the government has been unable to point to another example anywhere in the world where a government has sought to impose a mandatory requirement on consumers to re-sign contracts with their financial advisers on a regular basis. The coalition is strongly opposed to this element of the bills before the House. The inclusion of the best interests duty and the ban on conflicted remuneration address any factors that may have driven the inclusion of this clause. They offer appropriate transparency of fees charged and an ongoing capacity for clients of financial advisers to opt out of any advice relationship at any stage. This offers adequate consumer protection. Left without amendment consumers face increased costs and reduced access to appropriate advice as advisers reposition their offerings to the market to maintain turnover and productivity. Consumers will stop receiving advice or not seek advice at all.
In relation to removing the retrospective application of the additional annual fee disclosure requirement, again, the Ripoll inquiry made no recommendation to introduce an additional annual fee disclosure statement over and above the current regular statements provided to clients. This requirement in fact infringes on existing contractual arrangements and information that is already provided to clients. Failure to amend these measures will see a huge cost burden on industry for information consumers already receive. The Financial Services Council estimates that implementation of the fee disclosure requirement alone will cost approximately $54 for each new client and $98 for each existing client—an annual cost to the industry of $375 million. Like all costs these will be passed straight to the consumer. The government must be held to account for the commitment it made during the consultation process that these additional annual fee disclosure requirements would apply prospectively only.
Regarding improving the drafting of the best interest duty, the coalition supports the introduction of a statutory best interest duty for financial advisers into the Corporations Act. This is a central and very important part of the FoFA reforms. However, to avoid confusion and minimise the risk of future disputes it is important to get the drafting of the best interest duty absolutely right. Peak industry body the Association of Financial Advisers also support the best interest duty. But they too seek greater clarity and certainty for financial advisers. It is obvious that the government has struggled to come up with an appropriate definition of the best interest duty. The coalition remains concerned that a catch-all provision will create uncertainty for both clients and their advisers.
Proposed section 961B(2) defines a series of steps that are comprehensive in their definition and provide unambiguous guidance to advisers. However, paragraph (g) allows for any other steps that would be reasonably regarded as being in the best interests of the client. If there are further steps the legislation must clearly state so. They should be included in their entirety and paragraph (g) removed. Left as is, this section creates uncertainty that will eventually be tested in the courts. And, again, this section will lead to higher costs to the customer as ambiguity is likely to result in an increase in professional indemnity premiums. Regarding further refining the ban of commissions on risk insurance inside superannuation, the coalition supports the ban of conflicted remuneration structures such as product commissions within the financial services industry and commends the industry for moving proactively and effectively to abolish such conflicted remuneration structures. However, we do not consider commissions paid on advised risk insurance inside or outside superannuation to be conflicted remuneration structures. Again the government's own Ripoll inquiry did not make any recommendation to ban commissions paid for by risk insurance products. Banning such commissions will increase costs for consumers, remove choice and leave many people worse off, particularly small business people who self-manage their super.
To treat commissions on all risk insurance inside super differently from insurance outside super will also create inappropriate distortions which will fail to be in the best interests of customers. We agree that those Australians who receive automatic risk insurance within their super fund without accessing any advice should not be required to pay commissions. However, those Australians who require and seek advice to ensure adequate risk cover, whether inside or outside of their super fund, should have the freedom to do so.
We must also ensure that the ban on conflicted remuneration is not applied retrospectively. We must delay the implementation of FoFA to 1 July 2013 to align it with MySuper. The current implementation time frame of 1 July 2012 is completely unrealistic given that the proposed commencement date is less than four months away. Given the ongoing legislative uncertainty, implementation by this time is surely impossible. These two major changes require significant and expensive changes to the same financial service provider's IT systems and adviser training. It is the government's lack of understanding of practical business realities that sees it attempt to impose two different implementation dates involving significant and costly system changes in relatively quick succession. It is symptomatic of the government's chaotic approach not only to this policy area but to all legislation. Ultimately, the government must see that consumers' best interests must determine the timing of these reforms.
Dante De Gori of the Financial Planning Association of Australia told the Senate Economics Committee that his organisation supported a one-year transition and implementation of the scheme, emphasising the reforms had to be 'implemented accurately, while ensuring they are workable'. A one-year transition will 'allow all financial planners the time needed to implement these reforms in a transparent and efficient way'. The coalition agrees with this observation and, if amended, these regulations should not commence until 1 July 2013.
