Does any senator wish to have—Senator Macdonald?
I raise a point of order. I note that there is a proposal to have the Legal and Constitutional Affairs References Committee meet today and 24 March, which is tomorrow. My point of order—and I am not quite sure how to deal with it—is that there has been no legitimate meeting of that committee to determine to meet on 24 March. There was a meeting yesterday. Senator Watt and I both had to leave the meeting. The meeting was then inquorate. The discussion had started about the decision to meet, but it had not concluded. It had not got anywhere near the moving of a motion to meet on the 24th when the committee became inquorate. I did, as I left the meeting, indicate that the committee would be inquorate, so the committee was aware of it. I raise, as a point of order, the fact that this actual request is here for the meeting on the 24th.
Thank you, Senator Macdonald. On the same point of order, Senator Dodson.
Yes. I was at that meeting, because I am a member of the committee.
Can I just clarify, I probably will not take it as a point of order, but I am happy for this to be a point of clarification in relation to what is on the Notice Paper. Senator Dodson.
Yes. I have it as a point of clarification. Our advice from the secretariat was that the notice given by Senator Macdonald that the committee was not constituted appropriately was contrary to his view of that, so we proceeded.
Thank you, Senator Dodson. I will go to Senator McKim and then Senator Hinch.
I was also at that meeting. I do note that Senator Pratt has just arrived in the chamber and may wish to make a comment here. The very clear advice given was that a member is unable to call attention to whether or not a committee is quorate after they have left the meeting. It was only when Senator Macdonald was leaving the meeting that he did it over his shoulder on the way out.
I was at that meeting, and I support Senator Dodson and Senator McKim. Their recollection of what Senator Macdonald said is quite accurate.
A legitimate point has been raised by Senator Macdonald with me. Senator Pratt, you wish to speak on the matter as well.
We took very clear advice from the secretariat at the time. We took their clear guidance and advice, and I took that as chair.
Senator Macdonald on this issue.
The committee was clearly inquorate. Senator Watt had left, and I stood and said, 'I'm leaving; you are now inquorate', and then I left the meeting. It was clear to anyone there that the committee was then inquorate. The fact that Senator McKim has a different view of things really does not take the matter any further. The committee was clearly inquorate and if this proceeds it means we get to the stage where, as long as there is a quorum at the beginning of a meeting, everyone can leave and then one person can maintain a committee hearing by himself or herself. If we get down to that, it even further diminishes the standing of Senate committees and the notice that is taken of Senate committees, because they have become an absolute farce. This committee, particularly, keeps demonstrating that it does not matter what the rules are, it will do whatever the Labor and Greens majority want. They set up meetings knowing that no government member will be there. They therefore have these hearings, which are just extensions of the Labor Party and Greens political campaign using Senate money and Senate time and resources to run a political line.
Senator Macdonald. I have heard enough of the debate. Senator Bernardi, on the same matter.
I am just seeking a point of clarification. This is seeking approval for a committee to meet whilst the Senate is sitting. If that being the case—
I am about to deal with that point.
If that being the case, it only takes one objection by a senator before it has to be put to a vote. That is my understanding of the standing orders.
That is correct, Senator Bernardi, but what has actually happened is I have asked if any senator wishes to have the question put on any of these matters. Senator Macdonald has not asked that. He sought a point of—
I will.
I am going to get to the points. Firstly, it is not a matter for the President to determine the affairs of a committee. A committee determines its own affairs. One of the points of concern has been raised by Senator Macdonald. Maybe Senator Macdonald should write to the Procedure Committee or write to me in relation to that to have that matter examined. Secondly, committees determine their own agendas and their own issues. It is up to the Senate if it wishes to take issue with the performance and with the outcomes and the deliberations of a committee. But a committee is empowered by this Senate to deliberate and take action.
But they have to be quorate.
Well, the issue of being quorate or not is a matter that, I think, needs to be examined in a different forum, not in this chamber. I asked did any senator wish to have the question put on any of those matters. Senator Macdonald, you did raise the issue of that particular committee. Do you wish to have the question put on that committee?
I would want to have that one put. It is unfortunate, because the request contains two requests—one for today, which I have no objection to which was legitimately determined by the committee; but the one tomorrow was not determined legitimately by the committee. So I do ask for that to put.
I will deal with it in this way. I take it that there is no objection to all the other committee requests; there is no objection to any of those proposals. Senator Macdonald, I am happy to split the question in relation to the dates for the Legal and Constitutional Affairs References Committee to meet today and 24 March. I gather there is no objection to the meeting today. Therefore, the question is: does the Senate agree to the Legal and Constitutional Affairs References Committee meeting tomorrow during the sittings of the Senate if the Senate is sitting?
The ATO is not available.
Perhaps I could save the Senate time. The chair just advises me by way of interjection that the inquorate committee has now determined that there will not be a hearing tomorrow.
The witnesses were not available.
In that case, Senate Macdonald, are you happy to withdraw the request to have that proposal put?
I think the chair should tell the chamber that she withdraws the request to meet tomorrow.
I am not going to turn the Senate chamber into a deliberation about committee matters. That is what we have committees for. The only question I am interested in now is this: Senator Macdonald, do you wish to put the question about that committee meeting tomorrow?
As deputy chair of that committee, all I am aware of is a request by the inquorate committee to meet tomorrow. Now I am being told that the committee is not meeting. They have not had the courtesy to tell the deputy chair. So—
Senator Macdonald, there is only one question before the chair.
yes, I do need it put.
The question is that the Senate approves the Legal and Constitutional Affairs References Committee to meet tomorrow during the sittings of the Senate if the Senate indeed sits. Those of that opinion say aye and those against say no. The ayes have it.
Question agreed to.
The Fair Work Amendment (Protecting Take-Home Pay) Bill will protect the take-home pay of 700,000 low-paid workers, and this is at a time when inequality is at a 75-year high under this coalition government. Inequality is huge in this country. Wages growth is at a historic low and unemployment is at historic highs. These cuts campaigned for by the Prime Minister and members of the government affect 700,000 Australians and will have a particularly devastating effect on women, migrant communities, young people and regional communities. The McKell Institute's analysis states:
For many, the changes are dramatic: full time or part time retail workers who work a full 8-hour shift, for example, will lose at least $72.90 per week. Annually, this equates to a $3499 loss.
This is the equivalent of a 10 per cent pay cut for these workers—10 per cent out of the lowest paid workers in the country. In relation to regional communities, the McKell Institute estimated a partial abolition of penalty rates in the retail and hospitality sectors would result in:
… workers in Rural Australia losing between $370.7 million per annum and $691.5 million per annum … a loss in disposable income of between $174.6 million per annum and $343.5 million per annum to local economies in Rural Australia.
How could One Nation, who say they stand up for the battlers but do nothing about it? How could One Nation and Senator Hanson sell workers out for this amount? How could they do this? They run around the country telling people that they stand up for the battlers, yet they are going to take $3½ thousand out of the pay packets of rural and regional workers. What else will they do? They will destroy local economies because these are the workers who actually go out and buy the fish and chips, Senator Hanson. They use the money to buy fish and chips. They do not put the money in the bank. They do not go on cruises overseas. They use their money to go and maybe once in a blue moon buy some fish and chips in the local fish and chip shop, and keep that fish and chip shop profitable. That is what they do, Senator Hanson, but you do not understand it. But now you are not a fish and chippie; now, you are a senator.
Senator Cameron, may I remind you address your remarks through the chair.
Now that Senator Hanson is in here on a $200,000 base rate, she does not care about the battlers. She does not care about regional communities. She does not care about poor families or migrant families that are battling to put food on the table. She is absolutely unconcerned about the problems that there will be. What a fraud One Nation is! What a fraud of a party it is! What a fraud is the leadership that they have! They are running around this country telling people they care about the battlers, yet they would cut social security and they would cut penalty rates. Nothing could be further away from looking after battlers than what this mob are going to do over the next couple of weeks.
The government are also attacking working-class people. The Liberal Party have been attacking workers' rights and their penalty rates for as long as I can remember, and the National Party—the lapdogs of the Liberal Party—have been in there supporting them. How could any National Party member in this place support a $3½ thousand cut to the lowest paid in the community, especially in rural and regional Australia? We know the form of the Liberal Party. They spent $46 million on a rorted trade union royal commission to try to weaken the capacity of workers to bargain collectively. They set up the ABCC under Nigel Hadgkiss, the most incompetent, biased, politically motivated public servant this country has ever seen.
A good man.
Senator Abetz says 'A good man.' Senator Abetz, we know that he is your mate. We know what he is up to. We know that the ABCC is simply about taking money out of building workers around this country and taking away capacity for them to get decent wages and conditions. Some young workers will be threatened with pay cuts. Many young workers may not remember Work Choices, but I remember listening to the Work Choices debate in the Senate. Senator Abetz, when he was on the frontbench and had not been kicked off the frontbench, argued for Work Choices to cut workers' wages and conditions. He was the Work Choices warrior in the Senate. He stuck his hand up to cut the wages and conditions of ordinary workers to make sure that workers had no capacity to bargain effectively. That is the Work Choices warrior that Senator Abetz is.
What is really happening here is that, even though he is sitting on the backbench in exile, Senator Abetz is actually exercising a lot of power from exile. That is the reality. That power is making sure that the weakest Prime Minister ever in this country, Mr Malcolm Turnbull, supports these cuts to workers' wages, because it is the extremists in the right wing of the Liberal Party who are pushing these cuts through.
That is why I want to grandfather it.
The minority have control. Senator Abetz is controlling and manipulating the Liberal Party from the backbench. We know they are a divided, chaotic party, and Senator Abetz is in there, his tentacles all over it, controlling the Liberal Party.
The Liberal Party's view on Work Choices was clear: destroy the safety net for working people and destroy the trade union movement. They undermined the capacity of workers and their unions to bargain. They stripped back the safety net. They got rid of the no-disadvantage test that ensured workers' entitlements did not fall below the standard set in the awards. Senator Abetz was in here arguing for that day in, day out during the Work Choices debates. Do you remember those workers' entitlements that John Howard told us were protected by law? Penalty rates, overtime, allowances, basic provisions for low-paid workers. In the first year of Work Choices, workers on 70 per cent of non-union agreements in the retail and hospitality sectors lost either all or part of their weekend penalty rates, their entitlement to overtime and their allowances, amongst a long list of other enforceable rights. The coalition used their control in the House of Representatives and the Senate to come in here and smash the rights of working people in this country. Senator Abetz and the right-wingers in here clapped each other on the back when they destroyed the rights of workers in this country.
Under Work Choices, low-paid workers had their wages cut by up to 30 per cent as a direct result of Liberal-coalition policies. Nothing has changed. If the government gets their way, an average worker will lose $77 a week. If they think that is insignificant, then they do not understand the world from most people's position. They simply look at this from a position of power and privilege. Penalty rates mean the difference between registering your second-hand car and not being able to afford to buy a second-hand car. Penalty rates mean the difference between putting decent food on the table for your family and not having the weekly earnings to manage to do that. They mean the difference between your kids' netball and football fees being paid and your kids missing out. This money means the difference between celebrating important events and holidays with your family and facing the prospect of relying on charity at Christmas and birthdays or going into debt—debt you cannot be sure you will ever be able to pay back. Those in the government have never experienced it, so they just do not get it. These are decisions they will never have to make. I warrant they are decisions they have never had to make, otherwise they would not be pushing these cuts.
If the coalition understood what this meant, if they were actually in touch with the struggles that people have in this country, they would not be doing this. But they are so out of touch, they are so divided, they are so controlled and manipulated by the extreme right wing of the party that they do not think twice about doing this. The Prime Minister is doing this as part of the push to save his job. That is the reality. He is a weak Prime Minister, a Prime Minister who is just buffeted around by the right wing, pulled and pushed wherever the right wing wants to pull him and push him, a Prime Minister who shows no leadership and no capacity to stand up for what is right.
We heard from Ann Sudmalis, the member for Gilmore. When one in five workers are likely to be affected by these cuts—one in five workers in her constituency are going to be affected by this—she described cutting wages of young people as 'a gift'! How out of touch can any one individual be? How out of touch with your electorate could you be? Mrs Sudmalis has not got a clue. She went on to say that: 'We should look more broadly than our own hip pocket.' Well, her hip pocket is filled with 200 grand every year! But the workers that she wants to take these penalty rates from earn 35,000 bucks a year, and this is a 10 per cent wage cut. It is the equivalent of $20,000 coming out of Mrs Sudmalis's pay. So this is a huge hit on poor people.
Senator Ian Macdonald calls these cuts 'a step in the right direction'. What breathtaking hypocrisy from a politician who is willing to cross the floor on securing lifelong privileges for himself and supporting the anachronistic parliamentary gold pass. Senator Macdonald fires up when it is his own entitlements and privileges; he never fires up for working people; he never fires up for the poor and underprivileged. But take away the anachronistic gold pass and what do we see? We see a volcano erupting over there with Senator Macdonald: anger, threats and indignation, 'because you dared to take the gold pass away from me and my mates,' and yet workers are battling, even with the penalty rates, to put food on the table. How obnoxious can this lot over there get?
So 'a step in the right direction' said Senator Macdonald. Well, a step in the right direction to what? What does this mob have planned next for working people in this country? They may not want to call it Work Choices, but that is what they mean. What does the Prime Minister have to say about cuts to penalty rates—that weak, jelly-backed Prime Minister; that Prime Minister who only thinks about his own job, day in, day out, battling to put a decent economic thought together and jumping from one position to another? People know that he is hopeless. His own back bench know that he is hopeless. This is what he says about penalty rates:
… we've got to find solutions to create a more flexible, dynamic, 21st century economy out of which everybody wins.
Well, people do not believe that smarmy doublespeak about 'flexibility' and 'dynamism' from this government. Let me translate the babble from Malcolm Turnbull. They do not care about working people—that is the bottom line. They did not care when it was Work Choices, and they do not care today. The members of the government do not care about whether the rents get paid—unless, maybe, they are a landlord. Maybe Senator O'Sullivan might care, seeing as he has got 30-odd houses out there, as a landlord; he might care about it. But I do not think anybody else cares.
This is 101 class warfare isn't it? 101 Class warfare!
They just don't get it. They just don't get it.
Class warfare!
They don't care if you can't afford to keep your car roadworthy and replace bald tyres.
Senator McGrath interjecting—
And again I am being accused of class warfare. Well, if that is protecting workers' penalty rates and protecting workers on $35,000 from attacks by this rabble of a government, then I plead guilty: I am a class warrior, and I will be a class warrior every day—
Class warrior! Guilty as charged!
Order!
looking after working people, looking after the poor in this country—looking after them against the 'privileges' that you would impose, from your point of view, against ordinary working people. You are an absolute rabble.
Senator McGrath interjecting—
You are an absolute disgrace. You don't want workers—
Senator Cameron, resume your seat. Senator Cameron has the right to be heard in silence. Please respect that right. Please continue, Senator Cameron.
So if looking after poor people in this country is being a class warrior, I am in it. I will be in it every day, because I do not want this country to end up like the United States. I do not want this country to end up where retail workers have to depend on tips to actually make a decent living in this country. That is unacceptable, because this country was built on egalitarianism. It was built on decency. It had a worldwide reputation for being a country that looked after everyone in the country. But, under this mob, whether it was former Prime Minister Tony Abbott or, as it is now, that weak-kneed Prime Minister Malcolm Turnbull, they do not care. What they are about is getting labour as cheaply as possible, to suck up to business in this country. If they could introduce slavery they would do it, so that they could get a pat on the back from their mates that hand over the brown paper bags in the back seat of the Bentley to Liberal Party members in Newcastle. No wonder they are bowing down to the business group in this. They want a reserve army of labour where it is cheap. And how cheap can they get it? They want a society where low-paid workers spend hours on buses coming in from satellite suburbs in the dark hours of the morning to clean their offices and make their cappuccinos without any penalty rates—that is what this mob want.
Like Clean Event?
And Senator Abetz interjects again. Well, this is the man who cut the wages of the cleaners in Parliament House! This is the man who stood up for Work Choices, who pushed Work Choices his whole time here, and then cut the pay of the poorest workers in here: the cleaners that cleaned your office, Senator Abetz—that cleaned your toilet after you. And you cut their wages. That is what you did. What pathetic human beings some of you mob are over there.
Then they say, 'We will simply stop the hardship overtime.' This was a bad decision. Dr Jim Stanford, from the Centre for Future Work, has said this would make matters worse, if you tried to spread it out, and it would take 17 years to get the real purchasing power of wages back and inflation could make it 22 per cent worse. This was a bad decision by the Fair Work Commission. This was a decision that nobody in their right mind expected. This was a decision that was not based on the evidence that came before it, because there will be no jobs created. It will simply create hardship, and this mob is loving it. This mob are so bad they love workers getting their wages cut.
The hyperventilating hyperbole we have just had to endure from the ALP is shamefully and simply designed to ensure that our fellow Australians do not understand what is actually at stake. I stand here as somebody who represents not only the state of Tasmania but also the Liberal Party. It is a party that was founded on a principle of looking after the forgotten people. The forgotten people in this debate are the unemployed, the underemployed, the Australian consumer and Australian small businesses.
Let us be very clear in this debate: big unions and big business have traded away penalty rates day after day. Indeed, the person who would have to be the champion of trade union leaders doing deals with big business to trade away penalty rates is none other than the alternative Prime Minister, Mr Shorten. He traded away penalty rates for the Chiquita Mushrooms workers and for the Clean Event workers and then got payments made to his union. How dare Senator Cameron assert that somehow I had reduced the wages of cleaners in this place. It is untrue. But I can tell you who has reduced the wages of cleaners: the Australian Workers Union, as led by Mr Shorten, with the Clean Event enterprise agreement. This is where those opposite, in their former careers as trade union officials, were day after day negotiating away penalty rates and doing enterprise agreements with big business whilst forgetting about the unemployed, the underemployed, the Australian consumer and small business.
One thing that we do know is that if somebody is employed their mental health is in a better state, their physical health is in a better state, their self-esteem is in a better state and their social interaction is in a better state. So we as a community need to ensure that opportunity, which is such an important individual, social and economic good, is afforded to as many Australians as possible. What we had, not in this government decision but in this Fair Work Commission decision, was an acceptance of the reality that penalty rates in certain modern awards that had previously been established by the Fair Work Commission had been set so high as to undermine the opportunity of the unemployed and the underemployed to gain employment.
So why is it that the Australian Labor Party, the Greens and Senator Lambie would seek to ensure that these people, the unemployed and the underemployed, continue to be denied the opportunity of employment, of that important individual and social good? That is what the Australian Labor Party, the Greens and Senator Lambie really need to come to grips with in this debate. Why is that, when they know that if this bill were to be passed people would be denied the opportunity of employment and, as a result, they would be on the social scrap heap of unemployment? That is what they wish for with this bill. That is the crassness of this bill. That is the social inequity in this bill that needs to be fully understood by all of my colleagues in this place.
The unemployed seek employment. The underemployed seek more employment. The Australian consumer, not unreasonably, seeks services on a weekend. And today in Australia we have many service providers and businesses closed on a Sunday for one simple reason: they cannot afford the labour cost and, therefore, they are closed. And if they are open, many of the mums and dads who run these small businesses are working the businesses themselves, which denies them the opportunity to spend time with their families. The Fair Work Commission, in considering all these matters, saw the social good in reducing the penalty rates for certain categories of workers. We should be reminded that this is something that was a decision made under which legislation? The Australian Labor Party's Fair Work Act. Indeed, as the Rudd government was in its death throes in 2013, Mr Shorten, as the then Minister for Workplace Relations, forced through this place, with virtually no debate, an amendment to the Fair Work Act requiring the Labor Party's appointed Fair Work Commission to consider penalty rates. An amendment, forced through this place by Mr Shorten, specifically required the Fair Work Commission to have a look at penalty rates. So this requirement for penalty rates to be considered every four years is all Mr Shorten's own doing in the legislation. Be careful what you wish for.
That aside, who made the decision? There were five Fair Work commissioners on this full bench, all of whom were appointed by the Australian Labor Party. When I went through the names, I was reminded that four out of the five were appointed whilst I was the shadow minister for workplace relations. Indeed, the Australian Labor Party, in pretending to consult—underline the word 'pretending'—advised me of the names that they were intending to appoint. I objected to all four. So here we have a Fair Work Commission bench stacked out by Labor appointees which we on this side of the chamber did not favour. But they heard all the evidence. The Labor Party and the trade union movement could not have hoped for more favourable legislation or a more favourable full bench considering this decision, but that bench was mugged by the reality that the previously set penalty rate regime was costing Australians jobs. That is the reality, and that is why, if you believe in social equity—if you believe in the opportunity for the underemployed and the unemployed to take a step on the ladder of employment—you would acknowledge that this decision of the Fair Work Commission is a good, right and proper decision from a social justice point of view because it does allow people to step on the ladder of employment. What do the statistics tell us? In very rough terms, within 12 months 75 per cent of our fellow Australians who start on the most basic and minimum of wages move up another rung of the employment ladder. The great debilitator is getting onto the ladder. As soon as they are on the ladder, the vast bulk of Australians are then on a trajectory to move up the ladder of employment. The balancing act is: where do you set that first rung on the ladder to ensure that people are properly remunerated but not denied the opportunity of employment? So, in carefully considering this decision under Labor's legislation, Labor's Fair Work Commission appointees were mugged by the reality that social justice demanded that some of these penalty rates be changed.
Indeed, the hyperventilating Senator Cameron, in his contribution, was unable to tell us why it is that, at the moment, if I am a pharmacy assistant, I get 200 per cent, or double time, for working on a Sunday but somebody who is slaving over a hot stove cooking hamburgers, doing the hard yards, only gets a penalty of 175 per cent. Where is the justice in that? Where is the rationale? Where is the logic? It defies logic and defies rationale. Nobody can explain it, other than that it was 'historical'. Well, some people actually think it is nearly hysterical. How can you justify these sorts of inequities where somebody in relatively good employment in a pharmacy who does not have to do as much physical and hard work as a person in a fast-food outlet is not remunerated in the same manner? But the gross injustice here is that, if I am a worker at McDonald's working on a Sunday, I get paid literally dollars less per hour than my colleague working in the independent hamburger shop down the road. Why is that? Because the trade union and the big business, McDonald's, have traded away my Sunday penalty rates. So the small, independent, mum-and-dad owned hamburger joint down the road has to pay their worker a lot more than the multinational McDonald's. Where is the justice in that and how come the McDonald's workers get paid less? There is only one reason: the trade union bosses have traded away their penalty rates. That is how it occurred—and do you know what? I do not think that what the trade union movement did was unjust. They saw the reality themselves. They saw the importance of having a business model that would keep these people employed.
The sinister part of this is: where do the unions get their membership from? It is from the big businesses. That is where they collect their membership from. The small, mum-and-dad, independent hamburger joint down the road are like a little family. They look after each other, so that is not a unionised workforce. So from the union perspective, and indeed the big-business perspective, if that independent hamburger joint down the road can be priced out of business, that is good for the union because then, hopefully, there is more work at McDonald's and, therefore, more union members. And, of course, it means more business for McDonald's when the local independent hamburger shop gets closed.
So let us take a reality check of what this is all about. It is, yet again, the Australian Labor Party and the Greens and Senator Lambie wanting to do dirty deals with big unions and big business at the expense of the unemployed and underemployed Australian consumers and Australian small business.
This is an absolutely galling piece of legislation. Mr Shorten, the would-be Prime Minister of this country—and this was, if I recall correctly, on the Neil Mitchell program on 21 April 2016—was asked, in relation to this pending penalty rate decision by the Fair Work Commission, 'Would you accept the decision of the Fair Work Commission?' His answer was, yes, he would. Allow me to find the actual quote. Neil Mitchell said:
… the Fair Work Commission will report soon on … penalty rates. They're an independent body, in fact you had a lot to do with the way they operate now when you were Minister. Will you accept their findings given this is an independent body assessing penalty rates for Sunday, if you're Prime Minister.
Bill Shorten said:
Yes.
MITCHELL: You'll accept them?
SHORTEN: Yes.
MITCHELL: Even if they reduce Sunday Penalty rates?
SHORTEN: Well, I said I'd accept the independent tribunal …
That was Mr Shorten's position to the Australian people before the federal election. He did believe in the independence of the umpire and that sometimes the umpire might make a decision that you do not like, but you have to abide by it. That was Mr Shorten's position before the federal election. And of course he, who had helped negotiate and trade away penalty rates for workers in the jurisdiction of the Australian Workers' Union, would not have had a difficulty with this particular pending decision of the Fair Work Commission.
But now we know that the new trade union boss, Sally McManus, is of the view that, if you do not like a law, you just break it. The concept of abiding by the rule of law has gone out the window. So what does Mr Shorten do? Yes, if you do not like the decision of the umpire, you just trash the umpire, try to blame somebody else and try to make cheap political capital.
But, as I indicated earlier, what is also galling about this is that the whole regime that has led to this decision on penalty rates was designed, was created and was legislated by none other than Mr Shorten and the Australian Labor Party. If that was not enough, of the appointees to the Fair Work Commission who made the decision, four out of the five were appointed by Mr Shorten himself. But still that is not enough for him.
The simple fact is that this is a decision that does seek to provide social justice. I am on the public record—and this is, I suppose, one of the characteristics of being 'extreme right wing', as Senator Cameron sought to describe me—as saying that, when modern awards were created under Labor in 2009, no worker should be worse off. I moved an amendment in this place in 2009, as the shadow minister, seeking to put into the Fair Work Act that, when the modern awards were created, no worker would be worse off. That amendment was defeated courtesy of the Labor Party and the Greens combining to vote down that amendment. That is their legislative record. When given the opportunity, they voted down that amendment.
I have been consistent. That is why, when the Fair Work Commission announced its decision and said, 'We now have to decide how to implement this decision,' I was relatively quickly out of the blocks to say that I believe that for those workers, especially the full-time and the permanent part-time people who rely on these penalty rates today, their wages and entitlements should be grandfathered. But supposedly that is the characteristic of being extreme right wing—seeking to ensure that no worker would be worse off.
Senator Cameron's Labor Party voted against that in 2009 and now seeks to condemn me in 2017 for still supporting the view that no worker should have their wages cut in circumstances such as the Fair Work Commission has recently determined. I am still of that view and have been heartened by the support from, indeed, some trade union officials, the Council of Small Business, Ross Greenwood and many other commentators who see the common sense and justice in ensuring that no worker is worse off.
What it will ensure is that new people will be able to get the benefits of employment. The unemployed and the underemployed will be able to step onto the ladder of employment, move up it and enjoy the benefits of mental health, physical health, self-esteem and social interaction—all those benefits that come with employment. That is what that Fair Work Commission decision seeks to achieve. That is why we support it, and that is why I believe there needs to be a balance in the implementation of this decision to ensure that current workers' rights are protected, but we are enabled to engage new Australians in the benefit of employment.
At a time of growing inequality, when the gap between the superwealthy in this country and ordinary people is growing, we know that something is badly wrong with this country's laws when some of our lowest paid and youngest workers can have their pay cut. This bill, the Fair Work Amendment (Protecting Take-Home Pay) Bill 2017, if passed by the parliament in this sitting fortnight, will prevent the unfair Fair Work Commission decision from coming into effect. We know that many people, especially young people in this country, are being screwed over right now. We just need to look at what is happening with the cost of education, the cost of housing in particular, the rising cost of health care and so on. We know that what is happening in this country right now is that young people are being screwed over. Many of them rely on their penalty rates to make ends meet, to pay their rent or their mortgage and to put food on the table.
Right now, the rules of the Fair Work Commission allow them to reduce the living standards of these people. They allow the commission to take things backward, and that is why they need to change. This bill will maintain the independence of the commission, but it will change the rules—which, we have seen, are unfair—so that young people and vulnerable workers cannot go backwards.
It is time right now for the crossbench to decide where they stand. Senator Xenophon, Senator Hanson and Senator Hinch need to decide whether they stand for protecting wages or for cutting them. They often talk a big game in their home states about standing up for ordinary people, for battlers, but what we have seen, particularly from the One Nation party, is that when they come to Canberra they vote with the Liberals time after time. In this case, doing so would be an attack on people's rights at work.
The Greens are very proud of having led the national debate across so many areas. Obviously we are the party that took on the issue of dangerous global warning at a time when no-one in this parliament was even talking about it. We have been leading the debate on housing affordability and, in fact, led the charge on reform to negative gearing and capital gains tax reform. We are very pleased that the Labor Party has shifted its position and has joined us on that, as it has on the debate on a royal commission into the banking and finance sector. Before the last election, the Greens were the only party that committed to legislating to protect weekend penalty rates of pay, and now we can see why that has to happen. We are indeed pleased that the Labor Party has changed its position and that Senator Lambie has joined us, so that we can stop this decision from coming into effect before it is too late. Initially, we had some concerns about Labor's bill still allowing the commission to phase in penalty rate cuts over years by offsetting those cuts against cost-of-living wage increases, but this new, agreed, joint bill is now bulletproof.
It might be hard for members of the government to imagine it, but I ask them to look at the world that young people are facing right now. We have an unaffordable housing market. People are being locked out of it. The drawbridge is being pulled up in front of them as baby boomers, who enjoyed affordable housing, are now looking to enter the property market to purchase their third, fourth or fifth home while young people are being locked out of purchasing their first. We are seeing low levels of student assistance. We are seeing massive HECS debts. All of those mean that the cost of living is rising. So cutting weekend rates of pay, which are often the only thing that allow people to pay the rent and keep studying or do other things that they need to to get by, would place them under immense pressure.
This government has made its priorities crystal clear. It is using this week in parliament to make hate speech easier. We have seen in the lower house, just today, legislation being introduced to give huge, big tax cuts to the big end of town. We are seeing an attack on the social safety net. Indeed, quite literally at a minute to midnight last night we saw passed legislation that would take money out of the pockets of families who are doing it tough right now. Besides opposing all of these moves that will deepen income inequality in Australia, the Greens say that one of the most important things that we can do over the next week or so is stand up for young people, for those workers who rely on penalty rates to make ends meet. Make no mistake, those people are waiting to see if parliament is going to act to stop those cuts. Those hundreds of thousands of people are set to lose many thousands of dollars. They are inching closer and closer to a future that is becoming more uncertain, more difficult, one where they are going to have to sacrifice even more time to make ends meet. There are even some reports today that the effect of these cuts will be felt for many, many years. The Australia Institute's Centre for Future Work released a report warning that at current levels of wage growth—we have to remember that wage growth has been stagnant now for a number of years—it would take 17 years until higher base wages for retail workers offset lower penalty rates. That is what this government is doing. Let us be really clear about this: in an environment where housing prices are out of control and where wage growth is stagnant, the government is taking an action that will ensure that the losses from these cuts may not be recouped for at least 17 years. It is doing this at the same time as it is saying, as the member for Deakin did: 'Well, what you need to do if you want to buy a house is get a highly paid job. Just get a better job.' Too bad if you are trying to crack into the housing market at a time when wages are stagnant or indeed being cut.
This bill lays down a challenge for the government, which says that it is doing all that it can to help ordinary people. That has been shown to be a lie. Indeed, that was shown just last night, when we saw those big cuts to social security payments. But it is a challenge also for members of the crossbench, those people who sit here, who talk a big game in their home states about standing up for the battlers and yet vote with the Liberals almost every time and attack people's rights at work. The question is: are Pauline Hanson's One Nation party, Nick Xenophon and Derryn Hinch simply a branch office of the Liberal Party? Have they become simply a faction of the Liberal Party?
Our job in this Senate is to hold government to account. That is what people elect the Senate to do, to be a check on executive government, to hold government to account. The Greens have shown that we are prepared to do that, that when it comes to seeking to be a check on executive power it is the Greens who are the genuine alternative to politics as usual. People know that the Greens will stand up to this government. We now know that the Labor Party, which has changed its position, will stand up to the government on this issue. We know that some of the Independent crossbenchers will do that—Senator Lambie has indicated that that is also her position. So the question now is for Senator Xenophon, Senator Hinch and Senator Hanson. What will you do when you are forced to decide whether to support this government, indeed its big business mates, cutting the wages of ordinary people? Will you side with them or will you side with those voices in this parliament that want to do something about growing inequality?
