I present report No. 8 of the Selection Committee relating to the consideration of committee and delegation reports and private members' business on Monday 25 November 2019. The report will be printed in today's Hansard and the committee's determinations will be appear on tomorrow's Notice Paper. Copies of the report have been placed on the table.
The report read as follows—
Report relating to the consideration of committee and delegation business and of private Members' business
1. The committee met in private session on Tuesday, 22 October 2019.
2. The Committee deliberated on items of committee and delegation business that had been notified, private Members' business items listed on the Notice Paper and notices lodged on Tuesday, 22 October 2019, and determined the order of precedence and times on Monday, 25 November 2019, as follows:
Items for House of Representatives Chamber (10.10 am to 12 noon)
PRIVATE MEMBERS' BUSINESS
Notices
(Notice given 22 October 2019.)
Presenter may speak to the second reading for a period not exceeding 10 minutes—pursuant to standing order 41. Debate must be adjourned pursuant to standing order 142.
2 Mr Katter: To present a Bill for an Act to provide for the auditing of Australian banks by the Commonwealth Auditor-General, to reinforce the Constitutional obligation of the Commonwealth to regulate Australia's banking system and resultant currency and credit within the Australian economy and to better protect deposits within Australia's banking system, and for related purposes. (Australian Banks (Government Audit) Bill 2019)
(Notice given 22 October 2019.)
Presenter may speak to the second reading for a period not exceeding 10 minutes—pursuant to standing order 41. Debate must be adjourned pursuant to standing order 142.
3 Mr Burns: To move:
That this House:
(1) notes that:
(a) access to adequate housing is a fundamental right under Article 11 of the International Covenant on Economic, Social and Cultural Rights which Australia has ratified;
(b) adequate housing requires safe, secure and affordable accommodation be accessible to all;
(c) 116,427 Australians were homeless on the last census night;
(d) homelessness affects Aboriginal and Torres Strait Islanders disproportionately;
(e) homelessness includes those in crisis accommodation, improvised dwellings, temporary accommodation, boarding houses and other insecure forms of housing;
(f) inadequate provision of public housing is a major cause of homelessness;
(g) public housing is a central tenant of an equitable Australia where a fair go requires access to secure accommodation;
(h) public housing is a determinative factor in education, employment, and health outcomes; and
(i) public housing is a means of social mobility and opportunity; and
(2) calls on the Government to help build more affordable homes and ensure every Australian has their own safe place to live.
(Notice given 17 September 2019.)
Time allotted—45 minutes.
Speech time limits—
Mr Burns—5 minutes.
Other Members—5 minutes. each.
[Minimum number of proposed Members speaking = 9 x 5 mins]
The Committee determined that consideration of this should continue on a future day.
4 Mr Falinski: To move:
That this House:
(1) recognises that 12 August 2019 marked the 70th anniversary of the opening for signature of the four Geneva Conventions in 1949;
(2) notes that the Geneva Conventions of 1949, the foundation of modern international humanitarian law, remain as fundamental and relevant to armed conflict today as when they were opened for signature 70 years ago;
(3) acknowledges that the Geneva Conventions, while universally accepted, are not being uniformly respected in times of war, underscoring the need for ongoing advocacy;
(4) recalls that the Conventions and their Additional Protocols protect those who are not fighting, such as civilians, medical personnel, chaplains and humanitarians as well as non-military places such as hospitals;
(5) honours the continuing role of Australian Red Cross in:
(a) disseminating international humanitarian law;
(b) assisting successive Australian Governments to ensure respect for and disseminate international humanitarian law; and
(c) educating the general public about the correct use of the red cross emblem;
(6) pays respect to the continuing global leadership role of the International Committee of the Red Cross in assisting the victims of armed conflict and working for the greater understanding and advancement of international humanitarian law;
(7) determines that Australia should remain, now as always, a global leader in advocacy for, and implementation of, the four Geneva Conventions of 1949 and all that they stand for; and
(8) resolves that this resolution has effect and continues in force unless and until amended or rescinded by the houses in this or a subsequent parliament.
(Notice given 14 October 2019.)
Time allotted—remaining private Members' business time prior to 12 noon
Speech time limits—
Mr Falinski—5 minutes.
Other Members—5 minutes. each.
[Minimum number of proposed Members speaking = 9 x 5 mins]
The Committee determined that consideration of this should continue on a future day.
Items for Federation Chamber (11 am to 1.30 pm)
PRIVATE MEMBERS' BUSINESS
Notices
1 Ms Stanley: To move:
That this House:
(1) acknowledges:
(a) that 14 November 2019 is the 12th United Nations World Diabetes Day; and
(b) UN Resolution 61/225 and the need to improve human health and provide access to treatment and health-care education;
(2) recognises:
(a) the success of the National Diabetes Services Scheme and the support the scheme provides to people with diabetes;
(b) the role of families and healthcare workers in caring and supporting people, particularly children, with diabetes;
(c) the significant cost to healthcare systems as a result of complications associated with diabetes;
(d) new technology, including flash and constant glucose monitoring, has shown significant improvement in overall control for people with diabetes who have access to this technology;
(e) the need for supporting people with diabetes to access new technologies to assist in the management of diabetes; and
(f) that access to these technologies is likely to prevent complications in people with diabetes and reduce the significant social, human and financial burden of this disease on government, health systems, and people and families of people with diabetes;
(3) encourages all people with diabetes and their advocates, carers and families to continue their important work; and
(4) calls on the Government to ensure that all people with diabetes have earlier access to new technology, such as flash glucose monitoring and constant glucose monitoring under the National Diabetes Services Scheme.
(Notice given 10 September 2019.)
Time allotted—40 minutes.
Speech time limits—
Ms Stanley—5 minutes.
Other Members—5 minutes. each.
[Minimum number of proposed Members speaking = 8 x 5 mins]
The Committee determined that consideration of this should continue on a future day.
Orders of the day
1 Recycling: Resumption of debate (from 16 September 2019) on the motion of Dr Allen—That this House:
(1) recognises the imperative of improving waste management, reducing unnecessary packaging and boosting recycling in Australia;
(2) acknowledges that:
(a) Australians generate about 67 million tonnes of waste each year, of which 37 million tonnes is recycled;
(b) only 12 per cent of the 103 kilograms of plastic waste generated per person in Australia each year is recycled, mostly overseas;
(c) for every 10,000 tonnes of waste recycled, more than 9 jobs are created; and
(d) waste related activities add $6.9 billion to the economy annually;
(3) welcomes the Government's recent $20 million commitment for innovative projects under round 8 of the Cooperative Research Centres Projects grants to grow our domestic plastics recycling industry; and
(4) notes that this is part of the Government's Australian Recycling Investment Plan, a package of initiatives totalling $167 million designed to grow and strengthen Australia's domestic recycling industry, and to support industry and community initiatives to lift recycling rates in Australia.
Time allotted—30 minutes.
Speech time limits—
All Members—5 minutes. each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this should continue on a future day.
2 Dr Leigh: To move:
That this House:
(1) recognises that:
(a) Australia's incarceration rate has now risen to 0.22 percent, the highest level since Federation;
(b) rates of homicide, robbery, car theft and assaults have fallen considerably since the mid-1980s, while the imprisonment rate has more than doubled;
(c) the direct cost of prisons is almost $5 billion per year; and
(d) there is a significant indirect cost of prisons, including the impact on the 77,000 children who have an incarcerated parent, adverse effects on the physical and mental wellbeing of inmates, and high rates of homelessness and joblessness among ex-prisoners;
(2) acknowledges that:
(a) the Indigenous incarceration rate is now 2.5 percent, the highest level on record;
(b) the Indigenous incarceration rate is now over twice as high as when the 1991 Royal Commission into Aboriginal Deaths in Custody report was delivered;
(c) among Indigenous men born in the 1970s, 23 percent have spent time in prison;
(d) the Indigenous incarceration rate exceeds the incarceration rate among African-Americans; and
(e) Noel Pearson has described Indigenous Australians as 'the most incarcerated people on earth';
(3) notes that in:
(a) the United States (US), a bipartisan reform coalition at the state level has led to a substantial reduction in that nation's imprisonment rate over the past decade, with conservative groups such as Right on Crime joining with centrist reformers such as the Pew Charitable Trust's Public Safety and Performance Project to reduce incarceration in states such as Alabama, Texas and South Carolina; and
(b) 2018, President Trump signed the 'First Step Act', which reduces the US federal prison population by expanding compassionate release and increasing credits for good behaviour; and
(4) calls on the Government to:
(a) work with the states and territories to adopt justice targets under the Closing the Gap framework, so that the inequality in justice outcomes can be properly highlighted and to address unacceptable levels of incarceration among First Nations peoples;
(b) require the Australian Institute of Criminology to project levels of incarceration (and fiscal costs) in 10 years' time in the absence of meaningful policy reform; and
(c) engage states and territories in an data-driven conversation—drawing together victims' rights groups, prosecutors, and criminal justice experts—to identify the policies that are most effective to reduce crime and imprisonment.
(Notice given 16 September 2019.)
Time allotted—40 minutes.
Speech time limits—
Dr Leigh—5 minutes.
Other Members—5 minutes. each.
[Minimum number of proposed Members speaking = 8 x 5 mins]
The Committee determined that consideration of this should continue on a future day.
3 Mr Simmonds: To move:
That this House:
(1) recognises that precision medicine, enabled by advances in genomics, data analysis and artificial intelligence represents an exciting leap in healthcare that will improve the outcomes of preventative and targeted medicine for countless Australians and their families;
(2) acknowledges that:
(a) our world class healthcare system ensures Australia is well placed to lead the world in precision medicine innovations;
(b) Australian researchers, including those at the University of Queensland, are world leaders in their field and their work is at the forefront of precision medicine; and
(c) research in precision medicine stimulates the economy, leads to growth in highly skilled jobs and supports Australia's $185 billion healthcare industry;
(3) welcomes the Government's significant investment in precision medicine research including as part of the recently announced $440 million in National Health and Medical Research Council grants; and
(4) encourages the Government and private enterprise to continue to invest in the genomics, data analysis and artificial intelligence research required to grow the precision medicine sector in Australia in order to create jobs, keep Australia at the forefront of medical advances and improve the healthcare outcomes for everyday Australians.
(Notice given 22 October 2019.)
Time allotted—remaining private Members' business time prior to 1.30 pm
Speech time limits—
Mr Simmonds—5 minutes.
Other Members—5 minutes. each.
[Minimum number of proposed Members speaking = 8 x 5 mins]
The Committee determined that consideration of this should continue on a future day.
Items for Federation Chamber (4.45 pm to 7.30 pm)
PRIVATE MEMBERS' BUSINESS
Notices—continued
4 Mr Watts: To move:
That this House:
(1) notes that:
(a) according to a report released last month, Australia's Digital Opportunity, Australia is lagging behind global peers and failing to capture the economic opportunities of the rapidly growing global digital economy;
(b) Australia ranks second last among OECD countries for relative size of our technology sector and its contribution to the economy; and
(c) the Australian tech sector could create an additional $50 billion per year were Australia successful in catching up and matching the tech sector growth rates of our global peers;
(2) recognises that the Government released 'Australia's Tech Future' which read more like a promotional brochure than serious strategy—it described initiatives already in train, was vague on targets and outcomes—and, importantly, offers no bold vision to drive growth in our digital economy;
(3) further notes that under this Government Australia is suffering from record low wages growth, more than a million Australians underemployed and a per capita recession; and
(4) calls on the Government to urgently take a coordinated approach to the digital economy.
(Notice given 18 September 2019.)
Time allotted—30 minutes.
Speech time limits—
Mr Watts—5 minutes.
Other Members—5 minutes. each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this should continue on a future day.
Orders of the day—continued
2 Medicare: Resumption of debate (from 16 September 2019) on the motion of Dr Gillespie—That this House:
(1) notes the Government's commitment to Medicare;
(2) further notes:
(a) the record level of funding to Medicare in 2018-19 of $24.1 billion, which is an increase of 3.5 per cent in benefits paid in the 2017-18 financial year;
(b) that the national GP bulk billing rate of 86.2 per cent is a four percentage point increase on the 2012-13 figure of 82.2 per cent when Labor were last in office; and
(c) that patients made 136.5 million bulk billed GP visits in 2018-19, up 3.3 million visits on the previous financial year;
(3) acknowledges that on 1 July 2019, the Government increased the patient rebate for further GP items on the Medicare Benefits Schedule, and that specialist procedures, allied health services and other GP services such as mental health and after hours services, were indexed; and
(4) congratulates the Government for ensuring the Medicare Benefits Schedule Review will continue to ensure that Medicare services are effective and appropriate for patients now and into the future.
Time allotted—40 minutes.
Speech time limits—
All Members—5 minutes. each.
[Minimum number of proposed Members speaking = 8 x 5 mins]
The Committee determined that consideration of this should continue on a future day.
Notices—continued
5 Mr R. G. Mitchell: To move:
That this House:
(1) recognises that 2019 marks the 550th anniversary of the birth of Guru Nanak, the founder of Sikhism, with his birth being celebrated worldwide as Guru Nanak Gurpurab on Kartik Pooranmashi, the full-moon day in the month of Katak, October-November;
(2) joins with all Sikhs in Australia to acknowledge this significant anniversary; and
(3) notes:
(a) that the Sikh community forms an important and growing segment of our community, with the Sikh faith being one of the emerging religions in Australia; and
(b) the contribution that the growing Sikh community makes to our multicultural nation through its commitment to Guru Nanak's teachings of selfless service and social justice.
(Notice given 21 October 2019.)
Time allotted—30 minutes.
Speech time limits—
Mr R. G. Mitchell—5 minutes.
Other Members—5 minutes. each.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this should continue on a future day.
Orders of the day—continued
3 Vilification of minority groups: Resumption of debate (from 21 October 2019) on the motion of Mr Perrett—That this House:
(1) recognises that:
(a) social harmony is vital to the continuation of a successful Australian democracy;
(b) all Australians should be able to go about their lives free from discrimination; and
(c) there is no legislative protection against vilification and incitement to hatred and/or violence based on a person's religion or religious belief;
(2) notes that:
(a) incitement of hatred and violence is a threat to religious minorities;
(b) vilification of minority groups through online social media is prolific;
(c) fifty-three per cent of Australian youth have witnessed anti-Muslim harmful content online;
(d) online vilification normalises negative attitudes against minority groups;
(e) vilification or inciting hatred is often the initial stage of a hate crime;
(f) personal attacks are also occurring against religious minorities, including verbal insults, graffiti, targeting religious dress and physical attacks on buildings and individuals;
(g) women are the main targets of personal attacks based on their religion; and
(h) almost half of all personal attacks occur in crowded community spaces where women should feel safe; and
(3) calls on the Government to protect:
(a) religious communities at risk of endangerment; and
(b) all Australians from incitement of hatred and violence.
Time allotted—25 minutes.
Speech time limits—
All Members—5 minutes. each.
[Minimum number of proposed Members speaking = 5 x 5 mins]
The Committee determined that consideration of this should continue on a future day.
Notices—continued
6 Dr Webster: To move:
That this House:
(1) recognises the importance of reliable communications services for rural and regional Australia;
(2) notes the launch of the Sky Muster satellites in 2015 and 2016 as a way of connecting rural and regional Australia to the National Broadband Network; and
(3) congratulates NBN Co on the introduction of the Sky Muster Plus service, providing unmetered data for activities including some web browsing, select emailing and PC and Smartphone operating system software updates.
(Notice given 14 October 2019.)
Time allotted—remaining private Members' business time prior to 7.30 pm
Speech time limits—
Dr Webster—5 minutes.
Other Members—5 minutes. each.
[Minimum number of proposed Members speaking = 8 x 5 mins]
The Committee determined that consideration of this should continue on a future day.
THE HON A. D. H. SMITH MP
Speaker of the House of Representatives
23 October 2019
I move:
That this bill be now read a second time.
The Health Legislation Amendment (Data-matching) Bill 2019 amends the National Health Act 1953, the Health Insurance Act 1973, the Privacy Act 1988, the Private Health Insurance Act 2007, the Therapeutic Goods Act 1989 and the Military Rehabilitation and Compensation Act 2004to support the integrity of Medicare through data matching for Medicare compliance and related purposes, while maintaining strong privacy and data protection provisions.
The overwhelming majority of healthcare providers claim Medicare Benefits Schedule (MBS), Pharmaceutical Benefits Scheme (PBS) and Child Dental Benefits appropriately. I want to emphasise that and thank our extraordinary medical workforce and professionals for their cooperation and their incredible patient care.
Unfortunately, we know that a very, very small proportion do not.
It is entirely reasonable for Australians to therefore expect that the government has appropriate systems in place to detect instances of Medicare noncompliance and treatment pathways proportionate to the type of noncompliance detected. This will ensure that every taxpayer dollar of our precious healthcare spend is directed to clinically necessary services for Australians.
While the Commonwealth has sophisticated detection techniques at its disposal, current legislative restrictions are impairing the effective and efficient detection of some cases of Medicare fraud and noncompliance.
Healthcare services provided through Medicare and the Department of Veterans' Affairs were funded by taxpayers to the tune of over $36 billion in 2017-18. The integrity of these programs must be ensured so that Australians can continue to access high-quality, effective health treatments. Every dollar wasted by fraud is a dollar that the government cannot invest in cutting-edge new treatments, like CAR-T therapies for people with blood cancer.
The bill will permit data matching across the MBS and PBS for Medicare compliance purposes. This will enable, for example, the identification of instances where the Commonwealth pays for a PBS medicine that is not actually supplied.
The bill also provides for data matching between the Department of Health and the Australian Health Practitioner Regulation Agency to ensure that restrictions placed on registered healthcare providers by their professional board are adhered to in Medicare claiming.
It would also allow for therapeutic goods information to be used by the Department of Health to help ensure Medicare claims in relation to unapproved medical devices are appropriate.
Healthcare providers claiming Medicare services for general patients may also claim for services delivered to patients under Department of Veterans' Affairs programs.
The bill supports matching of data from Medicare and the Department of Veterans' Affairs to ensure that services provided under both programs are considered for the purposes of the prescribed pattern of services, where exceeding a certain number of services on a certain number of days may be considered inappropriate practice.
Data-matching with records held by the Department of Home Affairs that indicate whether a person is overseas will allow confirmation that both the healthcare provider and patient were in Australia at the time of their claimed services. Believe it or not, we have actually found instances of fraudulent Medicare billing where either the doctor or the patient for a service billed to Medicare was actually out of the country when the service was supposed to have been provided.