At a time when our population is ageing, growing superannuation balances mean Australians will need more and better financial advice. We must ensure that the implementation costs of these bills do not come at the expense of product development, in particularly post-retirement products. But the current regulatory change makes it hard for companies to allocate budgets to these projects. Over the past two years there have been continual and unexpected changes to the proposed regulatory arrangements under FoFA right up until the introduction of the current legislation. Companies are keen to develop better retirement products, but they cannot spend money on that if they have to spend money on FoFA. The current draft of this legislation will significantly and negatively impact not only customers but, most importantly, older and retired customers.
The Australian financial services industry performed very well in the stress test of the GFC. When it comes to providing financial advice in our region, the Australian market is considered best practice, with established industry bodies and licensed advisers with specific training. And efforts to professionalise financial advice and planning in Australia go back many years. There is no doubt that financial services reforms legislated in 2001 provided a solid regulatory foundation for our financial services industry. But there is always room for improvement.
The financial services minister and cross-bench members must seriously consider the coalition's amendments and support them. The original intent of the FoFA reforms should be adhered to, ensuring that all financial advice is in the client's best interests and financial advice should not be put out of reach of those who would benefit from it. Our goal must be to balance effective consumer protection with access to high-quality financial services that are available, accessible and affordable. We must avoid regulatory overreach that increases red tape and costs for both business and consumers with little or no additional consumer protection benefit. I call on the House to adopt the coalition's constructive recommendations and amendments to allow these important reforms to pass in a form that is beneficial both to industry and to the customer.
I rise to contribute to the debate on the Corporations Amendment (Future of Financial Advice) Bill 2011 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011. I start with a note of thanks. This is a highly complex area, highly important. So many thousands of people's lives are affected by this decision, not only those receiving advice, most importantly, but also those that are giving the advice.
A division having been called in the House of Representatives—
Sitting sus pended from 18:01 to 18:22
As I was saying before we were rudely interrupted with a division, I would like to begin my comments with a vote of thanks in particular to John McInerney, who is a financial planning consultant from Bentley and has given me enormous assistance, with invaluable, informed advice and insights from the coalface. He organised some 60 fellow professionals within the financial planning profession locally to gather with our shadow minister, Mathias Cormann. We had a 2½ hour session on the impacts of the legislation on their services and on the way they interact with their clients. It was a most valuable exercise. John has been in the financial planning industry since 1988, and before that spent 23 years as an educator, so he is a person with the sorts of qualities to be very effective, as he has been in providing advice to clients. He has also been an active participant in raising the standards in the profession, as a member of FPA's Towards Professionalism Task Force, and has assisted the Securities Institute of Australia to develop its financial planning course amongst the profession.
I feel I had some very good guidance locally, meeting so many of them from the southern suburbs in Melbourne. It is certainly something that has greatly exercised the sector, and this legislation is very important. They are very proud of the profession that they are part of and the service that they give to individuals. I suspect that the one-on-one nature of the profession is something that elicits from so many of them a great desire to assist and ensure that the quality of life and the opportunities of their clients are maximised. You would expect that they are 'people people', and they are professionals who take great pleasure in seeing the success of others, because, if that happens, that means they have been successful. The coalition cannot support the future of financial advice bills in their current form. This is very unfortunate because, as we all know, a cross-party committee—the Ripoll committee—did some very solid work, coming up with a list of comprehensive, balanced recommendations that had the support of both sides of the House. Sadly the Minister for Employment and Workplace Relations, after several months of being influenced by other vested interests, has materially changed some recommendations and added other recommendations which we find unnecessary and in fact counterproductive and in particular serving the interests of one part of the industry—the industry funds. This reflects the continuing bias of the minister for workplace relations. I see him as the minister for unions in much of what he does. This is a very unfortunate development.
A division having been called in the House of Representatives—
Sitting suspended from 18:26 to 1 8:40
As I was saying before the division, it is a bit ironic that after a day in the House when there were quite wild and ridiculous assertions being made of undue influence, here we have in this very bill tonight a concrete example in legislation. A very strong bipartisan position has been derailed by the decisions of the minister, who has been quite clearly and unduly influenced by former colleagues and cronies within the union movement. It really is an unfortunate state of affairs that we have here a piece of such significant reform legislation which has been so sadly derailed, one which was agreed on by those who are very experienced and well credentialled on both sides of the House on these issues. Their agreement had laid out a series of comprehensive and quite effective measures that would have been dealt with in a bipartisan way. If this legislation were to be amended along the lines put forward by the coalition, we could return to a position of bipartisanship, instead of a position that will quite clearly benefit a certain sector of this industry in a most unfortunate way and will impact dramatically on the lives, the profession and the businesses of many thousands of people who are so strongly experienced in this sector.