This parliament acts far too often in the interests of a privileged few. They act for their powerful mates, mates in big business, mates in the coal industry, mates who are big Liberal Party donors. And, too often, they act against the interests of people in the community. This week we have seen that on display. We have seen cuts to the social security net, we have seen cuts across a range of areas like health care and education, and now we are seeing a Fair Work Commission cut to penalty rates. We have seen the government refuse to take on the issue of housing affordability by tackling what we know is the critical policy reform required in that space—that is, negative gearing and capital gains tax reform, along with other measures that the Greens have put forward. The Greens, the Labor Party, and Senator Lambie have put this challenge to the government, front and centre. We are in a situation where people's livelihoods might go backwards. We have to decide whether we are going to do something useful in this place and stop it, or whether we are going to see the growing gap between the super-wealthy and everybody else continue to get bigger.
I rise to speak on the Fair Work Amendment (Protecting Take-Home Pay) Bill 2017, a bill that is co-sponsored by Labor, the Greens and Senator Lambie. The purpose of this bill is to protect the take-home pay of the millions of Australians who this Prime Minister has abandoned. It will ensure that the penalty rates that they rely on are not cut. It is a fair bill that all in this place should support. It clarifies the Fair Work Act to ensure that the spirit of the original bill is upheld—that a relevant and fair minimum safety net is provided through the award, which is relevant to the needs and expectations of the community; and that additional remuneration is provided for employees working outside of normal hours, such as working on weekends, overtime, late nights or very early mornings, as many workers around the country do.
It is without doubt that the spirit of the Fair Work Act was misinterpreted by the Fair Work Commission in its recent decision. As such, it is incumbent upon us all—as we often do in this place—to pass a simple bill that closes the interpretative loophole. In this case, it is to protect the take-home pay of Australian workers by protecting penalty rates for Sundays and public holidays—because the Fair Work Act must never, never be used to cut the pay of workers. I believe in strong penalty rates for overtime, weekends, public holidays, late nights and very early mornings. There is a clear need to better remunerate workers for taking on these unsociable hours that are often essential to a business but mean valuable time away from friends and family. Working these hours when others are relaxing, when others are taking their time of leisure, has clear costs on the individual that must be remedied through improved wages. It is Labor's clear belief that the commission's decision to allow a reduction in pay for low- and middle-income Australians does not maintain a relevant and fair minimum safety net, and is not relevant to community expectations, and that therefore the commission's decision is contrary to the spirit of the Fair Work Act. This bill will right that wrong. It will close that interpretative loophole. It will ensure that the recent decision of the Fair Work Commission which cuts the pay of workers in the hospitality, retail, pharmacy and fast-food industries cannot take effect. It is important to note that the bill maintains the independence of the Fair Work Commission, while guiding its future decisions to ensure that wages cannot be cut.
Paying penalty rates has clear benefits to workers, to employers and to the entire community. This bill gives the Prime Minister and all members of this parliament the opportunity to use their vote to support working Australians and their families. I hope that the crossbench, particularly the Nick Xenophon Team, support this bill. I hope that the government supports this bill. Supporting this bill is right and it is a just thing to do. However, I am not confident that we will get the support of the government—because, for the past year and a half, we have had a Prime Minister, Mr Turnbull, who is willing at every turn to cut wages and cut government support to low- and middle-income families, while pushing for tax cuts for millionaires. In my time in the Senate, and in my 20-odd years in the union movement before that, we have seen a Liberal-National coalition that is dogged on one thing—that is, the need to cut wages and support for working Australians and divert the benefits of labour to the owners of capital. Some may say it is an old cliche, but it rings very true with this current government.
They do not try to govern for all Australians. They do not even try to govern for 50 per cent of the Australians who voted for them. No, time and time again, the government prioritise the owners of big business at the expense of the Australian community. In this case, they couch cuts to penalty rates in the notion that business needs a fair go on Sundays and public holidays, and they say that cutting wages will lead to more jobs—a total fallacy on both counts. It is a total fallacy that business needs to cut their wages bill, as there has been strong growth over the past few years in the sectors covered by this Fair Work decision. While there are some businesses that do not open on Sundays and public holidays, those that do open—and pay their staff penalty rates while collecting additional revenue from customers—are very likely doing well. As we have pointed out, time and time again, if Sundays and public holidays are sacred to the head offices of business, then they should be sacred to the working people of this country as well. I say that when the head office of a major business is closed on Sundays and public holidays but their workers are working on those days, they should be paid such penalty rates as to compensate them for the lost time with family and friends—and that rate should never decrease. The second fallacy is that cutting penalty rates will lead to more jobs, and therefore make society better off overall. It is common sense that if a business is going to offer additional hours just on Sundays and public holidays, those hours are going to be offered first to those workers who are suffering a cut in their wages. So workers will have longer working hours to try and scrape together the same take-home pay, seeing their families and friends even less. And they will receive nothing extra for working on those days, when compared to before the Fair Work decision.
Then we have Senator Xenophon's position, which is similar to a recent thought bubble from Senator Abetz—the bizarre idea that, by cutting the wages of new employees only, existing workers will not be worse off. How do these senators propose to regulate such a move to ensure that no existing Sunday employee loses shifts to new employees? That is the question for them. It will not be just a cut of 25 or 50 basis points to their penalty rates; their Sunday pay is likely to drop to zero as they are priced out by new entrants. And what if an employee moves jobs once, twice, three times, which is quite often the case? At what point is their take-home pay no longer protected? No, we should not phase in this decision for new employees only; we should not phase in this decision at all. The best way to stop this decision from taking effect is to give full support to this bill. The position put forward in this bill is the simplest, it is the fairest and it is the only option that can be supported, going forward.
What is often forgotten in all of this by those opposite is that $30 or $70 a week might not seem like much, but, for people who rely on penalty rates, for families on low and middle incomes, a cut of between $30 or $70 a week is the difference between scraping by to make ends meet and keeping your head above water. In the case of working Sundays and public holidays, it is also about compensation for missing the most precious occasions with your family and friends. For low- and middle-income Australians who rely on penalty rates, the extra cash they get for working on the weekend is necessary, but many would give it back for memories shared with loved ones on weekends.
Coupled with the government's continual cuts to family payments and welfare measures, this move by the government to cut penalty rates will drive more people below the poverty line. It is mean, it is nasty and it is unnecessary. It will not create jobs. It will not improve the lives of low- and middle-income Australians. It will simply deliver greater returns to business owners.
For thousands of people across the country, particularly those in outer suburbs, small towns and the regions, like people in my home region of the north-west and west coast of Tasmania, penalty rates are vital for their families. In north-west Tasmania, around one-third of families are experiencing rental stress. In comparison, in the eastern suburbs of Sydney, where the Prime Minister lives, only around one in 10 families are experiencing rental stress, despite the high rents in Sydney. Many of the families experiencing rental stress in north-west Tasmania rely on family tax benefits and penalty rates to make ends meet. This cut to penalty rates, coupled with the low wages growth over the past few years and this government's cuts to family payments, will only make this stress more pointed.
This cut to penalty rates will severely impact regional communities right across the country. Workers who rely on penalty rates typically spend all or most of their income within their community's economy. They buy hardware, clothes, food and fuel. A cut of around $70 a week is $70 less that each worker will have to spend in their local shops. Add that up across a community where 500 people are set to have their Sunday penalty rates cut, and that is tens of thousands of dollars a year less going to local shops. It is bad for jobs. It is bad for workers. So what is the purpose of this decision?
When this decision was handed down, my local newspaper, the Burnie Advocate ran an editorial in favour of the decision. They used the headline 'Penalty rates winners must not be sidelined'. The editorial attempted to argue that the unemployed and underemployed, as well as those who want cafes and shops open on a Sunday, were the winners from the decision. As I have argued and will continue to argue, at best the so-called benefits to the unemployed and underemployed are theoretical; at worst they come at the expense of existing workers. In regards to cafes and shops opening on a Sunday, the author of the editorial would have done well to read the decision: the relevant award for cafes was not amended by the Fair Work Commission, so how could it be relevant? And, in retail, some shops may open on a Sunday, but, with most people spending time out of our CBDs on weekends, who knows if the wage cut will matter anyway? I would have thought the major driver would be that the turnover on a Sunday would not justify opening for many smaller shops. The cut to penalty rates of 25 to 50 percentage points will mean a lot to the worker who is currently working, but will it really be enough to encourage the shop owner to open or to extend their hours?
The comments on TheAdvocate's Facebook page after the editorial were quite insightful as to the community's view of this proposed cut to the take-home pay of workers. I hope Senator Duniam in particular, whose office is located on the north-west coast of Tasmania, paid attention to the comments. The article was on 24 February, if anyone cares to take a look. I do not recall any comments being in support of the editorial. If there were, they were drowned out significantly by people talking about their personal circumstances in relying on penalty rates, or talking about the flaws in the logic that the journalist attempted to employ. The overwhelming majority did not believe that the decision would create jobs or make it easier for people who are working on a weekend. The clear majority told it as I see it: people will either lose take-home pay or have to work longer hours to make ends meet. A more appropriate headline for the story would have been 'Penalty rate losers must not be forgotten'.
The day after the article ran, the member for Braddon, Justine Keay, and I were joined by 32 union and Labor Party members from across the north-west coast at the Beach Hotel in Burnie. We went to the Beach Hotel because their licensee, Ben, has made the brave decision to not pass on the cut to the award wages of his staff—and I commend Ben for his leadership. Thank you to chefs Di and Jess from the Beach, who joined Justine and me for a story in the newspaper. Di said that she felt for young workers who need that Sunday rate. 'It helps them live,' she said. Jess said that a cut to rates will affect staff morale at other businesses. She said, 'Why should we give up our weekends if it's not worth it?'
It is really important to note that the retail, fast-food, pharmacy and hospitality industries are staffed mostly by women. The gender wage gap in this country is still at 18 per cent. Yet instead of boosting the wages of low-paid working women, instead of seeking to reduce that wage gap, this government is going to stand by and let women's wages be cut. Well, there is no way Labor is going to stand by and let that happen. This bill will protect women working in those industries by ensuring that they can provide the basics for their families after working all weekend and missing birthdays, sports matches and other special events.
The facts are that inequality is at a 75-year high, wages growth is at a 20-year low and almost 5,000 full-time jobs have been lost in Tasmania over the last year, yet we have Prime Minister Turnbull and Premier Will Hodgman cheering this wage cut. The performances of the Premier and the Prime Minister in this debate have been shameful. In Tasmania, we already have severe skills shortages across a number of the industries affected by this decision. What we need is for our Prime Minister and our Premier, Will Hodgman, to have plans to improve skills and jobs, not a plan to cut those wages. What we need is better support for our TAFEs and our apprentices. What we need is a proper fibre National Broadband Network to connect every community in the nation. What we do not need are cuts to the take-home pay of working Australians.
This bill seeks to draw a line in the sand on workers' take-home pay. If the commission can cut Sunday and public holiday penalty rates in the hospitality, fast food, retail and pharmacy awards then there is every chance that nurses, firefighters, aged-care workers and others can expect the Prime Minister to support their wages being slashed as well. It is why we need all parties to get behind working Australians and support this bill. We need all parties to put behind them past comments and votes and to vote to ensure that the take-home pay of Australian workers is not cut.
It will be interesting to see where the Nick Xenophon Team land on this bill, for on Monday afternoon this week they were missing in action. The motion on Monday afternoon is an indication that the Xenophon team are, again, the deciding vote. Senators Xenophon, Kakoschke-Moore and Griff were notably absent on Monday. Where were they? As a result of their absence, Senator Cameron's motion was lost. This bill gives the Xenophon team a great opportunity to right that wrong. I hope that the Xenophon team senators move on from their attempt to have it both ways on penalty rates and get behind not only South Australian workers but all other workers around the nation.
I am firmly of the belief that workers should never face a cut to their pay and conditions. It is a basic principle of our workplace relations system that, as productivity increases and as our economy grows, workers should receive wage increases that reflect their invaluable contribution to their employer and the ever-increasing costs they face to buy goods and services. Never should a worker face a wage cut.
What is particularly galling is that wages are currently flatlining in this country. Wages rose less than two per cent over the past year, and underemployment is already at 8½ per cent, one of the highest levels in recent years. This underemployment is already placing pressure on wage growth as competition for work reduces workers' bargaining power. This reduction in penalty rates will be the double whammy on working Australians of slow overall wages growth coupled with cuts to penalty rates, so the cuts to penalty rates are even more savage than they might have been at a time of moderate or high wage growth.
Also, this week the government did a secret, grubby deal with the self-styled workers' and battlers' friends Senator Hanson, Senator Hinch and Senator Xenophon, a deal that will make workers, students and battlers worse off. I hope that Senators Hanson, Hinch and Xenophon have a long, hard think about that grubby deal. I hope that Senator Xenophon and Senator Hinch think about why they were part of the same sneaky deal as Senator Hanson and One Nation, because, after that grubby deal, how can any of those senators have any credibility whatsoever when they say that they care about workers and battlers? They do not care at all.
With this bill, they can come into this place and right that wrong. They can come into this place and vote for this bill instead of voting to cut, cut and cut. Instead of supporting a government that is hell-bent on making the lives of working Australians even harder, they can vote to ensure that the Fair Work Commission does not have the capacity to cut the take-home pay of Australian workers.
This bill represents clearly the two competing visions between the Labor and Liberal parties, the alternate governments of this country. On one side, we have the Labor vision that, if you look after the working and middle class; if governments provide a strong safety net, including proper family payments and through decent wages, including penalty rates and a strong minimum wage; if governments give our children the best chance at school through targeted, needs based funding; and if there is a healthy, well-funded Medicare, it does not matter how rich you are or how rich your parents are, because this Australian society is about a fair go for all, where hard work is rewarded. And, if you fall on hard times, you are not persecuted as being weak but supported to bounce back, bigger and even better.
On the other hand, there is the flawed trickle-down economics of the Liberal-National-One Nation coalition, an idea that, if you take from the poorest and the middle and give tax cuts and handouts to business, somehow the magic pudding will trickle down into the bowls of the poor and the middle class and keep them full at night. It is a flawed approach that has failed in Australia. It has failed in America. It has failed in Great Britain. Cutting wages of workers will not deliver a better standard of living, and it will not create jobs.
In that, I support the bill, and I urge all in this place to support the bill.
I rise to contribute to this debate on the Fair Work Amendment (Protecting Take-Home Pay) Bill 2017. I want to talk about umpires in various industries—people who make decisions and bodies that are set up. In 1982 we had a terrible drought. It was widespread right throughout New South Wales, Queensland, Victoria and South Australia. I do not know how it was in the west. In August 1982, the Australian Workers' Union through the shearers went on strike for more money. That was their right, but the problem was that we had ewes heavily in lamb, and we had to get the wool off them. You cannot let your ewes lamb in full wool. They will get down, and they will not get up; it is as simple as that. When the strike went on, my brother, I and a couple of friends went on shearing. Then the union finished the strike and came back to work. In October 1982, the shearers of the AWU went on strike again. My late dad said: 'Next time they go on strike, sack them. I have had enough.' The sheep were poor and the drought was so severe that we had to get those sheep shorn.
In March 1983 the umpire made a decision to allow wide combs to be used in the shearing industry. The old narrow combs were about 2½ inches wide. They were convex, which means the centre of the teeth would often scratch the sheep and you would cut them a lot more. The wide combs were introduced, and the umpire said, 'You can use these if you wish too if the boss agrees and the shearers agree.' So we started using wide combs, and a hell of a blue erupted. It was March 1983, and we had to sack our shearers, which ended friendships. My brother, Peter, was a great mate of Wayne Murray, the AWU rep. Wayne used to shear for us. Peter had to go and tell him he was no longer employed It caused a huge amount of division.
Of course, the AWU, then led by Ernie Ecob, just promoted the disturbance, disruption and division. We stuck to the umpire's decision, and here we are all these years later. Every shearer uses a wide comb. Narrow combs do not exist. The argument then was that, if you allow wide combs to come in, they will break the award down and they will pay you less. That was never going to happen, because the umpire made decisions about the pay rates as well. You are never going to have the pay rates go down for shearers. Every cent a shearer earns they deserve, I can assure you from experience.
And the division was terrible. We had the police involved, blues in the pubs, threats to burn shearing sheds down, black banding our wool—you name it. It was really ugly because one side would not accept the umpire's decision. And we have moved on. I do not think you will find a shearer now in the AWU. They have their own organisation. They simply get on, work hard and do their job—and do a magnificent job. I think the first export Australia had after European settlement was a bale of wool. It is good to see the record wool prices back now after the crash of the early nineties with the oversupply. We used to have 180 million sheep. We now have just 70 million sheep in Australia.
So that was the experience for me. Of course, Acting Deputy President Sterle, you would be well aware that a separate umpire—the Road Safety Remuneration Tribunal—made a decision last year that on 4 April a pay rate for owner-drivers had to come in. What happened then? The Transport Workers Union asked the Road Safety Remuneration Tribunal to delay that order until October. The ATA and Nat Roads, trucking organisations, along with the government asked to delay it till 1 January this year. A court order delayed it. Then the Transport Workers Union went to the court and had that delay overturned. What happened then? The government got together with some support from the crossbenches and abolished the tribunal, because 35,000 owner-driver truckies had their families' future put at risk. If the Road Safety Remuneration Tribunal had listened to the TWU and listened to others, it would probably still be there today.
Here we have an umpire now established as Fair Work Australia. They were put in by Labor and the Greens in government. I am just amazed that Senator Urquhart is blaming the Turnbull-Joyce government for their decision. We did not establish Fair Work Australia; those opposite did in government. I remember being in here when the former Prime Minister was here as a minister celebrating the passing of the bill.
Penalty rates are damaging and severe to small business, but they are also essential to workers. Nurses working night shifts, police working through the night, the ambos, the fireys—all those people who do that shift work deserve to be paid more for the hours they work. But I said to a publican only a few months ago: 'Why didn't you open on Easter Monday? Why'd you shut your pub in a small country town?' He said: 'Simple as this, Wacka: I had to bring three people in to work. They were going to cost me $70 an hour.'
Senator Bilyk interjecting—
Yes, it is a small country pub, Senator Bilyk. You probably do not understand about small business and small country pubs.
Of course I understand. I'm from Tasmania. Of course I understand a small country pub.
Don't blame Tasmania because you do not understand it.
Of course I understand it.
Can I continue now?
Ignore the interjection.
I will ignore the interjection. That is a very good piece of advice. I will take that advice on board and I will ignore it, because they are still barking over there.
So this publican said to me: 'I had to bring three people in for seven hours. That was $500 each person cost with wages, workers comp and superannuation.' He said, 'My gross takings for the day'—gross—'were about $2½ thousand.' That is the gross takings, so he said, 'I would lose $1,000 if I opened my pub on Easter Monday,' so the pub did not open. No-one got any work, the boss did not make any money and he had the day off with his wife. As John Laws has said for decades, 80 per cent of something is better than 100 per cent of nothing. In the case of this pub on Easter Monday, there was nothing. No-one earned any money.
I am quite amazed at the attack because, as I said, Fair Work Australia was set up by Labor and the Greens when they were in government. It is just amazing. The umpire has made a decision. The Fair Work Commission was set up by the Labor government in 2009. The commission was tasked by Labor to review all awards every four years. Those over there commissioned the review every four years. You got it. This decision is part of the four-yearly review of modern awards as established by the Labor government in 2009. The Minister for Workplace Relations in 2013, Bill Shorten, amended the Fair Work Act specifically to require the commission to consider penalty rates as part of that process. Mr Shorten induced the commission to consider penalty rates as part of this process. Labor appointed all members of the commission who made the penalty rates decision. I will repeat that. Labor appointed all the members of the commission who made the penalty rates decision, so Mr Shorten owns this decision. We see that he is now the one complaining about what he constructed with the support of the Greens. That umpire has now made a decision.
Recently Mr Shorten said he would accept the decision of the umpire. No, he will not. He is now protesting and introducing legislation to change it. So get the facts straight. The Labor-Greens alliance in government established the Fair Work Commission, they made sure the rates are reviewed every four years and now the same lot will not accept the decision of what they established. I find that quite amazing. It is amazing what Senator Cash put out on small business yesterday.
Let us have a look at some hypocrisy on penalty rates. You often see family-owned news agencies open every Sunday morning. In country towns especially you see people going down to the paper shop to get their papers and have a chat to the locals. What is the rate for a family-owned news agency on a Sunday? $37.05 per hour, which has been the award penalty rate since 2014-15. But look at Officeworks; what is their Sunday rate? $7 an hour less—$30.05 per hour—
What does the 'better off overall' clause say?
A union agreement—so the big end of town get their labour $7 an hour cheaper than a small business—
That's not true.
That is a fact, and I am sure the truth hurts, Senator Bilyk. If the truth hurts, you just have to take it on board. What is the flexibility for a small business as far as these weekend rates go? None. There is no flexibility. The flexibility for big business was established by Labor. Yes, they have the flexibility. I want to quote some of what the Ai Group have said. In a letter to me, they said:
First, penalty rates are not being abolished.
And that is a fact. The rates are not being abolished, and people deserve to be paid more when working inconvenient days, especially holidays. They go on:
The Sunday weekend penalty rates for Level 1 fast food workers will be aligned with the Saturday rate of 125% for permanent employees and 150% for casuals. This is a relatively modest reduction from 150% and 175% respectively. Even higher penalties will apply to fast food employees classified at Levels 2 and 3. The public holiday penalty rate will be adjusted to 225% for permanent employees and 250% for casuals. A similar modest reduction.
Second, the adjustment in Sunday penalty rates will be phased-in over at least two annual increments, commencing on 1 July this year. The incremental adjustment in Sunday penalty rates will occur on the same day that employees will receive a minimum wage increase through the Commission's Annual Wage Review.
And when a pay rise comes through, the umpire will put it through, and business will pay it. They have to, just like we did in the shearing industry. When the award was changed and the pay rate was increased the employers paid it. The Ai Group say:
Third, penalty rates for nurses, firefighters and indeed all workers are not under any threat whatsoever. The Commission's decision only concerns fast food, retail and hospitality industry workers. There are some unique issues in these industries and no-one is suggesting that penalty rates for nurses or firefighters should be changed.
I have a lot to do with small business, being involved in farming small business all my life, and this is what has been happening. I will give you an example. When the school kids would finish their day of schooling and go and work at a local business, the business had to pay them a minimum of three hours. They would only work an hour and a half, so what would happen? One, the business would not employ them, which was a terrible situation when youngsters, 14-year-olds and 15-year-olds, would get their first job, as all of my three children did. They learn a work ethic and learn about getting paid and learn to save some money. The rule used to be that you had to employ them for three hours, so businesses were doing one of three things. Firstly, they would not employ them. Secondly, they would employ them for an hour and a half over two days and then say, 'Here's your three hours wage,' which was wrong. Thirdly, they would simply pay them cash and not put it through the books. That is what happens. That has been changed, thankfully, for the youngsters. If they do an hour and a half's work now they get paid.
Likewise in businesses like the coffee shop in Sydney. What happens if on Sunday they cannot afford to pay the casual rates? Firstly, the proprietors run the shop for the day. If you get out to country pubs on the weekends, who is running the pub on a Sunday? It is the publican and his wife, and they do not employ people or employ very few. The proprietors will run their business with very few or no people employed. Secondly, they will not open a business if they are going to lose money. Thirdly, they will take the illegal option and say to some university student who is wanting some cash on the side, 'Come down to work for me on Sunday morning and I'll pay you $30 an hour cash.' It happens. I know it happens and business knows it happens. As John Laws says, 'Eighty per cent of something is better than 100 per cent of nothing'—as I said, they simply do not open the business. Business is there to make profit. They are not a charity. In fact, business derives the nation's wealth. Businesses employ people, and they pay taxes and that is what keeps the government going. The more you harm business, the more it will bring our living standards down in this country.
I am a big fan of the Pharmacy Guild. Let me tell you what the Pharmacy Guild has said, where they welcome the Fair Work Commission's penalty rate decisions. I will quote their media release:
The Pharmacy Guild welcomes the Fair Work Commission decision on penalty rates which is reasonable, balanced and evidence-based.
This was all done by the Labor Party and the Greens, by the way. Remember, they established it and they ordered the commission to review the penalty rates. The commission has made a decision, and now the very bodies, the Australian Labor Party and the Greens, who established this, are the ones complaining the most.
The Pharmacy Guild says:
Once implemented, this decision will help enable community pharmacies to continue to provide access to vital medicines and other services across weekends and public holidays.
The commission ruled today that 7am-9pm Sunday penalty rates for full and part-time pharmacy employees will be reduced from 200 per cent to 150 per cent and for casuals from 225 per cent to 175 per cent. The rates for public holidays have been reduced from 250 per cent to 225 per cent for full and part-time pharmacy employees, and from 275 per cent to 250 per cent for casuals.
On public holidays, 275 per cent is a big bonus. That is two and three-quarter times the hourly rate. A spokesman for the Pharmacy Guild said the Guild welcomed the decision as a sensible way forward that balances—and I underline 'balances'—the interests of patients, pharmacy staff and local community pharmacy small businesses. They are small businesses and they have suffered. We have even seen pharmacies going into receivership, with administrators and liquidators selling them up. That is something I have never seen in my life. They are a small business and in many respects they do it tough. They go on to say:
It has never been in anyone's interest for pharmacies to be unable to open on Sundays or public holidays.
How true that is. I will repeat it:
It has never been in anyone's interest for pharmacies to be unable to open on Sundays or public holidays.
This decision will help pharmacies to meet community expectations that they will be able to access vital health services seven days a week. I am familiar with this. Just recently my wife had a terrible cold and had to get some medication. Luckily, at 6 o'clock on the Saturday or Sunday afternoon she went into the local pharmacy and got the medication she required on the recommendation of a very good friend and ophthalmologist, Professor Minas Coroneo.
I find it amazing that Mr Shorten and the Labor Party, the huge critics of this whole program, are the ones who established it. Let us look at Mr Shorten's form on penalty rates. When he was the leader of the AWU, Mr Shorten reduced or removed penalty rates for some of Australia's lowest paid workers. I will give you an example. Workers at Clean Event were stripped of all penalty rates under Mr Shorten, as the AWU boss. Workers at Clean Event were stripped of all penalty rates with no compensation under a 2006 agreement for which Mr Shorten was responsible as National Secretary of the AWU. So they were stripped of their penalty rates under Mr Shorten's leadership with no compensation.
The Melbourne and Olympic Parks Trust agreement approved by Mr Shorten in 2001 and 2003 stripped workers of all penalty rates and overtime except a 125 per cent penalty rate for work performed between 1 am and 6 am. So exactly when does Mr Shorten support and when does he oppose cuts to penalty rates? As boss of the AWU he instigated the cuts with no compensation. Now he, along with his team over there, with the Greens, is crying crocodile tears about exactly what he has done to the lowest paid workers in this country. People wonder why politicians are branded with the term 'hypocrisy'. This is amazing.
You over there established the Fair Work Commission. You over there said that they would have a review every four years of penalty rates. That has been done. The umpire has made a decision and here you are crying crocodile tears about what you established and what you have done while your leader, when secretary of the AWU, was responsible for some of the lowest paid income earners in our nation getting a pay cut and having their penalty rates removed with absolutely no compensation. This is just amazing.
I go back to where I started. The umpire has made a decision, just like in the shearing industry when we had the wide comb dispute. It was a terrible fight. It is something I do not wish to raise, because there are sad memories of when we burnt friendships. We were good friends in the shearing sheds but we ended up political enemies over an umpire's decision. On one side was the Australian Workers Union, the very place where Mr Shorten comes from, which was then led by Ernie Ecob. He went to Dubbo, held meetings and told them all to go on strike. The union reps and the union bosses still got paid, but the shearers never got paid when they were on strike. We just went and shore more sheep. The dispute was terrible.
So the umpire is there. The umpire has been set up. You set it up. You abide by the umpire's decision, as Mr Shorten said he would. If you do not, then you are just wallowing in hypocrisy.
This Fair Work Amendment (Protecting Take-Home Pay) Bill 2017 before the Senate today is very important because it seeks to protect the take-home pay of some of this nation's lowest paid workers. I am disappointed that the Senate did not support Labor's motion to bring this bill on for debate yesterday when they had the opportunity, instead giving priority to the government's Social Services Legislation Amendment Bill. This bill is very worthy of the support of this chamber. As the Leader of the Labor Party, Mr Bill Shorten, said in the House:
… some issues in this parliament … are complex and … some … are dead simple. This parliament has never had a more straightforward choice than it does today. This parliament can vote with Labor to protect … the take-home pay of … 700,000 of our working Australians … or it can vote to cut wages in retail, hospitality, pharmacy and fast food.
It is just that easy.
I often wonder if those on the other side of the chamber have ever had to rely on penalty rates—not just get them while working a part-time job while living at home but actually rely on them. We are not just talking about students or young people, but 700,000 people. Mothers, fathers, carers and primary breadwinners: these are the people we are talking about. They really do need these penalty rates and the security that those penalty rates offer. They know that the extra rate on Sunday will allow them to pay the gas or electricity bill or to put new tyres on the car. They rely on them to pay for school supplies or new uniforms or to make sure there are a few dollars in the bank account if they ever need to go to the doctor. If those opposite ever had to rely on penalty rates, they would never accept them being cut. If those opposite really understood, they would side with our lowest paid workers and make their lives a little easier. They would vote with Labor to support this bill today.
As a member of Labor's Fair Work Taskforce I have heard first-hand from some of the Tasmanian people whose lives clearly demonstrate that penalty rates are no luxury. Carol is a receptionist who works 15 hours a week on a three-week rotating cycle. For this she earns $20,000 each year, with the penalty rate component accounting for 25 per cent of that amount. Carol supports a child and a profoundly deaf mother. She did not seek out working those penalty rate times—that is what is required of the job—and sometimes the hours are not convenient for her. But work is hard to get, especially in Tasmania. It took her 62 job applications over 33 weeks to find this position and she wants to hold onto it. Nobody in their right mind would envy Carol or think she was a profit murderer, but her employer once referred to her penalty rates as money 'supporting her lifestyle'. Penalty rates do not support an extravagant lifestyle; they support Carol's life. It is people like Carol, often in part-time or casual work at low rates of pay, that Labor is absolutely determined to stand up for. But they are not the only ones negatively impacted by penalty rate cuts.
What is possibly the most disappointing aspect of all of this is that, if these cuts proceed, if those opposite do not support Labor's bill, then on the exact same day as workers get a pay cut millionaires will get a tax cut. A retail worker on $40,000 will lose up to 10 per cent of their income for the year while someone on $1 million will get an extra $17,000 a year. Tell me if that is fair. It is completely and utterly unfair. Labor does not accept the failed, flawed and sterile view of this country that says you reward the very top and hope that something trickles down to everyone else. If we went out onto the streets of Hobart or Launceston, or Triabunna or Queenstown, or down in the Huon and asked people whether millionaires should get a $17,000 tax cut while our lowest paid workers gets a $4,000 pay cut, people would be utterly outraged. However, this is what is going to happen on 1 July 2017.
It is clear to see that the government's priorities are utterly wrong. They have looked at what is the right thing to do for the Australian people and then they have completely turned their backs. The last thing this country needs, the last thing Australians need, is a cut to household budgets which are already often stretched to their last dollar. When corporate profits are at a record high and wage growth is at a record low it is not the time to give multinationals a tax cut and workers a pay cut. The unfairness at the heart of the Liberal-Nationals economic plan is in plain sight. This is what it includes: a $50 billion tax cut for multinationals making record profits; a $7.4 billion bonus for big banks jacking up interest rates; tax cuts for millionaires; and a pay cut for working families.