The bill also allows private health insurers to voluntarily share information with the Department of Health for the purposes of detecting fraud and recovering incorrect payments. The bill will not allow the government to share any patient information collected by the government with private health insurers.
While data-matching permitted by the bill will enhance my department's ability to detect Medicare fraud and non-compliance, it will not expand its existing compliance powers. Nor will it change the approach taken by the department in conducting its compliance activities which are designed to be proportionate to the type of non-compliance detected.
The department will continue to engage and consult with professional bodies and other stakeholder groups on its compliance strategies and activities, as well as provide education support resources for health professionals.
I particularly want to thank and acknowledge the very diligent work of both the AMA and the Royal Australian College of General Practitioners for their input, advice and consultation in the development of this legislation. They have taken a very responsible approach and that is a credit to the leadership of both organisations. I want to thank other health and medical professional groups, the department and my adviser, Kylie Wright, for their outstanding work in helping to obtain stakeholder views and to ensure that is faithfully reflected within the legislation.
Importantly, departmental officers will continue to follow prescribed and legislated processes when undertaking Medicare compliance, with procedural fairness and review rights for health professionals retained. The bill does not support automation of the department's compliance activities and outcomes, or the raising and collection of debts.
The government acknowledges the importance of protecting an individual's privacy and the trust placed in the government by Australians to manage their health data appropriately. Protecting the privacy of an individual's health and other data is central to this bill.
As Minister for Health, I will be required to put in place governance arrangements for data-matching for Medicare compliance purposes through a legislative instrument that prescribes how information for data-matching will be handled. The legislative instrument will ensure that the use, storage, access and handling of data protects privacy.
In conclusion, I consider that this bill strikes the right balance by facilitating the important public policy objective of protecting the integrity of our taxpayer-funded health system, while enshrining strong principles to protect the privacy and security of personal health data.
I would again like to extend my thanks to all of the healthcare professional groups that have engaged in the design of this bill, providing constructive input and feedback over the past 18 months. I would also like to thank the opposition for their constructive engagement and involvement. Those groups, as I mentioned earlier, that have contributed include the Australian Medical Association, the Royal Australian College of General Practitioners and the Pharmacy Guild of Australia. All have played a constructive role and have improved the content, structure and drafting of the bill through its processes.
I want to commend the legislation to the House and I thank the House for the opportunity to present the bill.
Debate adjourned.
I move:
That this bill be now read a second time.
The Australian government's first responsibility is to keep Australians safe and secure, and this includes protecting Australians from transnational, serious and organised crime. That is why I today introduce the Transport Security Amendment (Serious Crime) Bill 2019,to ensure that security-sensitive areas at Australia's airports, seaports and offshore facilities are not accessible by serious criminals.
Serious and organised crime is a major threat to the Australian way of life. It causes enormous human suffering and is estimated by the Australian Criminal Intelligence Commission to cost the Australian economy more than $47 billion per annum.
Airports and seaports are transit points for organised criminals to import weapons, illicit drugs and other harmful goods into Australia. Trafficking of these illicit goods puts Australia's security and prosperity, and the welfare of our communities, at great risk.
The 2015 National Ice Taskforce and the Joint Parliamentary Committee on Law Enforcement have both recommended that Australia's aviation and maritime environments be hardened against these risks by strengthening the eligibility criteria under the aviation and maritime security identification card schemes (ASIC and MSIC schemes). This bill delivers on this recommendation.
The ASIC and MSIC schemes are essential in ensuring security within Australia's transport network. Persons who hold an ASIC or MSIC card are able to access the most secure areas of Australia's airports and seaports. To attain an ASIC or MSIC card, a background check is required. However, at present, the background check only determines whether a person may be a threat to aviation or maritime security. It does not consider whether the person has a history of involvement in serious crime. This leaves our airports and seaports vulnerable to exploitation by serious criminals. The Australian Criminal Intelligence Commission (ACIC) has identified that almost 300 ASIC or MSIC card holders have known criminal links to organised motorcycle gangs and other serious and organised crime groups on the ACIC's National Criminal Target List.
ASIC and MSIC card holders can abuse their privileged position for criminal purposes, and card holders are able to assist crime syndicates by facilitating the transit of illicit goods through our transport networks and border controls. For example, a Sydney airport baggage handler is currently before the courts charged with using his trusted position to bypass customs processes. The handler was part of an alleged trafficking syndicate, and he is alleged to have used his airside access to transit large amounts of cocaine undetected through border control.
The bill will address such criminality at our airports and seaports by broadening the Aviation Transport Security Act 2004 and the Maritime Transport and Offshore Facilities Security Act 2003 beyond their present focus on security to include provisions aimed at addressing crime.
The bill establishes a regulatory framework for introducing new eligibility criteria to address the existing vulnerability across both schemes and to ensure that persons convicted of serious offences will be ineligible to hold an ASIC or MSIC card. In addition, the bill will strengthen the regulatory framework by harmonising the eligibility criteria under each scheme. These changes will reduce the ability of criminals to exploit Australia's aviation and maritime networks for illicit gain.
In conclusion, the Australian government is committed to improving safety and security outcomes for all Australians. The ASIC and MSIC card schemes are an important part of securing the aviation and maritime sectors. Any person with an operational need to access a security-sensitive area at an airport or seaport should be of proper character. This bill will ensure that this is the case.
The reforms presented in this bill were reviewed by the Senate Standing Rural and Regional Affairs and Transport Committee during the previous term of parliament, and the committee recommended that they be passed without amendment. The imperative for this legislation is clear. It will reduce the ability of organised crime groups to engage in illegal activities at airports and seaports.
I commend the bill to the House.
Debate adjourned.
I move:
That this bill be now read a second time.
This bill implements measures announced in the government's 2017-18 budget housing affordability package to improve housing affordability, encourage investment in affordable rental housing and to improve the integrity of our tax system. These measures support those already legislated as part of the Treasury Laws Amendment (Housing Tax Integrity) Act 2017 and the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Act 2017.
Schedule 1 to this bill implements stronger rules for foreign residents owning Australian housing to reduce pressure on housing affordability.
Firstly, foreign residents will be denied access to the main residence capital gains tax (CGT) exemption from 7.30 pm Australian Eastern Standard Time on 9 May 2017 except in the case of certain life events that occur within six years of losing their Australian residency.
A grandfathering arrangement will apply for properties already held at that time, with the change taking effect for these properties from 1 July 2020. This will provide foreign residents sufficient time to consider and to plan their affairs.
These amendments will also allow foreign residents to continue to access to the main residence exemption within six years of becoming a foreign resident if a CGT event occurs to their Australian property and during that period they experience certain life events—their death, or divorce (and equivalent) or terminal illness, or the death or terminal illness of their spouse, or child who is under 18 years old.
Secondly, this schedule addresses an integrity issue with the CGT rules for foreign residents that hold indirect interests in Australian real property, such as land, from 7.30 pm Australian Eastern Standard Time on 9 May 2017.
This reform addresses an integrity issue with the principal asset test to require a foreign resident to consider any interests held by its associates, if it disposes of an indirect interest in Australian real property for example by selling shares in a land rich company.
This ensures the principal asset test cannot be circumvented by disaggregating holdings of membership interests.
These foreign resident CGT changes, together with the 2017 expansion of the foreign resident CGT withholding regime, are expected to have a gain to revenue of $510.0 million over the forward estimates period to 2020-21.
Schedule 2 to this bill delivers on the government's commitment to introduce tax incentives to boost investment in affordable housing, to create the right incentives and to improve outcomes for those in need.
This bill allows resident investors in qualifying affordable rental housing to obtain a CGT discount of up to 60 per cent from 1 January 2018. Under current arrangements, individuals generally receive a 50 per cent capital gains discount for CGT assets held for at least 12 months. This includes residential investment properties that are supplied for affordable housing.
The additional CGT discount will be available to resident investors who hold affordable housing directly or through certain trusts, such as holding units within a managed investment trust.
To qualify for the additional discount, the affordable housing must be held for a period of at least three years from the start date of this measure, and be managed through a registered community housing provider in accordance with state and territory housing policies and registration requirements.
This measure encourages increased investment in affordable rental housing and forms part of the government's housing affordability package announced in the 2017-18 Budget.
This measure is estimated to have a cost to revenue of $15.0 million to 2020-21.
Schedule 3 of this bill is a technical amendment that introduces a reconciliation payment for the near-new dwelling exemption certificate that has already been introduced through Regulation changes on 24 June 2017. This change supports the streamlined foreign investment framework announced in the 2017-18 budget.
This amendment provides the mechanism for imposing a fee on the developer for each near-new dwelling sale to foreign persons.
Can I thank those who have contributed to the public consultation on the draft legislation for these measures.
In conclusion, the government through this bill is creating the right incentives as part of our comprehensive and targeted plan to improve outcomes across the housing spectrum.
Full details of these measures are contained in the Explanatory Memorandum.
Debate adjourned.
I move:
That this bill be now read a second time.
This bill just contains some very minor technical amendments that support changes announced in the 2017-18 budget which streamlined foreign investment frameworks.
These amendments introduce a reconciliation fee on developers for dwellings sold to foreign persons under a near-new dwelling exemption certificate. The near-new dwelling exemption certificate was introduced through regulatory amendments that took effect from 24 June 2017.
The full details of these minor technical amendments are contained in the explanatory memorandum.
Debate adjourned.
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: Fit-out of new leased premises for the Australian Federal Police at 140 Lonsdale Street, Melbourne, Victoria.
The Public Works Committee has recently reported to both houses of parliament, as required by the Public Works Committee Act 1969, on its inquiry into the proposed fit-out of new, purpose-built premises to be leased by the Australian Federal Police at 140 Lonsdale Street, Melbourne. The new lease arises as a result of the expiry of the AFP's current office lease at 383 La Trobe Street, Melbourne. The committee did not identify any issues of concern with the proposal and is satisfied that the project has merit in terms of needs, scope and cost. The committee has reported that, having regard to its role and responsibilities, the committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit for purpose, having regard to the established need. The committee has recommended that the House resolve, pursuant to section 18 subsection 7 of the Public Works Committee Act 1969, that it is expedient to carry out the work. On behalf of the government I thank the committee for again undertaking a timely inquiry. Subject to parliamentary approval, construction is anticipated to commence in late 2019 and be completed by late 2022. I therefore commend the motion to the House.
Question agreed to.
I move:
That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: CSIRO Sydney Consolidation Project.
As the House was advised on 13 February 2019 when this project was referred to the Public Works Committee during the 45th Parliament, the CSIRO is proposing to consolidate the organisation's property portfolio in the greater Sydney area through a mix of divestment, expiry of lease and consolidation of capability at five existing sites. The reference lapsed on the dissolution of the parliament on 11 April. On 31 July the project was again referred to the Public Works Committee of the 46th Parliament for consideration and report.
In its report on the project, the committee recorded its view that 'this project signifies value for money for the Commonwealth and constitutes a project that is fit for purpose, having regard to the established need'. The PWC made two recommendations—that the House of Representatives resolve, pursuant to section 18(7) of the Public Works Committee Act, that it's expedient to carry out the proposed works; and that, prior to commencing the proposed works, CSIRO provide all information previously requested by the committee and evidence of how the CSIRO are addressing the concerns of the local community regarding the impact on water pressure in the event of a bushfire or emergency in the area of the Lindfield facility.
On behalf of the government, I'd like to thank the committee again for undertaking a timely inquiry and report. Subject to parliamentary approval of the proposed consolidation project, construction is expected to commence in early 2020 and be completed in mid-2022. I therefore commend the motion to the House.
Question agreed to.
On behalf of the Minister for Health, I move:
That, in accordance with section 10B of the Health Insurance Act 1973, the House approve the Health Insurance (Extended Medicare Safety Net) Amendment (Eating Disorders Capping) Determination 2019 made on 10 September and presented to the House on 14 October.
Question agreed to.
The question before the House now is that the amendment moved by the member for Rankin be agreed to.
To continue my remarks from yesterday, I want to place on the record in the House of Representatives that we all know that Australia is suffering what I would say is the worst energy crisis since the mid-1970s, and it's simply not good enough for the government to not have a real energy policy after six years in government. As much as they would have you believe otherwise, this bill will not end the nation's energy crisis.
The member for Rankin's second reading amendment to this bill, which I'm speaking to, highlights just how much of a failure the government is when it comes to national energy policy, noting that 'the government has proven unable to deliver sensible national energy policy to support well-functioning electricity markets that will support new clean energy investment, safeguard energy reliability and security, and deliver a modern and affordable energy system for a modern Australian economy. That really sums it up: a failure on every facet, in my opinion, when it comes to a national energy policy.
I want to place on the record today that, since 2015, gas prices have tripled and wholesale power prices across the national energy market have skyrocketed by 158 per cent, smashing household budgets and jeopardising tens of thousands of manufacturing jobs.
The lack of policy from the government has been cited by the Finkel review, the Energy Security Board, industry and Infrastructure Australia as driving up costs. These are the facts. This is not spin. This is not an invention. This is hard-core data which clearly shows that, under this government, for the last six years, we are paying more in energy costs than we have ever paid before as a nation. Today before the House we are debating a bill which is the 16th attempt by the government to get an energy policy.
Out in the real world, out in the community, people are rightly confused. Since 2013, the coalition has failed to act on climate and energy and, quite frankly, their policy record is one of abject and complete failure, summarised by rising electricity prices and rising carbon pollution. Since I've sat in the House of Representatives, when we have debates on energy policy, normally the only response the government has are some concocted imaginings or some nonsense like, 'We won't be as bad as Labor,' or 'Labor would be worse,' or 'State governments are to blame.' That's really summing up what the debate is. It's not any arguments or alternative approaches—isn't that an ironic term at the moment! They don't actually come forward with proper policy to debate this.
We did have that once. There was a glimmer of hope for a little while when we saw the birth of the National Energy Guarantee. I want to be very clear: whilst it was not perfect, the NEG was a mechanism designed to ensure reliability of supply and emissions reduction in the electricity sector. The current Treasurer and then former energy minister, I thought, was sold a pup. He was given orders by the former Prime Minister to go out and sell this as a policy, and we all know how that movie ended. It was ripped apart. The member for Hughes and the climate change deniers got their hands on it, went on to Sky News After Dark and ripped it apart. That chorus came down and said: 'We don't need it. It's not going to happen.' It was all destroyed—a bit like the leadership of the former member for Wentworth. It was dumped just as quickly as it was born, and that was supposed to be the answer to all our energy problems.
If I was a member of the government, I'd be embarrassed that, when I go to the community or to schools or when I got up in front of people, they would ask: 'How are we going to fix energy prices? How are we going to reduce carbon pollution?' You'd have to say: 'Well, we'll wait and see. We're not sure. We keep coming up with things, and they keep getting knocked over. Some people like it; some people don't.'
Recent reports show that state governments are privately talking to the government, in particular the New South Wales Liberal government, to try to work out what to do post-NEG. The Berejiklian government wants Minister Taylor to just revive the NEG, given pretty much every stakeholder in the energy sector would prefer a transparent national policy mechanism rather than the government simply picking winners. But media reports say the minister has said no. We still really don't know why the government doesn't come back to the table on real energy policy like the National Energy Guarantee, which the Prime Minister and Treasurer both said would bring down power prices by an average of $550. That was according to the government's own modelling. That's not Labor's research; that's what the government told us. If we had the National Energy Guarantee, power prices would come down by $550.
I also want to make this point: the NEG has the support of every business organisation and every state and territory government, Labor and coalition alike, and would have finally delivered the price release that Australia is desperately in need of. Australia needs real action to bring down energy prices right now, not just more talk.
After all of that, we arrive at the second go of the so-called 'big stick' policy: to scare companies into lowering power prices. The other thing about this heavy market intervention is—it's amazing when you look at the speakers list today on this. Where are the free marketeers? Where are the people who champion free economies?
Where are there freedom lovers wanting to defend open markets? It's eerily silent. After listening to all the first speeches of 'less government, less regulation, less red tape, less green tap' and on it goes, they're suspiciously quiet when it comes to this dare I say socialist-style, market-driven, Venezuelan, Cuban-style intervention into the marketplace. It is quite ironic to hear one side of the street talk and then see the other side watching that as it goes down. I want to be clear: this is not a plan for national energy certainty. It only leads to more chaos and confusion for industry and consumers. And that's exactly what the Australian Energy Council put forward in their Senate submission on this bill. They called on the government to alter many 'poorly drafted' parts of the proposed laws, saying it would otherwise risk more frequent price changes and leave consumers confused and frustrated.
Whilst Labor has played a constructive role, as we do, in cleaning up legislation and ensuring that the government's own homework is better, we still understand that we have an awful long way to go when it comes to dealing with energy security in this country and, in particular, the reduction of carbon pollution.
This coalition is a government of fakes and flakes, and this legislation proves it. There is no better example of fakes and flakes than what we're debating right now. Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill is the official title but everyone refers to it as the big-stick legislation. Outside we get the government talking tough, saying that they'll use this to break up energy companies when they don't pass on drops in energy prices. Mind you, wholesale prices in this country have leapt nearly 160 per cent largely because there's no effective policy framework in the country. Inside here, with the media and all the people who rightly go, 'Hang on, is this the right step to take?' they go, 'No, no, this is a last resort.' Outside, they're tough; in here, they're timid and they don't want, they claim, to have to use this.
This legislation comes about because this is a government that haven't got their act together on energy because they fight amongst themselves. They've not been able to come up with some sort of coherent idea about how we'll generate energy in a much cleaner, more efficient way in this country. This is the big test for the nation—to do just that, to generate energy in a cleaner, efficient way. We'll sometimes have those opposite say, 'Well, look, we believe in climate change and we believe in the need to generate energy much better,' but they've got to come up with a practical idea, and what's their idea? The idea of those opposite is: 'Well, we're going to use taxpayer funds to generate power through coal. If the energy companies can't see our sense'—the coalition's sense of generating coal-fired energy—'then we're going to break them up and fund them with taxpayer funds. We'll generate it on our own.' What is practical about that? Nothing at all is practical about that at a time when renewables are going through the roof, and the government knows most energy players are going down this path.