Unfortunately, the FoFA package of legislation in its current form is unnecessarily complex and in large part still quite unclear. It is expected to cause increased unemployment and it is legislating to enshrine what is really an unlevel playing field amongst advice providers while inappropriately favouring a government-friendly business model. It is likely to cost about $700 million to implement and a further $350 million per annum to comply with, according to conservative industry estimates. To go from a position where there was industry and bipartisan support for a range of measures to one with all of those faults is quite unacceptable. I can understand what has happened but, for the life of me, I do not know how the minister can stand there with a straight face and support the measures he has now made decisions on. In some cases, as I have said, they are decisions which are still unclear about how the measures would operate—and I am not sure that he knows either. As it currently stands, the legislation will lead to quite significantly increased costs and reduced choice for Australians seeking financial advice.
The coalition will be moving a series of amendments, the most important of which are that the government be required by parliament to table a regulatory impact statement on FoFA which has been assessed as compliant by the government's Office of Best Practice Regulation. The level of regulatory impact of this bill is just beyond the pale. In the last 3½ to four years we have seen the greatest growth of government in our lives, and that includes the Whitlam era. This place is now awash with legislation despite the hand-on-heart commitments given by former Prime Minister Rudd, when in opposition, about one regulation in and another one out. I think it is currently something like 16,000 pieces of regulation in and at most 200 or 300—and I think I am being generous—pieces of regulation out. We are awash with regulation and this bill will add another bucketful to the industry and massively increase costs. The opt-in arrangement should be removed from FoFA. It is something that was not part of the bipartisan agreement. The opt-in arrangement imposes a mandatory requirement on consumers to re-sign contracts with their financial advisers on a regular basis. Not only is this a significant increase in red tape and cost for both planners and consumers, it will make Australia the world champion in financial services red tape. It was not part of the initial Ripoll inquiry recommendations. In this context it is important to note that the Industry Super Network provided, not surprisingly, the only submission to the original Ripoll inquiry, arguing in favour of opt-in. The proposal for a mandatory opt-in requirement was not accepted by that very comprehensive inquiry.
The minister has been unable to point to another example anywhere in the world where the government has sought to impose a mandatory requirement on consumers to re-sign contracts with their financial advisers on a regular basis. On our side of the House we strongly oppose Labor's push to force people to re-sign contracts with their advisers on such a basis. If you know anything about the nature of the industry and what functions within some of these Industry Super Network organisations you can see that they will have a very clear advantage. This is what it is there for: to siphon customers away from small business people who have spent a lifetime developing relationship and expertise and giving independent advice. They will be siphoned off into industry funds because of these sorts of arrangements. The industry funds can absorb a lot of this complicated procedure and they have other benefits that the small independent players may not such as connections with different policies and all the rest those things that will come into play.
Again, all of that is within organisations—these industry funds—where there is no transparency about the directors who run the organisations and the salaries they get. These are the sorts of things that are commonplace within the corporate world. They are multibillion-dollar industries and organisations that are responsible for billions in funds. We have this extraordinary situation where they are able to pull the levers of influence and not have any transparency. We had a day in the House on transparency and here is another perfect example where there is no attempt for real application of it. Yet one of the major recommendations of the Cooper inquiry was to shed some light on the inner workings of the sector so that there is more competition. When there is competition you get self-regulation in many respects, because the consumer is able to make their own judgments and they will discipline organisations by taking their business to where they see they will get the best opportunity.
Amongst these amendments the coalition has moved—and for which we are looking for support—we also see proposals that the retrospective application of the additional annual fee disclosure requirement be removed; the drafting of the 'best interest' duty be improved; the ban of commissions on risk insurance inside super be further refined; and the implementation of FoFA be delayed until 1 July 2013, to align with MySuper. Minister Shorten and the crossbench members should seriously consider these amendments.
This industry provides important financial services and advice. It helps Australians with their financial health and wellbeing. Australians are becoming far more financially literate and far better able and prepared to seek advice and have an informed view themselves to balance up the advice they get from these advisers. The services are dealing with other people's money, which is why it is so important to have an appropriately robust regulatory framework in place. The framework worked satisfactorily through the global financial crisis. We think there is room for further improvement and that is why within the very comprehensive Ripoll committee inquiry we agreed to a raft of changes on a bipartisan basis with those on the other side of the House. Certain elements of it have been turned on their head for no good reason. There has been no justification. You just get an assertion from the minister that this is the way it is going to be, and you will cop it. Well, we are not going to cop it. If we do not get these amendments in place we are going to oppose these things so that we can protect the livelihoods of so many thousands of very strong and professional people— (Time expired)
I rise to oppose the Corporations Amendment (Future of Financial Advice) Bill 2011 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011. I would like to emphasise this immediately: no-one in the coalition is saying that the financial services industry does not need regulation; of course it does. However, the Australian financial services industry was subjected to the stress-testing of the global financial crisis and performed well overall. There is no doubt that Australia's financial services reforms, legislated in 2001, provide the solid regulatory foundation for our financial services industry. Therefore the coalition believes that, with the existing legislature in place and increased resolve to police it, improvements can be made. This point of view was one of the key observations of the Ripoll inquiry in 2009, which stated:
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations, rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.