The other policy agendas the government is supporting—things like cutting funding for the arts, watering down race-hate laws and backing away from fully funding Gonski—just show how out of touch they are. Labor will fight this unfairness. A mum working on Sundays in retail does not take any comfort from hearing the Prime Minister shout about Bill Shorten and Labor. One of the things I find really amusing is that those on the other side think that if they shout it somehow makes them more right. I think there is a competition between Senator Cash and Senator Nash about who can be the most theatrical in their shouting. It does make me laugh. Embarrassing as it is to say this, you should watch question time in the Senate just to see the theatrics. They obviously all go to the same theatrical school.
But what that mum working on Sundays in retail wants to hear is what the government will do to protect her penalty rates. A young person working in hospitality who stands to lose $77 a week is not remotely interested in the politics of finger-pointing and blame. Australians facing a cut to their penalty rates just want someone to fight for them. And that is exactly what Labor will do. Those opposite say that we should just accept the decision of the fair work umpire. We absolutely respect the Fair Work Commission but they have made the wrong decision here and we will not stand idly by while working people pay the price.
We would take the government's point of view much more seriously if it was not tainted by the utter hypocrisy they showed last year when they abolished the Road Safety Remuneration Tribunal. Between 2012 and 2016 the Road Safety Remuneration Tribunal set pay and conditions for road transport drivers in the road transport industry. It did this by making orders for the people covered by the system, as well as approving road transport collective agreements and dealing with disputes. Some of my current and former Senate colleagues worked very hard to fight for the implementation of the tribunal. In fact, truck drivers and their representatives fought for 20 years for the creation of the Road Safety Remuneration Tribunal—and I would like to mention Senator Alex Gallacher and Senator Glenn Sterle in particular for their fight to ensure the tribunal came into force.
The tribunal handed down the Contractor Driver Minimum Payments Road Safety Remuneration Order 2016—which the government was opposed to. So what did the government do? Did they just sit back and accept the result? Did they say, 'Oh well, we'll accept the advice of the umpire'? No. They abolished the tribunal in its entirety! They rushed legislation through this place and the other place and scrapped the whole thing. Can you believe that? They refused to ensure truckers are properly paid—which is shown to improve road safety. It is therefore rank hypocrisy for those opposite to call for Labor to just accept this decision of the Fair Work Commission. We know it is a bad decision and an unfair decision. It is bad for workers, it is bad for families, it is bad for the economy—and we on this side of the chamber utterly reject it.
I would just like to take a few moments to talk about the importance of penalty rates to the broader economy. In 2015, research compiled by the McKell Institute, on behalf of the Shop Assistants Union and United Voice, revealed the effects of the partial or complete abolition of penalty rates on workers. I would like to thank these unions—the SDA, who I know do fantastic work in Tasmania protecting the rights of shop workers, and United Voice, who look after bar staff and some early childhood educators, among others—for commissioning this study.
The study estimates that a partial abolition of penalty rates in the retail and hospitality sectors would result in workers in Tasmania losing between $31.5 million and $58.7 million a year and a loss in disposable income of between $15 million and $29.4 million a year to local economies in Tasmania. A full abolition of penalty rates in the retail and hospitality sectors would result in workers in Tasmania losing between $78.9 million and $131.6 million a year and a loss in disposable income of between $38.2 million and $64.1 million a year to local economies in Tasmania. It would be an utter disaster for the Tasmanian economy if there was $131.6 million dollars less in Tasmanian workers' pockets to spend in their community.
The Catholic Commission for Employment Relations rejected the argument that cutting workers' penalty rates would result in increased job opportunities. Its executive director, Tony Farley, said back in 2015:
As a major employer, we simply don't agree with the argument that stripping workers of their take-home pay is going to be good for business or for employment.
He continued, adding:
There's no evidence whatsoever to support the claims that cutting low-paid workers' pay even further is going to be beneficial for us as a nation.
People can't spend money they don't have and cutting pay ends up hitting businesses between the eyes.
The Catholic Commission for Employment Relations, the ACCER, and the Catholic Commission for Employment Relations, the CCER, also made a submission to the Fair Work Commission's penalty rates case. They told the FWC that they:
… do not support the PC recommendations to reduce Sunday penalty rates in the hospitality, entertainment, retail, restaurants and cafe industries or to provide greater consistency in weekend rates in those industries where that would result in rate reductions. We do not support the requirement for the FWC to implement the reductions through the award review process.
ACCER and CCER oppose the applications in the Penalty Rates Case to vary specific awards in the retail and hospitality sectors to reduce penalty rates, in particular reductions to Sunday rates. ACCER and CCER reject legislative and other attempts to abolish or reduce weekend penalty rates due to concerns about the negative impact on the incomes of vulnerable workers and the detrimental impact of unsociable working hours on rest, recreation, and family time.
Research by the University of South Australia found that the abolition of penalty rates will actually have a negative effect on businesses themselves. The research found that 62.2 per cent of workers would stop working non-standard hours, if penalty rates or additional pay were not offered. In particular, according to the University of South Australia research, employees with household incomes below $30,000 were less likely to continue working non-standard hours, if penalty rates were not offered. To put it simply: many businesses will be struggling for employees, if penalty rates are cut. The abolition of penalty rates may make it impossible for the business to open at all.
We know that those opposite like to attack unions—sometimes I think it is their reason for living. We know it, everyone that has watched this place for more than five minutes knows it—and they have said a lot during this debate about unions. But their attacks on the union movement have been exceptionally dishonest. Those opposite should be ashamed of their dishonesty, but I presume you would have to have a conscience to be ashamed of your dishonesty.
For over a decade, I was a union official for the Australian Services Union in Tasmania—a very fine union I am proud to support and to say that I was out there working hard to improve pay and conditions for membership. What those opposite haven't said—and what Senator Williams speaking previously did not speak about—is that when unions negotiate on behalf of workers, it is about making them better off overall. Taking the example of Sunday penalty rates in isolation completely ignores the benefits of the higher base rates of pay and better conditions. But that is what those opposite keep doing.
They love to talk about McDonalds—at McDonalds full-time senior weekly wages are up to $70 better than the award, because of union negotiations. And the EBA also delivers: guaranteed minimum shifts; family violence leave; compassionate leave and study leave. But the cut to penalty rates from the Fair Work Commission is just a pay cut. There is no compensation benefit of lifting the overall rate. The end result will be that people will work the same hours for less pay.
The Prime Minister either does not understand industrial relations or does not care about industrial relations. The Labor party does understand, and we do care about getting industrial relations right. It is the Labor Party and the union movement that have fought to get every employee every right at work they currently hold. I must admit: I have never had an employer come to me to suggest that they will improve the working rights of their workforce. I never once in 12 years of being a union official had the bosses come to me and say, 'We propose that we will give workers this in exchange for nothing'—never once.
It is the Labor Party and the union movement, as I said, that have fought to get every employee every right at work they currently hold. These include things like—let me remind people—penalty rates, sick pay, holiday pay, paid parental leave, work health and safety regulations. It is all down to the hard work of the union movement. Mr Turnbull and his friends opposite have only ever sought to cut pay and conditions.
I recently asked in this place whether those opposite were unknowing, or unfeeling, of the impacts their changes make on the most vulnerable in our society. I am sad to say that, given their continued and sustained attacks on the least well off in our society, supported by One Nation faction, I can only conclude that those opposite are fully aware of the hurt that these cuts cause, and they simply do not care.
Members of this place have a choice, as I have said, to vote with Labor to protect the take-home pay of working people or they can stand by and allow the harshest pay cut in living memory. You guys have talked the talk; now you have got to walk the walk. But if you go back to your states and say you care about workers—and I say this particularly to the Xenophon team; One Nation is just a faction, as I said, of the Liberal party, so I do not hold any hope that they will change their views—and yet you backed cuts to penalty rates, your words will ring very hollow.
I would like to finish by echoing Bill Shorten's words in the House:
There is a very clear decision to be made here. You can either vote to save the penalty rates—the Sunday pay rates—of young people, of women, of people in the regions and of workers who depend upon these penalty rates. You can vote to do that, or you can vote to endorse cutting them.
I call upon the Senate to pass Labor's legislation to protect our lowest-paid workers
It is great to follow Senator Bilyk, because she had a lot of interesting things to say and I wanted to respond to a couple of them before I got into other parts of my speech. Senator Bilyk was talking about the SDA. She was talking about what a wonderful union they are and that they had done this study about how cuts to penalty rates hurt. The SDA would know about that, because apart from Bill Shorten, the SDA would be the other contender for the world champion of cutting penalty rates.
Senator Seselja, resume your seat, Yes, Senator Polley.
Madam Deputy President, I will just draw to your attention that, as this good senator would know, it is respectful to refer to other people in the other place with their correct titles. Those on the other side are always very quick—
Thank you, Senator Polley. I will remind Senator Seselja to address senators and others by their correct titles. Thank you.
Absolutely. It is interesting that Senator Polley did not address what I am saying about Mr Shorten, but I will address him by his correct title. Apart from Mr Shorten, the SDA would have to be close to the world champions. I was once an SDA member, believe it or not, in the 1990s, when I worked for Woolworths.
You should be proud.
They sold me out on penalty rates. I think we got time and a half in the nineties on a Sunday. I was young. I was 19 and I joined the SDA in good faith, hoping they would do me a good deal. It turned out like so many others in the union movement and like Mr Shorten: they sold me and thousands of other workers out as well.
Senator Bilyk interjecting—
Senator Seselja, please resume your seat. Yes, Minister. Order!
Madam Deputy President, we have just listened to a contribution from the other side and we have respectfully listened—
Senator Bilyk interjecting—
I certainly have. We have listened respectfully in silence.
Just resume your seat, please, Minister. The minister has risen to make a point of order. He has the right to be heard in silence. Thank you, Minister. Have you finished your point of order? Yes. Senators have the right to be heard in silence, so I ask people to try and not interject constantly.
The cacophony on the other side, I suspect, is because of the sensitivity from former union leaders like Senator Bilyk. I do not know if Senator Bilyk sold out workers when she was negotiating. I have no evidence, one way or another. We know that Mr Shorten and the SDA did. Senator Bilyk may have been one of the good union leaders who did not sell workers down the river. I make no comment.
Senator Bilyk interjecting—
I do not know, Senator Bilyk. You can answer for yourself but when it comes to—
Senator Bilyk interjecting—
They are very sensitive.
Thank you, Senator Seselja. Resume your seat.
Madam Deputy President, just a point of clarification. Senator Seselja, I was not actually a union leader. I was never a leader, but I was a union official.
Senator Bilyk, that is not a point of order. Thank you. Resume your seat.
It is good to be corrected. Senator Bilyk was not a union leader. She was a union official. Whether as a union official she sold workers down the river, I do not know. I guess that is something she will have to answer for, and I have no evidence one way or another in terms of Senator Bilyk's time as a union official, but we do have evidence in relation to the SDA, a union that was mentioned by Senator Bilyk. She said that they do a great job for workers. We have had a few examples in recent times where it has been highlighted that perhaps they did not do such a good job. I pointed to the fact that back in the nineties it was time and a half for Woollies' workers on a Sunday, so less than the award, and that was more than 20 years ago. In August 2016, we heard from Australian workers in retail and fast food outlets including Woolworths, Hungry Jack's and KFC being underpaid more than $300 million a year in a national wages scandal centred on a deal struck with the shop assistants union. That is $300 million in one sector where workers were being underpaid because of deals done by one of your favourite unions, Senator Bilyk, the SDA. If you are going to talk about the SDA—
Senator Seselja, I remind you to direct your remarks to the Chair.
Of course, Deputy President. If Senator Bilyk, through you, Deputy President, is going to talk about the SDA, we might point out what the SDA and other unions have done for some of their workers. It goes on. The Fairfax Media investigation uncovered new evidence of some of Australia's biggest and best-known employers paying many of their employees less than the award under deals done with the SDA—Coles, McDonald's, Woolworths, Hungry Jack's and KFC—a number of businesses. This goes to the cosy relationship that the Labor Party and large unions have with elements of big business. There is no doubt about it. It has always been the case that they will always choose to do a cosy deal that suits union leaders and that might suit some big businesses over workers and small businesses who always end up coping it.
Senator Bilyk interjecting—
Senator Bilyk might think it is funny that small businesses and workers cop it, but we do not. In February 2016, we heard that the Fair Work Commission was told that the union representing low-paid workers at Coles stores knew some workers might be financially worse off under an agreement it struck with the supermarket giant but did not tell its members. An industrial officer for the Shop, Distributive and Allied Employees Association also told the commission that the union knew some workers could be financially more worse off under the agreement than under the award when it signed a statutory declaration saying the agreement should be approved. The union that Senator Bilyk has chosen to rely on for evidence around penalty rates is a union that has systematically ripped off and sold out workers and systematically done deals that left workers worse off.
I need to respond to another point that was made by Senator Bilyk in this space. She claimed, in her contribution, that in fact when Mr Shorten, the SDA, the AWU and other unions are lowering the penalty rates, they are doing the workers a favour and that they are actually getting a better deal. Well, that is not true. Let's go through a couple of examples.
Under the McDonald's enterprise agreement, a part-time level 2 employee working a total of 20 hours during the day from Monday to Friday and six hours on Sunday would be $15 worse off in dollar terms under the agreement negotiated by the union than if they were paid under the Fast Food Industry Award. So a worker on the award is $15 better off. I wonder whether Senator Bilyk was happy with the deal under which a worker who worked 20 hours from Monday to Friday and a few hours on Sunday was left $15 worse off every week. It goes on. A part-time level 2 employee working two shifts of seven hours each between Monday and Friday and seven hours on Sunday will be $33 worse off. The union deal has left them $33 worse off. So they miss out on Sundays, but overall they have less money because of the deal negotiated by the paymasters of the Australian Labor Party, unions like the SDA. Further, a part-time level 2 employee only working weekends—seven hours each on Saturday and Sunday—would be $79 worse off under the agreement than if they were paid under the Fast Food Industry Award.
So there are more and more examples that we have seen of unions—big unions who fund the Labor party—not telling their workers that they are going to be worse off, and doing deals with large businesses that leave workers with less penalty rates on a weekend and less money in their pocket at the end of the week. Many of these workers, of course, have paid the union to represent them and cut their wages. That is what they have paid for. So they pay their weekly or fortnightly dues, and the SDA, or the AWU under Mr Shorten, go out and do dodgy deals which leave those workers, who are entitled to think that their union might be looking after them, much worse off. Any discussion around penalty rates needs to look at this fact.
Why would it be, do you think, that we would see these kinds of deals? There are a few theories, but before we get to the 'why' let's look at the disparity between large business and small business that the Labor Party supports, which makes it so difficult for many small and medium businesses who do not have the clout and cannot make the payments to unions to get them to commit to the deals that would lower costs for those businesses. Let's do the comparison. A bed and breakfast pays $10 an hour more than a five-star hotel. A five-star hotel in the CBD of Sydney would pay $10 an hour less than a bed and breakfast in a regional or outer suburban area. There are often pretty tight margins for a bed and breakfast, but they would pay $10 an hour more than a five-star hotel, normally owned by a multinational, often overseas owned—large companies. A family chicken shop must pay $8 an hour more than KFC. The Labor Party, of course, supports that. A family-owned takeaway pays $8 an hour more than McDonald's. A family greengrocer pays $5 an hour more than Woolworths. A pizza takeaway pays $8 more than Pizza Hut. A boutique clothes shop pays $7 more than David Jones. A family bookshop pays $8 more an hour than Target. A family newsagent must pay $7 more an hour than Officeworks. A family bottle shop pays $7 more an hour than Dan Murphy's, and a family hardware store must pay $5 an hour more than Bunnings.
So here we see the real-life experience when it comes to penalty rates. If you are working in a big business and you have a union agreement, which is ordinarily the case for these large businesses—Bunnings, Woolworths, Coles, McDonald's, KFC and any number of these other businesses—the penalty rates that are the subject of the decision of the Fair Work Commission were traded away a long time ago. So the bulk of workers who work for those large businesses have seen a reduction in their penalty rates a long time ago, and I pointed to some of those examples.
So what we are actually talking about is a range of small business that this decision would primarily apply to. It is worth looking at the situations for some of those small businesses. I have spoken to a number of these small businesses here in Canberra, such as local newsagents. Newsagents normally have a requirement to be open seven days a week. They do not have a choice as to whether to open on a Sunday. What ordinarily happens in those circumstances is that, because of the very high penalty rates, the family business owners normally work seven days a week. They will work on the Sunday, because they simply cannot afford the level of penalty rates that they have to pay but that some of the big businesses that they might be competing with in various ways do not have to pay. The Coles around the corner, which sells the newspaper and the like, has traded away penalty rates. Their penalty rates on a Sunday are much lower than the local newsagent has to pay. So what they end up doing, because they cannot close in many cases, is stay open. They do not have much of a family balance. They go in and work seven days.
So there are two impacts from that for that newsagent. One impact is on their family: it makes it just that bit harder for them to run a business and to have any sort of work-life balance. The second is on those in our community who are unemployed and looking for work and those who are underemployed. You might be working in the newsagent and only getting 15 hours during the week, and you would be pretty keen, perhaps, to get some Sunday shifts at time and three-quarters or time and a half, but that is simply not available, and what those newsagents choose to do in working for themselves puts more stress on them as a family and takes away the opportunity for the unemployed person to get a job or the underemployed person to pick up those extra five or seven hours that would make a big difference.
So these are some of the real-life impacts when you do not get the level of penalty rates right. No-one in this discussion argues that there should not be penalty rates. But the Fair Work Commission has looked at this independently and said there should be an adjustment to some penalty rates. I just make the point again that, for the big businesses dealing with the big unions, those penalty rates were traded away a long time ago. What would the motivation be for the unions to be doing this? What would the motivation be? We know what the motivation is because it was laid bare during the trade union royal commission about some of these corrupting payments—
What a joke! You are a joke!
Senator Polley can laugh at the corrupting payments, but these were some workers who seriously got sold out. Mr Shorten, in his role as a union leader, when he was selling out workers, did it for a pretty low price, it must be said. It did not take much in terms of payments to Bill Shorten's union to get him to wipe off hundreds of millions of dollars, potentially, in wages for the workers that he claimed to represent. I have laid out some of the examples of where large unions have left workers much worse off—not just lower penalty rates but worse off overall. If you are looking for examples of the motivation for that, let us look at Mr Shorten and his union.
Thiess John Holland paid AWU Victoria $300,000 plus GST whilst they built the EastLink freeway extension. The AWU issued false invoices to disguise the payments as training, back-strain research and AWU magazine advertisements. The false invoices—there is the guilty mind right there. They know these payments are dodgy. They know that, if their members knew about them, they would think they were dodgy. They are corrupting benefits, yet they were happy to accept them, but they certainly were not going to be transparent about them. They had to hide them because they knew—if you were to put it to the workers, 'Yes, we've been paid 300 grand, and, by the way, we've taken away some of your wages and conditions,' what do you think a worker would think? They would probably think that was corrupt, and they would be right.
ACI Operations paid AWU Victoria $500,000 while they laid off workers at their Spotswood glass-manufacturing factory. The AWU invoiced the payments as 'paid education leave'—again false; a guilty mind as they sold out workers under Bill Shorten and his union mates. Clean Event—
Senator Seselja, I remind you once again to refer to those—
Indeed. It was Mr Shorten who sold out the workers. I do apologise. Mr Shorten sold out the workers for a pittance, it must be said. It was a very low price to get Mr Shorten to sell out workers. Clean Event saved tens of millions of dollars. Clean Event, as I understand it, normally worked almost exclusively on weekends and after hours. That was the work that Clean Event did. So they would have been expecting to pay some penalty rates for those unsociable hours, but they came up to Mr Shorten, and Mr Shorten was happy to help. He was happy to help save them tens of millions of dollars, and it did not take much. It took $75,000 to AWU Victoria to maintain the enterprise agreement, which saw the workers stripped of penalty rates, overtime and shift loadings. How many workers lost perhaps thousands of dollars a year? They would have lost thousands and thousands of dollars a year for Mr Shorten's union to get $75,000. They are not just corrupting; they are dirty deals done dirt cheap if I have ever seen them. Absolute dirty deals done dirt cheap—$75,000.
Unibilt paid Mr Shorten $30,000 for his 2007 election campaign manager—$32,000 while the company was negotiating an enterprise agreement with the AWU, for which Mr Shorten was national secretary. Of course, that was what helped him get into parliament. His first tilt at parliament was paid for, in part, by this kind of dodgy payment going back and forth: 'Don't worry; we'll sell the workers down the river. Don't worry about penalty rates. We'll get rid of all those.' But 32 grand for a campaign officer, who they called a research officer or something—they came up with some descriptor. He was on his campaign, so Mr Shorten's campaign was paid for and funded, in part, because of some of these deals.
It goes on. Chiquita Mushrooms paid AWU Victoria $25,000 whilst casualising its mushroom-picking workforce. Again the guilty mind of the AWU: they falsely invoiced the payments as 'paid education leave' and never disclosed the payments to the Chiquita employees.
Winslow Constructors paid AWU Victoria around $200,000. They had to pay a little more. It was a little bit of a higher bill when it came to Winslow for the sellout. They provided the union lists of employee names who were secretly signed up to the union. The AWU hid the payments again behind false invoices for OHS training, workplace inspections and similar. If you wanted motivation, there are half-a-dozen examples of the kind of motivation that leads some union leaders to sell out their workers.
Let us be crystal clear when it comes to the Labor Party talking about the rights of workers: they do not care about the rights of workers. If they cared about the rights of workers, they would not be taking money from the SDA, which has consistently sold out these workers. They would not be taking money from the AWU, which has consistently sold out these workers whilst receiving payments from some of those very big businesses. They would not care. They do not care if businesses pay employees less as long as the unions get their cut. As long as the unions can get a piece of the action and keep their inflated membership numbers and the money coming in, they do not give a stuff about workers. Anytime you hear Mr Shorten claiming to care about workers, remember who he is and what he did. It is all there in black and white in the royal commission, and Mr Shorten should be condemned for it. (Time expired)
I rise to speak on the Fair Work Amendment (Protecting Take-Home Pay) Bill 2017. The bill would prevent the Fair Work Commission from varying an award if this is likely to reduce the pay an employee receives or the pay a potential employee could receive. This would prevent the Fair Work Commission from ever reducing any award wage, penalty rate or casual loading. This would cost jobs. It is bad enough that we still have so much government wage setting, but this would make the job of the government's wage setter nigh on impossible.
I oppose the bill, and I strongly suspect that Bob Hawke and Paul Keating also oppose the bill, because the bill is a betrayal of their legacy. Bob Hawke and Paul Keating spent years dismantling the idea that government sets your pay rate. They spent years dismantling the idea that wages should be the same across an industry. And they spent years dismantling the idea that if one wage goes up all wages go up. Because of the efforts of Hawke and Keating, we saw fewer people have the government set their wage over the 1990s and 2000s. This meant that pay rises increasingly depended on a worker's performance and the performance of the business they work for, rather than on government rulings covering the entire industry and economy.
But over the past decade more and more people have had the government set their wages. This is a result of Gillard's 'modern' awards, which ramped up award wages, leaving less room for businesses to pay above award wages. It is also the result of a rigid interpretation of the better-off-overall test in enterprise bargaining, which has made enterprise bargaining inflexible and therefore pointless.
With this bill, Mr Shorten and Labor want to further repudiate enterprise bargaining and further impose government wage-setting. It is backwards economics, and if Hawke and Keating were dead, they would be rolling in their graves.
I rise to speak on the Fair Work Amendment (Protecting Take-Home Pay) Bill 2017, which will prevent the penalty rate cuts proposed by the decision of the Fair Work Commission from taking effect. The purpose of this bill is to amend the Fair Work Act 2009 so that the Fair Work Commission cannot vary a modern award to reduce the take-home pay of any employee. It will protect workers' take-home pay now and into the future.
In this debate we have heard from those on the other side some of the most unfounded and ridiculous comments in relation to penalty rates. Those from Senate Seselja were quite astounding. As usual, the minister, Senator Cash, in question time cherry picks from agreements that have been negotiated by various unions in the best interests of their members when they have been negotiating members' entire pay, not just Sunday penalty rates.
This bill ensures that modern awards cannot be varied to reduce the take-home pay of any employee. I do not think anybody expected that the Fair Work Commission would bring down a decision that reduced the take-home pay of some of the lowest paid workers in this country. It was certainly never envisaged that a modern award would be cut in the manner that the Fair Work Commission decision has proposed for these penalty rates. We never envisaged that but we should have, because we know the behaviour of those on the other side of the chamber. We know that this government has done nothing but attack the most vulnerable people in our community. It is in its DNA. It has always wanted to cut penalty rates, and it has succeeded in having the Fair Work Commission bring down this decision. But we on this side are not going to be in this place and not stand up and support those who need these penalty rates more now than ever before.
The Prime Minister and his Liberal colleagues campaigned for these cuts and they are responsible for 700,000 Australian workers nationally, and 40,000 Tasmanian workers, standing to lose $77 a week. That is a huge blow to the pay packet of Tasmania's lowest paid workers. It is also bad for our state's economy, because these workers will now have less money to spend. We know, as the government knows, that those people who earn the lowest wages in this country expend all that money. They do not use the money they receive in penalty rates to buy luxury items. They use that money to ensure that their kids can go on a school excursion. They spend their money in the local economy, so the coffee shops will continue and so that they are able to put food on the table by going to the supermarket. That is the real implication of the cut to penalty rates. It is not about these people saving up for a motor car. It is not about them spending it and wasting it, as those opposite purport, but it is about the benefits that penalty rates bring to those individuals and families and to the local economies and communities that rely on this money circulating within the economy. I can assure senators that when they go out for a Sunday coffee or lunch with their families while other people are working their coffee will not cost them any less and their meal will not cost them any less, because those establishments will not be reducing their prices.
We on this side will always stand up for those who are most vulnerable—it is in our DNA. We will always stand up for Australian workers, for the most vulnerable workers, who work hard for their families to save that bit of money to ensure that their kids have the same opportunities as everyone else. We are not going to abandon those people—not today, not ever. But those on the other side have campaigned against penalty rates for years and years. We are not going to go down without a fight; the Australian community expects us to stand up for them. We respect fairness in this country. We expect that everyone gets a fair go. We know already that this cut will not be just for the retail sector. It will not be just for pharmacy and it will not be just for takeaway outlets. We know that this decision poses a real danger to the area I have responsibility for—ageing and aged care. Aged care workers are some of the lowest paid workers in this country. They are the ones who look after our most vulnerable older Australians, and we know we cannot get enough of them to work in our sector. What does the threat of them losing their penalty rates say to older Australians?
It says, once again, that those on that side—Malcolm Turnbull and this government—do not care. They do not care about older Australians to the extent that they should. They do not care about the shortage that we have in the aged-care sector in trying to attract carers and people to work in the sector, because it is in their DNA to make sure that people stay down.
They look after the big end of town; they never look after workers.
Order! Senator Polley, your time has expired.
I seek leave to continue my remarks later.
Leave granted. Debate adjourned.
Pursuant to notice given on 22 March 2017, I withdraw business of the Senate notice of motion No. 1 standing in my name for 30 March 2017, proposing the disallowance of the Financial Framework (Supplementary Powers) Amendment (Agriculture and Water Resources Measures No. 3) Regulation 2016.
I present the third report of 2017 of the Selection of Bills Committee. I seek leave to have the report incorporated in Hansard.
Leave granted.
The report read as follows—
SELECTION OF BILLS COMMITTEE
REPORT NO. 3 OF 2017
1. The committee met in private session on Wednesday, 22 March 2017 at 7.16 pm.
2. The committee recommends—That—
(a) the provisions of the Fair Work Amendment (Corrupting Benefits) Bill 2017 be referred immediately to the Education and Employment Legislation Committee for inquiry and report by 9 May 2017 (see appendix 1 and 2 for a statement of reasons for referral);
(b) the provisions of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 be referred immediately to the Education and Employment Legislation Committee for inquiry and report by 9 May 2017 (see appendix 3 for a statement of reasons for referral);
(c) the provisions of the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017 be referred immediately to the Education and Employment Legislation Committee for inquiry and report by 22 May 2017 (see appendix 4 for a statement of reasons for referral);
(d) the Racial Discrimination Amendment Bill 2016 be referred immediately to the Legal and Constitutional Affairs Legislation Committee for inquiry and report by 9 May 2017 (see appendix 5 for a statement of reasons for referral); and
(e) the provisions of the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 be referred immediately to the Economics Legislation Committee for inquiry and report by 9 May 2017 (see appendix 6 and 7 for a statement of reasons for referral).
3. The committee recommends that the following bills not be referred to committees:
4. The committee considered the following bill but was unable to reach agreement:
5. The committee deferred consideration of the following bills to its next meeting:
(David Bushby)
Chair
23 March 2017
APPENDIX 1
Proposal to refer a bill to a committee:
Name of bill:
Fair Work Amendment (Corrupting Benefits) Bill 2017
Reasons for referral/principal issues for consideration:
The bill makes significant changes to bargaining under the FW Act.
Possible submissions or evidence from:
Unions
Employer organisations
Fair Work Commission
Fair Work Ombudsman
Department of Employment
Committee to which bill is to be referred:
Education and Employment Legislation committee
Possible hearing date(s):
Possible reporting date:
(signed)
Senator Siewert
APPENDIX 2
Proposal to refer a bill to a committee:
Name of bill:
Name of bill: Fair Work Amendment (Corrupting Benefits) Bill 2017
Reasons for referral/principal issues for consideration:
To allow for a full and detailed examination of the provisions proposed in the bill. To allow stakeholders to make submissions on the detailed proposals in the bill.
Possible submissions or evidence from:
Employers, employer groups, unions, academics, industrial relations experts.
Committee to which bill is to be referred:
Senate Education and Employment Legislation Committee
Possible hearing date(s):
To be determined by the committee
Possible reporting date:
22 May 2017
(signed)
Senator Urquhart
APPENDIX 3
Proposal to refer a bill to a committee:
Name of bill:
Fair Work (Protecting Vulnerable Workers) Bill 2017
Reasons for referral/principal issues for consideration:
To allow for a full and detailed examination of the provisions proposed in the bill. To allow stakeholders to make submissions on the detailed proposals in the bill.
Possible submissions or evidence from:
Employers, employer groups, unions, academics.
Committee to which bill is to be referred:
Senate Education and Employment Legislation Committee
Possible hearing date(s):
Possible reporting date:
22 May 2017
(signed)
Senator Urquhart
APPENDIX 4
Proposal to refer a bill to a committee:
Name of bill:
Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017
Reasons for referral/principal issues for consideration:
To allow for a full and detailed examination of the provisions proposed in the bill. To allow stakeholders to make submissions on the detailed proposals in the bill.
Possible submissions or evidence from:
Employers, employer groups, unions, academics, industrial relations experts.
Committee to which bill is to be referred:
Senate Education and Employment Legislation Committee
Possible hearing date(s):
Possible reporting date:
22 May 2017
(signed)
Senator Urquhart
APPENDIX 5
Proposal to refer a bill to a committee:
Name of bill:
Racial Discrimination Amendment Bill 2016
Reasons for referral/principal issues for consideration:
Removal of 'offend' and 'insult' provisions from section 18C of the Act.
Possible submissions or evidence from:
Persons and organisations who made submissions to the inquiry of the Parliamentary Joint Committee on Human Rights concerning Part IIA of the Racial Discrimination Act 1975. The Committee could inform itself of the submissions and report of that Committee to enable a relatively short review process.
Committee to which bill is to be referred:
Legal and Constitutional Affairs — Legislation - Committee
Possible hearing date(s):
April 2017
Possible reporting date:
Tuesday 9 May 2017
(signed)
Senator Bernardi
APPENDIX 6
Proposal to refer a bill to a committee:
Name of bill:
Treasury Laws Amendment (GST Low Value Goods) 2017
Reasons for referral/principal issues for consideration:
Possible submissions or evidence from:
Committee to which bill is to be referred:
Senate Economics Legislation Committee
Possible hearing date(s):
To be determined by the Committee
Possible reporting date:
The week of May 9
(signed)
Senator Urquhart
APPENDIX 7
Proposal to refer a bill to a committee:
Name of bill:
Treasury Laws Amendment (GST Low Value Goods) Bill 2017
Reasons for referral/principal issues for consideration:
To understand the extent of the market that will actually be captured by this tax. To understand the ability of the tax office to collect this tax.