The prime mover of reviews, the now Treasurer, Josh Frydenberg, went through all these incarnations: he went with an emissions intensity target. That got dropped because the hardheads in the coalition party room didn't like anything that sounded like that. He then went to a clean energy target. That got dropped as well. And then he ended on the NEG, the National Energy Guarantee, which again, they couldn't get their heads around. At that point in time, we had the spectacle of those opposite say, 'We're only going to put the National Energy Guarantee to the floor of this parliament if we get bipartisan support,' which suggested we weren't in favour of getting a coherent, sensible energy policy in this country—garbage; absolute rubbish! Why? Because, while we agreed, as my colleague the member for Oxley just indicated, we didn't think it was perfect, we thought it was good, better than what was on offer at that moment. So when those opposite said, 'Well, we need bipartisan support,' it wasn't that they needed support from us—bipartisan, two parts; what they needed was in their own party room agreement. They had this split between the Neanderthals and the sensibles—the ones who knew that they needed to get a policy in place—but the Neanderthals said, 'We are not going to have this NEG because it sounds too green; it sounds too much like we're doing something fancy that we don't like,' and they fought amongst themselves. It wasn't bipartisan with us; it was within them. The problem with that side of politics at the moment is that they have regressed into this sort of Trumpian slump, where they just ape what they're seeing on the other side of the Pacific and they're continuing this long conflict on this policy.
We need to get this right. As I said, a 160 per cent increase in wholesale power prices means that people are getting whopping power bills in the mail, and they can't believe their eyes. Why? Because those opposite have not been able to work out how, as I said earlier, we can generate energy in a cleaner, more efficient way. And this is the classic case. This is the most commonsensical thing. If you haven't got supply, guess what? If demand is up and there is no supply then prices are going to go up and that is exactly what has happened.
So we get this type of legislation being put to us here as some sort of suggestion that this is a serious attempt to deal with it. No, it's not. This big stick is about breaking up energy companies because they won't go against their business sense and do what the coalition wants in an ideological sense, and that is what we've got here. There's no better test, too. Outside, the energy minister, Angus Taylor, says, 'We want drops in wholesale power prices to be passed onto consumers.' If they're saying that this legislation, this big stick, will be taken to those energy companies and they will be broken up if they're not passing on drops in wholesale power prices to consumers, the test for them is this: go and use it on the banks.
The big debate we're having in this country is that every time there's an interest rate cut by the Reserve Bank of Australia, it is never passed on properly to consumers, in particular, to those people who are balancing paying off a home, while their wages aren't going up, aren't getting the hours they need at work, are doing everything they can to meet the cost of living, while power prices—mind you—are going up. If the banks won't pass on the interest rates cuts, where's the big stick? We get a lot of tough talk out of the coalition but we don't get any of this type of proposal being put out in the public space—that they'll pick up this divestiture power and put it on the banks and break up the banks. The banks are profiting massively. They're raking in billions by not passing on interest rate cuts at a time when ordinary Australians need them or the economy needs that boost to get it out of the spluttering state that it's in at the moment, where the IMF has downgraded growth four times more than most other economies, and our growth is expected to be slower than Greece. The coalition won't do that. They will not do this to banks at all—mark my words. They'll not use their so-called big stick on the banks. They will use this big stick basically to hold up a sign that says, 'fake action here', because that's what this bill is about. The coalition know they will be in a world of pain if they do this.
Sometimes in this weird world of politics, you have to give people what they are hankering for. If those opposite are hankering for this bit of legislation, they'll get it, and then we'll test and see what they actually do. I don't think it's necessarily a smart idea to break up these energy companies, because they know they've got these ageing coal fired generators they're not willing to put money into, they know the game is about finding new ways to generate energy in a much cleaner, more efficient way, and that's where they want to put their money. Why would you load them up with costs that you know will get passed onto consumers at any rate? But the government wants to break those companies up. That's what the claim is outside, not in here, and the test will be: will that actually happen?
The bigger test, though, is: will power prices actually come down? I reckon those opposite will not meet that test at all. This will not lead to a drop in prices and it certainly won't lead to a drop in emissions. The rest of the world is saying, 'Come on, we've got to get our act together on this and see that actually occur.' We are not going to see that whatsoever out of this government.
We're debating this legislation. If they want this legislation, they're going to get it. We're going to see if they actually deliver—deliver not more hot air, not more slogans, not more political stunts, but deliver results for ordinary people who want to see a drop in their power prices and who expect us to take the issue of climate change seriously and to do the things that will reduce emissions in the longer term for the benefit of the nation. That's what we expect to see. That is the challenge. That is the real test of whether governments in this country will take this seriously, will recognise the challenge that we've got before us, will take the steps to reduce emissions, will do the things that we expect will see energy generated in a much cleaner and more efficient way, and will also leave a legacy of a better future for those who will follow us, as opposed to the scenario we've got now, where inaction is genuinely concerning people. Those opposite will deride young people for taking time out of school to protest about the inaction and inability of adults to actually take this seriously. They'll also dismiss the hundreds of thousands of people out in our streets, in our capital cities and across the globe, saying this stuff needs to be taken seriously. They'll dismiss all that. But that's what those people that are marching expect us to do. They expect this place to be able to come up with a regime and a suite of measures that will see emissions drop—not this kind of big stick stunt we're getting right now—and to be able to genuinely address climate change and genuinely find a way to do all the things that people expect and want to see happen.
I rise to speak on the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019. We've had 10 years of energy policy uncertainty and half a dozen failed attempts by both the government and the opposition to sort this out. As a result, household energy prices have ballooned by 56 per cent in the last decade, pushing many households around Australia into financial stress. The majority of this price increase was driven by network costs caused by gold plating; the network companies and these players have not been dealt with by this bill. We've seen increases in the wholesale electricity prices, not renewable generation. We have been under a policy of relying on coal-fired power and gas, and that has led to rising prices. In the last few years, the government has introduced legislation like the Default Market Offer and the Retailer Reliability Obligation to try to bring prices down. This bill, allegedly and supposedly, is going to help reduce prices further. This will be a test because this will be followed and watched closely.
What is in this bill? We've heard a lot about it, so it's important to understand it. The government is seeking to introduce new remedies for high power prices, specifically dealing with alleged anticompetitive conduct in the National Electricity Market. What does it purport to do? In the retail market, in the event of a sustained and substantial reduction in supply chain costs, retailers will be required to make reasonable adjustments to their retail prices for market offers, including to households and small businesses. In the wholesale market, generators will be prohibited from manipulating the spot market, and that can occur in a number of ways set out in the explanatory memorandum. In the contract market, energy companies will be prevented from withholding hedge contracts for the purpose of substantially lessening competition.
This legislation sets out graduated remedies that can apply in the event of misconduct. The ACCC will be able to issue a warning notice, accept an enforceable undertaking or seek a financial penalty of up to $10 million, three times the value of the total benefit attributable to the conduct, or 10 per cent of the annual turnover of the corporation in the 12 months before the conduct occurred—extremely significant, severe financial penalties. In addition, the ACCC will also be able to recommend that the Treasurer either issue a contracting order or pursue a divestiture order in the courts. The contracting order will essentially subvert the processes of a company and force it to run a business in a way that may not be consistent with its shareholders or internal decisions.
What evidence do we have to rely on for the basis of this bill? I'm deeply concerned that this bill is trying to solve problems that, first of all, don't exist. I must say, there have been a number of speakers in this House who have made very important points, including the member for Indi yesterday. The government likes to point to alleged price manipulation behaviour around the closure of Hazelwood in Victoria as evidence for the necessity of these new remedies, but the Australian Energy Regulator investigated those events and found that the Hazelwood closure did not identify instances where the opportunistic exercise of market power significantly affected average price outcomes in Victoria or South Australia and therefore did not agree with the government that there had been such conduct. In a later report, they found:
Despite this vulnerability to the exercise of market power, we did not identify short-term behaviour as contributing to recent price rises.
But the government doesn't want to listen to those findings. Instead, it wants to listen to its own agencies, who used flawed analysis from policy advisors like the Victoria Energy Policy Centre. In relation to the report that they came up with, Frontier Economics wrote this:
The numerous methodological and procedural flaws in the Mountain-Percy report leave the evidence well short of that required to allege serious wrongdoing by market participants. Certainly, the report does not provide any suitable justification for the government’s misguided interventions in the NEM.
And, finally, the ACCC, who will be tasked with providing recommendations to the government on prohibited conduct under this bill, said that the behaviour that this bill seeks to remedy has simply not occurred.
What is the likely effect of this bill? That's what we really need to be concerned about. Despite not having any evidence that justifies the remedies, the bill will have a significant effect on the National Energy Market. The Law Council of Australia concluded that the bill's remedies are heavy handed, disproportionate and overly bureaucratic market reforms to perceived prohibited conduct and to some extent double up on powers which already exist under section 46 of the Competition and Consumer Act for market misconduct and the default market offer already introduced by the government. Furthermore, they suggest that, in attempting to remedy possible misconduct with sections like 153E, F, G, and H, this bill introduces uncertainty which will have negative effects on the market. These sections need considerable tightening up.
The legislation will further distort the market by adding further regulation, which will affect investment in an already fragile investment climate. The Grattan Institute echoes the Law Council's submission, saying:
... hasty government intervention risks making things worse rather than better. Lowering prices ultimately requires private investment; a short-term ‘company bashing’ approach may well prove counter-productive.
Also, on the alleged misconduct, they say:
Not only did the ACCC never say these things are happening and they also said in their view having integrated gentailers was actually a good thing and would actually reduce the overall cost.
I have a particular concern with the provisions regarding contracting orders in sections 153W and 153X. Such powers require an assessment that should be made by a court, not the Treasurer. My concerns—and they have not been addressed in the explanatory memorandum or the bill or by the minister—are that these powers can be misused by the Treasurer to keep generators open or allow the minister to reopen closed generators that have been closed due to a company strategy, resolution or due care and safety reasons. If a company decides to close a fossil-fuelled power plant for commercial reasons or in line with their stance on climate, they must not be victims of coercion by this government to stay in the market, as we have witnessed with Liddell. I was assured by the minister that the powers under this bill would not be used for this purpose, but I call for this to be put on the public record by the minister. These orders cannot be used to force coal-fired power plants to stay open or be used for an ill-conceived plan by some to get control of a coal-fired power generator.
What is the appropriate way forward? Market observers are saying that this legislation is the exact opposite of what the National Energy Market needs at the moment and that this bill is another part of a piecemeal attempt at energy policy. What we actually need to deal with energy prices is a settled energy policy, and the best we have had to date would be the National Energy Guarantee, which had bipartisan support from state governments and industry. Kerry Schott, the chair of the Energy Security Board, said, on the policy front:
One of the things that does make it difficult is the lack of integration of emissions reduction with the energy market.
… … …
And the world would be much easier if we knew, for example, a national target out at 2050, or some guide of where we're going.
Integration of emissions reduction and a target are both what the National Energy Guarantee sought to remedy. This is further emphasised by the ACCC, who said in their latest report on the NEM price:
The National Energy Guarantee seeks to more clearly link the introduction of lower emissions generation sources to the ability to call on generators to produce energy when it is most needed. To the extent that this policy can encourage investment in capacity from a diverse range of sources, diluting market concentration and promoting competition to supply retailers, the policy should assist in delivering electricity affordability.
If policy is not used in that way to integrate these factors, it will create further instability and discourage investment in the energy sector—if not the NEG then at least something to replace it. This could be a clean energy target that includes signals for firming, which was the 50th recommendation of the Finkel review. It was, at the time of the report, the most effective mechanism to drive investment in renewables, other than an emissions trading scheme.
Academics like Blakers and Stocks at the Australian National University have identified enormous opportunities for renewables if we provide a mechanism for new transmission and transmission upgrades to enable renewable energy zones like New South Wales to Queensland via New England or access to zones in South Australia via the river link. The Integrated system plan, which is Australia's most comprehensive energy system planning document to date, created by the Australian Energy Market Operator, lays out transmission possibilities and should be integrated into the government's energy policy decision making. Both AEMO and Blakers and Stocks simply state that, if we provided signal for transmission, this would bring on the next wave of investment and competition in the market. As for firming, Blakers and Stocks have identified over 22,000 pumped hydro sites in Australia, a fraction of which could meet Australia's storage needs for a 100 per cent renewable energy grid. In a recent committee hearing they maintained that 100 per cent renewable energy is not an engineering problem. It is technically straightforward; the only barrier is the politics.
What are the opportunities for Australia in energy? Australia has an unprecedented chance to turn the country into a renewable energy superpower. The GenCost 2018 report by CSIRO and AEMO, which investigated the cost of various forms of generation in Australia, showed us that renewable energy by itself is the cheapest cost of new generation, at roughly $45 to $55 per megawatt hour and, firmed with six hours of pumped hydro, would be roughly $90 to $100 per megawatt hour. This is because our abundant sun and wind resources and engineering ingenuity give us a natural advantage over other nations. We must harness this opportunity. People in Warringah want to see this. Many are willing to contribute to a new era in energy. We have renewable energy developers at the Manly Solar Beach hub, like Solar Choice, Edify Energy and WIRSOL, already helping to fix our energy mess. These companies have already developed over one gigawatt of renewable capacity in Australia. That is powering the equivalent of over 500,000 homes. Now they are on the new frontier of battery storage, contributing to pioneering projects like the Gannawarra battery and investigating the applications of virtual power plants.
Outside of Warringah, we are already seeing plans for renewable energy exports to Indonesia, and massive renewable hydrogen projects as well. The Australian National University's Zero-Carbon Energy for the Asia-Pacific project is suggesting that we build a high-voltage undersea cable to Indonesia from the Northern Territory that could export 440 terawatt hours of electricity yearly. They are working with developers like CWP Renewables to achieve this. They further add that we could use renewables to make green steel and green hydrogen, and the combination of these would grow to the equivalent of our current fossil fuel energy exports and iron ore volume.
The Australian Renewable Energy Agency is supporting these kinds of endeavours. They are part financing early-stage hydrogen projects in Queensland. ARENA has put in a total of $2.9 million to one project in Moura, which is proposing to produce 20,000 tonnes per year of ammonia from 3,600 tonnes of renewable hydrogen. ARENA is doing this with projects across the board, from electric vehicle charging to battery storage, demand response and transmission technology. To keep up their good work, they urgently need assurances from the minister of continued funding past 2022. This agency is essential for our energy future.
These projects are just some examples of what we can achieve if we set our minds to the future. To get us there, we need considered policy—not just big sticks, which will drive away investment and create instability. Customers will be the ones who will pay for that instability with higher prices, and they will pay for poor planning policy. I call on the government to present a considered energy policy that will take Australia into the future. Much more is needed.
This bill, theTreasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019, delivers on our commitment to the Australian people to bring down power prices and stop dodgy conduct. It puts them back in control of their power bills. This bill once again shows that the Liberal-National government is on the side of hardworking Australians by ensuring energy savings are passed through to customers, introducing real penalties to stop the unacceptable and unsustainable conduct called out by the ACCC in their report last year and ensuring that big businesses can't manipulate the market to drive up prices.
The bill, importantly, complements the work since the election. From 1 July, we implemented a price cap on the highest standing offers, which is bringing and has brought down power prices by as much as $663 for some households. This comes on top of the government's work to stop dodgy discounting and charges from the big energy companies, including sneaky late-payment fees that were crippling those who could least afford it. From 1 July, we have also delivered the Retailer Reliability Obligation, which requires retailers to guarantee their energy supply three years in advance. It will keep prices down and ensure that the lights stay on. Whilst there is still more to do, I'm pleased that the most recent data shows that Australian power prices are dropping in the CPI.
Looking forward, the government's Underwriting New Generation Investments program will deliver new reliable generation into the market, putting downward pressure on prices and ensuring, importantly, the security of the grid. Further, we've introduced legislation to ensure that lower power prices are passed on to customers by the big energy companies.
I turn now to the bill. The bill will amend the Competition and Consumer Act 2010, introducing a new legislative framework to support the ACCC's electricity price monitoring inquiry. The bill is a targeted and time-limited intervention that aims to act as a deterrent to electricity businesses from engaging in the kinds of behaviour that, in the current energy market, could result in poorer outcomes for consumers. The ACCC's inquiry will monitor retail prices, contract liquidity and wholesale bids and conduct in the National Energy Market between 2018 and 2025.
The ACCC's new inquiry is framed around three key issues identified in the retail price inquiry final report, which was publicly released on 11 July 2018: first, retail pricing structures are confusing and make it difficult for consumers to compare and switch offers; second, new electricity retailers can face a barrier to entering the market due to liquidity issues in electricity contract markets; and, third, there is a general lack of competitive constraint in the wholesale electricity markets. The legislative framework complements the ACCC's inquiry with three new prohibitions designed to address the specific electricity market conduct that's detrimental to competition and consumer welfare. The retail pricing limb will target retailers that take unfair advantage of consumers' confusion around electricity offers and the difficulty of identifying and switching to better deals. It will require that supply chain cost savings are passed on to consumers on market offers, rather than increase retailer profits.
The contract liquidity limb and the wholesale bids conduct limb target anticompetitive behaviour in the markets which can lead to price increases that flow through to consumers. There are prohibitions on conduct that threatens the effective and efficient operation of electricity markets and leads to poor outcomes for consumers. These prohibitions are specifically designed to neither interfere with how our electricity markets are supposed to operate nor impact on genuine, efficient operational decisions by electricity market participants. Failure to offer a financial contract because of the plant being unavailable due to mothballing or closure would not be considered prohibited behaviour.
To ensure effective enforcement of the prohibitions, the bill will equip the ACCC with a graduated set of remedies, including ACCC-issued public warning notices, ACCC-issued infringement notices and court-ordered civil penalties. For the most serious breaches of the new prohibitions, the legislation contains a notice, response and recommendation process, leading to the potential imposition of the strongest sanctions: Treasurer-issued contracting orders and court-ordered divestiture orders.
Where the ACCC identifies a potential serious breach, it will notify the relevant company. The company will be given an opportunity to respond by explaining and rectifying their conduct. If the ACCC is not satisfied with this response, the legislation provides a process for the Treasurer to make a contracting order or apply to the Federal Court for a divestiture order on a recommendation from the ACCC. Contracting orders will only be available for breaches of the contract liquidity prohibition as well as aggravated breaches of the wholesale conduct prohibition. Divestiture orders will only be available for aggravated breaches of the wholesale conduct prohibition. Both the ACCC and the Treasurer must consider the remedy proportionate and targeted to the conduct and, in the case of a divestiture order, that the order would result in a net public benefit.