This is an extremely important point to make from the beginning and it points to the philosophical differences between the coalition and the Left of Australian politics. When times are tough, when money is tight or when things go wrong, the coalition will look to work harder to improve the existing frameworks, tighten our belts and encourage others to do the same. Those on the other side of the parliament prefer to take the easier option of introducing new taxes or imposing even stricter regulations. This broadbrush approach to governance and fiscal policy is lazy. Instead of rolling up their sleeves and finding ways to improve, the Gillard-Greens alliance think it is easier to put their hands deeper into Australia's pockets than to change the rules of the game to prevent Australians from stopping them.
The government's decision-making processes around FoFA over the past two years were confusing. There were lurches and changes that came from nowhere to the proposed regulatory arrangements under FoFA right up until the introduction of the current legislation. Knowing this government's track record, naturally this was done without proper appreciation or assessment of the costs involved of any unintended consequences or other implications flowing from the proposed alterations.
The reason I am so passionate about this is that in my electorate of Hasluck there are 16 financial service providers serving hundreds of my constituents. They provide an essential service to the community, especially in the Western Australian economy where many people are taking advantage of the mining industry and taking home increased pay packets. Conversely, there are many people in Hasluck who have not been able to take advantage of the mining boom or who work in a different industry.
With all the new taxes heading their way, financial advisers are actually reporting an increase in people looking to make their money work as hard as possible for them. Financial advisers help Australians to increase their financial opportunities and better manage their financial risk. Peter Stewart, of Benchmark Consultants, and David Goode, of Westate Finance are two that come to mind in Hasluck who provide this essential service to the local community. They work hard to provide these opportunities to their clients. They should be supported rather than being faced with increased costs, increased red tape and increasingly unclear and unnecessarily complex legislation.
This is not to say that the industry should not be regulated. Let me be very clear once again and say that, because financial advisers deal with other people's money, they should have a robust regulatory framework to protect the consumer. However, this bill does more harm than good. We need parliament to make things better, not more complex and costly for everyone. Other speakers have gone into the history of this legislation, so I do not intend to linger much on this. I want to spend most of my time expressing my dismay at the content of this bill and representing the views of my constituency—because they are the ones that will be hurt the most. When I was elected as member for Hasluck in 2010, I promised to stand up and fight for the residents of Hasluck on the issues that are important to them. This is one of those issues that I will take up for them.
Financial advisers in Hasluck face job uncertainty and increased costs which will ultimately be passed on to consumers. The Financial Services Council stated that this legislation will cost the industry $700 million to implement upfront and $350 million a year thereafter. Additionally, job losses are expected to be in the tens of thousands across the industry. Government is supposed to facilitate growth by providing the infrastructure and services that the private sector cannot and then getting out of the way.
How is this fiscally and socially responsible, to introduce legislation that Minister Shorten and Prime Minister Gillard know will cost jobs? This is baffling to us on this side of the chamber. Just in Hasluck, in addition to the firms mentioned before, we have Adviser Investment Services in Thornlie, NC Bruining and Associates in Midland, Golden West Financial Services in Midland, Grange Financial Management in Forrestfield, Clarity Wealth Management in Wattle Grove, Howarth Financial in High Wycombe and many more. Can the Minister for Financial Services and Superannuation tell me how many of these firms will expand or shrink, and which individuals will face unemployment, as a result of this bill?. How about the real increased costs faced by each firm? Just like the carbon tax legislation, this bill lacks detail, it lacks proper thought and it increases the costs to everyday Australians.
The residents of Hasluck deserve the opportunity to plan for their future. This bill will adversely affect the ability of people to retire comfortably. This government clearly does not understand the current needs of the community. This government does not respect the right of an individual to make it for themselves. The government should be providing every opportunity for residents to save effectively for their future and impact positively upon their future livelihoods. I know younger members of the local community who are working in the mines, in both the north and the south of Western Australia, and are working extremely hard to earn their money. Younger people are more financially aware than ever before and should be encouraged to seek financial advice, rather than be faced with increased costs to access it and reduced choice and competition in the industry. We should be not only providing people with the opportunity to access this advice now so as to reap the reward for their hard work in the future but also providing the industry with more support and fewer obstacles.