Possible submissions or evidence from:
Online retail platforms.
Bricks and mortar retail firms. Logistics companies.
Tax academics.
Committee to which bill is to be referred:
Economics
Possible hearing date(s):
Possible reporting date:
(signed)
Senator Siewert
I move:
That the report be adopted.
I move:
At the end of the motion, add “and in respect of the Human Rights Legislation Amendment Bill 2017, the bill be referred to the Legal and Constitutional Affairs Legislation Committee for inquiry and report by 9 May 2017”.
This amendment has been circulated in the chamber, I think. No? Perhaps while it is being circulation I will speak to it.
As I understand it, this was raised last night—the desire to have this bill referred to the Legal and Constitutional Affairs Legislation Committee. Certainly, the opposition believes this is very important. This is not an insignificant bill. There is clearly a very significant depth of feeling on this issue about the proposed changes to 18C right across the country. We believe that there needs to be a proper parliamentary process to explore the position of the government, as detailed in this bill.
We know that whilst the government may not have had time to explore what these changes mean, due to their internal disunity and issues that they have been trying to manage. But certainly, affected communities have not, other members of parliament have not and also, indeed, the Human Rights Commission has not. Members of parliament deserve the opportunity to speak with the Human Rights Commission and other affected parties about what these changes might mean. Whilst I can hear that perhaps I might be pre-empting some of the discussion, we do not believe that the inquiries that have happened to date on 18C are adequate. They dealt with hypothetical situations; they did not deal with drafted laws.
It is interesting to note that previous inquiries also did not recommend any changes to 18C, so I think it is entirely reasonable that prior to debate and prior to the most significant changes to this legislation in many years—in decades—there be a thorough parliamentary scrutiny, a thorough Senate scrutiny, of these laws, to understand their impact.
I understand that it is the desire of the government to deal with this quickly—I presume for their own internal management of issues. But we do not believe that these laws should be rammed through. We do not believe that they should rammed through next week. I understand there have been other discussions with the senators in this place about whether a short inquiry is adequate. We do not believe that the issues can be looked at quickly, and certainly not in a the matter of days.
This is all about watering down of protections for people, essentially allowing racial hate speech to become a more acceptable part of the Australian community. We do not accept that. We have very strong and significant concerns. We are opposed to this legislation and we believe that those people, particularly those who are going to be the most affected—certainly, as far as I can see no-one on that side of the chamber will be—should have their voices heard. And that can only be delivered through a proper, open and public inquiry that my amendment would allow.
We are not seeking to delay this unreasonably. This is for reporting by 9 May, which is only a matter of weeks for that inquiry to be handled. We believe that would allow for at least some of these issues to be heard. They are not insignificant. Even if we look at the process or the procedural issues that are canvassed in this bill and the impact they would have on how the Human Rights Commission actually does its business alone, they are significant. So even if we just focused on those elements, they are something that need a proper process—not something rammed through, just like this government seems to be keen to do on every other piece of legislation. It is not acceptable that this type of change, where there is this level of distress amongst some parts of the community about the potential impact of these changes on members of the Australian community's lives that they be rammed through without a thorough committee inquiry and without those voices being allowed to be heard.
This is not something that should be determined by the ideologues on the back bench of the coalition. And it is something on which the Prime Minister has had to give in—like he has on marriage equality, like he has on climate change—to keep his own job. Watering down race hate law and race hate protections should not be determined by whether or not this Prime Minister keeps the numbers to keep his own job, but that is what has happened. It was not a priority. Now it is a priority. Now the laws have to be rammed through, and no-one has had the opportunity to have a say on them. That is what this amendment is about.
I move the following amendment to Senator Gallagher's proposed amendment:
Omit “9 May 2017”, substitute “28 March 2017”.
I will speak briefly to my amendment to the amendment that is before the chamber.
I do need to categorically reject the suggestion from the opposition that the government are in any way, shape or form seeking to ram something through the parliament, or indeed that we have sought, in the course of this week, to ram legislation through the parliament. The only way that you can ram legislation through the Senate is by way of a guillotine. We have not guillotined any legislation, and there is no proposition before the Senate that we guillotine legislation. In fact, all we have done in the course of this week is provide the opportunity for legislation to be debated and for the Senate to sit for as long as required to address the legislation that is before this place. I thought it was important to make that point at the outset.
In terms of the particular piece of legislation that the opposition is seeking to refer for inquiry, the Human Rights Legislation Amendment Bill 2017, when I was chatting to Senator Brandis earlier he made what I think is the self-evident point that the ink is barely dry on the last inquiry into this area. In fact, I think what we have seen by way of the Parliamentary Joint Committee on Human Rights, the referral it had and the work that it did is a model of good process—a model of good examination of the issues that are raised by people in the community, who, we recognise, can legitimately have different points of view.
We firmly believe that the legislation that we are proposing does reconcile appropriate protections for individuals and freedom of speech, which is something that we on this side hold to be one of the fundamental underpinnings of a free and pluralistic society. It is for those reasons that we do not believe that there is the need for an inquiry of the length proposed by those opposite. We think that there is adequate time to address this legislation by 28 March, largely because of the very good work done by the human rights committee. I should acknowledge the chair, Mr Goodenough, in the other place, and his colleagues. I think each of them discharged their duties in the way that the community would hope that members of parliament do when examining complex issues on which there are strongly held views.
I leave my remarks there, but I urge my colleagues to support the substitution of the date for report so it is 28 March rather than 9 May.
Senator Watt.
Madam Deputy President—
Madam Deputy President, we have limited time for this debate, and Senator McKim has been on his feet previously.
Senator Siewert, I saw Senator Watt. But, if Senator Watt wants to yield to Senator McKim first, then that is his call.
Not especially!
This is only a 30-minute debate.
Yes, he will still have time.
Senator Siewert interjecting—
Order, Senator Siewert! It is not a point of order.
He will still have time. I look forward to Senator McKim's contribution as well, which I am sure he will have time to make. I rise to oppose and speak against the amendment just moved by Senator Fifield. The effect of Senator Fifield's amendment would be that the Legal and Constitutional Affairs Legislation Committee would have the sum total of, I think, five days to conduct an inquiry into what are very far reaching changes proposed to racial discrimination laws in this country.
Senator Gallagher moved an amendment seeking the referral of these changes to section 18C to the committee to review properly within not a particularly long period of time, by 9 May. But the government, as we are seeing all too often, is attempting to gag debate on this controversial proposal by requiring this inquiry to conclude by 28 March, which I think is next Tuesday. It is farcical to think that a proper inquiry can be conducted within that period of time.
I spoke yesterday on the substance of this issue and why I and Labor oppose change to section 18C. In essence, we stand for respect. We stand for not hurting, not offending, not insulting and not humiliating people on the basis of their race. It is deeply disappointing that the government, with the support of crossbenchers, is seeking to change that and make it okay for Australians to racially offend, insult or humiliate other Australians.
I will not say much more about the substance of these changes today, due to the lack of time. I just want to focus on what is being proposed here in a process sense. Section 18C as it currently stands has been the law in Australia for, I think, about 20 years. It has worked effectively, there is no evidence that can be pointed to that demonstrates the provision has been abused by litigants, and the law should stay as it is. That is indeed why the Parliamentary Joint Committee on Human Rights—people from both parties—got together, examined this in detail and recommended that no change be made to the language of 18C.
Senator Brandis interjecting—
It is true, Senator Brandis. It is true. I think we know who has a better record on telling the truth in this place out of you and me, and it is not you.
Senator Brandis interjecting—
Senator Brandis again is wanting to talk to me about lying to the Senate. It is so ironic.
Senator Watt, I remind you to direct your comments to the chair.
Thank you, Deputy President. I am always surprised when Senator Brandis wants to have a debate about lying to the Senate. That is a debate I am always happy to have with him.
It is farcical that the Legal and Constitutional Affairs Legislation Committee can be expected to conduct a proper inquiry into this within a five-day period. Already, in the time since the government's announcement was made, we have seen howls of outrage from ethnic communities right across this country expressing severe concern about the emotional distress that is going to be caused to ethnic people around Australia as a result of these changes. They are being denied the opportunity to comment on these far-reaching proposals by the government rushing through this inquiry.
It is also very disappointing to see crossbenchers lining up with the government to rush this inquiry through. I am not particularly surprised to see Senator Hanson and One Nation lining up with the government. We know they vote with the government about 85 per cent of the time, I think, proving over and over again that they are nothing but an arm of the Liberal Party. This is just yet another dodgy deal that has been done by Senator Hanson with the Liberals courtesy of the preference deals that she negotiated in Western Australia.
But I am particularly disappointed to see the Nick Xenophon Team voting with the government to support this farcical noninquiry into far-reaching changes to racial discrimination laws. I have only been in this place a short period of time, but I have certainly heard and I have certainly experienced that Senator Xenophon, in particular, has been one of the guardians of proper process in this place and making sure that the Senate does have the appropriate amount of time to properly investigate significant proposals about the law. So it is deeply disappointing to see that Senator Xenophon and his colleagues today come in and have clearly done some sort of backroom deal with government to rush through an inquiry that will not give ethnic communities right around Australia, including in their home state of South Australia, the opportunity to comment on these proposals, which ethnic communities are very concerned will cause severe distress to people right around Australia.
It should not be happening. We should have a proper inquiry into this. The ninth of May is not too far away. That would enable the committee to hear from people. The crossbenchers should be ashamed of standing with the government on this.
The Australian Greens absolutely share Labor's desire to have a reasonable inquiry into this piece of legislation. We would be very comfortable about and supportive of a committee inquiry that would report on the date of 9 May. It is worth pointing out here that the Parliamentary Joint Committee on Human Rights—I will correct Senator Watt—is not made up of members of both parties; it is actually made up of members from all parties. In the past it has also contained Independent members from the other place. But I just remind everyone that that committee did not recommend the Human Rights Legislation Amendment Bill 2017. It did not recommend this bill. That was a process—let us name it—that was initiated by the Attorney-General, on instructions from his Prime Minister, to appease the far right of the Liberal Party, which has been running rings around the Prime Minister on a range of issues ever since and in fact before he assumed the prime ministership. Those issues include but are not limited to issues like marriage equality, for example, and now we see it on these proposed reforms to the Racial Discrimination Act, which—let us face it—are designed to make it easier to be a racist in this country. That is exactly what these reforms are designed to do.
Government senators interjecting—
They are being pushed by a bunch of privileged white blokes, like everyone who is currently interjecting over there—Senator Abetz, Senator Fifield, Senator Brandis and Senator McGrath—the serried ranks of privileged white blokes who just want to make it easier to say the n-word in this country, and that is exactly what this bill is designed to do. Let us be very clear about this.
Senator Abetz interjecting—
Yes, I am a privileged white bloke too, Senator Abetz. I fully admit to that. The only difference between you and me is that I want to stand up for multicultural Australia, and you want to shake it to its very foundations.
Government senators interjecting—
Senator McKim, resume your seat. I remind senators—
Senator McGrath interjecting—
Senator Brandis interjecting—
Senator McGrath and Senator Brandis! I remind senators that Senator McKim has the right to be heard in silence. Please give him that courtesy.
Thank you, Madam Deputy President. The reason for urgency here, from the government's point of view—I am going to name this as well. Firstly, it is indicative that the bill was tabled in the Senate and not in the House. Of course it was done that way because they know that, if they had tabled it in the House, they would have lost some of their members across the floor. There is no doubt about that. There were Liberal members ready to cross the floor downstairs. So what happens is that they come into this place and they table it upstairs, where they know that the substantive reforms to 18C that have been the passion of Senator Paterson, Senator Abetz and others in this place are going to go down.
Me too!
No, they have not been a passion of yours, Senator Brandis. You are a latecomer to this. It is Senator Paterson and other agents of the IPA in this place who have taken this on as a passion and driven it to where it is now, where it is going to go down when the substantive vote comes up on changes to 18C.
We think this does deserve a proper inquiry for the reason that there are issues contained in this legislation that were not even canvassed in the human rights committee report. They were not even mentioned. For example, no-one mentioned amendments to the Native Title Act, and here we see this bill, and there is an amendment to the Native Title Act contained in the bill. It was not the subject of a single submission to the committee and not the subject of a single reference in the committee's report or in any of the dissenting or additional comments that were made by committee members, and here we are with an amendment to the Native Title Act in this legislation.
And there are amendments to the processes of the Human Rights Commission which, again, were not canvassed in the committee's processes and were not canvassed in the committee's report. Let us be very clear about this: the government want to bring it on as a matter of urgency because they just want to clear the decks of the embarrassment that this issue has become for them and because they know that there are significant divisions in their own party room and their own caucus on this matter.
The Greens want to see a proper, ridgy-didge inquiry into this legislation so that we can look at the range of issues that were not canvassed during the human rights committee process which should be canvassed by this place, noting that the human rights committee did not recommend the provisions that are contained within this bill. We think that a reporting date in early May is a reasonable date. We will not support the amendment, because we think the inquiry will not be long enough.
Let me correct a few misleading statements that have been made in the previous two speeches. The reason the bill is being introduced in the Senate is because all of the legislation which it amends is legislation within the Attorney-General's portfolio. I am the Attorney-General and I am a senator, not a member of the House of Representatives. That and only that is the reason why the bill is being introduced into this chamber like every bill in my portfolio is introduced here first.
Secondly, I will correct something that came from Senator Watt. It is not the truth to say that the Parliamentary Joint Committee on Human Rights recommended against amending section 18C of the Racial Discrimination Act. It is the case that the Parliamentary Joint Committee on Human Rights did not arrive at a common view on whether or not section 18C should be amended, and so a range of options was put forward ranging from no amendment through a series of alternatives, including the alternative that has been adopted by the government.
The reason the government does not favour a seven-week Senate inquiry is because the ink is barely dry on a three-month parliamentary inquiry which only reported 23 days ago on 28 February. That parliamentary inquiry—an inquiry of members of both the Senate and the House of Representatives—held nine days of public hearings, in every capital city in Australia, over the course of some 2½ months. The very thing the Parliamentary Joint Committee on Human Rights inquired into was the issues in this bill, and this bill was drafted to give effect to those recommendations, particularly in relation to amendments to the Australian Human Rights Commission Act.
There are in fact four main elements to the bill, and let me run through them. I have mentioned the amendments to section 18C of the Racial Discrimination Act. As I said a moment ago, there was not a common view among the committee. A range of alternatives was put forward, and the government has adopted one of them. But it cannot be disputed that the issue of the language of section 18C was the principal issue before the PJCHR inquiry which proceeded for nine hearing days.
Secondly, this bill directly adopts word for word another of the recommendations of the PJCHR, which is to apply an ordinary reasonable Australian test—the so-called 'pub test'—to whether or not a breach of section 18C has occurred. That comes directly from the PJCHR report.
The third element of the bill is a range of procedural changes to the operation of the Australian Human Rights Commission through amendments to the Australian Human Rights Commission Act, not the Racial Discrimination Act, which adopt not all but many of the recommendations of that report that was tabled only 23 days ago.
Finally—and I think this is what Senator McKim may have had in mind—there are some other amendments, which were not the subject of recommendation by the PJCHR, to administrative arrangements for the Human Rights Commission which were made at the request of the commission itself and specifically at the request of Professor Gillian Triggs, whose involvement in this process has, if I may say so, been a very constructive one. Every one of those amendments is a technical amendment involving no controversy whatsoever and is merely to create efficiencies in the management of the Human Rights Commission as recommended by the commission itself.
So those are the four elements of the bill. Element No. 1 was the principal issue canvassed in submissions before the PJCHR's nine days of hearing, although it did not land on a unanimous view. Issue No. 2 was recommended by the PJCHR. Issue No. 3, procedural changes, gives effect to recommendations of the PJCHR. Issue No. 4, minor administrative practices, was recommended by the Human Rights Commission itself. In those circumstances we do not need to do this all over again, because over 2½ months it has just been done.
Somebody once said that, when there is nothing left to be said, Hinch will still be saying it. I think I will pass that mantle to Senator McKim and Senator Watt. Everything to be said about 18C has been said. It has been debated and debated and debated. As Senator Brandis said, the committee has just come back after lengthy and extensive multicity hearings into it. I will be supporting the government on this amendment. I hope it does come back on Tuesday. I would have tried to have it not be sent to committee at all. This is the best option available, and I will support the government on it. I think enough is enough. It has been talked and talked and talked to death.
This has gone on long enough. All we have got from this bill on 18C is increased separation across Australia. The Greens are the ultimate dividers in this country—the ultimate labellers. Which is the group that uses the term 'racist' more than anyone else? The Greens. And what have they done? They have created a victim industry in our country. And what has that done? It has caused a lack of respect right across our country—a lack of respect for people to speak up honestly, a lack of respect for what people really stand for. And now we see the ALP on yet another sham exercise, drawing it out. Why do they want to draw it out? Because they perceive it is embarrassing for the government. We are pleased to see the government and the crossbenches united in making sure we put an end to this and finish it. The ALP are just puppets, or maybe muppets, for the Greens. That is all they are. I just want to remind every senator and every Australian that governments can legislate behaviour, but they cannot legislate feelings. Responsibility must be understood, and above all we need to rebuild and bring back One Nation.
Very briefly, I can indicate that I and my colleagues will be supporting the government's amendment. It is something I have discussed with the government, and I have had useful discussions with the shadow Attorney-General as well in relation to this. He understands our position, although he may not agree with it.
The fact is that we have had the Parliamentary Joint Committee on Human Rights look at this in great detail over the last 2½ months. The issue for me and my colleagues is that there are a number of amendments in respect of process that I believe can be dealt with and examined carefully in the next few days. I understand that the Human Rights Commission president will be in Canberra tomorrow for an estimates hearing, and I think in practical terms we may well be able to hear from Professor Triggs then in relation to these process issues. I think this is the best and most effective way to deal with these matters.
There are two amendments. I am going to put the amendment as moved by Senator Fifield first, and that is to amend Senator Gallagher's proposed amendment on date, to omit 9 May and insert 28 March. The question is that the motion as moved by Senator Fifield be agreed to.
The question is that the amendment by Senator Gallagher, which has now been amended to have a reporting date of 28 March, be agreed to.
A division having been called and the bells being rung—
Madam Deputy President, I seek leave to cancel the division.
Leave granted.
The question is that the amendment put by Senator Gallagher be agreed to. I am advised by the Clerk that the amendment needs to be dispensed with.
Madam Deputy President, so there is no confusion: you are now putting Senator Gallagher's amendment to Senator Bushby's motion as amended by Senator Fifield's amendment?
That is correct, Senator Brandis. So the question is that Senator Gallagher's amendment as amended—the date has been changed from 9 May to 28 March—be agreed to.
Question agreed to.
The question now is that the motion of Senator Bushby as amended be agreed to.
Question agreed to.
Report adopted.
I move:
That the order of general business for consideration today be as follows:
(a) general business order of the day no. 45 (Banking and Financial Services Commission of Inquiry Bill 2017); and
(b) orders of the day relating to documents.
Question agreed to.
I move:
That general business order the day No. 44, the Fair Work Amendment (Protecting Take-Home Pay) Bill 2017, be considered on Thursday, 30 March 2017 under consideration of private senator's bills.
Question agreed to.
I move:
That the provisions of paragraphs (5) to (8) of standing order 111 not apply to the Human Rights Legislation Amendment Bill 2017, allowing it to be considered during this period of sittings.
The question is that the motion be agreed to.
I move:
That this bill may proceed without formalities and be now read a first time.
Question agreed to.
Bill read a first time.
I move:
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
Leave granted.
The speech read as follows—
The Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016 introduces major reforms under the government's Jobs for Families Child Care Package.
This package will deliver genuine, much-needed reform for a simpler, more affordable, more accessible and more flexible early education and childcare system.
Almost one million Australian families will benefit as a result of this childcare assistance package. Low- and middle-income families will be the greatest beneficiaries.
The measures contained in this bill represent an important investment in Australia's future, and they will deliver genuine reform.
The child care package contained in this bill has been before three Senate Inquiries. I thank the Senate Education and Employment Legislation Committee, the Senate Community Affairs Legislation Committee, as well as all those individuals and organisations who contributed to these inquiries. The government welcomes and accepts the recommendation from each of the committee's majority reports that the childcare bills be passed.
The government's Jobs for Families Child Care Package strikes the right balance between targeted childcare support for hardworking families who depend upon it, a generous safety net to protect those most vulnerable in our community, and ongoing support for high-quality early learning. This is further boosted through our $840 million in federal support in 2016 and 2017 for 600 hours of universal preschool access for each child in the year before school.
The key elements of the Child Care Reform Package are:
o the Additional Child Care Subsidy
o the Community Child Care Fund
o the Inclusion Support Program
This bill makes significant amendments to the current A New Tax System (Family Assistance) Act 1999 and A New Tax System (Family Assistance) (Administration) Act 1999 in order to introduce the Child Care Subsidy, Additional Child Care Subsidy, and new approved provider and service requirements from July 2018. The bill provides for a number of transitional provisions that will commence in July 2017 and for the fast-tracked introduction of some enhanced compliance measures from royal assent.
Together these will give effect to the majority of the government's response to the recommendations from the Productivity Commission Inquiry into Childcare and Early Childhood Learning
Our objective is to help parents who want to work, or who want to work more, while still focusing on early childhood education.
Having two parents in paid employment has become the preferred choice for most families because of the changes in our society and economy over many years. Access to more affordable, quality child care puts the opportunity of work within far better reach of more families.
The Jobs for Families Child Care Package is designed to support more families, including jobless families, to increase their participation in work, training, study or volunteering. The Government's significant investment is targeted to those who need it most—low- and middle-income families who are juggling work and parenting responsibilities.
We want families to choose their child care around their work, rather than limit their work hours to suit their child care. It is estimated that the package will encourage more than 230,000 families to increase their involvement in paid employment.
Child Care Subsidy
The centrepiece of the Jobs for Families Child Care Package is the new Child Care Subsidy. From July 2018, the Child Care Subsidy will replace the current Child Care Benefit and Child Care Rebate with a single, means-tested subsidy.
The Child Care Subsidy will be better targeted than current childcare payments, providing more assistance for low- and middle-income families.
This reform is fundamentally fair. Low-income families will receive a Child Care Subsidy rate of 85 per cent of the actual fee charged (up from 72 per cent). That decreases to a 20 per cent subsidy for very high income families who are currently receiving a 50 per cent rebate on their out of pocket costs. The Child Care Subsidy rate tapers from 85 per cent to 20 per cent to ensure the package is most generous to those who earn the least. A family on $60,000 a year [whose child care centre charges $100 per day] would pay around $15 a day per child for care.
To make child care fairer, the coalition's reforms include abolishing the $7,500 Child Care Rebate annual cap that currently applies to all families. This will ensure that low- and middle- income families are not limited by a cap on the amount of child care they can access. Families earning more than around $185,000 will also benefit from an increased annual cap of $10,000 per child.
The new Child Care Subsidy will be paid directly to childcare service providers to make the system simpler for families.
An activity test will ensure that taxpayers' support for child care is targeted to those who depend on child care to work or work additional hours. The three-step activity test will align the hours of subsidised care more closely with the combined hours of work, training, study or other recognised activity undertaken, and provide for up to 100 hours of subsidy per fortnight. The bill provides that at least eight hours of activity a fortnight results in access to 36 hours of subsidised child care a fortnight; more than 16 hours of activity a fortnight results in access to 72 hours of subsidised care a fortnight; and more than 48 hours of activity a fortnight results in the maximum amount of subsidised care of 100 hours a fortnight.
These reforms are fundamentally fair—they provide the greatest hours of support in child care to the families who work the most hours, and the greatest subsidy and financial support to the families who earn the least.
The Package is also designed to place downward pressure on childcare costs for families and to ensure the government's significant investment in child care is more sustainable into the future.
New data released earlier this week showed that there are nearly 18,000 approved child care services nation-wide, caring for roughly 1.25 million children.
But the data also illustrates a broken early education and care system that is not working for Australian families. The data for the June 2016 quarter shows families faced a fee spike of almost eight per cent since the June 2015 quarter. While the Turnbull Government has done everything it can to reduce fee increases in the current system, this latest 7.6 per cent increase in child care fees – including a 6.3 per cent increase in Long Day Care fees – demonstrates that Australia's child care system needs to be reformed.
We need to fix this broken system with a complete overhaul.
The reforms will place downward pressure on what have been incessant child care fee increases through an hourly rate cap.
Additional Child Care Subsidy
We know children from disadvantaged backgrounds benefit most from quality early childhood education and care, and that is why we are providing additional support to those who need it most. The Child Care Subsidy I have just spoken of will be supplemented by an Additional Child Care Subsidy to provide extra childcare support for disadvantaged and vulnerable children, whether they be children at risk of serious abuse or neglect, families experiencing temporary financial hardship, grandparents on income support with primary carer responsibilities for their grandchildren, or parents on income support seeking to return to work, study or training.
The Child Care Safety Net aims to work alongside other state, territory and federal government payments and programs that are designed to give our most vulnerable children the additional support they need. Amongst other measures, it will provide low-income families who do not meet the activity test up to 24 hours per fortnight of subsidised care—this is equivalent to two weekly six-hour sessions. These 24 hours will be provided at the highest 85 per cent rate of subsidy, which is an increase on the current rate of about 72 per cent.
Getting children into quality child care maximises the early learning opportunities for children who may not be getting all the support they need at home. It also improves a family's ability to break a cycle of poverty and intergenerational welfare dependence by minimising barriers to workforce participation and providing access to early learning.
The Productivity Commission's report identified that existing programs that support disadvantaged and vulnerable families are complex, inefficient, poorly targeted and open to abuse. This is particularly the case in relation to the Community Support Program, special childcare benefit and the jobs, education and training childcare fee assistance payment.
These payments and programs, along with the current Budget Based Funded Program and grandparent childcare benefit, will be replaced by the Additional Child Care Subsidy and other elements of the Child Care Safety Net. Together, these will comprise a more integrated and targeted set of funding programs that leverage the increased Commonwealth investment in child care to provide the best early learning outcomes, particularly for those who need it most.
The new payments will remain linked to immunisation requirements that were strengthened under the very successful No Jab, No Pay policy from 1 January 2016.
Elements of the Jobs for Families Child Care Package outside the legislation
The Jobs for Families Child Care Package also includes a number of other important measures that are not formally part of the legislation. This includes the Community Child Care Fund which will help new and existing services, particularly in rural, regional or vulnerable communities, increase the supply of places in areas of high, unmet demand.
Much has been said, in both the House of Representatives debate and in the Senate Inquiry, about the transition of Budget Based Funded services under this package, otherwise known as BBFs, and the support they will receive from the Community Child Care Fund.
There are 300 BBF services nationwide, caring for around 22,000 children, amongst those are around 5,000 children in 45 mobile services.
In order to address concerns with the current block-funded program, which is capped and closed, this Package brings BBFs that are delivering child care into the broader funding model. For the first time, families using these services will receive direct support from the Government through the Child Care Subsidy and, for those requiring extra support, through the Additional Child Care Subsidy.
Recognising that many of these services go to great – and costly – lengths to travel to small communities with limited numbers of children, our third funding source for BBFs, including mobiles, is the Community Child Care Fund, which is an ongoing program with funding of $110 million a year. A significant portion of that fund will be provided as a supplementary funding stream to BBFs that need extra support in order to remain viable. As is the case for the BBF program, Community Child Care fund guidelines will not be legislated – this has the benefit of flexibility and the ability to tailor the program to meet emerging needs into the future.
However, having listened to the need for certainty going forward, I can assure the Senate that these BBFs will benefit from longer term grants of between 3 and 5 years. Great care has been taken to support BBFs in the Jobs for Families Child Care Package, including service based reports developed by Pricewaterhouse Coopers for each and every BBF. This careful work will continue after the bill has been passed, particularly with regard to further consultation on the Guidelines governing the Community Child Care Fund, which will be published by July 2017. We will also examine this program, along with every other provision of the bill, as part of the Post Implementation Review scheduled to commence within one year of implementation.
Strengthened compliance arrangements
Unfortunately, there are those who seek to use Government support to the childcare system for personal gain. This Government is determined to ensure that taxpayer support for early childhood education and care is used for fee relief for families, as intended.
We know that compliance measures are effective. Last year, we introduced new rules to eliminate the costly abuse of payments through a process known as 'child swapping' in the family day care sector. The Australian Government's focus on noncompliance (mainly but not solely focussed on family day care) is showing very clear results. The Government's action has resulted in a significant reduction of fraud in the child care system. While still growing the number of child care places available to hard working families, we have also managed to spare taxpayers nearly $1 billion in waste and driven dozens of rorters out business.
By contrast, under the previous Labor Government in the two years to June 2013, there were no cancelations, no suspensions and only two fines issued. In 2012-13 the Labor Government carried out only 523 compliance checks, while in the past financial year the Coalition Government carried out 3,100.
This Government will continue its tough stance on compliance and it is fast-tracking some of the strengthened compliance arrangements in this legislation to ensure they take effect from Royal Assent.
Currently, once a child care provider is approved by a state or territory regulator, the Commonwealth has limited grounds for not approving fee assistance for parents using that service. Compliance measures being brought forward in this legislation will include the power for the minister to make legislative instruments to place a pause on child care service applications for fee assistance. Such a pause may be made in relation to a particular service type for a defined period.
This measure will help us to address excessive growth within a particular child care service type, specifically where there are concerns about proven or alleged noncompliance with family assistance law.
Closure and transitional arrangements for child care payments
The bill includes consequential amendments and will provide transitional provisions to support the replacement of existing child care payments with the Child Care Subsidy and Additional Child Care Subsidy.
Conclusion
By way of conclusion, this bill, and the Jobs for Families Child Care Package more generally, will deliver significant and greatly needed reform through a simpler, more affordable, more flexible and more accessible childcare system. I commend the bill to the Senate.
I rise to speak on the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016. I would like to begin by saying that Labor supports more investment in child care and we have long been calling for that. But Labor does not support the government's cruel and crafty way of making important and necessary investments in child care on the one hand whilst cutting family payments on the other hand. That is why this bill was so unpopular with the Australian community. Whilst Australians understand and support the need for and value of more investment in child care, they will not support that when it comes at the cost of making life harder for families with the passage of the other related but separate bill late last night. That is unfair and it is bad legislation.
Labor is pleased that the government finally saw sense and bowed to overwhelming community pressure to split the bill so that we can deal with these important childcare measures on their own. For years, the government has been warned about the serious problems with their childcare changes but, in typical style, this government has arrogantly ignored stakeholders and stubbornly refused to fix the monumental flaws. Analysis by ANU reveals that these childcare changes will leave one in three families worse off. A total of 330,000 Australian families will be worse off and 126,000 families will be no better off. That means almost half of all families—555,000 families—will be either worse off or no better off.
Of particular concern is that more than 71,000 families on incomes of less than $65,000 will be worse off. The harsh activity test will leave children in 150,000 families across the country worse off. For those vulnerable families on incomes less than $65,000 access to early education could effectively be cut in half from two days a week to one. We are talking about the most vulnerable and most disadvantaged children in our community—the very children who most need access to early education to help equip them with social, emotional and cognitive skills to prepare them for preschool and school. Cutting access to early childhood education for these families will only make problems worse. All children should receive quality early childhood education which should be recognised and used for its powerful ability to address social problems and to address disadvantage in the longer term.
Labor is particularly concerned about the effect of these changes on Indigenous children who already have low early education enrolment rates than the average. The Secretariat of National Aboriginal and Islander Child Care has warned:
These changes will diminish our kids' potential to make a smooth transition to school, compounding the likelihood of intergenerational disempowerment and unemployment. Children will fall behind before they have even started school and suffer greater risks of removal into out-of-home care.
The government's package will scrap the Budget Based Funded Program that provide subsidies to services. The government has been unable to explain how pushing 300 Indigenous and mobile providers into mainstream funding arrangements will work. The government has also been unable to guarantee that these services will not be forced to close. The uncertainty is impacting on these services and these families now. Budget Based Funded Program services provide early education to about 20,000 children who are, yet again, amongst the most vulnerable and disadvantaged in our community. It beggars belief why the government would take the axe to programs that provide such benefits to children who desperately need guidance, support and education.