In the case of a government-owned corporation, a divestiture order can only require divestiture to another government-owned corporation. The bill does not empower the court to order divestiture to a private purchaser. This ensures that the relevant asset remains in government ownership, while still addressing the misconduct in question and promoting competition. The appropriateness of seeking a divestiture order or contracting order will be assessed on a case-by-case basis. But divestiture will be considered a last-resort response, reserved for the most egregious breaches for which other remedies are not sufficient to address the conduct. These are significant remedies, and I do not expect to have to pursue them, but we will do so if required.
The government is confident, particularly given the international experience, that divestiture orders, as a measure of last resort, will not act as a deterrent to investment in Australia. Indeed, the real deterrent to investment in Australia is anticompetitive conduct. While evidence may clearly establish that a corporation has engaged in the proscribed activity for the purposes of substantially lessening competition or to distort or manipulate spot-market prices, the bill follows precedent in the Competition and Consumer Act to allow the purpose of the corporation to be ascertained by inference from the conduct of the corporation, the conduct of other people or the circumstances relevant to the conduct. Provisions of this type already exist in the CCA in relation to hindering access to declared services, exclusive dealing and hindering a standard access obligation. The drafting of this provision reflects the existing law and the long-held understanding of the provision at law by all parties to provide clarity and certainty.
These laws will commence six months after royal assent, allowing a transitional period for the ACCC to develop guidelines and make its enforcement approach clear to industry. The amendments circulated by the opposition simply replicate what will already be the effect of the bill. That said, to give complete comfort to the chamber, the government is willing to support these amendments. I thank the opposition for working with the government to ensure that these amendments do not have any unintended consequences.
Finally, this bill also amends the CCA to provide additional information-gathering powers to the Australian Energy Regulator. This will support their functions under the default market offer and the reference bill.
This bill is a key part of our policy platform—a policy platform that has no shortage of endorsements. The Western Australian state Labor government has said, 'The government won the election and has a mandate to follow its policies through.' The member for Hunter has backed our policies in a ruthless and unsparing review of the member for Hindmarsh, and the Australian Workers Union, which produced many of those opposite, now endorses the government's policy. While I welcome the constructive way that the opposition has now come to support this bill, I call on those opposite to back our policies on energy and emissions reduction across the board, as some already have. I commend this bill to the House.
The original question was that this bill be now read a second time. To this the honourable member for Rankin has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment moved by the member for Rankin be agreed to.
by leave—I move opposition amendments (1) to (3) as circulated in my name together:
(1) Schedule 1, item 1, page 26 (lines 5 to 14), omit subparagraphs 153ZB(3)(a)(i) and (ii), substitute:
(i) if the body corporate is an authority of the Commonwealth—an authority of the Commonwealth that is genuinely in competition in relation to electricity markets with the body corporate in relation to which the order is made and that the Commonwealth has a controlling interest in that is equal to or greater than the controlling interest that the Commonwealth has in that body corporate; and
(ii) if the body corporate is an authority of a State or Territory—an authority of that State or Territory that is genuinely in competition in relation to electricity markets with the body corporate in relation to which the order is made and that the State or Territory has a controlling interest in that is equal to or greater than the controlling interest that the State or Territory has in that body corporate; and
(2) Schedule 1, item 1, page 27 (after line 6), at the end of section 153ZB, add:
(9) If a body corporate disposes of interests in assets to another body corporate as required by an order made under this section, then for the purposes of paragraph 311(1)(d) or 768AD(1)(d) of the Fair Work Act 2009, there is taken to be a connection between the body corporate and the other body corporate as described in subsection 311(3) or 768AD(2), as the case may be, of that Act.
Note: This means any employees of the body corporate who become employees of the other body corporate and satisfy paragraphs 311(1)(a) to (c) or 768AD(1)(a) to (c) will be transferring employees in relation to a transfer of business for the purposes of Part 2-8 or Part 6-3A of that Act.
(3) Schedule 1, page 31 (after line 11), at the end of the Schedule, add:
Part 4—Review of amendments
15 Review of amendments
Before the end of the period of 4 years after this Schedule commences, the Treasurer must establish a review of the effectiveness of the amendments made by Parts 1 and 2 of this Schedule, including a review of the following:
(a) impacts on electricity market performance, including market efficiency, equity, reliability, affordability, emission reduction and investment outcomes;
(b) any other factors relevant for an assessment of the effectiveness of the amendments on the Australian electricity sector and economy.
I don't intend to discuss these amendments in great detail. I have dealt with them in my remarks in relation to the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019 more generally. They essentially deal with three issues. The first is to close absolutely the loophole that existed in the original bill and still exists in the bill in its current form around privatisation of publicly owned electricity assets, particularly in those states of Queensland, WA and Tasmania, where the communities have said time and time again that they want their electricity assets to be publicly owned. This was an issue first raised by the Labor Party and the member for Kennedy. The government has made some progress in relation to it, but amendment (1) closes the loophole entirely. I'm glad that the government is willing to support that.
The second amendment deals with the protection of worker entitlements in the event of a divestiture order. Obviously workers are not to blame in any sense for any of the conduct envisaged by this bill. Their entitlement should be protected absolutely. They should not be prejudiced in any way. Amendment (2) deals with those entitlements that are contained in registered enterprise agreements and awards by giving effect to those protections already contained in the Fair Work Act in the event of a divestiture order.
The third amendment deals with a review of this legislation prior to the sunset clause going into operation. I commend all three amendments to the House.
I rise to support the amendments to the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019. This week, Labor's position has been raised with me. It has changed since the legislation was introduced during the last parliament, and that's because the legislation has been changed. The Labor Party makes no apology for sticking to our guns on some critical issues regarding this legislation. The Labor Party will always stand up for workers' entitlements. That is what we have ensured and will ensure through these amendments.
Secondly, the Labor Party regards privatisation of essential assets as something that has proven to not achieve the outcomes that those people who argue that government should just get out of the way—'Leave it all to the market, and it'll somehow work out!'—think it will. In practice, in part as a direct result of privatisation, we have seen energy prices go up, not down. We have seen, due to a lack of energy policy from this government, prices continue to go up for consumers at the same time as emissions are going up. This government does not have an appropriate energy policy, and this legislation is not a substitute for that.
These amendments deal with critical issues. We said that the original legislation brought forward by the government provided, essentially, a back-door way for the Commonwealth to dictate to state governments that assets should be privatised, in spite of the fact that privatisation of electricity has been a major issue during election campaigns in Queensland, on a number of them; in Western Australia, with the election of the McGowan government; and, of course, in Tasmania, where electricity assets remain in public hands. This legislation, as it stands, dealt with wholesale privatisation and ruled that out. But it left open partial privatisation of assets. Under these amendments, this is what will occur: if there is a divestiture proposed of any public asset, it can only be bought by another public asset. What that does is provide an assurance which Labor has sought. If these amendments are carried—and I expect them to be—Labor will have achieved an outcome that is appropriate.
The second issue is that of workers' entitlements. We want to make sure that, as a result of this legislation, if divestiture does occur, no worker is worse off. We want to make sure, as a condition of our support, that that occurs. The amendments that we have ensure that the transmission of business provisions in the Fair Work Act apply, so that workers' entitlements will be transferred without any loss of leave entitlements, superannuation and all the other measures that apply. That is important.
There's a third issue, which we will also deal with through the Senate inquiry—that is, that some workers' entitlements aren't part of award agreements. Some of them are in unregistered agreements; I particularly refer to agreements between the CFMEU Mining and Energy Division and AGL. Both AGL and the union want those entitlements to be protected. So we will pursue that through the Senate inquiry. We will pursue appropriate amendments in the Senate, and I would expect that, consistent with the government's support for the amendments that we're moving here, they would be accepted as well.
Labor will always stand up for workers' entitlements. The government, when it framed this legislation, just didn't give them a second thought. That's not surprising, because that's the attitude that it has—never standing up for workers, never standing up for entitlements. This is the same government that's presiding over wage stagnation at a time when everyone from the Reserve Bank to the IMF is saying that it's having an impact on our economy.
I commend these amendments to the House. They're important amendments. It's also important that we examine the impact of the legislation prior to the sunset clause kicking in. That's what the third amendment here does.
Question agreed to.
by leave—I move amendments (3), (4) and (8), as circulated in my name, together:
(3) Schedule 1, item 1, page 21 (after line 3), at the end of subsection 153X(1), add:
Note: An order cannot be made under this section if it would have the effect of inhibiting, delaying or stopping a planned closure of a coal-fired generator: see section 153ZE.
(4) Schedule 1, item 1, page 25 (after line 26), at the end of subsection 153ZB(1), add:
Note: An order cannot be made under this section if it would have the effect of inhibiting, delaying or stopping a planned closure of a coal-fired generator: see section 153ZE.
(8) Schedule 1, item 1, page 27 (after line 3), at the end of Division 7, add:
153ZE No orders under this Part that would affect planned closure of coal-fired generator etc.
Despite Divisions 5 and 6, an order must not be made in relation to a body corporate under either of those Divisions if the order would have the effect of inhibiting, delaying or stopping a planned closure of a coal-fired generator.
What is clear is that this government wants a big stick so that it can beat companies into keeping coal-fired power stations in the system for longer. This comes at a time when the world's scientists have said that, to have any chance of meeting the targets that the world signed up to in the Paris Agreement, we need an orderly plan to replace coal-fired power stations with renewable energy at a rate of about one a year between now and 2030. So we need to be closing coal-fired power stations and replacing them with renewables in an orderly way. We need a plan to do that. That's what the science that the government purports to accept says.
But what has been clear from the contributions to the debate so far from both sides—and I'll go to specifics in a moment—is that this bill allows the government to use the powers in the legislation to effectively keep coal fired power stations like Liddell open for longer. From the government side one need look no further than the contribution from the member for Hughes, who said in the Hansard:
We have in New South Wales a coal-fired power station, Liddell, that AGL say they want to close down … That is anti-competitive conduct …
… … …
Therefore, that is why this legislation is so important. We cannot stand back and watch a company with a very substantial degree of market power in an industry that supplies an essential service like electricity engage in anti-competitive conduct by closing down a coal-fired power station—
Hear, hear!
I hear 'hear, hear' from the government side. It's crystal clear that this bill allows the government to intervene to keep Liddell and other coal fired power stations like it open for longer.
Government members: Hear, hear!
And they cheer. The government is accepting it. The opposition, who is now shepherding this bill through, understands that that power exists in this bill. The member for Shortland, who is the assistant spokesperson on this, made the point in his contribution yesterday that it potentially threatens the arrangements around the closure of Liddell, and the member for Kingsford Smith made exactly the same point. The opposition is about to support through this place a bill that everybody in this chamber seems to accept allows intervention to keep coal fired power stations in the system for longer. That is a bad provision to have in the bill. I expect it from the government, but the opposition should not be supporting it.
We need to do two things. One is to amend the legislation to exclude the ability for the powers under the legislation to apply when there is a planned coal fired power station closure. That's what amendments (3), (4) and (8) do. I urge everyone in this chamber to support the amendments so it will be crystal clear that AGL can proceed with its planned closure of Liddell and that other companies who accept the science can announce in good time that they're going to close their coal fired power stations and know that this legislation will not be used, as everyone accepts it can be at the moment, to interfere with their projects.
The second thing we need to do—and I understand that the opposition has made reference to things that might happen during the Senate inquiry, so I hope the opposition will change its position—is insist on these amendments when this bill comes before the Senate, so that we don't pass a piece of legislation that allows this climate-denying government to keep coal in the system for longer. Everyone is now on the same page that the government can do that, if we pass this bill. I commend these very sensible amendments to the House, so that, if the government is not going to do the right thing and come up with an orderly plan to replace coal with renewables, like they've done in other countries, then companies who decide that they want to do it won't be inhibited by this bill from so doing.
I thought I might make some broad remarks about all of the amendments moved by the member for Melbourne. I very clearly understand the first substantive policy point contained in those amendments, around taxpayer financing for new coal fired power stations or for extending existing coal fired power stations. It's a point I've made myself in this debate on more occasions than I could count over the last few years, but it's not a matter covered by this bill.
I also understand the second substantive policy point that was really the focus of the member for Melbourne's remarks then, about the powers contained in this act being used, effectively, to manipulate the closure schedules of existing coal-fired power stations. I think that point would certainly have much more weight, were the powers to order divestiture still in the minister's hands, with the greatest of respect to the minister. But, with the changes that we have been able to obtain so that those powers are now in the hands of the Federal Court, on the advice of the ACCC, I don't think that those points have the weight that they may have had previously.
More broadly, though, I make the point, as the Leader of the Opposition indicated only just then, that our focus—particularly in this bill, because we think the bill will pass both chambers in one form or another—has been to protect against the privatisation of those publicly owned assets that remain in the jurisdictions that the Leader of the Opposition outlined, and to ensure that there is no prejudice to worker entitlements in the event that a divestiture order is made. We're utterly committed to delivering those two protections for communities, who have said time and time again that they want their electricity assets to remain in public hands and also worker entitlements—two things I know the member for Melbourne feels strongly about, as well.
We know that the member for Melbourne's amendments are not going to be passed by this parliament. We understand the policy position. I have some sympathy, obviously—I've said that time and time again myself—for the policy positions being advanced by the member for Melbourne. But our focus, our very clear focus in this debate, is on those two protections that were identified by the Leader of the Opposition.
I thought I'd take this opportunity just to make a couple of comments on this amendment and the speech we just heard from the member for Melbourne. This bill is focused on competition policy, on competition reform. The Greens can't see the world through any other lens but emissions. Emissions are important. We're focused on emissions and we have clear policies which will overachieve on our 2020 targets, and we've laid out to the last tonne how we'll will reach our 2030 targets. But to the Greens there is no issue other than emissions, and anticompetitive conduct is something they're completely happy to live with, they seem completely unconcerned about it, because they have one lens through which they look at the world.
We know that in this place just last week they moved a motion on climate emergency, and I've been puzzled as to what the definition of that is. Well, the member for Melbourne has been helping us out with that. The definition has been given by the Greens in the Senate. It is clear: no oil, no gas, no coal—and, frankly, in that world, no hope. There is no hope, because that is what the Greens want to see, and they see the world through that lens only. I'm looking forward to seeing how the Greens are going to get to the parliament in future sittings, and I'm not sure how they're going to get home, because oil is pretty important for transport around this country. But they are focused simply on emissions.
One of the things they want is to see all of our coal-fired power stations bulldozed straightaway. They want to see them gone. We have seen what mismanaging this does in Victoria, where the Victorian government encouraged the closure of the Hazelwood power station. We saw a large slab of electricity supply going out of the market. We were assured by people like the Greens that this wouldn't have an impact on prices. Well, we saw exactly what it did. It more than doubled the wholesale price of electricity on the day it was announced. Now, that doesn't worry the Greens, because they want to see a higher price for electricity so that people don't use it. They don't like electricity. They don't like economic development. They don't like a strong economy, because a strong economy to them is at odds with what they want to achieve.
Our approach to coal-fired power stations is characterised by the Liddell task force, where we've been very, very clear. If we have a coal-fired generator which is planned for closure, we put notice periods in place, as a result of the recommendations of the Finkel review, and we want to see either like-for-like replacement or life extension. It is simple. We can't afford to see large parts of the electricity supply disappearing from the marketplace because guess who will pay. It will be the hardworking families and small businesses of Australia and the people employed by energy-intensive industry who will pay the price for mad green policies that are all about the premature closure of coal-fired power stations—and gas as well. They hate gas as much as they hate coal. This bill is squarely focused on anticompetitive conduct, on manipulation and distortion of the market, on shutting out new competitors coming into the market, on failing to pass on substantial and sustained savings to customers. These are things that really matter to middle Australia. That's the focus of the legislation. We're pleased that Labor is joining us. We're happy to support their amendments of course, because they were already embodied in the original bill. For the avoidance of doubt, we're happy to support Labor's amendments but we're not going to support the amendments put up by the Greens.
Just briefly, in response, it takes a special kind of genius to lift pollution and lift power prices, but that's what the minister has done under his government. Fantastic! Great move! Well done, Angus. You've lifted pollution and you've lifted power prices. The independent Australian Energy Regulator has said people are paying more on their power bills now than when the carbon price was enforced and we were reducing pollution as well as generating money that could be used for households and put into renewable energy. You've managed to lift pollution and lift power bills. Great work!
I'm not going to take lectures from a government that, after it abolished the carbon price, doubled wholesale power prices.
The honourable member for Petrie, on a point of order?
I ask the member for Melbourne to refer to the minister by their correct title.
I remind the honourable member for Melbourne to use the correct title of members.
I'm not going to take a lecture from the minister about power prices when, after they abolished the carbon price, wholesale power prices doubled. That is the effect of what they've done. And now they're playing catch-up, trying to work out how to keep coal in the system for longer and bring down prices. What they haven't worked out is you can't do both. If we had an orderly procedure for replacing coal with renewables, where the fuel is free for renewables, then we'd bring down pollution and bring down power bills. But, as I said, it takes a special kind of genius to lift pollution and lift power bills, but that's what this minister's been able to do because he has made the industry the most uncertain it has been for a very, very long time. And this bill is going to do more of that.
What he shows in his contributions talking about the so-called premature closure of power stations is two things. One is that he's a science denier through and through. He just does not accept what the world scientists have said—that there's a link between coal and global warming and that, if we want to give ourselves the best chance of defeating the climate crisis, we have to have an orderly plan to replace coal with renewables. It's basic physics. But the minister doesn't believe in physics. That's what we've heard in his response, and that's no surprise. The government's facade, their new approach, for dealing with climate change is no longer to say, 'We don't accept the science,' but to say, 'We accept the science, but, don't worry, we're doing something about it.' It's a paper-thin veneer. You can just see the minister itching to say, 'No, we want coal around forever and we don't believe in renewables at all.' That was basically the essence of his contribution just then. That's why we need these amendments. We're hearing the deniers out in force; they're running the show, and we shouldn't be aiding and abetting them. If the minister says, 'Look, this bill is only about anticompetitive conduct,' then he should support the amendments because all the amendments say is, 'You can have the rest of the provisions, the bill just can't get in the way of an orderly closure of coal-fired power stations.' You can have the rest of your bill. If he truly believes it's got nothing to do with climate and everything to do with competition, then support these amendments because it shouldn't get in the way.