The coalition's amendments will significantly improve this bill. These are the most important of the amendments: that the government be required by parliament to table a regulatory impact statement on FoFA that is assessed as compliant by the Office of Best Practice Regulation; that opt-in be removed from the bill and the retrospective application of the additional annual fee disclosure requirement also be removed; that the drafting of the best interests duty be improved; that the ban on commissions and risk insurance inside super be further refined; and that the implementation of this bill be delayed until 1 July 2013 to align it with MySuper.
The coalition also believes that one way of ensuring that clients are able to access affordable and appropriate financial advice would be to allow advisers and their clients to limit the scope of advice to a series of discrete areas identified by the client, rather than to mandate a full financial plan in every case. This concept of focusing advice to areas specifically identified by a client has become widely known as scalable advice. Numerous submissions to the committee expressed concern that the wording of the best interests provision in the proposed legislation does not allow for scaled advice to be provided. The legislation should allow the provision of scalable advice where the request for such limited or scaled advice is instigated by the client. This would allow many people to access advice more frequently and would be a very good starting point for clients seeking financial advice for the first time as it would not require them to undertake a costly and sometimes unnecessary complete financial plan.
I think the biggest joke of this bill is that the government proposes to have it come into effect on 1 July 2012. When has this government ever been known to implement something effectively in such a short time frame? What is the rush? The proposed commencement date is four months away. It would it make sense to implement this bill simultaneously with MySuper, as they both require significant changes to the financial service provider IT systems; not to do so is indicative of this government's lack of understanding of the practical business realities faced by these companies. This legislation is a disgrace and the epitome of this bad Labor government.
Minister Shorten needs to consider the coalition amendments to save this struggling industry. However, the minister has shown his true colours once again on this legislation—he has completely disregarded his government's own process requirements. On 8 August 2011 the Office of Best Practice Regulation noted that an adequate regulatory impact statement was for only one part of the proposed changes. The other parts, which have the most impact on business and consumers, did not have an adequate regulatory impact statement prepared. Yes, they were drafted, but they were definitely not within the government's own standards. The government's own Office of Best Practice Regulation confirmed this in Senate estimates. It is no secret that this minister has no regard for the financial services industry and obviously no regard for following processes set by his own government.
The coalition supports sensible reforms which increase trust and confidence in Australia's financial advice and financial services industry by increasing transparency, choice and competition. However, any reforms in this area need to strike the right balance between appropriate levels of consumer protection and ensuring the availability, accessibility and affordability of high-quality financial advice. The government has been unable to point to another example in the world where a government has sought to impose a mandatory requirement on consumers to re-sign contracts with their financial advisers on a regular basis. Coalition committee members do not support government attempts through this legislation to make Australia world champions in financial services red tape. The FoFA red tape envisaged in this legislation will increase the cost of financial advice for millions of Australians with no or very little commensurate consumer protection benefit. A government seeking to lead the world in imposing additional financial services red tape should at least submit those proposals to a proper cost-benefit assessment.
If you think this is just the coalition forecasting doom with this legislation, listen to the words of Craig Meller, managing director of AMP Financial Services. His words have no doubt been quoted by my colleagues previously but they need to be repeated and repeated until this government understands that real people will be hurt by this and almost every other piece of legislation it has introduced in this parliament. Mr Craig Meller said there would be job losses of up to 25,000 in the next few years as a result of Minister Shorten's bungling and added that one of AMP's overriding concerns is that the bill has been rushed through in its drafting and that if enacted in its present form it would have a deleterious impact on customers, financial advisers and the broader community. We believe there are so many problems with this bill that a rigorous stocktake is necessary and substantial additional work needs to be undertaken to get the drafting right. It needs to be recognised that this additional regulatory cost of the legislation will ultimately be borne by customers, who will pay more and not obtain the advice they need. But the initial impact will be on financial planners, and even the explanatory memorandum to the bill forecasts a halving of planner numbers in the next few years. We believe this could lead to job losses in the industry of up to that 25,000 figure over that period. We also fail to see how this would improve advice access.
I once again would like to reiterate my opposition to this bill and call on Minister Shorten and the Prime Minister to swallow their pride and at least entertain some of the coalition's amendments to this bill. If they do, it would help keep people across this country in a job. Just one job loss hurts the community of Hasluck. One job loss creates pressure on a family, bills become bigger overnight, children's extracurricular activities get cut, holidays become non-existent and discretionary spending is halted with the heavy strain placed upon them. When we place this legislation next to the mining tax, the carbon tax and the private health rebate, this really does show where the Gillard-Greens' thought process is. They are an alliance driven by ideological means committed to punishing those that strive to better themselves and Australia's forgotten families and our seniors that the Prime Minister once described as not important. This is why I oppose the legislation.