The government has also taken the decision to introduce a new complicated activity test which would remove the current entitlement of all children to receive two days of early education. This would see about 150,000 families worse off. As I mentioned earlier, the new test effectively slashes this subsidised access in half for families and it removes eligibility completely for some children in families with non-working parents. Families earning over $65,000 that do not meet the activity test will not be eligible for any subsidised care at all. The most common characterisation of families in this situation would be two-parent families where one parent—usually Mum—stays home. Currently, these families have access to at least 24 hours of subsidised care a week, with the hourly rate adjusted down as the family income rises. What these harsh changes mean is that, if a child's parents work casually or part time, which is increasingly the norm, their likelihood of accessing stable, subsidised early education is seriously compromised. The Social Policy Research Centre at the University of New South Wales has said, 'the new, three-tiered activity test introduces a level of complexity never seen before in the Australian childcare system.' They note, 'the Bill introduces provisions that will increase the complexity and reduce accessibility and affordability for some of the most vulnerable children and families.'
There should not be any need to make a case for the importance of investing in early childhood education, but sadly, with this government, there is a need. Labour will continue to make the case over and over again for early childhood education, as we have seen so capably delivered by the advocacy and representations made by the shadow minister for early education, the Hon. Kate Ellis, from the other place. We know what a strong advocate she is for ensuring that families and children, particularly those from low-income households and those who suffer from disadvantage, get access to high quality child care close to where they live to provide them with the best start in life. This is a core Labor value. How do we support those families? We know the evidence is so clear that children who get access to high quality early education, professional attention of the early childhood educators in a childcare setting, are much more likely to make the transition to formal preschool and school more easily and have better outcomes in the long run, not just through school but also in later life. That is how essential it is that we get the policy settings for child care right. We know that those policy settings outlined in this bill have some major deficiencies that will prohibit Labor supporting this bill, unless those issues are addressed.
I would say, again, that this legislation goes to the chaos and dysfunction of this government that we have seen on display this week in the shambolic way that they deal with their legislation program. We have bills coming in here introduced the moment before I stand on my feet to speak, through a motion supported by the crossbench, enabled by the Nick Xenophon Team, One Nation and Senator Hinch—all voting to ram through legislation without proper process. Whilst the government and the crossbench might be having all these negotiations and are able to elicit information about what potential amendments might look like and how they might impact on families, the Senate as a whole is being denied that. It is a major problem that I would urge crossbenchers to think about, particularly those who have stood in this place and argued for transparency, proper scrutiny and proper process. We have seen this week at every step and on every major piece of legislation that matters to the government that the crossbench have enabled due process and the proper role of the Senate to be absolutely abused.
Regardless of whether there have been previous inquiries and analysis, on the legislation that has been tabled in this place on the social security amendments, the minister introducing it in this place did not even know what was in it when he was asked, let alone anybody else knowing what was in it. We have the same problem here with the childcare bill. Even though those changes have been contained in other bills, we are unaware of the government's position on some of those fundamental issues around the activity test, support for the Indigenous mobile services and also the budget-based funded program. How is the government going to deal with that? That is critical to the support that Labor can provide.
We want to see improvements for child care. We get that people are finding it hard to make ends meet with childcare costs growing rapidly. We get that rising inequality is putting real pressure on those families that need access to high quality child care the most. We understand all that, but we need some assurance from the government that they are going to fix the major problems with the legislation that has been introduced into this place this morning. Again, we say that the process around this has been absolutely shambolic, to say the least. One of the most fundamental tests for any government is its ability to handle its legislation program in a way that is coherent and allows the normal and proper processes of the parliament to execute its responsibilities. And I am afraid to say that this week we have not seen any of it, and it looks like next week may be going down the same path, with deals around ramming through legislation around section 18C. That is a real disappointment.
Through the Hon. Kate Ellis, Labor has been arguing for improvements to early education from this government for the last three years, and it is one of the achievements of the government that they have managed to do nothing for all that time. They make promises and constantly talk about pressures but actually deliver nothing. Labor on the other hand have been out consulting with the sector, ensuring that we are able to understand what the needs of families are, where the pressure points are and, as always, standing up in support of those families who we know would be benefit the most from access to early childhood education.
This legislation is important because it goes to those issues around access to child care. I know from my own experience here in the ACT just how much of a transformative experience it can be for some families to have access to child care, particularly subsidised access or, where they cannot afford it, secure places in both long day care and occasional care settings. As I outlined prior, there are some issues that we see around the activity test. We have been very clear on that. I think the Hon. Kate Ellis has written to the minister in the last couple of days outlining Labor's position in relation to the bill and the concerns that we have. I am unware that the minister has responded to that letter at this point in time, which, again, goes to the completely inadequate arrangements in place to deal with this legislation in such a hurried way. To have a motion pass this chamber that supports dealing with these bills earlier this week, without the legislation even being made available, is setting a new low for this chamber, I think, and one that we cannot allow. I would again urge the crossbench not to consider each one of these deals in isolation but to consider the bigger picture, the role that the Senate was established to play and the role we are being asked to play now. Instead of being the house of review, the check on executive power—with significant powers to inquire into legislation, call for documents, understand the issues and question public servants with responsibility for designing these laws—all of that, seemingly, for the next two weeks does not matter, because we can just pass a motion on a Wednesday morning and have all the legislation the government wants dealt with, because we have a compliant, enabling crossbench that either wants this legislation to go away or does not want to have to do the work that is required to understand all of the issues and how they interrelate to everything else. For example, how does this relate to the changes that passed the Senate last night? We will have no opportunity to discuss that.
We are certainly hearing rumours that deals have been done yet again. I am sure at some point in this debate today we will find out who has done what deals. I doubt we will get to understand what the pay-off for those deals has been, but I would certainly encourage the government to come clean on what those deals are so that we can have an informed debate during the committee stage and have the opportunity to examine whatever deals have been done. But Labor remains concerned about those fundamental aspects of the bill, and we will not be in a position to support this bill, despite our desire to address the problems in child care and to see improvements, particularly for low- and middle-income earners, in how child care fits in and enables them to live their lives, and despite our driving the agenda on improvements in child care and child care reform through the work that the Hon. Kate Ellis has been leading for the government. We have issues around the activity test and the fact that we absolutely want to make sure that children have access to hours of care and that that is spread over two days, not over one. We think that fundamentally that is a problem that needs to be addressed through this legislation. We cannot deny those children the care that they need simply because the government have not understood the full implications of the changes they have made. We will have to examine that more closely throughout the course of this debate this afternoon.
This is a very unsatisfactory process. Our shadow minister has not had the courtesy of the minister replying. The minister has not engaged with the opposition, despite attempts to engage and to understand what the government's thinking is. Despite our objections to the way that this is being pushed through, we have sought that engagement, and the government seemingly, because they have been doing their deals with everybody else, have not had the courtesy to address the concerns that Labor has raised. We will continue to raise them, and we will wait and see what the arrangements have been with others.
We hope that others, in signing up to whatever deal they have, have not sold out children, particularly those from the most vulnerable backgrounds, who need this Senate to stand up for them and make sure that we are putting in place a framework that will provide them with the best access to child care and therefore the best start to their lives. We hope that has not been sold down the river just as 1.5 million families were yesterday because the crossbench got into some cosy arrangement with the government to sweep that through in one day of sitting without the proper scrutiny. I hope this childcare bill does not follow the same path because the interests of the crossbench are treated as greater than those of the community as a whole. That is who we will stand up for: we will stand up for the families of young children who need the Senate and the parliament to stand up and make sure that whatever arrangements, changes or reforms get through are in the long-term best interests of those families, their kids and the kids that come after them, but also the sector so that they are able to manage these changes and to deliver the high-quality care that so many families rely on.
We are not convinced that that is going to be the case today. We remain to be convinced. We know the sector has concerns. We know the sector is hearing rumours about what arrangements the government has made with the crossbench. Again I would just reaffirm how completely disrespectful that is to the childcare sector who deliver the care. They are also sitting around listening to rumours about what arrangements have been stitched up, seemingly in the dark of night, to get these changes through. It is not adequate. We should not be pushing this through, and the government should be engaging with everyone in the Senate in the interests of children in this country.
I rise to speak in support of the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016. The bill seeks to amend various acts in relation to family assistance for child care. Key measures in this bill centre on the introduction of the streamlined childcare subsidy, replacing the childcare benefit and childcare rebate, and the introduction of the new supplementary payment, the additional childcare subsidy, which provides additional financial assistance for children at risk of abuse or neglect, families experiencing temporary financial hardship, families transitioning to work from income support, grandparent carers on income support, and low-income families in certain circumstances. The bill also sets out new approved provider service requirements due to come into effect next July. These requirements provide for an enhanced compliance network. As a result of these reforms, more than 815,000 families will receive a higher level of fee assistance than they are currently able to access. In short, millions of Australians will be better off because of these reforms.
Debating this bill is long overdue. It was hampered by the government's decision to package up the bill with welfare savings measures in the original Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017. This has delayed providing families with much-needed relief for rising childcare costs. Thankfully, the government made the sensible decision to decouple the reforms from billions of dollars of deep cuts to payments received by families, young people, pensioners and working parents.
Data from the Department of Education and Training has revealed that the average hourly fee for all childcare services rose by almost eight per cent in the year to June. The average cost of long-day care services, which are used by 540,000 families, jumped to $8.90 per hour, up 6.3 per cent, in the year to June. These families are now paying $740 per child more a year, based on the national average of 21.8 hours per week for 48 weeks of the year. For many families the costs result in many parents, predominantly women, regretfully leaving the workforce. The department's long-term forecast predicts childcare costs hitting $233 a day in Sydney, $175 a day in Melbourne, $157 a day in Brisbane, $152 a day in Canberra and $138 a day in Adelaide. The measures contained in the bill will provide much-needed relief to working families that rely on child care.
Australia has one of the lowest levels of female participation in the developed world, which acts as a handbrake on workforce productivity and economic growth. The Grattan Institute estimates that, if Australia could increase our female workforce participation rate to that of Canada, our economy would be $25 billion better off. This bill represents a substantial investment by the government of approximately $40 billion in childcare support over the forward estimates, supporting working mothers and working families. Modelling by PricewaterhouseCoopers shows that the childcare package will deliver significant benefits to the economy by helping more women to participate in the workforce. These women will pay an estimated additional $850 million in tax, which will serve to benefit our economy.
There is no doubt that early childhood education and care are integral to the health and wellbeing of Australian children and play a vital role in their development and preparation for school and in enabling parents to work. The Nick Xenophon Team supports the delivery of a genuine, much-needed reform for a simpler, more affordable, more accessible and more flexible early education system.
In relation to the activity test, the bill provides for 12 hours of subsidised care for families on incomes of less than $65,000 a year, without the need for them to meet an activity test. If a parent studies, works or volunteers for just four hours a week—that is less than an hour a day—they are able to access additional hours of subsidised care. The Nick Xenophon Team is aware that there was a push by some to raise the subsidised care from 12 to 15 hours per week. However, in order to secure these additional hours, many families may have had to endure deeper cuts to their family support payments. We were not prepared to ask families to suffer those cuts. As a result, we have agreed to the government's proposal of 12 hours of subsidised care for low-income families without the need for those families to meet an activity test.
In relation to the consultation process in the development of the childcare package, I provide the following comments in a very constructive sense. There are important stakeholders such as SNAICC, the national non-government peak body in Australia involved in promotion of the rights, needs and aspirations of Aboriginal and Torres Strait Islander children and families. SNAICC was not invited to be part of the initial reference group during the consultation period on the design of this package. When I questioned the department of education during the Senate inquiry into this bill late last year about the number of Indigenous organisations involved in the consultation process, the department was unable to name a single organisation.
If they had consulted with Indigenous organisations in the childcare space, the government would have more properly understood the importance of early childhood education and care in Indigenous communities. It is imperative that the department reviews its consultation procedures to ensure that all appropriate stakeholder groups are comprehensively consulted with when reform packages are being developed. Consultation during the early stages would ensure that what is proposed meets the needs of the most vulnerable and the most marginalised.
During the Senate inquiry into the bill, I raised concerns about the bill's apparent silence on the future of budget based funding. Budget based funding was introduced with the intention to allow early childhood education and care to be conducted in regional and remote areas in which a market would not otherwise sustain them. Budget based funding is vital in supporting approximately 19,000 children, with nearly 80 per cent of budget based funding going to early childhood education and care in Indigenous communities.
In their submission to the committee regarding the effect of the cessation of BBF, SNAICC stated:
… engagement in early childhood education reduces risk of harm to a child, and subsequent involvement with statutory child protection authorities, as well as reductions in remedial services and criminal behaviour in the longer term. Holistic community based Indigenous services are a central preventative measure to strengthen families and prevent child abuse and neglect.
That is why the Nick Xenophon Team is pleased to hear that concerns about the impact that the cessation of budget based funding would have on Indigenous communities and the resulting effect on efforts to close the gap have been listened to. We have worked with the government to ensure that Indigenous children and children in rural and remote communities continue to have access to early childhood education and care, just as any other child in Australia does.
We understand the government has committed to protecting existing childcare funding for remote and Indigenous communities by maintaining the $61.8 million in funding for these services. We also understand that an additional $49 million for services in remote communities or highly disadvantaged communities to commence or expand their services has also been committed. This will ensure that budget based funding programs continue and support the most vulnerable children in our community. That announcement, along with the suite of measures in this bill, will make a significant difference to the lives of Australia's most precious resource: our children.
As Senator Gallagher outlined to the chamber, Labor has significant concerns about the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016, the legislation that is before us today. In insisting that the only way to pay for childcare changes was through cutting family payments, the government has agreed to remove the changes from the omnibus cuts, and here we are today. I think that, while this might be a step forward, there are significant problems with the package that is before us. It is interesting to hear Senator Kakoschke-Moore's remarks about some of the compromises they may have made.
I have serious concerns about the package, and I am particularly worried about its impact on vulnerable children. We have not had the opportunity to see what deals the crossbench has done purportedly to fix this problem. There are serious flaws in the government's proposed changes to child care. We have made it clear that we will support the government's proposed changes if it fixes its package. So far it has refused to do so. It clearly has some negotiation going on, but not with us.
We have a very clear benchmark for what we would consider, to make sure that this package does not take services away from the most vulnerable in our community. The government has not addressed workforce participation concerns for parents to bring greater confidence and certainty to our sector, nor has it addressed the high-churn, low-pay conditions for many early educators. They are a professional work force and they deserve professional pay for the education and care they provide to our children—indeed, to my own son. The government has not addressed waiting lists. Parents are still waiting for too long for child care, which means children are being denied access to crucial early childhood education. We need to consider capping fees that providers can charge parents. That is not the same as capping the assistance that is available to parents. Labor has been working on and pointing out these problems for a long time; they are not new. We would have expected more from the government in bringing forward this package. Most fundamentally, we should not have to accept and will not accept child care changes that will disadvantage those who are already disadvantaged. The changes that are in the legislation before us do just that.
The bill cuts in half access to early childhood education for many vulnerable and disadvantaged children. What we have in this bill effectively cuts access from two days a week to just one day for families earning less than $65,000 per year. The ANU, in research, has shown that these changes will leave one in three families worse off. It has shown that 330,000 families will be worse off and 126,000 will be no better off—that is, almost half of all families, half a million families, will be worse off or no better off. Most importantly, low-income families with earned income of less than $65,000—there are 71,000 of those families—will be worse off. What is attached to these changes is a harsh activity test that will leave children in 150,000 families worse off. We are talking about access to just two days care and the need to maintain that. This is a change which particularly impacts the most vulnerable children in our community. We have been working with many stakeholder organisations to identify these problems for more than 18 months.
It is clear that the government has shifted around the edges of admitting that there is a significant problem at the heart of these changes, but it has papered over them. Perhaps it has been dragged kicking and screaming by the crossbench to do something about it, but we need to make sure that whatever is on the table fundamentally does not disadvantage these children. It seems as if Malcolm Turnbull does not care about the families that need this benefit the most, those with our most vulnerable children, because they are not adequately included in the package that is before us. Indeed, the government sought to make savings at their expense.
Community groups, service providers and advocates for vulnerable children have all come out against changes, to make sure that vulnerable and disadvantaged children continue to have access to at least two days of early education a week. They include organisations like Australian Childcare Alliance, Early Childhood Australia, Family Day Care Australia, UnitingCare, Anglicare, the Brotherhood of St Laurence, United Voice and more. These are organisations that understand what children, particularly vulnerable children, need in order to grow up safe and happy. At times, while a family may be suffering some complexities or dysfunction, access to those two days of care a week is what might enable a mother to go to drug and alcohol rehabilitation counselling, to go and sort out other issues in life, so we should not be depriving children for whom sometimes that time a child care is the most stable and nurturing time in their week.
So it is of significant concern to me that what the government proposed was to reduce their access from two days of care a week to one day. That is not meaningful when you are trying to create a nurturing, stable environment, particularly one where carers—early childhood educators—within a childcare centre are able to form a relationship with a child and monitor their learning and development. You cannot do that in one day a week, and you certainly cannot do that for the most vulnerable children, who may have more complex needs.
Quality early childhood education is really important for all families. We cannot underestimate how important are those early years, from zero to three, when a child's brain develops and their wiring is laid down. It is particularly why I am very grateful for the quality early childhood education that my son has received. He has been accessing child care since he was seven months old, and he is now 2½. Evidence tells us that a person's life successes, health and emotional wellbeing have their roots in early childhood. We know that if we get it right in those early years we can expect children to thrive and to succeed throughout school and their adult lives.
On that note, I really want to express my own personal gratitude to the early childhood educators at my son's childcare centre at Marjorie Mann Lawley in Mount Lawley in Western Australia. I can see the importance of his carers having had time to attach to him. I cannot help but think of what a dreadful situation it is to have children who need that attachment and time with their early childhood educators but who are not able to get that successfully. They are not able to get anything meaningful out of their early childhood education because they are there for just one day a week. Essentially, it becomes a babysitting service for that day, because you cannot do the things you need to do with that child in monitoring their wellbeing over time, as early childhood educators are well positioned to do.
We need caring and supportive environments that promote optimal early childhood development and which increase a child's chances of successful transition to school. We know that this promotes children's chances of achieving better learning outcomes while at school, and better education, employment and health after they leave school. This starts in those very early years.
We know that seriously negative experiences, such as neglect and abuse, on the other hand, affect brain development in significant ways and contribute to emotional and behavioural problems later in life. Indeed, I have been discussing these issues as part of Mental Health Week with people who are here with the Mental Health Advocacy Service today. It is really about how we do need to support infants and young children in their attachment to family, because that is where episodes of anxiety and depression can in fact come from later in life. These experiences that a child has in its early years can support learning and positive development, or badly interfere with it.
As the shadow minister for families and communities, I know that the government's proposed childcare changes will impact most on the most vulnerable children and the most disadvantaged people in our society. They impact negatively on Indigenous children, children who already have lower early education enrolment rates than the average child in every single state and territory across the country. I have spoken to stakeholders and providers, who have been alarmed and who have expressed their serious concerns. They have pleaded directly to me about the uncertainty for their services that this package has caused. In fact we need to be doing more, not less, for these services.
So we have seen a package that would scrap the Budget Based Funded Program that provides subsidies to services. We are yet to have the explanation about how pushing 300 Indigenous and mobile providers into so-called 'mainstream' funding arrangements will work. We are seeking a guarantee that those services will not be affected and will not close. These services impact on and provide services to about 20,000 children. These are children who need more from the government, not less.
Deloitte Access Economics has found that the changes to the Budget Based Funded Program will disadvantage Indigenous children, and that 54 per cent of families will face an average fee increase of $4.40 an hour. Forty per cent of families will have their access to early education reduced and over two-thirds of Indigenous early childhood education services will have their funding cut. I cannot begin to speak of a $4.40 an hour cut: when you are already on a low income that is simply not sustainable for households.
On placing Aboriginal and Torres Strait Islander services in competition for funding with mainstream providers under the Community Child Care Fund: in doing so, the Commonwealth is generating a system that has the potential to marginalise small-scale community organisations and to support larger established organisations to secure more funding, actually eroding the local community cultural leadership in service delivery. That is what is working in these communities; they have to have childcare services and early education and care services that are connected to communities. Otherwise, families will not come near them—they do not trust them. I have confidence in my son's childcare centre because I feel culturally connected to it at a community level. I cannot imagine what it would be like to send your child into one of these services if it is a cultural unknown to you.
While alternative funding arrangements have been proposed for these services, we do not have firm guarantees. As it stands they may cease to exist, leading to an increased service gap for vulnerable Aboriginal and Torres Strait Islander children. I am particularly concerned about children in remote areas.
The current government has made a commitment to increase places for Aboriginal and Torres Strait Islander children by 5,000 over the first three years of the package, to redress the current 15,000-place early learning gap. I note that when he was minister, Scott Morrison stated in relation to the package:
The Government is committed to Indigenous children having the same opportunities as other children to access child care and early learning.
But again, the bill before us is contrary to this statement. Independent analysis of the changes by the ANU shows that vulnerable and disadvantaged children will have their access cut in half, and that many others will be pushed out of the system altogether. Indigenous and country services will also face closure.
We know that SNAICC, the Secretariat of National and Islander Child Care has been working hard to get these issues brought to the government's attention. Indeed, it has taken the government a long time to listen. This is unacceptable, and we on this side of the chamber will not allow that to happen.
Instead of having this bill as a driver for the positive change that ATSI children need, we need a government that is prepared to commit to addressing the 15,000-place gap in early learning. We need more places and more access. Malcolm Turnbull and the government have glossed over the effect that these 'reforms' will have on vulnerable children.
We will always stand up and fight for our most vulnerable children, including fighting for access for our Indigenous children. We will stand up and say we cannot support a package which would see more money going to middle-class families and less money going to the most disadvantaged and vulnerable children in Australia. It is, in my view and in Labor's view, immoral to turn our focus away from the children who most need our care and protection and who most need us to stand up and fight for them.
In that sense it is extraordinary that, after all this, it is rumoured that the Turnbull government has set aside $16 million to run an advertising campaign to promote this revised package. If that is the case, I am appalled.
I want to make some brief remarks about the activity test, because I do believe that there are great flaws in the activity test that has been put forward. The 12-hour safety net for single-income families is not equal to two days care, as the minister has claimed. Labor and stakeholders across the sector are calling for an increase in the available hours so that children can continue to access at least two days care. As I highlighted before, we are talking about Indigenous children and other vulnerable children. This is a fundamental test. Your access to care for those two days should not depend at all on your workforce activity.
This is another example of a government that, sadly, has all of its priorities wrong. As we have said time and time again, you are focused completely on giving more to those in our society who already have the most and taking from those who already have the least.
Removing access to child care increases the chances of our most vulnerable children falling through the cracks. We know it is a sad reality that child care provides some children with the safest environment they are ever in. Child care can play a really important role in the early detection of an abusive or neglectful family environment, and a child's time at child care may be the only time they escape such an environment. Child care plays a very important role in assisting and supporting all families that access it—in particular, disadvantaged families—and in protecting vulnerable children.
I worry that the changes in this bill will bring disadvantaged families to breaking point and will cause lifelong harm to vulnerable children. I urge the government to fix the flaws in this bill. We cannot and should not punish the most disadvantaged in our society, especially not our children. I really want to thank all those that are involved in the early childhood education and care sector for the love, care and development they provide to our children.
Jacki Weaver, when she was a struggling young actress, long before she became a doyenne in Hollywood, admitted in later years that she once stole a bottle of milk off her neighbour's veranda. She did it because she was a single mum with a young son, Dylan. She would haul him around with her to auditions and to the theatre, and he would be babysat by people in the orchestra pit, because back then there was no single mother's pension and there were no childcare benefits at all.
I thought, when I read the omnibus bill: how things have changed. Don't get me wrong—because I have supported and I will support most of the changes to the childcare subsidies, especially for the lowest wage earners, including many single mums, who now will be getting 86 per cent of their childcare subsidised—but, not having any young children, I was shocked when I saw a graph produced by the government, a very impressive looking graph, that showed that wealthy Australian families earning between $350,000 and $500,000 had been getting a 50 per cent rebate subsidy on their child care. Now, that is mad, that is crazy, and I will be moving an amendment to make that go to zero. When you get $350,000 a year, you will get zero taxpayer dollars in childcare subsidies.
Having listened to Senator Pratt just a few minutes ago, when she said the opposition will not support giving more aid to middle-class families at the expense of other people, I hope that she and Senator Cameron will vote in favour of my amendment to take all taxpayer-funded child care away from people earning between $350,000 and $500,000 a year. I cannot see parties with a proud history of protecting workers, and working for the people, voting against an amendment which would stop people who earn half million bucks a year from getting taxpayer dollars from an increasingly bare larder.
I do support Senator Kakoschke-Moore's comments, the Xenophon team's comments, on the government's assurances about the importance of early education for Indigenous children. So go and have a look at this graph. Gloom and doom have been coming from the Labor Party and from the Greens, but what is going to happen when this bill passes is that nearly a million families, on average, will receive more. Nearly a million families will be better off. Just under 200,000 families, 180,000, will receive the same level of subsidy as they get now. Just under 50,000 families, on average, will receive less. About 23,000 families, who are earning $350,000 or more, will receive nothing, and I believe that is the way it should be. So I will be putting up that amendment, which I believe the government support, and I hope that Labor and the Greens will also back it.
I know that Senator Leyonhjelm has an amendment which he is putting up in which he wants the phasing out, the tapering, of these benefits to be even harsher, and I agree with him that $350,000 is too high. I hope that he will get some support for his idea that the taper should come in from about $200,000 and go down to $350,000, when you get nothing. He will be putting that amendment up. I will support that. Then I will have my own amendment, and then I will support the government.
Here we are for the second day running, debating legislation where it seems that the government is in fact proposing something different to the conversation that is being had in the chamber. As we heard from Senator Kakoschke-Moore, she is anticipating a change in the government position on a number of key issues, but no-one in this chamber has been informed about what is actually going on. What piece of legislation is it that we will be asked to vote upon later today? I think it is absolutely appalling that, where all of the evidence says that we need action on child care, action to support women's participation in the workforce and action to support the development of children, our most important asset, it has taken three years for a package to be brought into this chamber, and we do not even know what it is. We have not heard from the minister about what his intentions are. We know nothing except from the little crumbs let loose earlier in her remarks by Senator Kakoschke-Moore.
What we do know of course is that the premise for this entire package is that, if you want any changes at all to the childcare arrangements, you are going to have to pay for it by cuts to families. So the whole structure of the package that is being put before the Senate, the legislation that was considered last night in combination with the legislation today, is that you rob Peter to pay Paul; you take money away from families with one hand, and perhaps you give it back to those same families, or perhaps you give it to different families, with the other. There is no consideration of how we might appropriately fund families and particularly women, who bear the bulk of the burden in relation to child care in this country. There is no consideration of ways to do that except by means that hurt working-class and middle-class families. It is a hallmark of this government's approach to policymaking and the budget that it has chosen to link these two bills together.
I want to say, though, that we seek to be a constructive player in this process. We have made clear the changes that we think are necessary to bring this part of this package up to a level that is acceptable. I am going to say that we do not think it is good—there is so much that we need to do in relation to early childhood in this country—but there are some threshold issues in the package that the Senate is required to consider today. The first of those is that we seek changes to the activity test. As you have heard from our earlier speakers, we are deeply concerned that in the arrangements presented in the legislation as it stands at the moment—the information that we have about it—the changes to the activity test will halve access to early childhood education for disadvantaged children. We are similarly concerned that the lack of funding guarantees for Indigenous and mobile budget based funded services means that those services are in jeopardy, and the families who rely on them will also have their access to early childhood services reduced.
I want to talk a little bit about what the stakeholders had to say in this process. These questions have been considered for some time, and it has taken a very long time for the government to bring a package into the chamber. What did the stakeholders say? They were particularly concerned about the linking of cuts to family payments with these changes to child care. Investment in early education should not be held hostage to family tax benefit cuts, and yet that is exactly what we have seen in this chamber.
The Australian Childcare Alliance recommended that the implementation of this support not be delayed by any other legislation. The Early Learning and Care Council of Australia recommended that we:
Decouple funding for the Jobs for Families Package from cuts to Family Tax Benefit payments.
That was when we were considering another version of the legislation. They said that child care was an initiative that should stand on its own merits. The Parenthood said:
The link to Family Tax Benefits looks more like a political link rather than a budgetary one.
It is a political strategy which will adversely impact the same families the government argues its new childcare reforms will especially benefit.
Goodstart Early Learning also made a submission, and they said:
As families are struggling with cost of living pressures across the board, we strongly urge the Government and the Parliament to proceed—
around reform of childcare—
… without any further cuts to family payments.
That is not what happened last night. Last night, certain parties sitting on the crossbench fell over themselves to rush over to the government's side and vote for a series of cuts to family payments that will impact greatly on families. These are not wealthy families. These are families for whom family tax benefit makes a great deal of difference. It makes a difference in their ability to pay for school excursions. It makes a difference in just going down and getting those school shoes at the beginning of the school term. In some instances, it makes a difference in whether or not they are putting groceries in the cupboard.
There are many ways that we can go about budget repair, and no-one in this chamber says that this ought not to be a priority for government or for the parliament. But the priority ought to be proceeding with budget repair that is fair, not budget repair that targets—as it so often does with this government—the poorest people, working families and people who struggle to make ends meet from week to week. Unfortunately, the entire structure of this package is predicated on exactly this approach.
In relation to the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016, which is before us now, we have called for changes to the activity test. Under the new activity test, families will receive 36 hours per fortnight when both parents undertake activities for eight to 16 hours per fortnight, 72 hours per fortnight when both parents undertake activities for 16 to 48 hours per fortnight and 100 hours per fortnight when both parents undertake activities for 48 hours-plus per fortnight. It is pretty complicated.
I think most people understand that contemporary workplaces are not quite as orderly as they might once have been. Many Australians, particularly Australian women, work in workplaces where their hours are highly variable, but that is not how child care works. Childcare businesses require you to take a place and pay for it every week whether you need it or not, so there is a mismatch between the kinds of activities that the parents in need of child care might be undertaking and the kinds of services that are conventionally provided by long day care. Many of the submitters to the various Senate inquiries into this matter have called upon the government to consider a more flexible arrangement, in terms of the activity test, that responds to the realities of work for Australians and, in particular, work for Australian women.
Of course, the other component of this is that the practical effect of the changes to the activity test is to halve access for disadvantaged children. That is completely unacceptable, and we stand alongside those stakeholders—those practitioners, those childcare providers—who have pointed out to the government that this is completely unacceptable.
It is no exaggeration to say that access to early childhood education delivers a benefit for the whole society. This is not, as some people would have you believe, a benefit to middle-class families. I heard Senator Hinch's remarks before. This is an investment in the productivity of Australian workplaces, the productivity of Australian women and the education of Australian children. These are benefits that flow right across the society, and the productivity commission, when it looked at this question, was able to conclude that investments of these kinds yield enormous benefits to the Australian economy.
I want to talk in particular about what one important stakeholder has said today about this particular question of availability. Early Childhood Australia issued a media statement today begging the crossbench to stand firm on the childcare bill amendments to make sure that the bill that is passed in this chamber is in the best interests of children. In particular they said, 'We are calling on the Xenophon team and other crossbench senators to at least support an increase to 15 hours of care as a baseline to allow the most vulnerable children consistent access to two days of care a week.'
Unfortunately, that is not the advice that Senator Kakoschke-Moore has just provided to this chamber. Senator Kakoschke-Moore has indicated that they are happy to settle at 12 hours. They think it is too expensive and too difficult to pursue the baseline test that has been set by all of the stakeholders—all of those who actually work with children. As negotiators, it is pretty poor, because these guys have settled for something which is completely inadequate and which the sector is saying should not proceed. The sector and Early Childhood Australia calls on the Senate to block the bill today unless there is an amendment to increase the base entitlement to 15 hours a week. It could not be clearer. The early childhood educators have got a very clear message for senators here today. Unfortunately, we have already heard from Senator Kakoschke-Moore that they are not interested in pursuing that.