With respect to the opposition spokesperson, the amendments that have been moved around entitlements and so on are amendments that we support. They are worthy amendments and I'm glad they got through. But we only need them because the bill, now, is going to get through with Labor and Liberal support.
In the last parliament, the position that we were in was that by standing up to the government and saying, 'No, there's certain things we won't allow you to do,' we were able to get them to put the legislation off, to the point where it potentially was not going to be passed at all. I say again, with respect, it's not enough to say that the Federal Court is now involved—and, by the way, they weren't amendments that the opposition secured; they were in the revised bill that was put already. It's not enough to say that. Are you seriously saying that it won't affect a company's decision if they have the threat of litigation hanging over them, instigated by the minister? Of course it will. If a company has to work out if it has to go through an ACCC process and then potentially a Federal Court process, all initiated by the minister, it is going to affect their decision. They will say, 'Okay, if the price you want for taking the foot off our throats is that we're going to keep the coal-fired power station open for longer, then that is what is going to happen.' It is crystal clear from the government that that is what they want. We should amend the bill to remove the ability for the deniers in government to keep coal-fired power stations open for longer.
The question is that the amendments be agreed to.
A division having been called and the bells having been rung—
As there are fewer than five members on the side for the ayes in this division, I declare the question negatived in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.
Question negatived, Mr Bandt, Dr Haines, Ms Steggall and Mr Wilkie voting aye.
by leave—I move amendments (1), (2), (5), (6), (7), (9), (10) and (11), as circulated in my name, together:
(1) Schedule 1, heading, page 3 (line 2), at the end of the heading, add “and prohibition on Commonwealth support for coal-fired electricity generators”.
(2) Schedule 1, item 1, page 4 (after line 2), at the end of section 153A, add:
This Part also prohibits certain Commonwealth support for coal-fired electricity generators.
(5) Schedule 1, item 1, page 27 (after line 6), after Division 6, insert:
Division 6A—Prohibition on Commonwealth support for coal-fired generators
153ZBA This Division binds the Crown
This Division binds the Crown in right of the Commonwealth. However, it does not bind the Crown in right of a State, of the Australian Capital Territory or of the Northern Territory.
153ZBB Prohibition on Commonwealth support for coal-fired generators
(1) The Commonwealth or an authority of the Commonwealth must not, on or after the commencement of this Division:
(a) provide financial support or other support for the purpose (or for purposes that include the purpose) of the refurbishment or building of a coal-fired generator; or
(b) purchase, or assist the purchase or transfer of ownership of, a coal-fired generator; or
(c) provide financial support to an owner or operator of a coal-fired generator to use, fund, extend the life of or operate the generator.
(2) For the purposes of this section, financial support includes any support that involves a current or potential future financial exposure to the Commonwealth, including the Commonwealth underwriting investments or entering into other financial arrangements.
Exception—regulatory processes
(3) Subsection (1) does not apply to support or assistance provided solely for purposes connected with the Commonwealth or authority:
(a) processing an application for an approval, licence or permit (however described) that is required under a law of the Commonwealth; or
(b) undertaking any other regulatory process under or in accordance with a law of the Commonwealth.
Exception—transition assistance or research
(4) Paragraph (1)(a) does not apply to:
(a) financial or other support provided in connection with a program that provides transition assistance to workers affected, or who may be affected, by the retirement of a coal-fired generator; or
(b) funding research by an approved research institute (within the meaning of section 73A of the Income Tax Assessment Act 1936), so far as the research relates to coal-fired generators generally and does not relate only to a particular coal-fired generator or particular coal-fired generators.
Exception—managed closures
(5) Subsection (1) does not apply to:
(a) the provision of support in relation to a coal-fired generator; or
(b) the purchase, or the assisting of the purchase or transfer of ownership, of a coal-fired generator;
if the purpose, or one of the purposes, of the support, purchase or assistance is the managed closure of the coal-fired generator.
Subsection (1) has effect despite other laws
(6) Subsection (1) has effect despite anything in this Act or any other law of the Commonwealth (whether passed or made before or after the commencement of this section) unless the law expressly provides otherwise.
(7) Subsection (6) does not affect the operation of section 153ZC.
Executive power of the Commonwealth not otherwise limited
(8) This section only limits the executive power of the Commonwealth to the extent set out in this section and does not, by implication, limit that power to any other extent.
(6) Schedule 1, item 1, page 27 (line 11), omit “5 and 6”, substitute “5, 6 and 6A”.
(7) Schedule 1, item 1, page 27 (line 13), omit “5 or 6”, substitute “5, 6 or 6A”.
(9) Schedule 1, page 29 (after line 5), after item 2, insert:
2A Subsection 2A(1)
Omit “44E and 95D”, substitute “44E, 95D and 153ZBA”.
(10) Schedule 1, item 3, page 29 (line 8), after “XICA”, insert “(other than Division 6A)”.
(11) Schedule 1, item 14, page 31 (after line 11), at the end of the item, add:
(3) Subitem (1) does not apply to Division 6A of Part XICA of the Competition and Consumer Act 2010, as inserted by this Schedule.
It's clear from the last two votes in this parliament that the government and the opposition are prepared to intervene in the energy market and tell companies what to do, and it's clear that the government and the opposition are content with intervening to say, 'Let's keep coal-fired power stations open for longer even where the companies agreed to close them down.' So we are squarely within the realm of: what is the appropriate way for the government to get involved in the energy market?
These amendments do a very simple thing. These amendments say that you cannot use public money to keep open a coal-fired power station for longer or to help build a new one. That is very, very important when we are dealing the question of how the government is going to get in and rummage around in the internal workings of the energy market—as this bill is clearly dealing with—and where we now have a bipartisan position that it is okay to keep coal-fired power stations open for longer, using the powers under this bill—
Mr Burns interjecting—
Well, you just voted for it. You may not know it, but you just voted for it. I hear the interjection from the member for Macnamara. We know, separately, that the government want to intervene in the market to use public money to keep coal-fired power stations open for longer. We know that because we've read about it in newspapers that they are finalising their shortlist and they want to take money that could be going to schools and hospitals and use it to keep coal-fired power stations open for longer or, in other ways, support the operations of existing coal-fired power stations or potentially create new ones. These amendments would put a stop to that. These amendments say, 'No; public money is for schools, hospitals and renewables.'
At a time when we need an orderly government plan to retire coal-fired power stations and replace them with renewable energy, we should not allow the government to intervene in a way that is going to prop up an industry that should be on the path towards managed closure—in an orderly way that respects the workers, that keeps the lights on and that ensures that prices start coming down. These amendments are very sensible and, in the past, the opposition and others have supported them. I hope that this is a set of amendments that can be carried, because at the moment we know that the government are hell-bent on using every power they have to use public money to keep more coal in the system—and we have to stop them.
Those who believe in the free market should support this because it's about saying, 'Don't use government money to subsidise something that should be on the way out.' And this is something that should be supported by those who believe in climate change and accept the science of climate change. I suspect that, if you asked most people in this country, 'How would you rather a public dollar be spent: do you want it to make dental care available for everyone under Medicare, do you want it to go to schools and hospitals or do you want it to prop up coal-fired power stations?' they would say, 'We would rather it go to services.' I think most people would be shocked to know that the government currently does have the power to give public money to coal-fired power stations.
I commend these amendments to the House. I hope that, especially in the context where the door has been opened by the opposition by saying, 'We're going to accept the government's bill on certain provisos,' they include this proviso as well. If they're now in the business of negotiating and doing deals with the climate-denying government to pass their energy policy, then they should insist on something that will stop the government keeping coal-fired power stations open for longer than they should, especially if it involves taking money from the public purse and putting it towards coal-fired power stations.
The question is that the amendments be agreed to.
A division having been called and the bells having been rung—
As there are fewer than five members on the side for the ayes in this division, I declare the division negatived in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.
Question negatived, Mr Bandt, Dr Haines, Ms Steggall and Mr Wilkie voting aye.
Bill, as amended, agreed to.
by leave—I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
I rise to speak on the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019 and to move the second reading amendment circulated in my name. I move:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House:
(1) notes that the drought is severe and ongoing; and
(2) criticises the Government for forcing desperate drought-affected farming families off the Farm Household Allowance".
We are, in some circumstances, going into the ninth year of drought on the eastern seaboard, and of course there is not a state nor a territory in the Commonwealth which is not in some way adversely impacted by this drought. If it is not already, it will soon be the worst drought in our history—at least, since the time of European settlement. It is hurting lots of people—not just our farmers but people in rural communities everywhere. The economies of those communities are turning downwards. When the farmer is doing it tough, he or she purchases less in the town and less from the farm supplies business, and everyone is impacted. Of course, many of those communities are also suffering at the hands of terrible bushfires which are, themselves, a function of a changing climate—a hotter climate, a drier climate—a climate which is causing high temperatures earlier in the year than we would expect and a climate which, over time, has produced a lot of unspent fuel sources in and around those communities.
Lots of workers who don't get much mention in our debate here about the drought but should get more mention are all those who work on-farm for farmers and there are many of them. Many of them are now out of work or only getting intermittent work. That doesn't make life particularly easy, because that frustrates someone's access to income support through Centrelink. If they're in and out of work all the time or they're getting fluctuating rates and hours of work then they don't get the support that farmers will receive through this bill and the legislation it is amending. Some of them will be working for the local rural supplier's business or the local mechanic or the local electrician or some other tradesman and are now not getting the work they previously were able to secure because there's less work in the community.
Of course, some of those communities are literally running out of water. Even big communities like Tamworth, Armidale and Murrurundi, in the member for New England's electorate, are all too close to running out of water; in fact, Murrurundi did run out of water some time ago. We are very careful that, in the absence of meaningful rain in the next six months, year, maybe two years or, even worse, three years, we are potentially facing what I'd describe as a war-like situation. Some tough decisions might need to be made about whether we keep moving water to people or people to water, for example, whether there are some commodities that we can save and some we can't save. Some we will need to save with our limited resources and some we won't be able to save. I pray every day that we never face that situation but it's a real possibility. The weather forecasters don't give us any hope of summer rains. They don't give us much hope of meaningful rains through the winter of next year. And, you know, it's easy to come to the conclusion there's no reason to be optimistic beyond that either.
So the government needs to establish and determine some scenarios, like, as I said in the Australian Financial Review this morning, as a general would: assess the geopolitical situation, the risk of war, what the scenarios look like and then build a battle plan to respond to each of those scenarios. This is what this government hasn't done. At least, we're not aware that this has been done. If I am wrong, I will be very, very relieved but, sadly, I suspect I am not. The government needs to be asking itself: 'What do we do if it doesn't rain for another six months? What do we do if it doesn't rain meaningfully for another year? What do we do if it doesn't rain for another two and three years?' As scary as that proposition might be, it should have a battle plan for each. Generals don't wait for the battle to begin before establishing their battle plan; they make their assessments well in advance, they determine the scenarios, and they have a battle plan and contingencies for each. We don't have that in this country and we should have. And again, I hope I'm wrong but there is a possibility that we will be facing some very, very challenging times.
That's why the Leader of the Opposition and I have reached out to the Prime Minister and the Deputy Prime Minister and suggested that, given the severity of the situation, we sit down around a table—all parties—to talk about those scenarios, to assess those scenarios and to think about what will need to be done by government to ensure that the impact on the Australian community is less than it might otherwise be. That offer was extended very sincerely and genuinely, and I extend it again here today. I appeal to the Prime Minister to come to the table. He can have his jokes about the semantics about whether there was a war cabinet or not a war cabinet, or whether it was a war advisory council. The Australian people don't want us talking about or arguing about such frivolous points. What they do want us to do is sit down together, fully comprehend the seriousness of the situation and hatch a plan to do something about it.
The Prime Minister says he has a plan. The drought minister says he will have a plan; he said he will have a plan when the National Farmers Federation delivers its plan. Well, the National Farmers Federation has now delivered its plan, and it's time the government delivered a plan too. National Party MPs, we see in the newspaper today, are frustrated too. They're so frustrated that they've decided not to wait for the Prime Minister; rather, they've hatched their own 10-point plan, sadly cobbled together and every bit as ad hoc as the Prime Minister's approach to drought has been over the last—well, six years for the government, but only a year for him. It's no plan, but the fact that rebellious Nationals MPs are breaking away from their leader and their Prime Minister to deliver their own plan underscores the point the opposition has been making now for weeks, if not months: that we don't have a plan, we need a plan and we need it now.
In fact, we needed it six years ago, which is where this sad story began. Six years ago, on coming to office, the then Prime Minister and former member for Warringah, Tony Abbott, and the then agriculture minister—still the member for New England—decided to put the brake on the COAG drought policy reform process. Imagine that! Prior to that, something historic had occurred. The states, the Commonwealth, the major political parties, the National Farmers Federation and all of their affiliates agreed that the drought architecture we had in this country was not working. It was inefficient, it was ineffective, it was full of moral hazard and it had to go. It's a big call. But they were determined to prepare themselves for the next drought with a policy which was more meaningful, more economically efficient for the taxpayer, devoid of moral hazard and which, of course, built resilient in our farming community. The COAG committee which was charged with progressing that reform was the Standing Council on Primary Industries, a formal arm of the COAG architecture, but it was abolished.
I think the Prime Minister of the day, and those who have followed him—including the current Prime Minister—thought the rain would come. It's a wonderful confidence we see in our rural communities. Farmers tell me almost every time I speak with them, 'Every day is a day closer to rain.' It's an admirable optimism. It's a courageous optimism. It does help to build emotional strength in our rural communities. But the Prime Minister of the day can't be that relaxed. The Prime Minister of the day has to plan on the basis that it might not rain—or, indeed, when it does rain, it might be many, many days away. He doesn't have that latitude and shouldn't take that approach.
What did he and those who served before him do?
They thought they'd just take an ad hoc, piecemeal approach—roll out a program here, roll out a program there—and hope it rained, and rained soon. And then the current Prime Minister thought he'd lose an election. I'm sure he is very happy he didn't—much happier than we are, obviously! I think he believed it would be a Labor problem now, but it remains his problem. Notwithstanding that, the hand of friendship and bipartisanship is there for him, and he should take it.
The other thing he should do is stop claiming he is spending $7 billion a year on drought assistance. People no longer have to take my word for it when I say that that is a shocking exaggeration, a shocking embellishment. Thanks to Senate estimates just this week, that assertion by me has been confirmed by departmental officials both in the agriculture department and in the Department of Finance. We know how he got to that $7 billion. He got there very quickly by including the so-called $5 billion Future Drought Fund, which we know is not $5 billion and won't be $5 billion for 10 years; it's $3.9 billion. More specifically, it's a fund which won't draw down until after July next year. When it begins to draw down money, it will draw $100 million every year.
Now, that's not a bad thing. We support the provision of future funding for the building of drought resilience. We don't have any disagreement with that. That is a good thing, although the money should not have been robbed out of the Building Australia Fund, which itself was dedicated to regional infrastructure. We don't have any problem with the concept or the principle. But not one cent, as confirmed by the Prime Minister right here, at that dispatch box, will go to a farmer. Not one cent will go to a farmer! For the Prime Minister to claim $7 billion by including that $5 billion is being more than loose with the truth. And then of course it includes a billion dollars worth of concessional loans, which most farmers have decided are of no help to them. More debt or shuffling debt, they say, is not going to save the day for them. Of course, the cost for the government of providing concessional loans is quite modest. The government borrows at the bond rate, which is very low at the moment, and provides a concessional loan at a slightly higher rate. I'm not saying there aren't costs—of course there are—but it should not be counted towards the so-called $7 billion.
Of course there are loans to the states for water infrastructure. There are another couple billion dollars there, or just a billion dollars—I can't recall, but it's big numbers—but these are loans to the states which have to be matched by the states. This is why they haven't been particularly successful. The states are under pressure as a result of fiscal vertical imbalance, so they don't have the money to match that. I think the Department of Finance told us that, over the next four years, the government will spend $2.5 billion. That is not $7 billion, not $6 billion, but $2.5 billion over four years. That's being pretty generous too because, again, it depends on how you count some of these programs, which are either designed to fail or contingent on repayments. But, more importantly, they aren't really helping farmers.
I don't mind the Prime Minister being loose with the truth with farmers and rural communities. I'm not happy about it, but, let's face it, politicians do that from time to time; the current Prime Minister won't be the first to be guilty of it. But what makes me genuinely angry is that the $7 billion is used as an excuse not to do more. That's what the $7 billion tool is really all about. When asked whether he'll do more for farmers, the Prime Minister's standard response is, 'I'm already investing $7 billion'—code for, 'I shouldn't really do any more, because $7 billion is a lot of money in anybody's language.' He knows that many Australians who aren't farmers, who might live in the capital cities, love our farmers. They recognise them as salt-of-the-earth, hardworking people who deliver our food and fibre. He wants them to know also that $7 billion is a lot of money, and he lives in the hope that they'll agree that it's not necessary to spend more, because $7 billion is an enormous amount of money. What really makes me angry is that his $7 billion loan is an excuse not to do more at a time when we desperately need to do more.
A good start would be to stop cutting income support payments for Australian farming families. Six hundred families have already been cut off the Farm Household Allowance and another 500 are to be cut off by Christmas. What a wonderful Christmas present for those farming families! Remember, these are amongst the most desperate of our farming families. Farm Household Allowance, be in no doubt, is a difficult payment to secure. Ask the hundreds that have tried and failed, or spent weeks, if not months, trying to succeed. To cut them off now while this drought is ongoing—remembering that we're talking about a very modest payment, sufficient to put food on the table and maybe a little bit of cashflow into the farm business to get to the other end—is a callous act. It's hard to fathom when the opposition sits here and offers bipartisanship. The Prime Minister is not going to get any criticism from us by extending the period for which farming families remain on Farm Household Allowance; in fact we're appealing for him to do so.
For balance, let me tell you what the Prime Minister will argue. It's something we all agreed with back in 2012. We all agreed that the income support payment for farmers, which is just like Newstart but has far more relaxed income and asset test provisions, shouldn't be forever. COAG originally decided that it should be for three years and that, during that period, the farm enterprise and the farming family have to decide how they reshape their business model, or to get out. That was, in 2012, a reasonable proposition. I note that, in one of the earlier amendments we dealt with here, that was extended to four years. But no-one here now, or no-one who was in the conversation then in 2012, could have possibly conceived that the drought would be so lengthy and so harsh.