I rise to support the member for Hasluck and to congratulate him on an excellent speech where he detailed, I believe beyond doubt, the reason why if the passage of this future of financial advice legislation is to go ahead we definitely deserve to see the government cooperate and put through the coalition amendments. If they do not, we will be forced to oppose it because the bills as they stand at the moment cannot be supported. Before I detail the reasons why the bill in its current form cannot be supported I would like to go back a step, and start by thanking Senator Matthias Cormann, our shadow Assistant Treasurer, for the excellent job he has done in prosecuting the case as to why this bill needs serious amending. Senator Cormann very kindly came down to the electorate of Wannon—it was about six months ago now—to talk to small businesses, to talk to the financial services sector, in the electorate of Wannon, to go through this bill and to get an idea of what their concerns were. It was very interesting and informing. We had 60 people at the forum. It was very well attended because in Wannon we have a lot of small regional and rural towns, and there are lots of financial services businesses which give financial advice, especially to surrounding agricultural producers or people who work in local manufacturing et cetera. So, at a very well attended forum on this subject matter, Senator Cormann spoke very objectively about the Ripoll inquiry and what we were intending to occur as a result of the Ripoll inquiry and the making of some regulatory change in this area.
Senator Cormann pointed out very clearly that what we in the coalition were looking for was regulatory change where the parliament would focus on making things better, not just more complex and more costly for everyone. This was a message which was overwhelmingly well received within the forum. Senator Cormann then asked for questions, and the very first question that was asked by one of our financial services providers was: 'Senator Cormann, do you think that this bill that is going to come before the House, given who is taking it there, will favour the big super funds rather than all the small business providers of financial service advice?' That was the first question which came from the audience; that is what they were worried about. They understood who the relevant minister was who was putting this bill forward. They understood that he is very much beholden to and at the behest of the trade union movement and that, as a matter of fact, he is a former big union boss, so not only is he likely to prosecute on behalf of them, he understands their requirements and their needs. He also understands that as he wants to step further in this place he is going to need their factional support to deliver the numbers for him.
That was the question which came from the floor: do you think that it is going to be that connection to the big trade unions and to their industry funds that will in the end determine what this bill looks like? Senator Cormann said that he hoped not but he feared that would be the case. The fact that we are standing here tonight debating this bill and the way it has been presented in its original form shows that that question was, sadly, absolutely spot-on. It is a pity that the minister could not have been more objective, because the Ripoll inquiry was, and it set very clear guidelines as to how this legislation could look and how we could get bipartisan support for this legislation in this place. Yet this government could not put the legislation together in a form whereby it just said: 'Okay, we have agreement across parties on what the regulatory burden should look like when we make the changes here. We can do it in such a way that we reduce costs, simplify it and change the nature of the regulation but do so in a way which actually helps the industry to flourish rather than to help one part of it flourish and the rest of it to decline.'
So that is where we are today, and this is why the coalition really wants to make four points about this bill in its current form. Firstly, it is unnecessarily complex and, in large parts, unclear. Secondly, it is expected to cause increased unemployment. Sadly, that increased unemployment will occur in those smaller businesses in this sector. It will not be the big industry funds tied to the trade union movement; it will be the mum and dad businesses, especially out in the regional and rural areas and the suburbs. They are the ones which, sadly, are going to suffer and that is where the unemployment is most likely to occur.
Thirdly, it is legislating to enshrine an unlevel playing field amongst advice providers inappropriately favouring a government-friendly business model. That really draws on the second point. This bill will mean that those mum and dad family businesses will suffer. It changes the playing field and it does so in a way favourable to those bigger organisations that I have already mentioned. Fourthly, it is likely to cost about $700 million to implement and a further $350 million per annum to comply with, according to conservative industry estimates. That is the regulatory burden that this bill in its current form will place on this industry. That is a very important fact to remember—and I am going to come back to this point. When you look at how the government went about examining the regulatory burden that this legislation would have on the sector, it did not follow due process. I will come back to that because Senate estimates has been very enlightening when it comes to that point.