I say to the Nick Xenophon Team—to Senator Xenophon, to Senator Kakoschke-Moore, to Senator Griff—that they need to reconsider this, that it is not good enough to go to an election as they did, promising to do all the right things on child care, promising that they will represent the people of South Australia, promising that they will represent their interests in this parliament and then to come into this chamber and say: 'Oh, we thought it was all too hard. The government told us they couldn't do it, and so we decided not to press for it in our negotiations. We've settled for something completely inadequate, something that the sector says they don't want. We settled anyway.'
The sector has also indicated that they need to make the income threshold for the base level of care increase and they want changes to the activity test to make it more flexible for families who are in casual or unpredictable work situations.
I think it is time for government senators—for the minister or the minister representing the minister—to come in here and tell us what is proposed. We hear rumours that an agreement has been reached, that something different is going to be presented to this chamber, but of course we have no detail. Opposition senators find themselves presenting their thoughts about the bill and about the future of early childhood education without the benefit of any understanding whatsoever about the secret deal that has been agreed between the Nick Xenophon Team, as alluded to very directly by Senator Kakoschke-Moore, and the government. But I can say this: if it is, as Senator Kakoschke-Moore indicated, failing to deliver on the 15 hours which the industry has indicated is the benchmark for support for this bill then the Senate ought not pass the legislation. This is a problem, and Early Childhood Australia has put a very clear marker in the ground for all crossbench senators to consider. It is extraordinary that the Nick Xenophon Team has come in here today and explained that they do not intend to heed that advice.
Of course, the other area where Labor seeks action is around Indigenous children's services. Thus far—and who knows if something is about to change—the government has not guaranteed ongoing direct subsidies to around 300 Indigenous and mobile services that are accessed by 20,000 children mostly in rural and remote communities. I would be interested in understanding what the National Party think about this, because we hear a lot from the National Party about their role in supporting rural and remote communities but do not hear very much from them at times like this. We hear almost nothing. We hear a lot about their support for Indigenous Australians, but we hear nothing from the National Party about the shortcomings in this bill. Deloitte found that these changes will seriously disadvantage Indigenous children. They found that 40 per cent of families—
Debate interrupted.
It being 2 pm, we move to questions without notice.
My question is to the Minister representing the Prime Minister, Senator Brandis. Today Australians woke to the horrific news of an attack at Westminster in London. On behalf of all Labor senators, and I am sure all senators, I express our solidarity with the people of Britain, our sympathy for those lost in this terrible attack and our condemnation of terrorism in all its forms. I ask the minister to update the Senate on the steps the Australian government has taken to support and offer assistance to Britain on behalf of the Australian people.
Thank you, Senator Wong, for giving me the opportunity to update the Senate on the events in London overnight. As senators will be aware, five individuals have now died and around 40 people have been injured in the terrorist attack on the British parliament building yesterday afternoon, London time. London metropolitan police have confirmed that the five deceased include one police officer, three civilians and the attacker. While the investigation is still ongoing, British authorities have confirmed they are currently operating on the belief that this attack is the result of Islamist related terrorism. I am sorry to have to tell the Senate that, contrary to earlier reporting, an Australian permanent resident has been hospitalised in London with injuries sustained in the attack. Our consular staff in London are offering her assistance.
As Prime Minister Turnbull said this morning, the attack on the British parliament is an attack on parliaments, freedom and democracy everywhere. We condemn the attack and are deeply saddened by the loss of innocent life. Prime Minister May this morning rightly described the attack as 'sick and depraved' and commended the exceptional bravery of the police and security services who continually risk their lives to keep their citizens safe. We stand in solidarity with the people of the United Kingdom and our thoughts and prayers are with them at this time. In the face of such tragedy, Australians can be reassured that our agencies and police forces are working relentlessly to keep us safe. May I conclude by echoing the words of the Prime Minister this morning: we will never let the terrorists divide us or challenge our democratic way of life and the freedoms which we cherish.
Senator Wong, a supplementary question.
I thank the minister for that answer. Given Australia's long and deep relationship with Britain, can the minister outline how our two countries are working together in order to defeat terrorism?
Yes, I can. We work at a ministerial level, at an agency level, at a policing level and at a diplomatic level to defeat and thwart terrorism. As Senator Wong knows, Australia and Britain are both members of the Five Eyes group of nations, the closest intelligence partnership in the world. Through the Five Eyes arrangements we share intelligence. I can tell the Senate that that intelligence sharing arrangement has been responsible for alerting Australian authorities to, and preventing, terrorist strikes at home. Our agencies and our police forces operate very closely together. They are close collaborators. There are officers of Australian police and agencies located with British agencies, and the reverse is true as well.
Senator Wong, a final supplementary question.
Can the minister outline how the government is working to counter violent extremism here in Australia and abroad to ensure early detection and the inclusion of diverse communities in such CVE activities?
Yes I can. The government has responded to the increased threat from Islamist terrorism in Australia and overseas by enacting the most comprehensive program of national security legislation reform in a generation. Each of the eight tranches of legislation, which I have introduced into the Senate, I am pleased to say have been passed with bipartisan support, and I thank the opposition for that. The government has also invested an additional $1.5 billion to support Australia's efforts in combating terrorism. Since the threat level was elevated in September 2014, our law enforcement and security agencies have disrupted 12 planned terrorist attacks in Australia, the most recent disruption being the Christmas Eve attack in Melbourne, which, had it been successful, would have resulted in significant loss of life. Sixty-two individuals have been charged with offences.
In the time remaining to me, might I remind senators of the National Security Hotline 1800 123 400, which all members of the Australian community should access should they have concerns about the behaviour of individuals.
My question is for the Minister for Education and Training, Senator Birmingham. Can the minister inform the Senate how the government's reforms to child care will simplify arrangements for families?
I do thank Senator Hume for her question and her interest in the Turnbull government's policies in this area. Our policies will, as I have told the Senate time and time again, deliver a simpler, fairer, more affordable and accessible childcare system in the future. Importantly, we are proposing to roll more than two payments, most notably the childcare benefit and the childcare rebate, into one streamlined means-tested payment, a new childcare subsidy.
But, far more importantly, this new subsidy will ensure the greatest level of support goes to the lowest income Australian families working the hardest. It will empower them to make more choices about the hours they work and when they work. We are talking about increasing support for those lowest income families from around 72 per cent of their childcare costs to around 85 per cent of their childcare costs. That will ensure they can access effective child care for around $15 a day. Families who are earning around $60,000 or $70,000 or $80,000 will not just be a few dollars better off as a result of these changes, they will, on average, be thousands of dollars better off each year. It will empower those families to be able to make the choice to work the hours that suit them without having to worry about the crippling cost of child care in doing so.
Our new fee mechanism will help to keep a lid on fee growth in the future, helping to ensure the ongoing benefits of these changes. Because of the inherent fairness in these changes, because they are better targeted and because they are shifting resources away from higher income earners towards lower income, I would hope and think that this policy should get the support from everybody in this parliament. These changes see a greater investment to the tune of more than $1½ billion in additional support that will flow into childcare subsidy and support to help those hardworking, low-income Australian families. (Time expired)
Senator Hume, a supplementary question.
Can the minister update the Senate on how the new family portal will help to make child care easier for families?
These are not just policy reforms we are pursuing; we are making sure the administration around them is also simpler with a new IT system and support that will reduce regulatory burden on services. It will make it simpler for parents at drop-off and pick-up times and in their engagement with the childcare system. As well, it will remove a range of red-tape measures around services so that they can be more flexible in the hours and the days they open, which is particularly important to services in rural and regional Australia that offer different hours to suit what the market can sustain in those communities and the support that they need. Our new IT system will mean that early educators and care workers will get to spend more time with children and less time on paperwork. They will actually be more focused on the things that matter and the IT system will ensure far greater compliance and guarantee that taxpayer dollars are going where they are needed and where they ought to go.
Senator Hume, a final supplementary question.
Can the minister explain how the changes will support families' choices to work?
These changes, these policies of the Turnbull government, will make it simpler for families to choose to work the hours that suit them because they will not have to worry if they are a low- or a middle-income family about the impediment of childcare costs in making those choices. It will empower an estimated more than 200,000 Australian families to choose to work more days or work more hours, or engage for the first time in the workforce. These are empowering decisions for those families; life-changing decisions in terms of their opportunity to return to work sooner, to work hours that suit them and to do so knowing that they will get fair support that reflects low- or middle-income status in meeting their childcare costs. I find it remarkable that anybody could consider opposing these changes with the fairness that is built into them. Ultimately, they are going to deliver the greatest support to the lowest income, hardest working Australian families.
My question is to the Minister representing the Prime Minister, Senator Brandis. Does the minister agree with the Deputy Prime Minister who says in relation to amending section 18C of the Racial Discrimination Act: 'It is definitely not the issue people are talking about in the beer garden on Friday night or at the counters of banks or, to be quite frank, in the big office blocks when they finish work on a Friday night'?
I always agree with everything the Deputy Prime Minister says. That is not to say, and the Deputy Prime Minister does not say, that this issue is not one the parliament should deal with, as many, many people have said—opinion leaders such as Professor Gillian Triggs, President of the Australian Human Rights Commission; Professor Rosalind Croucher, President of the Australian Law Reform Commission; Professor George Williams; Mr Warren Mundine; and the Hon. Jim Spigelman.
Jim Spigelman, for example, made this contribution recently:
… declaring conduct, relevantly speech, to be unlawful, because it causes offence, goes too far. The freedom to offend is an integral component of freedom of speech. There is no right not to be offended.
… … …
None of Australia’s international treaty obligations require us to protect any person or group from being offended. We are, however, obliged—
that is, by our international treaty obligations—
to protect freedom of speech.
Order! Pause the clock.
A point of order, Mr President. I asked whether the minister agrees with the Deputy Prime Minister's quote.
Senator Singh, the Attorney-General answered the question quite clearly and distinctly up-front by saying he agreed with everything the Deputy Prime Minister says. The Attorney-General is in order.
Senator Singh, while I do agree with Mr Joyce that this is not the issue at the top of mind for people in the supermarkets and the shopping centres and the workplaces in Australia today, that does not mean that it is not an important issue for the parliament to deal with. The Parliamentary Joint Committee on Human Rights only 23 days ago delivered a report which proposed certain reforms to the Australian Human Rights Commission Act. I have discussed those proposals with Professor Triggs. She largely agrees with them and has been a very constructive contributor to this process. She has also offered some views of her own, which the government has adopted as to other reforms that might usefully be made. This is useful work for the parliament to do. (Time expired)
Senator Singh, a supplementary question.
Yesterday, Senator Williams told the Senate: 'Until about three years ago, I did not even know this law 18C existed.' Does the minister agree with Senator Williams that it is not something that people pull you up about in the street in the country towns and say, 'What are you doing about 18C?'
Senator Singh, I have always found my friend Senator John Williams to be a very wise and sagacious individual, and I have always found myself in agreement with him. As a matter of fact, I myself have been pulled up in the street by a person I did not know who said, 'What are you doing about section 18C?' I have. That experience is obviously not an experience that has been shared by Senator Williams. I really cannot go beyond what I said in my answer to your primary question. I actually agree that this is not the most important issue facing Australia today. The issue of jobs, the issue of prosperity, the issue of energy security, the issue of infrastructure, all of which this government has shown the lead on, are far more important. Nevertheless, it is an important issue on which this parliament may usefully do work in responding to the demands of those for whom it is a concern. (Time expired)
Senator Singh, a final supplementary question.
Given the Liberal Party's coalition partner is confused by the Liberals' obsession with weakening protections from racial abuse, isn't it clear the reason the Prime Minister has turned his back on multicultural Australia is to satisfy the ideologues on his own backbench and One Nation?
Senator Singh, not an hour and a half ago you voted in this chamber to have a six-week-long inquiry into this issue on the heels of the 2½-month-long inquiry in which your Labor Party colleagues recently participated. Since you want to have a second, six-week-long, parliamentary inquiry on the heels of a 2½-month-long parliamentary inquiry into this very issue, I am very surprised to hear you say now in your question that this is not an issue that matters. As I said to you in answer to your earlier questions, we do not put this at the top of the list. We put jobs, we put infrastructure, we put prosperity, we put energy security, we put getting the budget back under control there. All of those issues are far more important. All of those issues are issues on which we inherited a mess from you. But, nevertheless, there are other issues that deserves some attention, and this is one. (Time expired)
My question is to the Attorney-General. Before I ask it, I add the thoughts and sympathies of the Australian Greens to the sentiments expressed by Senator Brandis and Senator Wong earlier in regard to the attacks in London.
Attorney, during the inquiry into the Racial Discrimination Act, the breadth of multicultural Australia said: 'Leave 18C alone.' This included representatives of the Islamic community, the Jewish community, the Chinese community, Aboriginal and Torres Strait Islander communities, the Lebanese community, the Vietnamese community, the Sikh community, the Japanese community, the Indian community, African communities, the Greek community, the Cambodian community and many others, including many multicultural peak bodies. They warned that weakening 18C would unleash more racism in Australia, which would harm the health and wellbeing of their members. Why do you, the Prime Minister, Senator Hanson, Senator Canavan and Senator Abetz think you know more about the shocking damage that racism can cause than the unified voice of multicultural Australia?
Senator McKim, I have never been able to understand what it is that parties of the left like yours so fear about a debate. I have never been able to understand that. There is a variety of views in the Australian community on this question. For example, the Australian Law Reform Commission presented a report to this parliament in March of last year saying that section 18C ought to be reformed. I think a responsible government—and, indeed, a responsible parliament—should heed that. There was a variety of views put to the parliamentary committee, as you know. You have quoted selectively and you have made the assumption that every member of the communities that you have listed is of a common view. I know for a fact that that is not right and that members of those communities have different views one from another. Other members of the Australian community, not merely members of ethnic minority communities, have a variety of views as well, because there is a variety of views about this issue across the Australian community, and we on the Liberal and National Party side of politics are not afraid of having a discussion. Senator McKim, I challenge you—through you, Mr President—to defend an anti-racial-vilification provision which does not expressly refer to harassment, because section 18C of the Racial Discrimination Act omits reference to racial harassment. Whether you agree with me or not about the omission of terms like 'offend' and 'insult', and I know that you do not agree with me, surely you accept that a valid anti-racial-vilification provision should include a prohibition against harassment—as it was meant originally to include, if you look at the then Attorney-General's second reading speech. It does not, but under our proposal it now will.
Senator McKim, a supplementary question.
You are cutting 18C whichever way you want to put it, Attorney-General. Contained in the Greens' submission to the Human Rights Committee inquiry I referred to in my substantive question was the following story from Danielle in Victoria, an Australian person:
I'm walking my children to school and out a car window someone shouts f*#% off to your own country. My kids are 6 and witnessing such disgusting behaviour.
How do you explain to Danielle your desire to unleash more of that kind of behaviour? (Time expired)
How do you explain to her that you are apparently going to vote against a measure to include a prohibition on harassment of that kind in the law.
I rise on a point of order.
I believe the Attorney-General has concluded his answer. Did you still have a point of order?
No, I will not pursue it. But I will note that I dispute your reference to it as an answer, because it clearly was not.
Senator McKim, your final supplementary question.
Attorney, I direct you to the following quote from Senator Canavan this morning on ABC:
People should be allowed to have a joke in this country—it's part of our Australian culture and way of doing things, I think—without being hauled before the courts.
Why is Senator Canavan's right to tell racist jokes more important than people's right to be free from the harms caused by racism?
Senator O'Sullivan, on a point of order?
I have been listening carefully to the questions, and section 73 is very clear. There are about nine provisions in it, and I think the questions that have been asked—this one in particular, with its imputations—have offended all of them. It has to be withdrawn.
I will allow the question. The question will stand. I call the Attorney-General.
I did not hear Senator Canavan's interview, but, as I understand it, you are now attacking Senator Canavan for defending the right of Australians to tell jokes. You are attacking him for defending the right of Australians to tell jokes! For goodness sake, Senator McKim! Have you not gone beyond a parody of yourself when the political party you represent in this chamber is now launching a campaign to prevent Australians telling jokes? The Australian Greens are attacking one of the great properties of the Australian character—that is, the sense of humour. For heaven's sake, Senator McKim—get a life!
My question—
Government senators interjecting—
Order on my right! Order!
Mr President, can you please tell the senators opposite that they are only encouraging me?
Senator Dastyari, you have the call.
My question is to the Minister representing the Prime Minister, Senator Brandis. The minister yesterday said that the government's plans to weaken protection from racial abuse had resulted in 'so much hysteria'. The Ethnic Communities' Council of New South Wales, which represents 358 organisational members, on Tuesday said it would oppose the Turnbull government's amendment and:
… work to maintain the protections and preservations of Australia as a pluralist society in which multiculturalism is protected, and bigotry is challenged.
Does the minister think the Ethnic Communities' Council of New South Wales is being 'hysterical'?
No, I do not, Senator, and I welcome that contribution to the debate, but I think you are being hysterical, Senator Dastyari. I think you are being hysterical—charmingly hysterical, but hysterical nevertheless. The fact is that I doubt very much if any of the 358 members of the Ethnic Communities' Council would be of the view that there should not be a prohibition against racial harassment in the Racial Discrimination Act. I doubt very much if any of them would oppose the government's intention to introduce for the first time into the Racial Discrimination Act a prohibition against racial harassment. Nor do I believe any of them would oppose the government's commitment to freedom of speech. These are not inconsistent values, Senator Dastyari. We can have a good, strong and effective anti-racial-vilification law—
Senator Dastyari interjecting—
Senator Dastyari, you have asked your question.
and protect one of the fundamental Australian values, the value of freedom of speech, at the same time, if we get the law right, which is what this government will do, guided by the advice of the Australian Law Reform Commission; informed by the views of the Australian Human Rights Commission itself; informed by the views of so many other leading Australians, like Jim Spigelman, like Warren Mundine, like George Williams, like Gary Johns, like David Marr; and like so many other opinion leaders in this country, right across the political spectrum from the left to the right, have said we ought to do. We know you are trying to play the electoral politics of this, Senator Dastyari—that is transparent for all to see. But what we are trying to do is to ensure that we have the best and strongest anti-racial-vilification laws in this country, including protection against racial harassment, while, at the same time, defending the Australian value of freedom of speech.
Senator Dastyari, a supplementary question.
Given the minister yesterday said that no serious person would support 18C as it stands, does the minister think that the Australia/Israel & Jewish Affairs Council, which says the government's changes will 'significantly weaken legislation that has worked effectively for over 20 years', is not serious?
I know them very well, and I think they are very serious men and women, if I may say so, and many of them are friends of mine, and we welcome their contribution to the debate as well. But, Senator Dastyari, what you are going to have to tell me when you embark on this exercise is: what is the conduct that you say should be outlawed that would not be outlawed by the government's amendments? A protection against intimidation and harassment on racial grounds—what conduct would not be caught by that, that the government ought to regulate?
Senator Dastyari, a final supplementary question.
Minister, isn't it clear the Turnbull government is turning its back on multicultural Australia in its desperate attempt to win back voters from One Nation sitting over there?
No, and, Senator Dastyari, I refer you to the multicultural statement that the Prime Minister released only on Monday—a very, very fine example and a very, very fine iteration of a number of documents issued by governments of both political persuasions over the years, but, I am very proud to say, the first multicultural statement endorsed by Australia's multicultural community that recognises freedom of speech as a core value of multicultural Australia.
Thank you, Mr President—
A government senator: How did you get a question?
The reason I have a question is because Senator Hanson was unable to ask hers, and so this is truly without notice, and it goes to the Minister representing the Minister for the Environment and Energy, Senator Birmingham. As a fellow senator for South Australia, we both know of the South Australian energy crisis which has delivered the most unreliable and most expensive electricity anywhere in the country. I ask the minister to please provide information in detail as to what impact the federal government's renewable energy target has contributed to the South Australian power crisis.
I thank Senator Bernardi for the question, and, Senator, I am happy to take it on notice in terms of any particulars that can be provided. As you would be well aware, of course, the coalition government acted to reduce the level of the renewable energy target around 18 months ago—a change that brought down the rate of energy that was required to be supplied by renewable sources and, in doing so, reduced some of the burden across the national market. Of course, we have only ever supported carefully targeted and calibrated targets, whereas, as you are well aware, the government in South Australia has sought to champion a 50 per cent renewable energy target, in excess of double the federal renewable energy target and far more than anything that the coalition government has ever advocated for.
They have had a particular impact as they have encouraged investment, changed planning laws and undertaken activities to ensure that as much investment as possible was put into South Australia in those areas of renewable energy, which, as we now know, has created instability in the grid, as a result of issues in relation to the frequency and inertia of energy. They are serious issues that now have to be addressed, partly through energy market reforms and partly through looking at the storage capabilities that can address that. We have sent very strong, clear warnings to the states and territories that such inconsistent approaches from the states and territories do jeopardise their local energy markets. We urge them not to pursue those types of standalone policies that could undermine the efficiency of the system.
Senator Bernardi, a supplementary question?
I thank the minister. It seems to me that the South Australian government has firmly and warmly embraced the federal government's Renewable Energy Target and extended it. Does this mean that the federal government's Renewable Energy Target is responsible for about 50 per cent of South Australia's power crisis? If that is the case, what is the government proposing to do, and will it specifically freeze any further progression of the RET in the interest of providing stable and reliable electricity at a competitive price to South Australians. (Time expired)
As I explained, Senator Bernardi, and as I know you are well aware, this parliament took action around 18 months ago to change the Renewable Energy Target to a level that we thought was one that provided a degree of investment certainty without jeopardising the national stability—at least, around that target—of energy generation. It is the government's view that to change that again, 18 months after it was varied and only a couple of years until the conclusion of the 2020 target period, would actually create further problems in the energy market. It would exacerbate problems, particularly in terms of investment certainty, rather than actually help with any of those issues. I certainly do not accept that we have contributed half of the problem in South Australia. The problem in South Australia is that they sought to take on as much of the national target themselves for— (Time expired)
Senator Bernardi, a final supplementary question?
I thank the minister. Australia's competitive advantage has been built on having the cheapest and most reliable electricity in the world. That has been jeopardised in recent times by government policy, including the Renewable Energy Target, which the government is endorsing at 23½ per cent. Will the government commit to freezing any further funds for new renewable energy projects, which are doing such a disservice to Australian consumers and businesses, most notably in South Australia?
The Turnbull government wants to see energy that is affordable and reliable and, of course, also helps to meet our national emissions reduction commitments that we have given at a global level. Our policies are working towards that. That includes directing more of the funds within areas such as the CEFC and ARENA to support investment in storage capabilities—like the Snowy Hydro scheme and the Cultana project on the Eyre Peninsula or the western parts of South Australia, near Whyalla—and in projects that can provide stability into the grid and can make the heightened levels of renewable energy that have already been built in a state like South Australia work for us rather than against us in terms of supply into the market, the affordability factor and reliability. We will be making sure that, wherever possible, investment goes towards those principles of reliability and affordability while supporting meeting those targets, but it certainly does not undermine, as it has in the past— (Time expired)
My question is to the Minister for Employment, Senator Cash. Is the minister aware of any secret payments between big business and unions, which have been hidden from union members?
Unfortunately, Senator Duniam, yes, I am. Bank statements and other documents tabled during the Heydon royal commission from the Victorian branch of the AWU have, unfortunately, revealed numerous secret payments from big business to the union between 2003 and 2007. Who was the chief negotiator of the AWU at the time? It was none other than the current Leader of the Opposition, Bill Shorten.
What is worse is that these secret payments were being made at the same time as the union was negotiating enterprise agreements with these companies or shortly after these enterprise agreements were entered into. Guess who signed these enterprise agreements. Guess who signed them. None other than the current Leader of the Opposition, Bill Shorten. The companies included Clean Event, Chiquita Mushrooms, Thiess, John Holland, Winslow Constructors and Unibuild. But wait, unfortunately there is more: bank statements—look at them. Look at these bank statements and what they disclose. Let us turn to one of the examples in these bank statements. From 2004 to 2007, the AWU Victoria branch received 40 payments from Visy companies totalling $191,399.44. The only person who knows what these payments were for, and he has never disclosed it, is none other than Mr Shorten himself.
Senator Cameron interjecting —
Senator Seselja interjecting —
Order! Order on my left and on my right. Order, Senator Cameron and Senator Seselja. Senator Duniam, a supplementary question.
I thank the minister for her answer. Could the minister further explain why it is important that payments made by businesses during the course of pay negotiations are disclosed to union members?
Because, if you truly represent the members of your union, you should have nothing to hide from them. The question, therefore, needs to be asked in relation to the 40 payments from the Visy company to the AWU: why were they made? If they were legitimate, why have they not been disclosed? A legitimate payment is something that is there for all to see. One has to wonder why Mr Shorten has never disclosed the reason that the Visy company made 40 payments to his union of $191,399.44. It is a simple question, colleagues. Why was money given by the company to the union in the course of negotiating enterprise agreements?
Senator Duniam on a further supplementary question.
Honourable senators interjecting—
Order on both sides! I need to hear the question.
Finally, can the minister advise what action the government will take to prevent employers from paying corrupting benefits?
One of the criticisms from those opposite is that this legislation is going to target unions. That is completely, totally and utterly wrong. As Commissioner Heydon said in the royal commission: 'Corrupt receipt implies corrupt payment.' So the legislation that we will introduce is going to ensure that both the giving of the payment by the employer and the receipt by the union are criminalised. Again, unless they are legitimate payments—and legitimacy is something that one would assume requires disclosure and transparency—these payments should not be taking place. What we will do is criminalise those payments because, if you cannot tell the employees of the company, the members of the union, what these payments are for, then they should not be made.
Senator Cameron interjecting—
Senator Ian Macdonald interjecting—
Order! Senator Macdonald and Senator Cameron! I suggest that Senator Macdonald and Senator Cameron go to the lobby to discuss this further.
My question is to the Minister representing the Treasurer, Senator Cormann—no proverbs today. In a piece in today's Sydney Morning Herald titled 'How Turnbull can kill stamp duty and produce a budget to remember', Peter Martin looks at the Greens' policy to swap stamp duty for land tax. He cites Treasury papers that show how stamp duty is dollar for dollar the most destructive tax, while land tax is the most efficient. He says:
… a stamp duty for land tax swap could boost the economy by a massive 82c for each dollar swapped. There's no bigger benefit imaginable from rejigging tax.
This is also backed by the Grattan Institute, ACOSS, ACCI, the Australian Industry Group and a whole raft of economists across the country because it provides productivity, investment, housing and infrastructure benefits. Will the government back the Greens' policy and work with the states via a Commonwealth loan to deliver a stamp duty for land tax swap?
The short answer is: the government will not back Greens policy. But the government of course will continue to work with the states on sensible tax reform to make our tax system more growth friendly so that we can continue to build a stronger, more prosperous economy where every Australian has the best possible opportunity to get ahead.
Senator Whish-Wilson, a supplementary question.
Speaking of opportunity, a two-bedroom, one-bathroom house in Newtown recently was listed for $1.2 million at auction and sold for $2.6 million. Since this government came to office, the median house price in Sydney has risen from $670,000 to just under $1 million. That means the cost of a 10 per cent deposit has gone up by over $33,000 on your government's watch. Does your government accept any responsibility, through its policies or lack of action, for contributing to the Sydney housing bubble?
As Senator Whish-Wilson would be well aware, the price of anything is a function of demand and supply. Where demand exceeds supply, prices go up. Of course, the best way to ensure that anything that is too expensive becomes more affordable is to increase supply, and, indeed, state governments around Australia do have a lot of the levers to ensure, through planning and other arrangements, that supply of land in particular is appropriately increased.
Senator Whish-Wilson, a further supplementary question.
A very short answer, Senator Cormann. Young people in this country are being completely screwed by the Australian housing market. The amount they need for a deposit is going up every month by much more than they could possibly save. Given that a home deposit in places like Sydney is skyrocketing $850 every month, what assurance can you give first home buyers, especially young Australians, that you will bring policies into this budget to stop runaway increases in the cost of putting a roof over Australians' heads?
The assurance I can give to young homebuyers across Australia is that, under a coalition government, they will have the best possible opportunity to get ahead and to get a good and better paid job as a result of the economic policies of the coalition. Our economic policies will drive stronger growth and a more prosperous economy where people around Australia can get better jobs and better paid jobs—and, of course, that is a key important component to the whole issue that Senator Whish-Wilson raises.
In relation to housing affordability more generally, you would be aware that the Treasurer is doing some important work in this area, including in cooperation with the states, and that the Treasurer has already flagged that the government will have some more to say about that in the budget.
My question is to the Minister representing the Prime Minister, Senator Brandis. I refer to reports in The Australian indicating that the Turnbull government is preparing to shelve most of its $47.8 billion company tax cut. Is the government committed to the full $50 billion Enterprise Tax Plan?
Yes, we are.
I didn't ask you; I asked him.
Yes.
Senator Farrell, a supplementary question.
On 4 May 2016, the Prime Minister said:
Ensuring that our company tax rate is competitive, ensuring that it is competitive with other economies, particularly those in our region, is absolutely critical to attract the investment into businesses in Australia …
Does the Prime Minister still believe that the $50 billion company tax cut is absolutely critical?
Yes.
Senator Farrell, a final supplementary question.
) ( ): On 9 September last year, when asked to name his greatest achievement since deposing former Prime Minister Tony Abbott, Prime Minister Turnbull said 'reforms to business tax'. What reforms to business tax was the Prime Minister referring to?
He was referring to the reforms to business tax that the government has in mind. Senator Farrell, might I remind you, not that you need to be reminded—
Mr President, I raise a point of order. I asked a question about what the Prime Minister said his greatest achievements were, not future, potential achievements.
Senator Farrell, you asked what reforms the Prime Minister was referring to, and the Attorney-General answered that exceptionally directly.
Might I remind you, Senator Farrell, that this is something that you used to believe in on your side of politics. You were a minister in a government, and you sat with Mr Shorten as a minister in a government, when Mr Shorten used to praise to the sky the importance of company tax cuts as an enabler of investment and a creator of jobs. But since you have been on the opposition side of the parliament, you and Mr Shorten have forgotten. Like on so many different occasions, Mr Shorten says one thing when in government and does the opposite when in opposition. When Mr Shorten was a minister, he saw the wisdom of company tax cuts, but he seems to have forgotten it now—
Pause the clock. A point of order, Senator Farrell?
I have a point of order, Mr President. I am talking here about the Prime Minister, not the Leader of the Opposition.
If the point of order is on relevance there is no point of order.
It would be nice to think that this was the only area of policy on which Mr Shorten is Australia's Olympic gold medal winning hypocrite, but I am afraid it is not. On every single area of policy, whether it be 457 visas— (Time expired)
My question is to the Minister for Resources and Northern Australia, Senator Canavan. As I travel through Queensland, my constituents talk to me about jobs and the need for water infrastructure to open areas of employment and trade. What is the government doing to develop the long-needed water infrastructure in the too long neglected area of Northern Australia?
I thank senator O'Sullivan for his question. He is absolutely right that the government are committed to creating jobs in Northern Australia and that we intend to do so by using the abundant water resources we have in Northern Australia. Northern Australia accounts for around 40 per cent of our land mass, but more than 60 per cent of our rainfall occurs there. We have abundant water resources there, but they have not been as developed as those of, say, the Murray-Darling, where we are today. So there is great potential to get on with the job and create jobs by using water in those regions.
We have on the table right now $130 million to build the Rookwood Weir. That could be started tomorrow. It has approval from both state and federal governments and it could create 2,100 jobs. It could double agricultural production in the Fitzroy region and also drought-proof the towns of Rockhampton and Gladstone in Central Queensland. We could start tomorrow, but the state government has held it up. They are doing another study and another business case, and they are telling us to come back later this year and see if we can do it then. They are pushing ahead with the Cross River Rail in Brisbane, but they are not building a dam in Central Queensland, creating 2,100 jobs where they are needed.