The test of viability now should not be whether you can get through the ninth or 10th year of the drought. Sure, back then—remembering that Farm Household Allowance isn't just a drought payment; it's a hardship payment typically provided to drought affected farmers—it was reasonable for us to believe that, after three or four years, if the farming enterprise hadn't been able to sufficiently adjust its methods or its business model, it might be time to get out. And there will still be examples of that; there will always be examples of that. But those who are still hanging on in the seventh and eighth year are amongst the viable. The test of viability shouldn't be that you make it to the ninth or 10th year. That's the difference. When the facts change, you change your mind and you change the policy. We should all say together, 'Wow, this is something very significant, something unanticipated, something not expected, something no-one could have foreseen.'
We need to take away the time cap, which is forcing farmers off income support, and park it away until we get to the other end of this drought, and let's all pray that it comes sooner rather than later. I don't think there's an Australian out there who thinks that we should be throwing farming families off income support—a very modest payment—at this point in time. I'm disappointed in those who are publicly disagreeing with me. Amongst them is the member for New England, who outrageously claimed last night on the ABC that to extend farm household allowance to farming families beyond four years would be an affront to our WTO arrangements. You can just see it: the Europeans would be straight on the phone to say, 'You made an agreement you wouldn't have any subsidies, and therefore distortions, in the market.' Imagine them arguing that extending a modest $250 payment to a farmer who is destitute and barely able to keep their animals alive is going to distort the international market. It's not only a ridiculous proposition, but it's a ridiculous proposition to put. If that's the best excuse they can come up with for cutting farming families off farm household allowance, well, God save us all.
We support this bill, just as we've supported every other bill—this is the 12th we've supported. This is the 12th package of amendments to the farm household allowance, and we've supported each and every one of them. And along the way, in this place, in Senate estimates and in the public domain, successive ministers have told us, before the arrival of the next bill in this place, that farm household allowance is perfect and nothing needs to be done. I remind the House that when the member for New England doctored his Hansard in this place—a shocking event that led to the sacking of a highly regarded and respected public servant—it was for an answer he provided to a question I asked in this place about farm household allowance. They've been embellishing—when I say 'they', I mean the government—the effectiveness of farm household allowance, since March 2020, since the inception of the allowance. But here we are, after 12 packages of improvements.
What do these improvements do? Well, basically, three things.
They improved it!
I'll take that interjection. They improve it, and that's why we're supporting it. But don't interject to suggest that this is sufficient to cover off on what our farming families need. Let's keep it in perspective, too. The government says, 'Well, this is the first provision. Instead of being able to secure farm household allowance for only four years, you can get it for four in every 10.' Let me share with the Australian community what that means. It means that if I went on the payment in 2014 and I'm coming off it now—the government's cutting me off it now—I would be able to reapply in 2024.
Mr Littleproud interjecting—
And if I were the minister, I would not provoke me! The second thing it does is to further relax the income test. That's a good thing. We support that. But those worried about not being captured by $100,000 rather than $80,000 aren't the people, necessarily, who are destitute, Minister, so let's please keep this in perspective.
The other thing it does is to introduce these lump sum payments. So what the government is saying here is: 'We're not going to cut you off after four years, now; we're going to cut you off after four and a half years.' I'm impressed with their optimism. Maybe what they're saying is that they expect these farmers not to be in need of any allowance in six months time. I doubt it, sadly. I wish that were true. But I sadly doubt it.
We are now dealing with lateness again. This bill has to be passed before this lump sum payment can be secured. I've had a look at the parliamentary calendar, and, at best, this bill will pass through the parliament and go to royal assent in mid-November. It'll probably pass the Senate on Remembrance Day, if we get on with it. And we're here to facilitate it. But what happens to those who've already been cut off, until then? Of course, those who have been cut off before then will have to reapply for this payment, for this lump sum, and, gee, I pray that the process is nowhere near as horrific for farmers as was the original application to secure farm household allowance.
I just want to say something quickly about the dairy sector. The dairy sector was doing it tough, caught in a price-cost squeeze, even before the drought began.
Mr Littleproud interjecting—
The minister says he fixed it because he bashed up on the supermarkets. Go out to any dairy farmer in the country now and ask them whether anything has improved for them since the minister claimed to have fixed it. He claimed to be the new fixer!
Mr Littleproud interjecting—
Well, that's not what the dairy farmers are telling me, Minister. They had an 18-month ACCC inquiry into the dairy industry. Its main recommendation was a dairy code of conduct. Do we have a dairy code of conduct? No. Senator Hanson might give us one earlier than we can expect under those sitting opposite. But this is a government which has not lifted one finger—
Support Hanson!
I will support Senator Hanson, on any matter that helps our dairy farmers—in contrast to those who sit opposite. They have done nothing for them. When we put forward a reasonable proposition, to have the ACCC investigate the establishment of a minimum farm-gate milk price, do you know what those on the other side said? It was a cruel hoax imposed on our dairy farming families.
Mr Littleproud interjecting—
Well, Minister, let me tell you: that's not what they're saying now. In fact, they are screaming at you, and you should start listening. I know some of you are listening, because you had a bit of a stoush in the Nationals party room this week, and I know you're part of what I call the northern Nats, at war with the southern Nats. We stand with the northern Nats. If the northern Nats are prepared to do something for our dairy farmers, we will be there with them.
Thank you. Is there a seconder for the amendment?
I second the amendment and reserve my right to speak.
The original question was that this bill be now read a second time. To this the honourable member for Hunter has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The question now is that the amendment be agreed to.
I rise to support the original motion, that the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019 be read a second time. This gives me an opportunity to speak not only on the changes that we are making to farm household assistance but also on the general package of drought assistance that we are offering to Australian farmers and Australian communities at this time.
Recently, in South Australia, the agricultural paper the Stock Journal asked in a survey if the federal government was doing enough on the drought. Eighty-five per cent of the respondents said no. This was put to me at a Q&A panel in Jamestown at the local show. They said, 'How did you respond to that?' I said, 'Did any of the 85 per cent actually suggest what we should do?' I'm a farmer by trade. I spent 30 years farming before I came to this place and I don't find farmers coming to me and saying, 'You should do this. You should do that.' Generally, people who are not in the farming business are offering comments and suggestions to government, but not specifics. I note Fiona Simson from the National Farmers Federation has also said we need a national drought policy but is actually very scant on the detail and what that national drought policy should look like.
I would maintain that we have a national drought policy—a very extensive national drought policy. I'll come to that later in this speech. What we seek to do here is amend the farm household assistance program. Since 2014, we have put $365 million into this program and 12,700 farming households have benefited from that. Farm household assistance, as the previous speaker, the member for Hunter, said, is a pretty low payment. It's at the Newstart level. But it is about putting food on the table, making sure the kids can go to school with shoes on their feet, making sure they get to school, and paying the electricity bills. It's not about supporting the farm operations. There are other things in place to try to do that. It's about giving people dignity, a reason to get out of bed in the morning and making sure their families are running correctly, and that makes it a good payment. The difference to Newstart is that they don't have to report for work; they can get on with running their farms.
We have continued to adapt this program through the drought as the drought has altered. The previous speaker, the member for Hunter, said, 'Who could have imagined that we'd still be in drought in 2014?' That would seem to suggest that, as the drought has become deeper and deeper in places we wouldn't have expected it, we had to adjust the program. Last year, we gave $12,000 of support to affected households in two payments—$6,000 in each payment. We increased the asset threshold to $5 million. You can have a net worth of $5 million and still apply for farm household support. Quite rightly, we assess that, if you've got $10 million of assets, you should be able to borrow some money to support your own household. I don't think that's an unfair parameter.
In this bill we also seek to extend the access to farm household assistance from four years in the life of the person, or in the life of the entity, to 10. The member for Hunter centred on this particular criteria. It is a significant improvement from when the Labor Party introduced this legislation, when it ran for three years—for a lifetime entitlement, if you like. For those who can access the full amount for four years, we're putting in place a $13,000 payment to allow them to adjust and get on with their life. We're also increasing the off-farm income from $80,000 to $100,000. This would mean that, for instance, a farmer's wife or husband—who might be a school teacher or might work at a bank, or whatever it might be that they do to support the farming operations and the family—are not costing them the ability to quality for farm household assistance. That is a reflection of wages in the community—the reality of what many of these farming families do to make sure that their enterprise is viable. There you go. I farmed for 30 years and spent the whole time being married to a school teacher. Many people have said in the past that it's the best way to drought-proof your life: marry a school teacher. I take my hat off to the people who go off-farm and earn income to support the farming operation and the family. It's not easy—we all pay a penalty for it—but it's a way of making sure that your family and your operations are viable.
I'm very pleased about the fact that we are now allowing the income from agistment to be included in farm income rather than off-farm income. I was approached by a constituent, a farmer, about this exact circumstance. He had destocked his farm and was a cropper. He brought sheep in on agistment to allow the neighbour to access some feed and to bring him a modest income, but that denied him the right to apply for farm household assistance. We're fixing that.
The government is making the forms and the process of applying for farm household support easier by making sure that people are addressed as an entity rather than as individuals. All these are good things; it all helps. We are also, through the Drought Community Support Initiative, making up to $3,000 cash payments available to families through organisations like the CWA, the Salvation Army, St Vinnies, and good on them for being back at the coal face, helping the government to deliver support and obviously adding their own support. They're on the ground, they know the communities they live in, and I thank them all for their efforts.
Across the board, the government has a wide range of initiatives. I spoke earlier about how I believe we do have a very good national drought package. Apart from the farm household assistance, we provide funding for the National Drought Map, which is on the FarmHub website. This map gives farmers the ability to go in there and have a look at what's available. I speak to a lot of farmers—most of my best friends are farmers—I live in a farming community, and a lot of them are unaware of what's available. It's only a click away on the computer but they're still unaware, so the more places we can present this information, the more times we can tell them to go and consult with their rural financial counsellors, the better. We announced another $5 million to support the counselling service and that puts another person in my patch, in the electorate of Grey, as a rural financial counsellor. The message again and again to farmers is do not self-assess. But we do put that information up there on the FarmHub.
The government has put almost $30 million extra into mental health and wellbeing. The loans is where the federal government really steps into place to make sure that people are there to put another crop in, to make sure they come to another shearing. We have low-interest drought loans, we have low inter-business improvement loans, we have—and I think these are very good—low-interest replanting loans. Importantly, with these, there is no interest payable by the farmer for two years. That means they can borrow the money for the fertiliser, for the chemicals, for the cost of putting the crop in and for the fuel. They can grow a crop, they can sell the crop and they can receive the money for the crop before they have to pay any interest on the low-interest loan. The same thing applies to restocking loans. Once it has rained and they've got feed in the paddocks, a farmer can go and buy stock—they'll be expensive—with these restocking loans. They can buy themselves some calves, grow them up, get them onto the market, sell them and get the money before they have to pay the interest. I think that shows very good sound judgement. They are good sound loans to farmers. They continue to say: 'We don't want a handout; we want a hand up.' Low-interest loans, loans where you don't pay interest for two years, are all about providing a hand up.
The government is offering grants of up to $2,500 to implement the introduction of multiperil crop insurance and single-peril crop insurance, for instance. We have new insurance products. A lot of organisations and a lot of farming groups are working very hard across Australia to try and make multiperil crop insurance the norm rather than the outlier. We're putting up $2,500 for the base level business case because, if you take out multiperil crop insurance, you have to show to the insurers how much your farm has been producing over a long period of time.
Because the government recognise that farmers are not the only people that suffer during the drought, that the community suffers as well, we've established the Drought Communities Program. In my electorate of Grey, we've had 20 councils qualify for these grants of $1 million each. Things like sporting clubs, community facilities, community assets, water-harvesting programs, town halls, showgrounds, visitor centres have all benefited from this program. Importantly, this provides some sustenance to the local tradesmen, the people in the town, the people who do the work, because we recognise they're not getting the same level of work as before the drought, because the farmers have closed the cheque books on discretionary spending. I have talked about the rural financial counsellors.
We've also got programs for building resilience, and this is actually what I think is the visionary stuff. The best program I have ever seen as a farmer that helps farmers prepare for inevitable drought, is the farm management deposits. Recently, two or four years ago, we lifted the limits so now an individual farmer can take, in a good year, $800,000 off the top of the profits, stick it in a bank account and take the tax deduction. And for a partnership it's $1.6 million. They can put it aside, not for a rainy day—or perhaps it can be for a rainy day—but for a dry day. It's drought insurance. I checked about half an hour ago and the last figure we had for farm managed deposits Australia-wide is still increasing. For drought, farmers have saved up $6.7 billion. So, while some are facing difficulties now, many with the support of the Australian taxpayers and the Australian government, have accumulated funds so they don't have to call on the public purse when it comes to dry times.
We have immediate deductibility for water and fodder infrastructure. A farming family I know had two huge hay sheds full of hay before the drought. Last year, as the hay prices climbed, they sold it all off. A lot of the hay went to the eastern states. I was talking to the owner, one of the operators and he said: 'You know what we're going to do? We sold off our two lots of hay at good profits and kept hay for ourselves, and now we're going to use that money to build another hay shed because we get immediate tax deductibility of that asset. Next time, when it rains, we'll have three hay sheds full of hay.' This will expand the ability of all Australian farmers to withstand the drought because it will mean there will be more hay held in storage in Australia when it comes to the next drought. It's the same for investment in water infrastructure. There are 13 properties that I'm aware of in the Eyre Peninsula where farmers have invested in plastic water runs so they can harvest every drop of water, every drop of dew that runs off that particular area. It increases the efficiency of water runs by hundreds and hundreds of per cent. Water priced at $3.50 a kilolitre could make an enormous difference to the bottom line of the farm.
We've got the capital purchases, the immediate write-off of items up to $30,000 and $3½ billion for dams, weirs and infrastructure. We currently have $3.9 billion in the Drought Future Fund, and the member for Hunter spoke about this. It will return $100 million a year just for the kinds of projects I've been speaking about—building infrastructure, backing capital investment, building on ideas and investment for the future so farmers are better adapted to deal with the dry times in the future.
One of the things we've invested in for a long time in Australia is research and development, particularly the GRDC for the grains industry and the ALMC for livestock. I look at my property now, which is in a drought that's at least as bad as 1982, which is the worst drought in my memory, and there's no moving soil. The ground is all tied down. We don't have moving soil because we changed the agricultural practices that operate in Australia, and we changed those on the back of the fantastic research we've done in this country which has backed farmers to grow more grain out of less rain and ensure they can look after our soils for future generations and Australia generally. That comes from the long-term practice of governments setting good infrastructure frames in place.
I say we've got a fantastic national drought policy. I refute the claims of people who say we do not.
As the shadow minister has indicated, we will be supporting the measures of this bill, but I'm also here supporting his second reading amendment. In particular, I want to focus my remarks on the Drought Communities Program, which sits in the Infrastructure, Transport, Cities and Regional Development Portfolio. This is a drought funding communities program which, in essence, recognises that, as farmers go through drought, the communities that exist around them are also experiencing economic hardship. Over various governments, there has been some form of recognition that we do need to try and support the economies and jobs of those communities. But what is really disappointing—and we found this out in the last couple of days, through Senate estimates—is that not all councils are equal when it comes to the Drought Communities Program. I think there is a very serious issue with the way in which this program is being administered, the way in which decisions are being taken and the way in which councils are able to either get into the program or not get into the program.
As we understand it, as the current measures stand, there are about 123 councils that are eligible. During the election campaign, 14 councils were deemed eligible under this program. They may well be exactly in the circumstances we're talking about, but we heard in Senate estimates yesterday—and there is not a lot of transparency around this—that one of the measures that is being applied to whether councils are eligible or not is not only rainfall data but also the number of workers who are involved in the agricultural workforce; it has to be at around 17 per cent.
At Senate estimates we heard about the ridiculous circumstance of the shire of Moyne being deemed eligible for this funding and being offered $1 million, but they were out in the media saying: 'We are actually saying we think we've got enough rainfall at the moment. We feel a bit guilty about accepting this money, because we think there are other council areas in more trouble than we are.' That's not to say that parts of their shire aren't in trouble, but they were saying very clearly: 'We think there are people doing it much tougher than we are. How come we're getting this million dollars?' Then there was the example of the shire of Moira, in the member for Nicholls's electorate, which just fell short of the workforce figure—16.9 per cent. When you look at the workforce, that could potentially be, according to a spokesperson from the shire itself, a handful of workers—five people. It might have been because people had to leave the sector because the jobs weren't there due to the drought. This seems to me to be a very passing-strange way of administering this sort of program.
I also think, when we start to look at some of the things for councils being funded under this program, that the minister needs to pay some attention to this. I understand—others may not—that the government wants to use the program to, hopefully, provide some opportunity for better economic development—so, if it's in the tourism sector, trying to get people into the communities so that there are still jobs and that the economy is still going in those communities. But, when I look at the list of some of the projects that the department provided us on Monday—I am very happy to be corrected on this—I'm not convinced that toilets at Bourke Cemetery are actually economic drivers for jobs and growth in that region; I'm not sure about that. I'm not sure that toilets at a skate park are either. I think they're important, and I think it's great that you get toilets at a skate park, but I'm not sure that these were the sorts of things envisaged under the Drought Communities Program. We haven't seen a public media statement about this, but, as a result of some Channel Nine media inquiries, there was a report on Channel Nine that the government is now reviewing local government eligibility for this program. There has been, as far as I have seen, no media release or statement from the minister that this is actually a problem.
What we have got here is a government basically using this program with 14 councils during the election campaign—none of which are in Labor seats, I have to say, and there are definitely Labor seats that are drought affected. We had this program announced in the context of the election. It's a good election announcement to say, 'We are going to give your council $1 million in funds for community facilities.' We have got areas like Shoalhaven, and some of the areas in the member for Hunter's electorate, saying that they think they should meet the eligibility criteria as well—and places like Kiama as well. You have to say that this government has politicised this program, and it needs to clean it up—particularly in a context where we have communities that are severely affected by drought.
This government has tried to talk a big game about drought funding. The problem it has is that it has been asleep at the wheel. We are in this government's seventh year. The drought didn't just happen yesterday, or a week ago, or a month ago; we are in a long period of extended drought. The government basically cut and stopped much of the work that Labor had started in government: trying to actually look at drought mitigation strategies, trying to connect water infrastructure, trying to look at the way in which you would reform, trying to look at the way in which drought declarations and the partnerships between states and territories are made. It basically stopped doing any of that work because it had this principle that anything Labor did was bad, and therefore they couldn't do it, rather than actually thinking there was some good in it and they should just continue it.