As I mentioned earlier, on our side we think that when you pursue regulatory change you have to focus on making things better, not more complex and more costly for everyone. Yet that is what this bill does. What we need to hear from the government is: why, when we had the Joint Committee on Corporations and Financial Services conduct a comprehensive inquiry and make a number of well-considered and reasonable reform recommendations, did the government not sensibly adopt those recommendations and take them forward? Why has it gone beyond that? Why has it sought to favour one part of the industry over another? That is the one question I would like to leave with the government tonight. That is what we need an explanation on. I think it is beholden on the minister especially to give that explanation as to why he is serving the interests of a narrow base in this sector rather than putting forward legislation which would provide the whole industry a secure future going forward.
There are a few points that we need to touch on about the legislation. The bills do not meet the government's own standards. This is a very important point. I would like to read into the Hansard part of the transcript from Senate estimates because I think it is enlightening when it comes to this point. Jason McNamara is the executive director of OBPR. When he came before Senate estimates, he had this to say:
Mr McNamara: Treasury provided a number of RISs—
regulatory impact statements—
in that area. I think that there were six separate RISs in that area. But we found those RISs not yet adequate. They had not met the best practice requirements.
Senator CORMANN: … My question is: why?
Mr McNamara: In regard to those RISs, essentially the impact analysis was not at a standard that we would pass.
Senator CORMANN: You say 'the impact analysis'. Can you be a bit more specific?
Mr McNamara: The impact analysis of a regulation impact statement is generally the area of the RIS that refers to the costs and benefits associated with the policy. It is the detail—the impact on business, consumers or the government. It is that sort of analysis—'this change is meant to do particular things in the economy; it is likely to have these costs and these benefits'.
Senator CORMANN: Are you saying that the government did not even have in front of it adequate information to assess the cost benefit of the FoFA regulation changes?
Mr McNamara: The government did not have an adequate RIS in front of it when it made those changes. That is true.
… … …
Senator CORMANN: … the government's proposal to introduce the mandatory opt-in requirement and the annual fee disclosure, are they the sorts of things that were not properly assessed?
Mr McNamara: Yes. There were six elements.
Senator CORMANN: Can you list those six elements for us please?
And it goes on. I could read the whole transcript into the Hansard. It is there in Senate estimates for everyone to see. Basically, the government decided that it was going to pursue an agenda to favour a select few and impose huge regulatory cost burdens on the rest of the industry. I will again repeat what the regulatory cost is. That regulatory cost is about $700 million to implement and a further $350 million per annum to comply with, according to conservative industry estimates. No wonder the government did everything it could to make sure that there was no proper regulatory impact statement done on this legislation. No wonder it wanted to hide the true burden of this legislation on the sector.
The coalition will be moving a series of amendments, the most important of which are that the government be required by parliament to table a regulatory impact statement on FoFA assessed as compliant by the government's Office of Best Practice Regulation; the opt-in be removed from FoFA; the retrospective application of the additional annual fee disclosure requirement be removed; the drafting of the best interest duty be improved; the ban of commissions on risk insurance inside super be further refined; and the implementation of FoFA be delayed to 1 July 2013 to align it with MySuper.
These are straightforward amendments. They will improve this piece of legislation beyond doubt. They will immediately take away, in particular, the regulatory burden—that $700 million start-up burden and then the $350 million per annum compliance cost. These are sensible, straightforward amendments which are true to the Ripoll inquiry. As we know, the Ripoll inquiry had broad support in this parliament. It is the basis on which this legislation should have been built. It was not, and sadly that is why on this side we are saying that we will oppose this legislation for what it will do in particular to all those mum and dad family businesses in the suburbs, in the regions, in the rural areas, who will be severely impacted by this draconian legislation.
I reiterate that the coalition do not support the Corporations Amendment (Future of Financial Advice) Bill 2011 and cognate bill in their current form. We believe that the financial services industry requires a robust framework. However, as is typical of those opposite, they have proposed a framework overburdened with red tape. This legislation is particularly complex. It demonstrates the regulatory overreach that is now defining the Gillard government, a government so obsessed with regulation and red tape that they fail to recognise the damage they cause to business. Time and again, members in this place stand up and talk about the deadweight loss of compliance, of regulation, of red tape. As a member who has been in this place for 10 years I find it extremely frustrating that over time that burden never seems to reduce, but I am delighted that right here right now the coalition is deadly serious about reducing red tape, and that is one of the problems we have with these bills.
With employment participation as one of my portfolio responsibilities, I have grave concerns regarding the likely job losses that will result from the legislation. Under this government we have seen thousands of Australians lose their jobs since the beginning of this year. Labor's mismanagement of this legislation will further lengthen the unemployment queues, with financial advisers set to join the line. This will result in not only job losses but also a likely increase in the cost of service provision. It is likely to cost about $700 million to implement the government's proposals and a further $350 million per annum to comply with them, according to conservative industry estimates.