But we are not stopping there. We also have a $440 million water infrastructure development fund, of which $200 million will be invested in the North. To support those investments we will create a $2 billion low concessional loan facility for state and territory governments to help co-fund their parts of the water infrastructure. There is a fund that will be there to help the state government to do it when they finally come round to making a decision. We have also funded 39 water feasibility studies under the national water infrastructure fund, and 15 of these are in Northern Australia, and we are specifically looking at three basins across the North. The CSIRO are doing excellent work on the Fitzroy River Basin in Western Australia, the Mitchell River in Queensland and in the Darwin region in the Northern Territory. There is so much opportunity out there and we are focused on creating jobs in Northern Australia.
Senator O'Sullivan, a supplementary question.
I thank the minister for his comprehensive answer. Does the Queensland government share the Turnbull-Joyce government's commitment to water infrastructure?
As I was saying in answer to the first question, there has been delay after delay by the state government in Queensland. If they are committed to developing water infrastructure in North Queensland, they are sure taking their time coming around to it. Just this month the Queensland water minister, Mark Bailey, wrote to the Minister for Agriculture and Water Resources, Mr Joyce, complaining that our water infrastructure program unreasonably excludes programs that primarily have an urban supply focus. He has written saying, 'The other aspect of your criteria that is unreasonable is the exclusion of projects that primarily have an urban supply focus.' The provision of water to towns and cities has always been a state government responsibility. If the Queensland Labor government were doing their job, they would be providing that infrastructure to the people of regional Queensland.
We are interested in creating more opportunity to grow food and to provide jobs in the agricultural sector. That is a role for national government, and we are happy to work with the Queensland government. But they need to do their part of the job too, to make sure we can deliver these benefits to Queensland.
Senator O'Sullivan, a final supplementary question.
Again I thank the minister for that answer. How much funding has the coalition government provided for the building of Rookwood Weir, and what does regional Queensland think about this project?
As I was saying before, we have provided $130 million towards the project. We have also provided $2 million to fund the Queensland government's business case. We are funding their business case as well, and we are doing whatever we can to make this happen. The people of Central Queensland want this to happen. The Central Queensland Regional Organisation of Councils, which includes the Banana Shire, the Central Highlands Regional Council, the Gladstone Regional Council, the Livingstone Shire Council, the Rockhampton Regional Council and the Woorabinda Aboriginal Shire Council, has written to me saying that they support this project and want to see it happen. They say that the realisation of these water infrastructure projects will provide a wide range of economic growth opportunities to our regional areas. But, just as importantly, it supports the further development of Northern Australia and improves the water security for the Fitzroy Basin and the Gladstone region. What is holding this project up? What can be wrong now? It creates jobs, it protects the environment and it will secure water supplies for Central Queensland. What is holding it up? One word—Labor.
My question is for the Minister for Education and Training, Senator Birmingham. I refer to your plan to reduce by half the number of childcare hours accessed by vulnerable children. When asked in February whether you were considering increasing the number of hours available from 12 hours to 15 hours, you said, 'That's right.' Is this still the government's position?
I thank the senator for her question. The government considered many things during the discussions about our child-care reforms. We have considered well and truly the interests of hardworking Australian families, which is why we are increasing the amount of support that the lowest income Australian families receive from around 72 per cent, as I have told the Senate, to 85 per cent. We have considered absolutely the priority of families who do not meet the activity test—and let us remember that the activity test requires families to only work, study or volunteer for four hours per week; it is a very light touch family activity test—and are on a very low income, below $65,000. The legislation that has been presented to the parliament and has been considered by the parliament through three different Senate inquiries proposes access to 24 hours per fortnight of care even for those families not meeting the activity test but below that threshold as part of the safety net.
It is the government's position and belief that that can adequately deliver the two sessions of care per week that are recommended for children in those circumstances. In the end six-hour sessions are analogous to a school day. They are the types of sessions that are provided in a preschool environment, if not even longer. They are the types of sessions we see in countries like New Zealand as part of their model. There are those who might wish to lobby, for their own business or commercial reasons, for longer hours, even though in many instances we do not have children sitting there during those hours. We think it is appropriate that taxpayers' money is targeted for effective early learning opportunities in care sessions that will actually be effectively utilised.
Mr President, I have a point of order. In standing order 73(1)(k) the rules for questions state in that questions shall not refer to debates in the current session. I think Senator Gallagher has referred to a debate in the current session.
It is in the current session. I did discuss it with the Clerk a little bit earlier. Providing we do not go directly to the debate and the minister in answering the question does not directly engage in the debate before the Senate it is allowable. I was listening very carefully. There was a very similar question earlier, which again I listened to very carefully. The question is in order. The minister has been in order. Thank you for drawing that to my attention, Senator Bernardi. It is something I am aware of and I will be listening to the answer, as I always do. Senator Gallagher, a supplementary question.
Does the government agree with Mission Australia, which says:
Children from disadvantaged families need to have access to two days per week of affordable quality early childhood education and care as a minimum. The 12 hours per week proposed is insufficient.
If so, how does the government intend to improve the activity test?
I agree with the first half of that statement but not necessarily the second half. We do accept that two sessions of quality early education and care is appropriate for children in those circumstances and that is why we are ensuring that in our legislation there is a strong safety net in place that ensures two sessions per week can be delivered and ought to be delivered. It should be delivered and that is what our legislation clearly provides for.
People are entitled to have their view about the number of hours that are necessary for that to occur. As I said before, we are providing 24 hours per fortnight, which can equate to two six-hour sessions per week for providers who are genuinely committed to providing early education services. Of course that is longer, as I said before, than many preschool hours that children attend for and is analogous to a school day. There are plenty of international examples of that being an appropriate session of care for early educational opportunities.
Senator Gallagher, a final supplementary question.
The government's proposed child-care changes seek to spend an extra $1.6 billion yet they halve the access that some of Australia's most vulnerable children will have to early childhood education. How can you justify a $1.6 billion price tag when 71,000 low-income families with children will be worse off?
I can happily justify it because we are better targeting at every single level. When it comes to the safety net measures we are making sure it is better targeted so that resources are not being spent on services that are not being utilised and instead is targeted to ensure that services are supported to deliver high-quality early education in sessions of care appropriate for the children there and making sure that they are the maximum utilisation of those taxpayer dollars. Equally, I can justify the increased investment because overwhelmingly—almost entirely, in fact—that increased investment is going to the lowest income Australian families. It is actually going to the hardest-working Australian families. People who are meeting the activity test but earning low incomes will be thousands of dollars a year better off thanks to our reforms. These are exactly the types of measures that those opposite should embrace and support because they are delivering more dollars to support people with their cost-of-living pressures and their child-care costs and empowering those families to choose to work the hours that suit them. (Time expired)
My question is to the Minister for Industry, Innovation and Science, Senator Sinodinos. Can the minister update the Senate on how the government is serving as an exemplar in the science and innovation field?
I thank the honourable senator for his question and his ongoing interest in industry, innovation and science in many ways. One of the pillars of the Turnbull government's National Innovation and Science Agenda—
Did you say 'one of the pillows'?
Pillars. I will get you a pillow, Senator Cameron, if that will suit you better.
Opposition senators interjecting—
They do not want to hear about the National Innovation and Science Agenda. Doesn't that say it all? They are worried about talking about that pillar that we call government leading by example. I am proud that under the Turnbull government in areas like defence innovation we are leading the way through our naval military shipbuilding program. We are using that procurement to drive innovation throughout the Australian economy through upstream and downstream linkages. I am proud of the fact that we have got the Digital Transformation Agency, which is going to revolutionise the delivery of government services. We are going to be digitising government services and improving our capability, which will lead to better services for all the people who rely on government in various ways, whether it is people in business or people seeking to access their payments from the government. We are using science and innovation to improve our energy policy options. Through the National Innovation and Science Agenda we are also serving our agenda around research infrastructure. We are going to be encouraging a 10-year plan on research infrastructure promoting what I believe are globe-leading facilities in this country which will promote collaboration between research, government and industry. (Time expired)
Senator Smith, a supplementary question.
Can the minister explain the importance of evidence based policymaking in this endeavour?
Opposition senators interjecting—
The opposition have had a bad week. The scientists, almost universally, have approved what we have been doing this week. I could go through a whole folder of aggravation, but I will leave that to one side on this occasion. To make informed decisions we must rely on expert advice, especially from scientists. Increasingly, we have seen conclusions from experts being cast aside in favour of ideological positions and the selective use of facts. The only credible response to these positions is scientific fact. Drawing on scientific rigour and expertise, we have the best chance to solve seemingly intractable economic and social problems. The Innovation and Science Australia board is putting together a plan for our whole innovation, science and research system to 2030. That will inform our policymaking going forward across the whole sector, across government. (Time expired)
Senator Smith, a final supplementary question.
Can the minister explain the importance of collaboration in science and innovation?
Collaboration between researchers and businesses is essential if we are to enjoy the economic benefits of great Australian ideas. The Innovation and Science Australia report on the state of the system in 2016 clearly showed that we are fantastic at knowledge creation, we punch above our weight internationally, but we need to do more.
Senator Kim Carr interjecting—
The shadow minister talks about 'Fs'. Why is he swearing in this chamber?
Yes, a big 'F'!
Order on my left!
The recent performance survey by ISA indicates that we have to do more in the area of collaboration to translate research output into commercial ideas here in Australia. We cannot expect every idea to be commercialised in Australia but we are keen to commercialise as many ideas here in Australia as we can, bringing research, industry and government together to do that.
Mr President, I ask that further questions be placed on the Notice Paper.
I move:
That the Senate take note of the answer given by the Attorney-General (Senator Brandis) to a question without notice asked by Senator Farrell today relating to company tax cuts.
I rise to take note of the answers given by Senator Brandis to questions asked by Senator Farrell in question time today which go to the government's declared commitment to cut taxes to the tune of $50 billion—the company tax cuts. I want to turn back the Turnbull clock to the moment on 9 September when Prime Minister Turnbull was asked what the greatest achievement he had secured since deposing Prime Minister Abbott was. In what we could perhaps put down to another thought-bubble moment—though he seemed sincere at the time—he said his greatest achievement was the reforms to business tax.
Well, I do not know what is going on over there—and that is clearly the case for the government. We have had three days of Treasurer Morrison saying he will not commit to giving those tax cuts to big business. We have had a breakdown in communication, it would seem, because Senator Brandis got up and said, 'Yes, they're all going ahead.' That chaotic nature of the government is a typical example of how this government simply cannot be trusted. Its actions cannot be trusted. Its actions belie its comments time after time. The question is there in community: will the government stick with the promise that it took to the election or are we seeing the beginning of a backflip, at least in the other place? Senator Brandis clearly missed the memo.
From the very first day, Labor has not supported these Turnbull tax cuts. However, I do want to put on the record that it was Labor who, in its period of governance under Rudd and Gillard, instituted the small business tax cuts. Those opposite decried the instant asset write-off as a rort. They said it was something small business should never have. Indeed, Mr Abbott was completely opposed to it. It did make some resurrection, though, and come back into play. I would support genuine tax cuts to small businesses, which are the engine room of our regional communities and our regional economies, but the scale of what this government wants to do is all wrong.
This government's record is replete with management failures. Its plan for this has been a case study in fiscal and economic mismanagement and clearly defines the lack of leadership displayed by the current Prime Minister and the current Treasurer of Australia. In the Mid-Year Economic and Fiscal Outlook, which was released just a few days before Christmas, they showed how bad they are at managing the economy by having the deficit blow out by another $10 million over the forward estimates since the budget, and the deficit for this financial year since the government's first budget more than tripling. This is a government with a terrible economic record, and its decision to back in $50 billion worth of tax cuts, with $7.4 billion of that going to the biggest banks in this country, shows how completely out of touch they are.
We have net debt for this financial year blowing out by $100 billion since this government took office, which is more than $4,000 for every Australian. That is what they have done. But that is not good enough. On top of that, they want to take $77 away from ordinary Australians. That is, 700,000 Australians stand to lose $77 a week in their payments. They are happy to go ahead with a cut to the pay for ordinary Australians whilst going ahead with a $50 billion tax benefit to big businesses.
In the time that is remaining to me this afternoon, I want to indicate the concern that Australians have about this Prime Minister and his inability to honour his commitments or even show any solid line of commitment to the commitments he does make. It is of great concern. It is no surprise we had this conflicted answer from the minister today because this is a rudderless government being led by the quintessential hollow man. Mr Turnbull is a man who used to pop the collar of his leather jacket and find warm comfort in the plush chairs of the Q&A studios in Ultimo, promising a more centrist brand of politics. He now finds himself wanting to hand over $7.4 billion to the banks, and he will not lift a finger to stop the cuts to ordinary Australians. I can see that Mr Turnbull, the Prime Minister, is a political chameleon. His colours have all but run out and we will see in the coming days how strong his commitment is to that great reform his said was the mark of his prime ministership— (Time expired)
I, too, rise to comment on the motion to take note. Last night I could not have been prouder, being a Liberal member of this government. What the passage of the bill last night demonstrated was that responsible government still is possible. That is, if you want to spend money you have to find the money somewhere. We see those qualities again in the government's enterprise tax bill.
What are the values that underpin the legislation that was carried last night and also the one under debate? The first thing is that those on this side understand the principle of fiscal responsibility on behalf of the taxpayer. Secondly, we also understand that our responsibility is to ensure that every taxpayer's dollar is spent on government programs and is best targeted to those who need it the most. Thirdly, on this side we believe that we have to ensure any government programs—whether it is support welfare or any other government expenditure, including revenue measures for companies—are regularly reviewed to ensure that they are still relevant and still deliver the purpose for which they were originally implemented. As parliamentarians on this side of the chamber, we know that it is our duty to deliver on all three of those for the Australian people.
We must live within our means. As every Australian family knows, you have to prioritise and you have to take tough decisions. The one last night was one such tough decision, but it was an important decision, as is the tax rate for companies. As those on the other side seem to have forgotten—or they really do not care—if you want to spend money, whether you are a company or, in this case, a government, you have three options. If you want to spend new money, either you have to earn it, which in the case of us is done by raising taxes; you have to make savings in your budget elsewhere; or you have to borrow the money, knowing that you will have to pay it back with interest.
The same tough decisions have to be made for corporate tax. It is so important that Australia now considers how we reduce the burdens of corporate tax on our companies. Ultimately, it means jobs and more money to the federal government that we still want to keep delivering on behalf of the Australian people. The enterprise tax plan benefits employees because businesses paying less tax frees up more money to pay employees more and give them more hours of work. Also, what it does is make our companies much more competitive with international companies. We are seeing that most of our major competitors overseas, if they have not done already, are in the process of reducing their corporate tax. Not only is that a disincentive for new businesses to come to Australia but it also puts us at a further disadvantage for exporting our goods and services to the rest of the world. Whilst we support sustainability in social services, high health and education spending and a bigger welfare budget, it will not help hardworking Australians to pick up extra work and pay.
Labor is demanding that small and medium businesses pay nearly $5 billion more in tax, but have again refused to support how that is going to be paid. In this case, it is more than $6 billion savings to our welfare system to get our budget back into balance. Labor wants Australians to pay more tax to support a larger welfare system. But it is much worse than that. Again, we heard in the debate last night Labor moralising as if they were the only ones in this chamber who actually care about the Australian people. Of course we do. But those opposite kept saying, 'Yes, we've got to find savings, but these are not the right savings.' I listened very carefully to the debate last night and guess what? Not a single member opposite suggested where else the money could come from. It was like something out of Norman Lindsay's The Magic Pudding. Somehow, from somewhere, this extra money is going to be found for all these new expenditures.
It is different for government, who actually raise money and spend money on behalf of the Australian people and Australian taxpayers. Mums and dads who take out a loan to pay for whatever it is they want have to pay back the interest and the principle, but they have to have some collateral. What is the Australian people's collateral for those opposite to keep suggesting more and more expenditure without having the corresponding savings? It is your children who are going to have to pay back the debt— (Time expired)
I just want to pick up on a few things Senator Reynolds spoke about in terms of understanding the fiscal responsibility on behalf of the taxpayer. Senator Reynolds, I think what you are missing completely here in terms of members opposite is that when you keep removing things from the taxpayer—from the average Australian in this country—you really are missing out on the fairness test. You keep removing things. I go back to the 2014 budget, because that is where it really began in terms of many of our organisations across the country and in particular for Indigenous organisations, with a cut of half a billion dollars to Aboriginal and Islander services across Australia.
We have seen an increase in socially irresponsible decisions by the members opposite. We have seen the levels of joblessness and homelessness rise right across this country, and in particular in our regions. When we look at the mess of CDP and the problems that our communities are facing without the ability to have money available to feed their families, we are talking about real hunger, we are talking about people who do not have the money to pay for food for their children. This is how very real and hard these cuts are already impacting and have been for a number of years. So what happens when you just keep squeezing and squeezing to remove what we know are the basic human rights for most of our Australians across this country?
In terms of the question that was put to Senator Brandis this afternoon from Senator Farrell, the real question is: is the government walking away from its $50 billion company tax cuts? There are certainly reports in the media that the government is walking away from it and today in question time, we have the same. On 4 May 2016, the Prime Minister said—
Thank you Senator McCarthy, just a moment.
A point of order, Madam Deputy President. That is a flagrant misrepresentation. I was asked a direct question and I gave a one-word answer.
Senator Brandis, that is a debating point, thank you. Please resume your seat.
Senator Brandis interjecting—
Please resume your seat.
On 4 May 2016, the Prime Minister said:
Ensuring that our company tax rate is competitive, ensuring that it is competitive with other economies, particularly those in our region, is absolutely critical to attract the investment into businesses in Australia.
Yet today, it seems that the government may be about to change its mind. On 9 September last year, when asked to name his greatest achievement since deposing former Prime Minister Tony Abbot, Prime Minister Turnbull said 'reforms to business tax', and yet here we are wondering in the Senate if it was all just another thought bubble. Labor has never supported the company tax cuts. We certainly made it clear last year after this was announced, throughout the election campaign and through to today that we do not support this $50 billion dollar ramraid to the budget to deliver tax cuts to big business. The government's plans for this have been a case study into its fiscal and economic mismanagement, clearly defining the lack of leadership displayed by the current Prime Minister and the current Treasurer of Australia. The 2016-17 Mid-Year Economic and Fiscal Outlook released only a few days before the Christmas break showed this clearly. It showed deficits blowing out by another $10 billion over the forward estimates since the budget.
The deficit for this financial year, since the government's first budget, has more than tripled. The net debt for this financial year has blown out by $100 billion since this government took office. That is more than $4,000 for every Australian. The projected surplus for 2020-21 has shrunk to $1 billion, leaving us all in the danger zone when it comes to our much coveted AAA credit rating. I will add that this government has been a failure on the economy all over—a negative quarter of economic growth, just the fourth in more than 100 quarters, 34,000 full-time jobs lost last year, stagnating living standards and record low wages growth. This government totally walks away from everything. It is certainly walking away from what it took to the election and it is doing the same as always, even with 18C.
I rise to particularly take note of some of the comments that members opposite have just made. For anyone of the Australian public who is listing to this at the moment—
Nobody is.
you really need to consider what both Senators O'Neill and McCarthy have just said. They have talked about the fact that Australia has a growing debt and they are suggesting that the government is walking away from some of its commitments. I ask you to cast your minds back to when the Rudd-Gillard-Rudd governments left office. It was unlike when they inherited government: the books were in balance. We had money in the bank earning interest. When the coalition resumed government, there was a massive national debt and, importantly, the trajectory of the debt was on an increasing level. Ever since the coalition has come into government, it has sought to rein back that debt.
Members opposite should remember the words of the former Prime Minister, Mr Howard, who said that politics is governed by the rules of arithmetic. If the ALP does not support measures that the government brings into this place, to take steps to make savings to rein in that debt—well, guess what?—that debt is going to continue to increase. We have managed, with the support of the crossbench, to get some measures through that will reduce the rate of growth of that debt, but the primary reason that the government has not got its measures through is that the opposition has not supported those measures, so they cannot turn around and say that the government is walking away or not delivering or not fulling election commitments when they are the ones who are voting against the measures that the government has brought forward.
On this issue of tax cuts, it is pure rank political opportunism by the opposition, and particularly by the leader of the opposition. When Mr Shorten was in government, he made the case again and again about why company tax cuts would lead to more employment and benefit the economy. At the moment, we have the ridiculous situation where, for pure politics, we are seeing small and medium businesses being asked to pay some $5 billion more in tax and the opposition at the same time refusing to support measures that will reduce debt by nearly $6 billion. It is pure class warfare when members opposite start talking just about big business and put this label on 'big business', but when they were in government, they understood why, for example, other comparative countries to Australia were taking similar measures. The United Kingdom reduced its main corporate tax rate in stages from 30 per cent to 20 per cent. Over the period from 2008 to 2014, Canada has reduced its main corporate tax rate from an average of 36 per cent to 26, and Singapore has come down as low as 17. In the UK, their analysis says that that tax cut has been a central part of the government's economic strategy, contributing to the economic recovery in that country, business investment and job creation. The University of Oxford found that the corporate tax reforms in the UK increased investment by nearly $11 billion. The UK government have said the long-term impact of corporate tax cuts would increase GDP by up to 1.3 per cent.
In a state like South Australia, where we desperately need to see jobs for young people who have trained in trades or have gone to university and come out as graduates, we see them going interstate at the moment, and part of the reason for that is that we do not have large companies who are prepared to invest in South Australia, creating those job pathways, whether you are a tradie or a graduate. We desperately need to see Australia be a competitive place in the world, because that will attract the capital that will lead to corporate investment, and corporate investment leads to growth in GDP. That gives us the ability to pay for things like education, housing, health and all of the things that we want as Australians. But it starts with investment. It starts with people creating jobs. As the Labor Party well know, it is only because of rank political opportunism that they now deny that corporate tax cuts are not just about the big end of town; they are about delivering jobs for everyday Australians.
It is over 18 months since the Prime Minister knocked off the member for Warringah and took the helm of the Liberal Party, promising a mature discussion on economic issues, and what an 18 months it has been! We have seen a proposal for the states to collect income tax, a huge change to state and federal fiscal relations, floated in a football field and then shot down within days. We have seen the Treasurer hint at changes to negative gearing, but only to be comprehensively shut down by the Prime Minister. We have seen the government abandon simplistic three-word slogans like 'axe the tax' in favour of nuanced, sophisticated three-word slogans like 'jobs and growth'. We have seen the government have multiple conflicting positions on the effects test, some of them, quite impressively, held simultaneously. But what we have not seen is a mature discussion about economic issues.
Given that the corporate tax cuts are the only policy that this government seems to have for stimulating growth, it seemed inevitable that the caravan of confusion and chaos would eventually visit, and now it has. There are reports on the front page of the Financial Review that the government is contemplating 'junking the vast bulk of the plan'. It does not seem that this is just made up by the journalist. The journalist goes on to say:
Business groups have become increasingly concerned at the lack of commitment and this intensified on Wednesday when Treasurer Scott Morrison refused for a third straight day to say whether the government would stick with the plan and take it to the next election …
It sounds like some people are very worried about is going on inside this government. Senator Brandis gave some very short answers to questions about the government's intention in this regard, and it remains to be seen what will actually happen to corporate tax cuts. I will wait and see what will happen. But do not get me wrong, because I would be very happy to see this government dropping this misguided policy, which we cannot afford.
But it would raise an existential question for the government: what is this government actually for? What exactly is the point of this government? What is the policy that the Prime Minister has nominated as being his greatest achievement? He said 'reforms to business tax', and when Senator Brandis was asked in this chamber just moments ago, 'What reforms are these?' what was his answer? 'The ones we have in mind.' So the reform that the Prime Minister nominated as his greatest achievement so far is a reform that the government has in mind to be undertaken in the future. There are some serious problems when the greatest achievement you can identify is one which has not actually yet occurred.
It ought to ring alarm bells in the coalition party room. What do you have after that, when the only reform you have is something that has not yet happened? You have, I guess, a commitment to the right of people to be bigots, and you also have a whole range of excuses about inaction on a whole range of subjects. We have been told you cannot have a free vote on marriage equality in the parliament, because the plebiscite was an election commitment. We have been told the government will not contemplate changes to negative gearing and the capital gains tax, because it is contrary to the position they took to the election. Yet maybe, if you believe what is on the front page of the paper, the government might be contemplating a walk away from the tax cuts that were the centrepiece of their election offerings. Just this week, we have been told we cannot afford to make payments to struggling families and that people in need will have to wait longer before accessing payments they desperately need, because apparently we cannot afford to maintain our very targeted welfare system. Yet what we can afford, maybe—let's see—is a $50 billion tax cut.
We know what all these reasons and excuses for inaction are. They are just that—excuses. They are fig leaves. Like a small child that throws a tantrum, the government refuses to take ownership of its decision. It likes to say it cannot do things when the actual reason is that it does not want to. We know the truth: the only election commitments this Prime Minister cares about are the commitments he made to the right of the Liberal Party before being elected leader. The only policies we cannot afford are those that bring a cost to him in the party room. That is no way to govern, and those watching the Minister for Immigration and Border Protection might tell you that is probably no way to hold the leadership either.
Question agreed to.
I move:
That the Senate take note of the answer given by the Minister for Finance (Senator Cormann) to a question without notice asked by Senator Whish-Wilson today relating to housing affordability.
Inequality is one of the biggest issues that face all of us in this parliament, in this country and, in fact, all around the world. Right up there with climate change, it is the great challenge of our time. Inequality is all-pervasive, and it is multifaceted. One of the key parts of inequality in this country is the housing affordability crisis, because housing is also part of the wealth equation. You own your own house. You save to buy a house. You save to put a deposit on a house. You work hard to pay off that house, and that forms an essential part of your wealth and your wellbeing.
It must be really depressing to be a young Australian, especially in places like Sydney, Melbourne, Perth and Brisbane where you cannot even imagine that you could save for your own deposit for a house. You cannot even imagine that these days. In fact, when I asked the Treasury secretary about this last year, he said, 'These days most young people are able to access the housing market in places like Sydney through the bank of mum and dad,' because it is just not feasible that they can earn enough money to pay for the massive deposits that are needed to get into the home market.
What are we doing about this? Who is tackling the housing affordability crisis in this country? We know there is empirical evidence that there are a number of policies we can change to help fix this problem. There is no doubt about it; it is complex and it is all-pervasive. But we can make decisions in here, in the Senate, that fix this. There are a whole range of policies that have been around for too long that are what we call perverse incentives. They provide subsidies to housing investors which are driving the prices of houses in places like Sydney and Melbourne.
I mentioned in question time that in Newtown, in Sydney, a house that was listed for auction with a reserve of $1.2 million went for $2.6 million—more than double the price. That prompted the Governor of the Reserve Bank to come out and make a statement. I know they are very careful at the Reserve Bank about using the word 'bubble'. They try to avoid that word 'bubble' because it in itself can incite further panic in the housing market. The Reserve Bank, the Treasury secretary, all the economists around this country and some of the best financial journalists are all aware of the risks to the financial system—the risks to each and every one of us—that are caused by housing bubbles. And that is separate to the equation of inequality—tackling the housing affordability crisis.
What do we do? We can move immediately on this by removing the subsidies that are mostly for wealthy Australians. We know that the top 20 per cent of Australians are the ones that benefit from the policies in place like negative gearing and capital gains tax concessions. We can remove those and phase them out over time. We can also do other important structural reforms.
The question I asked the finance minister today, who is acting on behalf of the Treasury secretary, was about a reform that everyone in this country seems to agree on, and that is swapping stamp duty for a broad based land tax. We have done it in places like the ACT. I discovered this myself when I was chairing the select inquiry into infrastructure. It has benefits in the areas of infrastructure investment because, if we invest in public transport and in infrastructure like hospitals, schools, medical centres and community centres, we know that we get an uptick in land values around that investment by governments, and that can then be captured with increased revenue for governments.
There are so many ways that this is efficient, and this could actually help tackle the housing affordability crisis. We know that, if we do this, it will be revenue neutral for the Commonwealth government, and it will help reduce house prices and help tackle the affordability crisis. But there is a whole lot more we can do and we need to do. Instead, we seem to sit on our hands in this place, close our eyes and pretend it is not happening—but it is. We especially owe it to young Australians, people like my daughter, who I know will be looking at a career and looking at saving for a house. We owe it to them to actually do what is required, fix a broken system and make sure we can reduce the risks— (Time expired)
Question agreed to.
I present additional information received by committees relating to the following estimates:
Budget estimates 2016-17 (Supplementary)—
Education and Employment Legislation Committee—Hansard record of proceedings and documents presented to the committee.
Foreign Affairs, Defence and Trade Legislation Committee—Additional information received between 9 February and 22 March 2017—Defence portfolio.
On behalf of the Chair of the Finance and Public Administration References Committee, Senator McAllister, I present the committee's report on the Operation of the Administrative Arrangements Order, the effectiveness of the division and performance of responsibilities under it, and any other related matters, together with the Hansard record of the proceedings and documents presented to the committee.
Ordered that the report be printed.
I move:
That the Senate take note of the report.
I seek leave to continue my remarks later.
Leave granted; debate adjourned.
On behalf of the Chair of the Economics References Committee, Senator Ketter, I present the committee's report 'Lifting the fear and suppressing the greed': penalties for white-collar crime and corporate and financial misconduct in Australia, together with the Hansard record of proceedings and documents presented to the committee.
Ordered that the report be printed.
I move:
That the Senate take note of the report.
I seek leave to continue my remarks later.
Leave granted.
I would like to make some remarks. I initiated this inquiry following a very important Senate Economics References Committee inquiry, dating back nearly four years ago, where we had a look at ASIC, the Australian Securities and Investments Commission, and its performance, its powers and its resources. It was obvious to us, the economics committee at the time, that we in this country had an issue with penalties for white-collar crime. One of the recommendations from the report was that the government look at this issue: that it look at white-collar crime, that it look at the penalties in place compared with those in overseas jurisdictions and that it seek evidence from a number of expert witnesses on this issue.
Nothing happened for three years, so I initiated this inquiry. I am pleased to say that, following the initiation of this economics committee inquiry, the government has initiated its own inquiry into white-collar crime penalties in Australia. In fact, the terms of reference that the government's working group is adhering to on this issue are very similar to the terms of reference of the economics committee inquiry. I await the results of the government's inquiry with interest. I thank the committee members for their good work, the staff who worked on the inquiry and of course all the witnesses who gave evidence.
This is a really important area, because white-collar crime is little understood in this country compared to other forms of crime. White-collar crime tends to be highly premeditated. It tends to occur over long periods of time. It tends to occur from people in a position of trust who are able to misuse that position of trust to manipulate other people. It is often very sophisticated. And it involves, usually, a high degree of intelligence. It is very different to other kinds of crime, yet in this country we have seen evidence of hundreds of cases of white-collar criminals perpetuating crimes—be it in the financial services industry, be it across tax deduction; a whole range of issues that the committee looked at—but very few people have been penalised. I think Greg Medcraft, the chairman of ASIC, made the comment that Australia has become a haven for white-collar criminals. He later clarified his comments, but the point was an important one.
I have been on a number of other committees, as have other senators across the political spectrum in this chamber, that have looked at things like financial misconduct in the banks and in the financial services industry. One thing we can do to try and crackdown on white-collar criminals, to help stamp this out, is increase the range of penalties available to us. That is what the committee has looked at. We looked at detection and deterrence, because we know from evidence that fear is the key to trying to prevent white-collar criminals. We heard strong evidence that the thing most likely to stop people committing white-collar crime is of course the fear of getting caught. So we need to better resource our regulators, who actually do the monitoring of these kinds of things. But we know also that the fear of going to jail, of doing jail time, is the thing most likely to deter someone from committing a white-collar crime. In fact, we heard evidence that often in the financial services sector individuals and businesses are making so much money that they treat some of the penalties literally as a cost of doing business or as a slap on the wrist. So one thing we know is that jail sentences do matter in trying to deter white-collar crime.