The government has talked this game—'We've got $7 billion that we're spending on drought!'—which is simply and utterly not true. The government has taken $3.9 billion out of the Building Australia Fund, the infrastructure fund, which in fact it could have used for drought mitigation infrastructure if it got through the Infrastructure Australia process. It could've been using that money anyway. It's taken that and put that into a fund that will, over time, grow to $5 billion, and it will then draw down on the interest of that fund to the tune of $100 million a year. That is not a $7 billion drought program; that a $5 billion program, the interest of which will go to drought affected communities.
Again I say, supporting this second reading amendment, the government needs to actually look very seriously about what its drought policy is. In particular, it needs to look at what it is actually giving directly to farm households—it is in this bill, but also a number of people are coming off farm household assistance—and how that's working. More broadly, it needs to look at our preparedness and how we are actually managing drought—in particular, in my portfolio area, the Drought Communities Program. I look forward to seeing—the minister is at the table—the terms of reference of the review of the Drought Communities Program. I look forward to seeing whether it is just a review to try to say, 'We've got a local council in the member for Nicholls' area that probably should be eligible, so how do we make it eligible?' It looks to me, from the administration of the program, that this is a significant failure. If the government has politicised the program in the way that it looks on paper after the evidence of Senate estimates, frankly, they should be ashamed of themselves.
I rise to speak on the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019. We all realise how important food is to our nation. Our farmers feed our nation and they feed at least 60 to 80 million people overseas as well. At times of severe drought, that importance is thrust into national prominence. Since 2014, we have realised that, being involved in agriculture at this time with increasing costs of water, electricity, fodder and feed—all the costs that go into producing food and fibre for our nation have increased—if the markets and the value of the goods increase, it's well and good, but there are many times, like now, where the cycle is against you.
Everything is clustering against farmers who are in drought affected areas. They are unable to grow the crops or the pastures or support the animals because of physical lack of water. It's not just irrigation that's been brought into the spotlight; it's dairy farming, it's cattle production—all the things that we have been taking for granted. With the severity of this drought at this time, many branches of coastal rivers—you see plenty of water in them, but most of it is salty until you get up into the hinterlands. Some of the branches of these coastal rivers in my electorate have turned in a chain of ponds, rather like the Murray and the Darling have over time.
The Farm Household Support Amendment (Relief Measures) Bill (No.1) 2019 is equally as important at this time because of the intersection of all these escalating costs generated by the drought. It's not just a drought program. As I said, being involved in agriculture, you're on very long cycles. When it's good it's very good but, when it's bad, you have to have incredible resilience. There are many people who are resilient, who have been excellent farmers and who have done what they could, but they have no income—and they haven't had income for many years. That's why the farm household allowance was increased in 2014, and, as the minister has said, we are now taking the next step to offer support.
The farm household allowance is virtually the same as Newstart. For those who qualify, couples get $1,000 a fortnight and individuals get just over $500 a fortnight. This is not charity; this is what everyone else in Australia gets if they're unemployed. It shouldn't be seen as charity. It's delivering to people who need it when they need it most. We've changed the criteria to make it more accessible to more people, given the situation that we find ourselves in now. The assets that the payments are judged against were upgraded earlier. On 1 July, the asset limit went up to $5 million. It started at a much smaller number, but that increased figure will allow farmers with mid-size farm to access it.
The other thing that we have adjusted is the amount of non-farm income that can be offset against losses. It used to be $80,000 but has now been increased to $100,000, which gives a much better idea of the true net position of a farming enterprise. We have also tried to make it easier by reducing the amount of paperwork, from about 30 pages down to 17 pages. A lot of farmers have partners that are involved in the same business, and now only one set of paperwork for those partners will be required—so you're not duplicating the red tape.
We have also changed the amount of farm household allowance from four years worth of farm household allowance in a lifetime to four years out of 10, which is much more generous and much more realistic—because most farmers are in the industry for their lifetime and many of them have seen droughts before. I remember the 1982-83 drought. It was devastating. Many good farmers walked off the land at that time. Hopefully, this measure will keep really good farmers involved in agriculture for a lot longer.
The farm household allowance will provide support for the basic necessities of life when the asset that they have developed is sitting there not earning income—just costing them income. We've allowed them to offset the forced sale of their stock as long as they put it into a farm-managed deposit account within six weeks of the forced dispersal or sale of goods and stock. So we've tried to help in as many ways as possible. There's also an ancillary payment of $1,500 to allow them to get financial advice. There are rural financial counsellors who will help them do that for free. They have been doing a great job, and demand is up. We've put more money into rural financial counsellors as well. There is also an incentive to diversify and do business analysis, do extra training and learn extra skills to increase their sustainability and build their resilience—to the tune of $4,000 during the period that they are receiving the farm household allowance. So we're not just giving a cash payment; we're trying to strengthen their business position during the time that they're receiving support.
The relief payment is the other important thing in this bill. We are adding a relief payment for those people who have struck the four-year barrier: $13,000, effectively, for a couple, or $7,000 or so for a single person. There are many who have argued for more. If the situation changes, we will always keep a watching brief to see what is required. But this bill definitely receives my support, because we do need to keep our really amazing Australian farmers in the business of producing food and fibre for our nation. As I said, it's not charity. It's just doing what we do for anyone who finds themselves unemployed with no income.
Farmers make a unique contribution to the prosperity and wellbeing of our nation. They do so under extraordinary conditions and family sacrifices, often subjected to unpredictable weather, fluctuating commodity prices, long hours of hard work, pests, disease, and, more often than not, heavy financial burdens. Not surprisingly, I believe most Australians are sympathetic with the struggles of farmers and are supportive of assistance programs that enable farmers to get through hard times. With continuously changing weather patterns, those hard times are likely to be longer and more frequent. We're already seeing more frequent and more extreme weather events, precisely as predicted by climate scientists, yet the Morrison government does not even have a comprehensive climate change policy. They often talk about climate change commitments, but when you delve deeply into their policies, the reality is that you see very, very little.
This legislation, the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019, can, in fact, be directly attributed to a changing climate. Without continued financial assistance into the future, farmers are going to find it more and more difficult to make ends meet. Under this legislation, farmers will be eligible for 4.5 years of farm household support in every 10-year cycle. Originally, farmers were eligible for three years of support in a lifetime. That was probably a reasonable proposition at the time that the policy came into effect, but times have changed and, in particular, the climate has changed. The three years was subsequently increased to four years and the four years is now being topped up with a six-month lump-sum payment of $7,500 for a single recipient, or $6,500 each for couples, which means it's effectively a 4½ year support program. I note that the payments are not subjected to the government's shameful robo-debt program. I welcome that, but it does expose the Morrison government's double standards.
For some farmers, the increased assistance will not be enough. We're hearing calls from the National Farmers' Federation for more drought assistance, including farm exit packages. Farming in Australia has always been risky, but when calls are being made for farm exit packages, that implies a crisis.
On Monday night I spoke in this place about the long-term sustainability of the Murray-Darling Basin, which, again, is a matter I have spoken about in this place on many occasions, and which has been the subject of parliamentary debate in this place for over a decade now. Yet we still have a situation where the insecurity hanging over farmers in the Murray-Darling Basin is as bad as it ever was.
It is irresponsible for governments to wait until a crisis is upon them before they act. By that stage, the financial and social cost to communities is traumatic. My understanding is that, since 2014, farm household allowances have assisted over 10,000 people. As at the end of 2018, just over 5,000 people were still receiving support. We also heard yesterday in question time that around 600 recipients had had their payments ended, and a further 500 will have payments terminated by Christmas. It seems incredibly short-sighted and callous—in a worsening drought period, with calls for increased assistance coming from so many sectors—to end farmers' government assistance payments. I simply cannot understand that logic. I would have thought that this would be a time where, if anything, we would be going in the opposite direction—yet we are not, under this government.
Of course, when farmers are struggling financially, it affects whole communities and industry sectors. We just heard the member for Ballarat talking about the Drought Communities Program. Government assistance should not ignore the impact of drought on the workers and small and medium-sized businesses who depend on farming for their own survival. For them, the effects of drought are just as direct as they are for the farmers themselves. Those small and medium-sized businesses and the workers who work for them may not be farmers, but they are also affected by the drought, and their struggles, unfortunately, are all too often ignored. Then we see the social consequences of that, with many of them, whether they are business people or ordinary families, ending up in a financial mess, seeking help from support services, which they quite often can't get access to, and the like. In fact, I suspect that one of the reasons we have so many social problems in many country areas is because of the struggles of the farmers as a result of the climatic conditions and the like, which then flow on to the communities around them.
The other matter of real concern that has been raised in this place in recent months is the issue of the way banks have operated across this country. The government did finally agree to a royal commission into the banks, but the truth of the matter is that it only agreed to that reluctantly. It did so under pressure. One of the issues that farmers across this country have continuously struggled with is the way they have been treated by their banks. Not only did the government agree to the royal commission reluctantly—in fact, from my memory, it voted against it some 26 times—but even now it does not follow through on the recommendations of that royal commission nor ensure that the interest rate cuts that have been handed down by the Reserve Bank of Australia are passed on in full to the farmers. That's one of the measures that directly has an effect on the viability of farmers across this country.
The Morrison government has been in office for over six years. It claims to be a friend of Australian farmers. But that is a very shallow claim. I've just spoken about the greedy banks gouging farmers and causing some of them to lose their farms, but it's more than just that, when you look at the track record of this government. The banks are just one example. I said earlier that this is a government that doesn't have a policy with respect to climate change. Climate change will mean that there will be more devastation, whether it is in the form of longer or more frequent droughts, or in the form of floods or tornadoes and the like. We know that drought has been one of the issues that this country has had to grapple with, particularly in the last two decades—and, I believe, more so than ever before. We hear this government constantly talking about building more dams. They've been in office for six years, and I'm not aware of one single new dam being built. So it's one thing to talk about having a policy and a strategy and to make promises to people to try to suggest that the government is responding to the needs of the farming community, but it's another to actually see what they are doing when they're actually doing nothing.
I said earlier on that I spoke about the Murray-Darling Basin only a couple of days ago. The Murray-Darling Basin Plan is now in shambles. Over two million Australians live within the Basin, mainly farming communities, and I see no clear direction for those farmers in that plan. We heard only in recent days about the response to the dairy industry and how it's caused a major problem within the National Party, the junior coalition member of this government. In fact, I understand that, as a result of some suggested changes to the dairy industry that ought to be made, the National Party has its own leadership crisis to contend with. This is a government that has been in office for six years and it hasn't dealt with the dairy industry. We have absolutely absurd claims that farmers are being forced to compete with mining companies for water. There is no way that most farmers can compete with mining companies for water and pay the kinds of prices that the mining companies are prepared to pay. It's not a level playing field anymore, and the farmers will simply not be able to compete on that basis.
We've also heard other speakers today, time and time again, say this is a government that does not even have a drought policy. In a country that relies so heavily on farming in climactic conditions that make farming so insecure, it is incredulous that Australia does not have a drought policy. What we have is a government that has a knee-jerk response to each crisis as it arises. Talk of a drought policy by referring to a $5 billion or $7 billion drought fund is absolutely meaningless when, as the member for Ballarat also quite rightly pointed out, that's not the amount of money that is being made available to farmers across this country to assist them through a drought period. In fact, that to me is shameful dishonesty on the part of the government—to purport to be supporting farmers with that fund—when we know that all the farmers get out of it is the interest that that fund accrues.
The last issue I will touch on with respect to how this government has ignored farming communities is the government's failure to provide decent health services and get health professionals into farming communities and regional parts of Australia. This is a government that has had six years to fix the rural health crisis and it has failed to do so. When farming communities are struggling because of drought or other climactic issues, of course they will need health services to a higher degree than at other times yet, again, we see reports in the media today and I hear stories on a regular basis about how accessing health services in regional Australia is becoming more and more difficult.
The opposition has moved an amendment to this legislation and I will be supporting that amendment. In summary, many members of this government represent the very communities that are going to be affected the most by the drought. I would have thought that they would have been in touch with their communities more so than other members in this place because they represent them. And yet, in the last six years that they have been in government, I have seen farming communities struggle from one crisis to another and I don't see a cohesive strategy to deal with that. We had the National Farmers Federation come to Canberra yesterday, I believe—that's what the reports say—and speak to the Prime Minister and to other senior ministers. It took the National Farmers Federation to bring the whole notion of a policy or of a strategy to deal with drought to the government. It should have been the other way around. This is not a new concept, and it should have been the government that led in respect of establishing a national strategy to deal with drought. The situation, in my view, is going to get worse in the years ahead of us. I say that because I have faith in the science. If that is the case, I don't want to see our farming communities struggle, because, as I said in my opening remarks, the farming community is essential to the prosperity and wellbeing of this nation. We need to ensure it remains that way, and that will happen only if we have a national drought strategy.
The proposal put forward by the previous speaker—that the government should, effectively, know what's best for every particular nook and cranny within the agricultural sector—is a load of rubbish. To have an open-door policy; to have lines of communication with the NFF, who are the peak association for our agricultural sector; to have them develop a policy that is most pertinent and appropriate for the struggle of each particular sector—that is what we as a government need. We need open lines of communication to every peak association within the agricultural sector. Let those peak associations design the support packages for what is best for each of their areas and bring those support packages to government, so we can assist in the way the industry thinks is most appropriate, not in the way that some group of politicians who have had a brain snap think might be best for the sector. It's what this government has been very good at doing.
The Farm Household Allowance is not just about drought. In fact my first example of the Farm Household Allowance came just prior to the election in 2016, when the milk price collapsed and clawbacks were put in place by two of our major processors, claiming that they had overpaid our dairy farmers. They were demanding that hundreds of thousands of dollars be repaid to them. The Farm Household Allowance was the mechanism we used to support farmers through that time. This support package we have in place needs to be adaptable under different circumstances. We never envisaged that this would then run on into an ongoing drought; however, now that it has, and farmers are getting hit from one area to another, it is appropriate that we broaden the qualifying criteria and make it more accessible to more farmers.
That's what we've done. We've lifted the off-farm income test from $80,000 up to $100,000. That's very important. We've lifted the assets that you're allowed to have tied up in the value of your farm from $3 million up to $5 million. We've extended the time you're allowed to be on Farm Household Allowance firstly from three years out to four years in a lifetime and then made it even more accessible by making it four years in any 10. This support has been broadened and expanded. We now have the exit packages so that, as people do transition off Farm Household Allowance, they have the one-off payments of $7,000 or $13,000, plus a little bit. These are some of the things that are really important for our people. But, before we think that putting in place support packages is enough for our people, it's not. It's more important that we first look at policy opportunities and ways we can further assist our farmers during times of hardship.
If you're in the southern Murray-Darling Basin areas, this all pertains to water policy. Are we doing everything we possibly can with water policy to enable our farmers to farm? It's good to hear the previous speaker, representing the Labor Party, suggest that we should be doing more in relation to building dams. That's very refreshing—that we're getting criticised by the Labor Party for not doing enough in relation to building dams! We would like that sentiment to be echoed throughout Queensland. We would love that sentiment from the Labor Party to be pushed harder throughout Victoria. It's good to see that the New South Wales government have come on board to partner with the federal government to build dams in New South Wales. But, if that's the stance of the Labor Party, then we're very happy that they have taken that view.
We also have to look at other ways of getting water to farmers. In the Murray River and the Goulburn River areas of Victoria, this might mean looking at using environmental water in dry years in the way that it was first explained to the Australian people under John Howard, when he had the view of putting together a national strategic plan instead of just this ad hoc arrangement where various governments around Australia were rushing off to buy indiscriminate parcels of water. Therefore, Prime Minister Howard at the time thought we needed to put some strategy around it, instead of these indiscriminate buybacks. When we put this strategy around it and put together a plan where water is taken out of agriculture and put into the environment, in dry years we should make allowances for that water to be returned to agriculture to enable farmers to farm. If we enable farmers to farm by using water in a more flexible manner, we're not going to need to supply farm household allowance to a whole range of farmers, because they're going to be able to fend for themselves.
This is very critical piece of support that the government is putting in place. Minister Littleproud, the minister for water resources and drought, is talking very clearly about a three-pronged strategy that we as a government are adopting. That is about providing, here and now, farm household support, and low-interest loans that have the capacity to save farmers in the vicinity of $30,000 per annum. We have farm household allowance, which is in the vicinity of $26,000 a year over a four-year period—that is, over $100,000.
A large proportion of the farmers that have transitioned out of farm household allowance have indicated it made a significant difference to their ability to stay in the farming sector. After transitioning out—hopefully, on the back of a couple of good years and profitability returning to their business—they've been able to look back and reflect that the farm household allowance came to them at a very crucial time and was a major reason why they were able to stay in agriculture. There is no doubt that this program has had wide-ranging impacts. Over 12,700 farmers have been part of the Farm Household Allowance Program. That has cost over $365 million during that period up to 4 October 2019. There has also been an additional $44 million for supplementary payments in recognition of the severity of this drought.
This program has been absolutely crucial to the ongoing viability of our people, certainly in my electorate of Nicholls. All of them would rather not be on this program. All of them have expressed some frustration with the complexity of getting the FHA—and we were able to acknowledge that, and it's a positive thing that the applications process has been, effectively, cut in half. It is still regarded in the same light as welfare support, even though we understand that it is entirely different. But the process of gaining this financial assistance does mean that we ask people to jump through a lot of hoops and provide an awful amount of their financial positions and financial structures. I understand that many farms are set up with trust arrangements, and this does add complexity to the process of being assessed for the farm household allowance. We do ask that people do not self-assess. We understand there are rural financial counsellors out there, who are prepared to help, and we understand that every member of this House is also prepared to help farmers in their patch, in any way they can, with their application for the farm household allowance. It is something that has been incredibly valuable.
I also need to re-stress this issue: that right now, this drought tightens its grip on our agricultural sector and our farmers and our farming communities. The point that's been well made is that this is not just about the farmers; this is about the communities that support our farming sector. Certainly in my electorate many of these small communities have been built around the dairy industry and, to a lesser extent, the fruit growing regions of the Goulburn Valley. So these communities are also the beneficiaries when it comes to giving people the farm household allowance to enable them to put food on their table and have that little bit of money swim around the community, which, in fact, it does. We have to stay fully committed to our farming communities.