I do accept that in the wake of the global financial crisis there were a few high-profile cases of financial service providers collapsing, causing serious economic hardship to thousands of Australians. For this very reason parliament undertook an inquiry into the financial services and products on offer in Australia. The resulting Ripoll inquiry reported back to the parliament in November 2009, which is more than two years ago. The inquiry made some pertinent and timely observations. The coalition was supportive of the key recommendations from this inquiry. Regrettably, the government has decided instead to quiver, shake and run a mile from sensible change. The coalition, on the other hand, is supportive of introducing elements that foster greater trust and confidence in our financial services industry. Australians want to know that their hard-earned dollars are being carefully minded by those they do trust to provide their financial advice. Yet looking after taxpayers' money is something this government has failed to do.
This bill is anti consumer, anti adviser and anti small business, and for that reason we will be moving a series of amendments, which are that the government be required by parliament to table a regulatory impact statement on FoFA, assessed as compliant by the government's Office of Best Practice Regulation. I am preparing to speak on a bill about equal opportunity for women in the workplace. It is unrelated to this legislation and it is a pile of bureaucratic nonsense, again burdening employers with extraordinary reporting requirements. The point is that it has a regulation impact statement, and I do not understand why such a trivial bill—I will call it that, and when I talk about it in the House people will see why—has a regulatory impact statement and this legislation does not. We will also propose that the opt-in amendment be removed. That was never proposed by the Ripoll inquiry. We will propose that the retrospective application of the additional annual fee disclosure requirement be removed, that the drafting of the best-interest duty be improved, that the ban of commissions on risk insurance inside super be further refined and that the implementation of these bills be delayed until 1 July 2013 to align with MySuper. That makes perfect sense. Most of the subject matter financial advisers deal with concerns payments and superannuation.
Just to reinforce the opposition that we have to aspects of this bill, and the fact that we are not being entirely negative and we are making sensible proposals, I would like to run through the recommendations made by the dissenting coalition members of the Joint Committee on Corporations and Financial Services and draw from their report. The first recommendation is:
That the Parliament defer consideration of the FoFA legislation until the government has submitted a full Regulatory Impact Statement in relation to the legislation currently before the Parliament which is compliant with the requirements of the government's own Office of Best Practice Regulation.
Recommendation 2 states:
That the commencement date of this legislation be timed to coincide with the commencement date of the government's proposed My Super changes, which are currently scheduled to commence on 1 July 2013. The commencement date should provide at least a 12 month period from the date of finalisation of all legislation and associated regulations to enable an orderly transition and implementation period.
It is not fair to financial advisers, many operating in the small business space, to dump this stuff here and expect them to understand it and to operate perfectly in concert with it in a very short time. The third recommendation is:
That the Opt-in arrangements contained in the Corporations Amendment (Future of Financial Advice) Bill 2011 be removed from the Bill.
As I said, the Ripoll inquiry made no recommendation to introduce an additional annual fee disclosure statement over and above the current regular statements provided by financial service product providers to their clients already. And the committee received a lot of evidence that, based on the various consultation sessions, it was the industry's clear understanding that the government's proposal to impose an additional annual fee disclosure statement would be prospective—that is, it would only apply to new and not existing clients. The committee received evidence that, after more than two years of this long consultation process, the introduction of a retrospective annual fee disclosure statement was something that came completely out of left field when it first popped up in this legislation. Therefore, we really need to remove those opt-in arrangements.
Recommendation 4 states:
That the annual fee disclosure statements contained in the Corporations Amendment (Future of Financial Advice) Bill 2011 be prospective only as per the government's long standing commitment and that they should not apply retrospectively to existing clients on the basis that the increased costs – ultimately borne by consumers – far outweigh the questionable additional consumer protection benefits.
Recommendation 5 states:
That the annual fee disclosure statement requirements be amended from "detailed" prescriptive information and inflexible issue rules to "summary" information only "given" at least annually to the client.
Recommendation 6 states:
That section 961B(2)(g) be removed from the proposed Best Interests Duty to remove uncertainty about the practical operation of the Duty.
Recommendation 7 states:
That the best interests duty in the proposed legislation be amended to explicitly permit clients and advisers to agree to limit the subject matter of advice provided in order to facilitate the provision of ‘scalable advice’.
There are a couple more recommendations, which I do not believe I need to read into the Hansard of the Federation Chamber because I and other speakers on this bill have given a clear indication of the coalition's approach and our dislike of the direction in which this is going.
Debate adjourned.
Federation Chamber adjourned at 19:27.