I need to reinforce that, before we look at some of the things the NFF are talking about—that is, exit packages and maybe reskilling programs—we have to look under every rock and every hollow log to see if there's another way that we can actually help our farmers. If we happen to find an opportunity to assist with water policy and we are able to become more flexible with the water that currently exists within the agriculture sector, the investor pool or the environmental pool, then I think we owe it to our farmers to put the politics aside and look at the ways we can make water available to our farming sector in these incredibly dry times. If we come into this place and say that we all support our farmers and want to do everything we can to help them and then turn our back on them because we're not prepared to give them an opportunity to access the water that's flowing past their doors, flowing past their paddocks then we are simply politicians with hollow words. We have an opportunity to act in the Southern Basin. We have an opportunity to do something to help our farming sector. Everyone in this House has to have a genuine think about if it's just hollow words of support for our drought-affected farmers or if we actually want to change water policy to give them the water they need.
In Victoria right now, another element has been thrown into this, and this is the proposal that's been put forward to build another dam—that is, to turn little buffalo into big buffalo, which will effectively grow the size of buffalo dam by about 25 times. This is something that could lead to over a thousand gigalitres of water being held in storage. Again, this is something the Victorian government needs to come on board for and be supportive of. This is another way that we can capture more water in the heavy rainfall events and deliver it to Lake Nillahcootie to supply not just Victorian farmers but also South Australia and New South Wales with a more secure supply of water. Surely this is a project that needs to be looked at and examined. If it stacks up, then we need to see the funding flow and we need to see state governments prepared to get off their backsides and get to work and create further water storages to help our drought-affected farmers through these very, very troubling times.
I rise to speak on the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019. The drought may feel a long way away for city dwellers, but for many people in my electorate of Macquarie, on the fringe of Sydney, it's very close to home. We might only be 70 kilometres from Sydney's CBD, but we have around 500 businesses in the agricultural sector employing around 1,000 people between them. That includes cattle producers, orchardists and vegetable and produce growers. We've also got Western Sydney University and the Hawkesbury campus, with its focus on agriculture and innovation in agriculture.
This drought, which people are saying will soon be the worst drought since European settlement, impacts in a number of ways. It impacts directly on local farmers who are coping with less water and higher costs; that is affecting their production and their profitability. It affects the businesses that supply those farmers, who are much less likely to be upgrading tractors and equipment in difficult times and are cutting costs where they can. It flows on through the whole local economy. When you drive past paddocks and dams every day, there's also greater awareness. Of course, everyone appreciates that things are so much tougher across the ranges. There's certainly nothing much positive coming from forecasters about rain throughout summer, and there is therefore huge empathy for the farming communities who are suffering. The government didn't need to spend $190,000 on an empathy plan to make that happen, as it did with the Inland Rail project; people do understand.
There is real sympathy for the plight of farmers and little sympathy for a government that likes taking photos with farmers but whose claims on drought funding sometimes just don't stack up. I think the best example of that is this: the Prime Minister keeps banging on about his $7 billion drought package, but we've learned that $5 billion of that is locked away in a fund for another 10 years and that only $100 million is going to be spent per year—so it's a $100 million amount, not a $5 billion amount, to be spent. And the other $2 billion is actually loans. I really think the Prime Minister has to be a bit more up-front about what is actually being provided to people.
I've listened with interest to Senate estimates on the Future Drought Fund. It's designed to fund research and other things that are really worthwhile doing; there is no doubt about it. But it's not actually providing immediate support to farmers and their communities, and it won't start until 1 July next year. So the question has to be asked: what are people going to do until then? That is why we will be supporting these extensions and improvements to the farm household support program, because they are terribly needed. But this isn't enough.
One of the reasons some communities are missing out on drought funding is that they don't have quite enough people involved in agriculture. I was stunned to hear that the formula that is applied is being applied so rigorously. You're required to have a minimum of 17 per cent of your community employed in agriculture. There are communities all around Australia that are dreadfully drought affected, but they're missing out on funding because they only have 16.9 per cent of their population employed in agriculture. We need communities' needs to be understood, not an inflexible percentage to be placed. The government really needs to think about how to make the support packages that they have available and accessible. We support this increase in farm assistance, because we believe there are people who need immediate support. But we also need longer-term planning and action.
In terms of immediate support, it is extraordinary how my community have stepped up to provide immediate support where they see a need. Groups like Hawkesbury Hay Runners, set up by Dan Naethuys and Josh Stephenson, are contributing to the immediate response. Earlier this year their volunteer truck drivers delivered 50 round bales to Moree, to help out, and they've been collaborating with Animal Welfare League NSW to provide some hands-on practical support. City Slickers Appeal, another Hawkesbury charity, has been active for around 18 months after Wade and a group of Ebenezer friends realised that they could help, that there was something they could do. Their work was recognised in a Hawkesbury Australia Day award earlier this year. When I spoke to Wade, he said that he realised just how hard things were in the bush and he simply wanted to show country people that city-slickers did actually care about what was happening past the mountains. Ever since then, Wade and his team have been going about their business, just trying to help as many communities and farmers they can, delivering bales, food and all sorts of supplies regularly to the bush. They're well supported by the very generous Hawkesbury community in which they live.
These are people who can see there is more to be done, in spite of the Prime Minister's claims that it's all under control. In the absence of rain, a promised dam just ain't gonna cut it. Dams are great when it is raining, but we're kind of beyond that point. What we're missing is a comprehensive approach to tackling the impacts of the current drought and then a longer term plan to manage the changing conditions that farmers are clearly facing. The National Farmers' Federation thinks there needs to be a plan. The Nationals think there needs to be a plan. It's just that the government can't quite see that things are at a point where in fact you do need to reach out and work with a whole range of people. Guess what? That includes working with us, across this parliament, to put a long-term strategy in place.
One of the things we need to see is the report by the Coordinator-General for Drought, Major General Stephen Day, which the Prime Minister refuses to release. That is mind-boggling. He tells us it's the basis for the decisions government is making, yet we're not privy to what is in that report. Keeping secret the reports you receive isn't a way to work collaboratively or for there to be any confidence in the decisions the government is making; nor is bluffing your way through by saying, 'We're doing heaps,' when those on the ground are having a very different experience. That's why we've proposed a drought cabinet, modelled on the war cabinets chaired by Menzies, Curtin and Churchill, creating a forum that allows decisions to be made on a bipartisan basis. These are dark days for farmers and the farming communities that rely on them. That's also going to flow through to every person who buys food. It's only a matter of time before the crunch is really felt. We can't wait for that point. This situation goes beyond what we've seen in the past with drought and requires a comprehensive and urgent response now.
I will address one final point. It's often said by those on the other side that our side doesn't understand the bush and farming communities. That claim is made often, as are many others that are simply not based on any evidence or fact. I put on the record that as, a small-business operator, my very first client was New South Wales Farmers. This was back in the 1990s. For 25 years in the course of working in my business as a media and presentation consultant I was privileged to work with a multitude of agricultural businesses. Sometimes they came to me because things were really tough in their sector and they needed help; at other times things were going great guns and they wanted to spread the word on what they were doing and needed some skills to do that. What it gave me was the opportunity to really see inside some of these bigger agricultural businesses and smaller producers, the individuals who were there working on their properties. I think it does this parliament a disservice that those opposite think they have all the knowledge about farming and rural communities.
There are parts of my community which you look at and you think, 'This is absolutely remote wilderness.' There are other parts where you think, 'This is rural agriculture.' I really urge those opposite: work with us. We do have some knowledge and understanding, and, what's more, we have the goodwill to find a way through this very difficult problem, which is not your problem alone; it's our country's problem, and it's something where we should all be working together to find a resolution. There has been a lot of talk about what the solutions might be for the best way to come to an agreement on these, because nothing is going to happen in a single term of parliament. Anything that really will make a difference in the long run is going to require ongoing support. You can't have governments chopping and changing at will. I urge you to set your pride aside and come and work with us. We really want to help. We have Australia's best interests at heart.
I'd like to briefly thank the member for Macquarie for that excellent speech and I would like to echo her sentiments. We remain ready on this side of the parliament to stand with the government to address the drought crisis affecting farmers across our nation. The member for Hunter and the Leader of the Opposition have proposed a 'drought war cabinet'—a joint effort to address this issue. That offer stands ready. It continues. Let's work together as a parliament, united, to address this issue.
I rise today to speak on the Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019, and the amendment moved by the member for Hunter, as a representative of farmers who are battling drought, principally on the east coast of my electorate. It may surprise some in this place, but Tasmania does experience drought. I know the pretty pictures show we're an island of green and lush mountains and beautiful rainforests, but the east coast of my electorate and of the state is dry, and it's been dry for years. We've had record low rainfall and farmers are struggling. Farmers on the east coast of my electorate are haemorrhaging money as they try to prop up their businesses and feed their livestock. Their mental and physical wellbeing is undermined. They are desperately worried for their future. I've met with several of them in recent months and have attended a drought awareness community meeting in Cranbrook, as recently as a few weeks ago. Cranbrook is on the east coast of my electorate, smack bang in the middle of the driest region in Tasmania. From what I heard when I spoke one-on-one to farmers and others at the meeting, it was clear to me that these people, this community, are hurting, and hurting badly.
Tasmania is a state of microclimates. That's fairly normal. The west coast has always received much more rainfall than the east. But this year, the extremes were amplified. On the west coast, the town of Strahan—some members may be familiar with it and with its rainforests—had a record high winter rainfall. The east coast had the opposite. It's hard to believe how extreme the extremes can be in a state that is so geographically small. The west coast had record high rainfall and the east coast had record low rainfall.
This bill is welcome. It increases the time for which a person affected by drought can access farm household allowance from a maximum four years over their lifetime to four years in each specified 10-year period. It introduces an expanded off-farm-income offset, broadening the circumstances in which it can be applied and increasing the upper threshold from $80,000 to $100,000. Finally, it will serve to introduce a one-off lump sum payment to those who have exhausted the allowed days of the allowance, by July 2020. These are certainly good initiatives. Any support given to those living with drought is noble. But let me be clear: It's not sufficient. It isn't sustainable. It has no impact on the broader issues, which the government seems to be ignoring. In Little Swanport on the east coast, wool producer Stuart has been destocking and feeding sheep since May. He reports he has spent more than $50,000 on feed. If rainfall does not increase, Stuart is going to have to destock further and keep only his breeding stock. It will take him years to recover. Closer to Cranbrook, on Steph's cattle and sheep property only two of the 20 waterholes contain water. She reports that over the past five years the region has experienced less than half its annual rainfall—2014, she reports, was the driest in 118 years. Down the road, Alan, who also farms sheep, acknowledges the persistence of the dry. 'It's just hung on. There's no break in between,' he told the ABC last November.
In the south-east of my electorate it was reported in August this year that Bangor Vineyards' Matt Dunbabin, a former Australian Farmer of the Year, was having to invest in a $100,000 10-kilometre pipeline, simply to ensure that his grape vines continue to have a reliable source of water. It's expensive and a lot of work but cheaper than letting his grapevines die. The reality is that farmers across Lyons and across Australia are experiencing similar situations. There is no rain. There is no water. There is no let up from the dry, the extreme weather conditions and the drought.
The Prime Minister has stated several times that the drought is his top priority. He acknowledges the severity of it, the implications of it. He has a minister for drought. Previously he had a drought envoy. We still have not seen the reports or the results of that expensive, nonsensical marketing exercise that was generated—it seems clear now—only for a headline. We have seen nothing in public about what the drought envoy was supposed to have achieved.
Drought is not a new phenomenon to Australia. Our farmers and rural and regional communities have always had to contend with the realities of fickle and extreme weather, and it was always projected they will continue to be a prominent feature of Australian weather. What was not expected, however, was the consistency of this drought or just how extreme it has been. It May last year, a paper was published by the University of Melbourne in collaboration with the Australian Research Council's Centre of Excellence for Climate System Science. This paper demonstrates that Australia's recent drought experiences could be the worst drought seen on the continent in 800 years. The broader problem is Australia does not just have to face the challenges caused by drought. There is also blistering heat. The lack of rainfall has created an environment susceptible to bushfires and low dam reservoirs, and extreme temperatures mean we are not in a position to combat them.
Parts of my electorate not known for being overly dry—the Derwent Valley and the Central Highlands, which in winter are covered in snow as often as not—were ravaged by bushfires earlier this year, burning more than 200,000 hectares of land, including some of our state's most sensitive and unique natural areas. Vegetarian that has evolved over millennia went up in flames. In May 2018, many Tasmanian regions, including our capital city of Hobart and another part of the Derwent Valley—not the part that was hit by bushfire—were hit by floods, causing widespread damage and costing councils millions of dollars.
Across the world, we are seeing record-breaking temperatures and extreme weather becoming more frequent and more normal. This summer might well be the hottest summer in 100 years, but we need to change the way we think. We shouldn't be thinking that this is the hottest summer in 100 years but should realise that it could well be the coolest in the next 100 years.
Our farmers are resilient, optimistic and adaptable. There is only so much they can do in the wake of these experiences. The science, the data, the mapping and the research all show that our weather is going to get hotter, it's going to be drier and there will be more extreme weather events—more floods, more fires, more droughts. It's likely to be even more unpredictable in the years ahead.
Government needs to step up, take responsibility and do more to help those who are affected by the drought. While this bill certainly provides some assistance, it is not enough. I go to the member for Macquarie's statements and those of the member for Hunter. The government has made much of the $7 billion drought fund. Not one cent of $7 billion goes to farmers. We don't argue on this side against the merits a drought fund, about the $100 million to be drawn down in future years for drought infrastructure. We don't argue about the need for that or about the good sense in drought infrastructure, but stop telling farmers that it's for them. It doesn't help farmers on the ground, and it certainly does not help farmers who are affected by drought right now, today. Not one cent of it goes to farmers, so stop telling farmers that this is a drought fund for them.
Agriculture and our primary industries are critical to our economy. They employ tens of thousands of Australians in Tasmania alone. Around 10,000 Tasmanians are directly employed in agriculture and contribute about a third of gross state product. This does not include the money and jobs created through value-adding and downstream industries and processing. Last night, the parliament got quite literally a taste of some of the agricultural produce that Tasmania—
Hear, hear!
Thank you, member for Moreton. I'll take that interjection, that 'Hear, hear!' The Flavours of Tasmania was held in the Great Hall, a wonderful exhibition of Tasmanian produce, much of it from my electorate.
Agriculture affects a lot of people in Tasmania—a lot of communities—and a lot of them are vulnerable to increasing temperatures and unpredictable extreme weather. The fact is that the government have no plan for drought. Despite the minister, despite the envoy, despite the coordinator-general and despite all the research, they have no plan, they have no strategy. The backbench Nationals know there's no policy. They're sick of waiting to see one from their colleagues on the front bench. They're revolting, in more ways than one. Six years ago, the Liberals and the Nationals came to government and the first thing they did was abolish the Standing Council on Primary Industries, a formal body of the Council of Australian Governments. Under the last Labor government, the federal and state governments and the National Farmers Federation all agreed that existing drought architecture was deficient and we needed a coordinated national action plan. That was more than six years ago. The first thing the Liberals and the Nationals did upon coming to government, led then by Tony Abbott, the former member for Warringah, and his deputy, the current member for New England, was abolish this COAG process. What a different place we would be in today if that process had been allowed to continue. We would have a nationally agreed drought plan.
Where is the report from Major-General Stephen Day? He was appointed in a blaze of headlines to be the national coordinator for drought. Major-General Day did his job. He produced a report, with recommendations, that he has provided to the Prime Minister, but where is it? Collecting dust on the Prime Minister's desk. Why won't the Prime Minister release the Day report? Why won't he allow it to be discussed and debated? The Prime Minister's addiction to secrecy is causing uncertainty in the community, and others are filling the vacuum. In the absence of substantive drought action from the government, others are calling for a national drought plan. The NFF put its own ideas for one to the government earlier this week. Farmers for Climate Action are calling for a national climate change strategy, because, as we know, it would be foolish to have a drought plan that does not include a climate change action plan.
The discussion around climate and worsening weather should not be ideologically divided. The effects are real—it's based on science—and we can see them around us every day. The cost to our fellow Australians is real. The cost to the economy is real. Climate change is not about Left and Right. It's not about cities versus regions or latte sippers versus VB chuggers. Climate change affects us all and we must come together as a nation to do something about it.
I recently met with Farmers for Climate Action—a professional movement of farmers, agriculture and primary industry leaders, and rural Australians who want to ensure that action is taken on climate change. Farmers are on the front line of climate change and are part of the solution. They must be part of the solution. Farmers for Climate Action work directly with those on the ground to ensure that they have climate literacy. They encourage them to become advocates and teach them innovative and scientifically backed practices to adapt to a changing climate. The work they do is vitally important and the lessons they teach are valuable, but they can only do so much, and they must be listened to. Countries and communities across the world are implementing innovative practices and strategies that serve to alleviate some of the consequences of climate change. In Africa, we have the Great Green Wall, an ambitious project to grow an 8,000 kilometre natural wall of forest to combat climate change and desertification. A decade in and with roughly 15 per cent under way, the project is already restoring Africa's degraded landscapes, providing environmental outcomes, food security and jobs. Elsewhere in Africa, there are other attempts to restore landscapes and encourage water retention. Justdiggit, a Dutch NGO currently active in Kenya and Tanzania, is teaching communities how to modify their landscape through digging, to encourage growth and vegetation restoration, as well as water preservation for subsurface soil.
There's growing evidence that forest restoration can encourage rainfall, not only in places where trees already exist but also hundreds of kilometres away. Over the past 200 years, Australia has cut down more than 40 per cent of its forests, leaving a scarred landscape behind. To be clear, I support sustainable logging. I think the Greens' obsessive opposition to the sector is ridiculous. Sawn timber is a terrific carbon sink and a natural product we should make more use of, not less, in the construction of our homes and cities. When we cut down one tree, we should replace it with three, four or five. Some of those replacements should be destined for reharvest and others for reserve or reforestation, either here in Australia or overseas in places like Indonesia, Burma, Malaysia and the Amazon. Forestation is a major part of drought mitigation. I commend the bill to the House.
The debate is interrupted in accordance with standing order 43. The debate may be resumed later.
The House transcript was published up to 13:30. The remainder of the transcript will be published progressively as it is completed.