The committee has made a number of recommendations in relation to this. They are strong recommendations. The report talks also about disgorgement, which gives ASIC the specific powers to seek financial redress from the criminals themselves. One of the problems we have is that when our regulators go after people they do not have the powers to take funds from them. They have to refer a case to the Director of Public Prosecutions or to the Federal Police or to other groups to seek the money back. These court cases are so expensive that they end up spending literally millions of dollars of taxpayers' money on these court cases, and if they are lucky enough to get a conviction then they do not have the ability to get the money to pay for these expenses, or be a sufficient deterrent in the first place. So giving ASIC disgorgement powers, as we see with regulators overseas, would allow it to levy these fines by going directly after people and seizing their assets, the kind of thing that we know also matters in deterrence.
We also believe that penalties in the current system of civil or criminal prosecutions are not high enough, certainly in the area of civil prosecutions. The Greens have put in additional comments to the report. We did not want to put in a dissenting report, because the actual report is very good. We would certainly like to see things go a step further. We would like to see the default maximum custodial sentence for criminal wrongdoing being 10 years imprisonment. We want to see the default maximum monetary penalty for criminal wrongdoing being the greater of $5 million or three times the benefit gained. We heard of one very high profile example of insider trading where someone sold $3 million worth of shares. They were convicted of insider trading and fined $50,000, after having made a $3 million gain on the sale of their shares. That was not good enough. It went back to Director of Public Prosecutions, who got a better result the next time round. Nevertheless, under a much tougher regime, which we base on what happens overseas, that individual potentially could have been up for a $9 million fine for insider trading versus the slap on the risk that was $50,000. These are the kinds of things that we would like to see happen, so they have been added in the additional comments of the Greens.
We want to see the default maximum monetary penalty for civil and administrative penalties to be the greater of $1 million or three times the benefit gained. We strongly endorse the recommendation in the chair's report that disgorgement powers be available. Without those we have a gaping hole in our current white-collar crime toolbox. That is something I would urge the government—Senator Fifield is in here today—to act on immediately. We will wait for the government's report, but I would be very disappointed if that issue was not dealt with in detail and we did not see a forthcoming recommendation.
Lastly, we would like to see public reporting improved. We do have name-and-shame registers for some offenders in this country. We would like to see penalties on those committing white-collar crimes and that information being made available to the public. Transparency is of itself a penalty for the person who committed a crime—being exposed publicly—and acts as a deterrent against further criminal activity.
ASIC has established an enforceable undertakings register and a banned and disqualified register that makes information available to the public about certain white-collar criminals, such as directors who may have been banned from a company. However, this only represents part of the enforcement action undertaken by the regulator. There is still a lot of secrecy around these proceedings, whether they are criminal or civil.
We would like to take the hardest-possible line on this issue. We feel that this inquiry was very important; it follows up an even-more important inquiry, in the ASIC inquiry that started nearly four years ago. In fact, I think that Senator Williams and I may be two of the few left in here who were actually on that inquiry. I look forward to the government's response to this issue and I hope that we actually get some action. I think that just about everyone we heard from agreed that we needed much better enforcement and much stronger laws around deterrents and providing penalties for white-collar crime. Thank you.
I seek leave to continue my remarks.
Leave granted.
I present the government’s response to the report of the Joint Standing Committee on Migration on its inquiry into the business innovation and investment program. I seek leave to incorporate the document in Hansard.
Leave granted.
The document read as follows—
Australian government response to the Joint Standing Committee on Migration report:
Business Innovation and Investment Program
March 2017
Background
The Business Innovation and Investment Program (the program) was introduced on 1 July 2012 and included in the SkillSelect expression of interest (EOI) database to facilitate the matching of prospective migrants with state or territory government nomination. The program aims to attract skilled and experienced business owners, senior executives and investors to Australia with the assets and desire to migrate to Australia on the basis of entering into business or investment activity.
On 18 March 2014, the then Minister for Immigration and Border Protection, the Hon. Scott Morrison MP, asked the Joint Standing Committee on Migration (the committee) to inquire into and report on the program, excluding the Significant Investor Visa stream.
In March 2015, the committee handed down its report. The report included one recommendation for the government to consider.
Committee's recommendation
The committee recommended that the Department of Immigration and Border Protection examine the program as part of the 2015-16 Migration Program Survey (the survey) and in its Skilled Migration and Temporary Activity (SMTA) visa review The committee asked that the department examine the:
Australian g overnment response
The government appreciates the time taken by the committee in undertaking its inquiry into the program.
In principle, the government supports the committee's recommendation to review the program. However, rather than the committee's recommendation to review the program as a part of the survey and the SMTA visa review, the government will undertake a separate review of the program. This approach will allow for a more targeted and comprehensive analysis of the program.
A review separate from the survey or SMTA visa review is preferred for the following reasons:
Review of the program
The committee asked that the government examine specific aspects of the program in the recommended review.
1. Suitability and attainability of the objectives set for the program
The review will clarify the objectives of the programme, and the visa settings which underpin it. Any resulting recommendations will be put to the government for consideration.
2. Role the state and territory governments play in administering the program
The government will review the role of the state and territory governments in sponsoring business migrants and ensuring that the skills and economic value of business migrants is optimal.
The review will examine whether the current system adequately balances the risks and benefits of the programme and the division of responsibilities between the states and territories and the Commonwealth.
3. Data collection
The government recognises that more targeted data should be obtained from state and territory governments in order to properly evaluate and report on the suitability of the programme.
While this will be subject of further discussions with the state and territory governments, the review will develop a forward working plan for monitoring and evaluating the program.
4. Promotion and marketing of the program
The government agrees that the program requires promotion and marketing to ensure it targets innovative and successful business people to migrate to Australia. The government continues to promote the program and adapt its promotional activities to ensure Australia remains internationally competitive as a destination for innovative talent and investment.
5. Application processing and service standards
The government notes the committee's recommendation to examine options for improving application processing times and service standards. As noted by the committee, it is difficult to attribute the cause of delays in processing to any one issue, including whether these delays are due to under-resourcing in the department or failure on the part of the visa applicant.
Processing times and service standards are regularly reviewed and informed by feedback from the department's processing network, applicants and external stakeholders.
6. Role swapping
The government agrees with the committee's observation that a decline in applicant rates may be attributed to the removal of the ability for "role swapping" among primary and secondary applicants for the permanent visa.
On 1 July 2015, role swapping was reintroduced for the program (excluding SIV and PIV), to allow the primary applicant for the provisional visa to be the secondary applicant for the permanent visa and the secondary applicant for the provisional visa to be the primary applicant for the permanent visa. This enables visa holders with established businesses in their home country to maintain their business offshore and have their spouse or de facto partner run their Australian business, thereby increasing the flexibility of the program.
7. English language requirements
A minimum English language threshold is one of the factors that will be considered as part of the review. The age threshold for applicants will also be considered.
8. Innovation points test
The innovation and investment points test will be reviewed.
9. Attracting investment in regional Australia, graduates, early-stage entrepreneurs, and venture capitalists
The program settings recognise that business owners and investors may be the best judge of where to invest, including in regional Australia.
While visa settings facilitate the entry of talented or skilled migrants to Australia, other factors will also contribute to a potential migrant's decision to choose Australia. In this context, the department will work closely with other government agencies to ensure the program visa settings are appropriately supportive of broader policy directions.
On behalf of the Minister for Veterans' Affairs, I table a ministerial statement on the last veterans' mission to Korea.
I table a document relating to the order for production of documents concerning the Roe Highway Extension.
Order! The President has received letters requesting changes in the membership of various committees.
by leave—I move:
That senators be discharged from and appointed to committees as follows:
Education and Employment Legislation Committee—
Appointed—
Substitute member: Senator Rhiannon to replace Senator Hanson-Young for the committee’s inquiry into the provisions of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017
Participating member: Senator Hanson-Young
Finance and Public Administration References Committee—
Appointed—
Substitute member: Senator Siewert to replace Senator Rhiannon for the committee’s inquiry into the Community Development Program
Participating member: Senator Rhiannon
Lending to Primary Production Customers—Select Committee—
Appointed—
Senator Roberts
Participating members: Senators Burston, Georgiou and Hanson
National Broadband Network—Joint Standing Committee—
Appointed—Participating members: Senators Burston, Georgiou and Roberts
Strengthening Multiculturalism—Select Committee—
Appointed—
Senators Dodson, Kitching and Singh
Participating members: Senators Bilyk, Brown, Cameron, Carr, Chisholm, Collins, Dastyari, Farrell, Gallacher, Gallagher, Ketter, Lines, Marshall, McAllister, McCarthy, Moore, O’Neill, Polley, Pratt, Sterle, Urquhart and Wong.
Question agreed to.
I move:
That these bills may proceed without formalities, may be taken together and be now read a first time.
Question agreed to.
Bills read a first time.
I table revised explanatory memoranda relating to the Health Insurance Amendment (National Rural Health Commissioner) Bill 2017 and the Social Services Legislation Amendment (Simplifying Student Payments) Bill 2017 and I move:
That these bills be now read a second time.
I seek leave to have the second reading speeches incorporated in Hansard.
Leave granted.
The speeches read as follows—
EDUCATION AND OTHER LEGISLATION AMENDMENT BILL (NO. 1) 2017
Student loans to pay for tuition fees provide important financial support for vocational education and training students who would otherwise be unable to afford to study because of upfront fees.
Most training providers whose tuition fees are funded by student loans do the right thing, providing high quality training that gives their students the skills they need to get a job, or get a better job.
Unfortunately, however, it is common knowledge that Labor's failed VET FEE-HELP scheme was exploited by a number of unscrupulous providers and their agents.
In particular, disadvantaged Australians were targeted, including those with a disability, those with low levels of literacy, Indigenous Australians and older Australians.
People were signed up for loans but had little understanding of what they were signing up for; taking out loans for courses which they did not need and did not have the capacity to complete.
That is why the Turnbull government axed Labor's failed VET FEE-HELP scheme and established a new, student-centred, robust, outcomes-focused VET Student Loans program.
VET Student Loans rebuild Australia's income contingent loan program for vocational education and training from the ground up, restoring confidence in the VET sector and better protecting students.
As part of VET Student Loans, the Government announced it would establish a new VET Student Loans Ombudsman, giving students access to an independent complaints handling mechanism with the power to adequately investigate their concerns.
The submissions made to the Senate inquiry into the VET Student Loans Bills late last year demonstrated the significant stakeholder support for the government's announcement.
For example, the Consumer Law Action Centre said:
'An ombudsman will assist the sector to rebuild its reputation and the trust and confidence of students, parents and employers. The fact that the Government is acting quickly to establish this service is welcomed, as accessible and free dispute resolution is complementary to a rigorous consumer protection environment.'
Similarly, the Australian Council for Private Education and Training (ACPET) noted:
'An ombudsman also offers the vast majority of providers the protection of knowing that those who do the wrong thing will be weeded out.'
The VET Student Loans Ombudsman will be operated through the Commonwealth Ombudsman, whose independence will help in restoring confidence in the VET sector.
The VET Student Loans Ombudsman will be able to investigate complaints, and compliance by providers with legislation in relation to loans, for both the new VET Student Loans program or under Labor's failed VET FEE-HELP scheme, and make recommendations to address concerns.
The unfortunate actions of a small number of unscrupulous providers and their agents have left some students with significant debts and damaged the reputation of our many high quality VET providers.
This government recognises the critical importance of assisting these students with their complaints and repairing the reputation of the sector.
This is why I introduce this bill today.
Australian Research Council amendments
The bill also increases the funding caps in the Australian Research Council Act 2001 in line with inflation and ensures that the Australian government can continue to provide support for thousands of research projects.
The Australian government is making a significant investment in science, research and innovation—committing $10 billion across all portfolios in 2016–17 alone.
Through our $1.1 billion National Innovation and Science agenda (NISA) the Turnbull government is supporting research, incentivising innovation and entrepreneurship, rewarding risk taking, and promoting science, maths and computing in schools includes, including through:
Through the Australian Research Council (ARC), the Australian Government is investing in excellent fundamental and applied research that helps improve the quality of people's lives, supports Australian industries and businesses, and ensures our nation remains at the cutting edge of research, innovation and global competitiveness.
Such research has and continues to play an important role in both addressing the most challenging and significant social and economic problems of our time, and ensuring taxpayers money is invested wisely.
In November last year, the government announced more than $416 million in Australian government funding through the ARC's National Competitive Grants Program.
This funding supported research projects including: developing high-speed optical wireless technology; helping to better understand speech and language difficulties in children; and understanding how people with disabilities use smartphones to navigate and use essential services.
In January this year, the government also announced the first research projects awarded funding under the new continuous Linkage Projects scheme, including research that will: improve our national rail track system; develop better coal seam gas water treatment; and improve the efficiency of Australia's mining sector.
Australia's higher education system must have adequate research funding and facilities to ensure we attract and retain world-class academics, working with industry, and teaching the next generation of researchers, policy-makers and entrepreneurs.
Unlike the former Labor government, which left a funding cliff for NCRIS in June 2015, and announced $6.6 billion in cuts to university funding, the Turnbull government, through the NISA, has secured the future of the NCRIS network and its 1,700 highly skilled technical and research staff.
High quality, accessible and sustainable research infrastructure is a crucial investment in Australia's future.
The amendments in this bill, to extend funding through to 2019–20, provide certainty to Australian researchers to continue to deliver critically important research, build partnerships with industry and the community, and realise excellent research outcomes for Australia and the world.
I commend this bill.
HEALTH INSURANCE AMENDMENT (NATIONAL RURAL HEALTH COMMISSIONER) BILL 2017
1 SECOND READING SPEECH
I am proud to introduce the Health Insurance Amendment (National Rural Health Commissioner) Bill, which amends the Health Insurance Act 1973 for the purpose of establishing Australia's first National Rural Health Commissioner.
This is an incredible and historic occasion—an historic occasion for the coalition, the National Party, and the third of our population that call regional, rural and remote Australia home.
This is really a historic occasion for our nation.
Improving access to quality health care for people, no matter where they live, is a priority for this coalition government.
Our doctors, our nurses, dentists, allied health workers, our pharmacists, our Indigenous health workers, mental health workers, our midwives we understand these people, what they are up against and we understand the needs of Australians in regional, rural and remote Australia.
We understand that it takes a toughness and a boldness, coupled with a deep sensitivity, to work in health in rural and remote areas.
Since Australia's pioneering days, before telecommunications, we found ways to overcome isolation between the new colonies. We did that. We are a nation that has overcome geographic challenges, having one of the largest land masses and the largest search and rescue regions in the world.
Around one-third of Australians live outside metropolitan areas, and about two per cent of the population live in remote and very remote locations. Compared to metropolitan areas, rural and remote Australians generally:
For those living in rural, regional and remote Australia, finding services can often be difficult, if not impossible.
As our Deputy Prime Minister, the Leader of the National Party, has said, 'We will continue to make sure that for the people out there doing it tough, that you don't make their life tougher.'
This government is committed to bridging the city-country divide.
The common problems encountered in the bush necessitate the development and application of a dedicated framework which supports a nationally coordinated approach that is adaptable to local conditions.
Our commitment today is to ensure that regional, rural and remote communities will have a champion to advocate on their behalf so they are able to receive the support they need to deliver health services to local people.
This is all guided by a deep-lying principle that every Australian should have the right to access a high-quality standard of health care, no matter where they live.
To this end, this bill will pave the way to establish Australia's first-ever National Rural Health Commissioner. The commissioner is an integral part of our broader agenda to reform rural health in this nation.
Establishing this role will be achieved by amending the Health Insurance Act 1973, which will provide for the commissioner to be a statutory position, enabling them to carry out their duties independently and transparently.
The commissioner will work with regional, rural and remote communities, the health sector, universities, specialist training colleges and across all levels of government health administration to improve rural health policies and champion the cause of rural practice.
The position will be independent and impartial—a fearless champion. The commissioner will be someone who has extensive experience within the rural health sector, who is capable of collaborating and consulting closely with a broad range of stakeholders, and who has a passion for improving health outcomes in regional, rural and remote Australia.
The commissioner will be appointed for a period of two years, with a reappointment up until 30 June 2020.
As a part of the role, the commissioner will be required to submit a report to the responsible minister. This will outline findings and recommendations for consideration by the government.
The Minister must table a copy of the final report before each house of the parliament, within five sitting days of the House after the final report is given to the minister.
The commissioner will not be able to delegate his or her powers to anyone else, they will not hold any financial delegation powers, nor will they have any specific employment powers.
The commissioner will be assisted by staff from the Department of Health throughout the duration of their term.
Once appointed, the commissioner's first priority will be to develop National Rural Generalist Pathways. The aim of these pathways will be to address the most serious issue confronting the rural health sector: the lack of access to training for doctors in regional, rural and remote communities. Attracting and retaining more doctors and health professionals into country areas is essential if we are to improve access to health care around the coast and in the bush.
Rural generalists are faced with a unique set of challenges, and the commissioner will examine these while developing the generalist pathways.
It is widely recognised that rural generalists often have advanced training and a broader skill set than is required by doctors practising in metropolitan centres. In many instances, they perform duties in areas such as general surgery, obstetrics, anaesthetics and mental health. They not
only work longer hours but also are frequently on call after hours in acute care settings, such as accident and emergency and hospital admitted patient care.
However, despite the rural generalists' multidisciplinary skill set, demanding workload and geographic isolation, there is no national scheme in place which properly recognises this set of circumstances.
In developing the National Rural Generalist Pathways, the commissioner will consult with the health sector and training providers to define what it means to be a rural generalist. The commissioner will also examine appropriate remuneration for rural generalists, to ensure their extra skills and working hours are recognised. By addressing these areas, the pathways will help to encourage more doctors to practise in regional, rural and remote Australia.
While the development of the pathways will be the commissioner's first priority, the needs of nursing, dental health, pharmacy, Indigenous health, mental health, midwifery, occupational therapy, physical therapy and other allied health stakeholders will also be considered.
Health-care planning, programs and service delivery models must be adapted to meet the widely differing health needs of rural communities and overcome the challenges of geographic spread, low population density, limited infrastructure and the significantly higher costs of rural and remote health-care delivery.
In rural and remote areas, partnerships across health-care sectors and between health-care providers and other sectors will help address the economic and social determinants of health that are essential to meeting the needs of these communities. The commissioner will form and strengthen these relationships, across the professions and for all the communities.
It is worth noting that this government's commitment has been shared and welcomed by the sector. These are organisations that have been crucial in its development and I would like to thank:
In addition to establishing the role of the commissioner, this bill also contains two other amendments to the Health Insurance Act 1973.
It will repeal section 3GC of the act, to abolish the Medical Training Review Panel. In October 2014, members of the Medical Training Review Panel identified an overlap between their functions and those of the National Medical Training Advisory Network. Part of the advisory network's functions is to provide advice on medical workforce planning and medical training plans to inform government, employers and educators. Given this focus, it was agreed that the advisory network could pick up the panel's annual reporting obligations on medical education and training, and that the panel's role would cease. This measure will simplify legislation in the health portfolio.
The other amendment will be the repeal of section 19AD of the act. This will not affect any medical practitioner subject to the legislation, and will not affect the operation of any current workforce or training programs. It will remove a burdensome and ineffective process which required a review every five years of the operation of the Medicare provider number legislation, subsections 19AA, 3GA and 3GC of the Health Insurance Act 1973.
Previous reviews have not resulted in operational improvements to the legislation. Furthermore, recent developments in systems supporting Medicare provider number legislation and processes are not captured by section 19AD. Repealing this ineffectual measure in the act is a necessary measure.
To sum up, this bill is an important step forward for regional, rural and remote health in Australia.
This coalition government recognises the value of our rural communities and the special place they hold within the fabric of this country. People living in these communities make an enormous contribution to our national economy, and to the culture and character of Australia. Access to a quality standard of health care is what they deserve and are entitled to expect. The key is to recruit and retain more doctors and health professionals outside of the major cities, and that will be the focus of the National Rural Health Commissioner and our government.
With the appropriate training opportunities, recruitment, remuneration and ongoing support, the government is confident that more people will be encouraged to pursue a rewarding career in rural health.
Regional, rural and remote health is built on the commitment, the expertise and the courage of its workforce. We have some of the most resilient and passionate people working in this sector. The formation of the commissioner will help to provide the rural health workforce with the support it needs to carry out its vitally important work.
Finally, the commissioner will champion the incredible and rewarding opportunities of a career in rural medicine. Our government will do our best to hear you, to listen to you, and to make the necessary steps for our health system to work better for you.
Our coalition government looks forward to working closely with the National Rural Health Commissioner to ensure we can improve access to health services for all the men and women who call regional, rural and remote Australia home.
SOCIAL SERVICES LEGISLATION AMENDMENT (SIMPLIFYING STUDENT PAYMENTS) BILL 2016
SECOND READING SPEECH
This bill will introduce a package of measures that will simplify and support access to student payments by:
Youth allowance, Austudy and ABSTUDY Living Allowance are income support payments that provide financial assistance to full-time students and apprentices. The payments are designed to encourage people to undertake further education and training to enhance their employment and career prospects.
In the 2015-16 budget, the government committed over $60 million to commence the replacement of the ageing Centrelink IT system to support future welfare reform.
The measures in this bill support payment simplification, access to payments and future welfare reform by aligning payments settings, simplifying the administration of payments and making eligibility for student payments and concessions fairer and easier to understand.
I thank the Senate Community Affairs Legislation Committee for its report on the bill and its recommendation that the bill be passed. The committee received submissions from the National Welfare Rights Network and the Australian Council of Social Service both of which support the bill without amendments. I also thank these organisations for their support of the bill.
The government will continue to provide assistance for students and those most in need. The changes will not affect the overall value of student payments.
Aligning means testing rules
The first measure, aligning means testing rules, aims to simplify means testing and remove anomalies between student payments and other welfare payments. This measure is to commence from the first 1 January or 1 July after Royal Assent and will be achieved through a number of means.
Firstly, the family tax benefit income test and the youth parental income test will be harmonised, so that family tax benefit income details can be automatically reused for the youth parental income test. Parents will no longer be required to resubmit their income information to support a youth payment claim by one of their children.
Secondly, the integrity of the student payments means test will be improved by removing an anomaly that allows some partnered youth allowance and Austudy recipients to be subject to a more generous assets test than applies to all other youth allowance and Austudy recipients.
Integrity will also be improved by extending the trust and company rules that already apply to all other income support payments, to student payments. As a result, all of the income or assets held by students through a trust or company will be taken into account when establishing their entitlement to a payment.
Lastly, the pension income test exemption for regular gifts from immediate family members will be aligned across the social security system so that it also applies for student payments and other social security benefits.
Extending this exemption will remove a disincentive for families to provide support to family members. For dependent students, the parental means test already reduces a dependent child's youth payment where a parent has the ability to provide support, and it is not logical or equitable to further reduce the youth payment when the parent provides the expected support.
As per the explanatory memorandum tabled in parliament, this measure is estimated to save $778,000 over the forward estimates.
Simplifying eligibility for the Health Care Card issued to students
The second measure in this bill will ensure that from 1 January 2019 all students receiving income support will receive a concession card.
This change will allow all students receiving youth allowance (student), Austudy and ABSTUDY living allowance to automatically receive a Health Care Card. This will guarantee that around 240,000 students will receive Pharmaceutical Benefits Scheme prescriptions at the concessional rate and access to the lower threshold of the Extended Medicare Safety Net when they receive a student payment. It may also provide greater access to bulk billing allowing students to focus on their studies without worrying about their medical costs.
This measure will improve consistency by aligning access to concession cards for students with other income support recipients.
Under the current rules, students are the only income support recipients not to qualify for an automatic issue Health Care Card. Instead, students can make a claim for a low income Health Care Card if their income is below a certain limit. This process is burdensome for students and costly for the Department of Human Services to administer. The automatic issue Health Care Card and the low income Health Care Card provide the same Australian government benefits to cardholders.
In 2017, holders of the Health Care Card and low income Health Care Card pay only $6.30 for each Pharmaceutical Benefits Scheme prescription. Without a concession card these prescriptions could cost students up to $38.80 each. Access to a concession card means that once these students and their families' total out-of-pocket expenses for prescriptions reach the concessional Pharmaceutical Benefits Scheme Safety Net of $378.00 or 60 prescriptions, they may receive Pharmaceutical Benefits Scheme prescription items free of charge for the rest of the calendar year. These free Pharmaceutical Benefits Scheme prescriptions are not available to people without a concession card.
In 2017, the annual threshold for both Health Care Card and low income Health Care Card holders for the Extended Medicare Safety Net is $656.30, instead of $2,056.30 for non-cardholders. Once the threshold has been met, Medicare will pay for 80 per cent of any further out-of-pocket costs for the rest of the calendar year for services including general practitioner and specialist attendances, as well as many pathology and diagnostic imaging services.
Currently, the application for the low income Health Care Card requires students to meet a more stringent income test, with the student needing to earn slightly less than the income limit for youth allowance over an eight week period. This measure will also extend these benefits to around 4,000 students who previously were not eligible for a concession card.
Currently, in most circumstances, student payment recipients must wait eight weeks to become eligible for a low income Health Care Card. This measure will ensure concessions are available to all students as soon as they start receiving an income support payment.
In order to avoid waiting eight weeks to become eligible for a low income Health Care Card, currently an applicant of a student payment can provide proof that their income was below the relevant limit in the previous eight weeks. Following introduction of this measure, students will no longer be required to produce this proof to be eligible for a concession card. Not only does this measure guarantee that student payment recipients will receive health-related concessions, it will cut red tape and reduce reporting requirements for these students.
The financial impact of this measure over the forward estimates will be a cost of $726,000.
Automatically updating the geographical classification
The third measure in this bill will, from the first 1 January or 1 July after Royal Assent, simplify the process for adopting the latest version of the 'Australian Statistical Geography Standard' remoteness structure published by the Australian Statistician which is used in the assessment of eligibility for student payments under the Social Security Act 1991.
Currently, youth allowance recipients whose family home is in a location geographically categorised under the remoteness structure as Inner Regional Australia, Outer Regional Australia, Remote Australia or Very Remote Australia can access additional benefits or concessional qualification requirements under the Social Security Act that are not available to students from major city areas. The additional benefits are:
These additional benefits are in recognition that students from regional and remote areas are more likely to have to relocate to study and have significantly lower participation rates in higher education than students from major city areas.
The geographical remoteness structure currently used in the Social Security Act to determine eligibility for these additional benefits is the 2006 'Australian Standard Geographic Classification', published by the Australian Bureau of Statistics. The '2006 remoteness structure' has been used to determine eligibility for student payments since 2011. However, the '2006 remoteness structure' is out of date and was subsequently superseded, in January 2013, by the 2011 'Australian Statistical Geography Standard' remoteness structure. The remoteness structure is updated every five years by the Australian Bureau of Statistics, following each Census. The next update, which will be to the '2016 remoteness structure', is due in January 2018.
This measure will introduce amendments to the Social Security Act, so that qualification for student payments will automatically draw upon the updated remoteness structure, without the need for future legislative amendment when a new 'Australian Statistical Geography Standard' remoteness structure or any replacement remoteness structure is published by the Australian Bureau of Statistics. The 2011 'Australian Statistical Geography Standard' remoteness structure will apply from the first 1 January or 1 July after Royal Assent, with the 2016 version having effect from the first 1 January or 1 July to occur after the day of its publication. This will ensure that the assessment of qualification for youth allowance and the Relocation Scholarship is based on the latest available information on geographical classification.
This measure will result in some students, who were previously ineligible for payment, being able to qualify for youth allowance under the concessional workforce participation arrangements and the Relocation Scholarship, and they may qualify for a higher rate of the Relocation Scholarship.
There is a risk however that these changes could disadvantage students who commence study in a year that a remoteness structure update is released or who are partway through their course when their family home is no longer classified as located in a regional area. It is expected that the numbers of students affected will be very small.
However, students who are found ineligible for youth allowance under the concessional workforce participation independence criteria due to a change in the remoteness structure, may still qualify for Youth Allowance as a dependent or under one of the other independence criteria.
Students who are no longer eligible for the Relocation Scholarship due to their family home being reclassified as located in a major city area rather than a regional location, will still retain access to youth allowance, provided they continue to meet the qualification criteria.
Students who had previously qualified for youth allowance under the concessional workforce participation independence criteria using an earlier remoteness structure, will not have their qualification for youth allowance reassessed if their family home is classified as in a major city location of Australia under an updated remoteness structure. These students will retain their independent status.
The reclassification of areas is unlikely to have lasting or recurrent effects on students' payment eligibility given the cycle of five-yearly updates of the geographical classification document and that on average tertiary courses are completed in three to four years.
This measure is expected to have a cost neutral effect on the budget over the forward estimates.
Independent test for youth allowance and scholarship payments for students
The fourth measure in this bill was an election commitment and part of a package to support regional students' access to education. It will amend the rules governing when a person will be regarded as independent for the purposes of youth allowance and the Relocation Scholarship. This measure will reduce, from 18 months to 14 months, the period young people from regional and remote areas of Australia have to earn the amount required to satisfy the workforce independence provisions. This measure is to commence from 1 January 2018.
Students whose family home is in a regional or remote location can access youth allowance on the basis of being independent under concessional workforce participation arrangements. One way in which students can demonstrate they have supported themselves is through a period or periods of employment over 18 months since leaving secondary school, with earnings totalling at least 75 per cent of Wage Level A of the National Training Wage schedule in a modern award. This is $24,042 for the 2016-17 financial year.
In addition, to access these arrangements students' parental income must be below $150,000, they must be undertaking full-time study and they must be required to live away from home to study.
This measure recognises that regional and remote students face additional costs in pursuing tertiary education and, similar to the measure to automatically update the geographical classification used to assess eligibility for student payments, it recognises that regional students have much lower participation rates in higher education than students from major cities.
The reduced period from 18 months to 14 months will allow students to qualify for youth allowance four months sooner than under current arrangements. Students will be able to take a gap year at the end of secondary school, and subject to them satisfying the other qualification requirements for youth allowance, receive payment as independent the following year. Students who are considered independent for youth allowance purposes, do not have their rate of payment affected by parental income, as is the case for dependent recipients.
Currently, students who qualify for youth allowance under these arrangements may commence study prior to qualifying for student payments or take two gap years before commencing study and qualifying for payment. The longer students are disengaged from study after completing secondary school, such as for more than a year, the less likely they will be to commence or complete tertiary study.
It is estimated that approximately 3,700 regional and remote students will qualify for youth allowance as independent under this measure—approximately 2,500 would become eligible for payment as independent four months earlier than under current provisions and approximately 1,200 would become eligible for payment as independent, who otherwise would not have met the independence criteria, due to an expected change in their employment patterns to earn the required amount in a shorter period. This may include students who choose to take a gap year, who may have not undertaken a gap year otherwise.
This measure is expected to cost approximately $81.1 million over the forward estimates.
Conclusion
Together these measures will assist in simplifying and supporting access to the payment system and support future welfare reform.
Debate adjourned.
I move:
That the bills be listed on the Notice Paper as separate orders of the day.
Question agreed to.
I move:
That these bills may proceed without formalities, may be taken together and be now read a first time.
Question agreed to.
Bills read a first time.
( I table the revised explanatory memoranda relating to the bills and I move:
That these bills be now read a second time.
I seek leave to have the second reading speeches incorporated in Hansard.
Leave granted.
The speeches read as follows—
TREASURY LAWS AMENDMENT (COMBATING MULTINATIONAL TAX AVOIDANCE) BILL 2017
SECOND READING SPEECH
This bill implements the suite of tax integrity measures the Turnbull government announced in the government's 2016-17 budget to combat multinational tax avoidance.
Most taxpayers comply with Australia's tax rules and pay the right amount of tax.
However, there are some who do not; some who try to avoid paying Australian tax by diverting Australian profits to low tax countries.
When this happens, other taxpayers, including families and small businesses who comply with our tax laws, are left to carry the taxation burden.
This government will not stand for tax avoidance. We will not stand for the deliberate flaunting of our tax laws by major multinational enterprises.
That is why the Turnbull government has introduced some of the strongest taxation integrity rules in the world — so that those taxpayers who attempt to avoid paying tax are caught and do not undermine our tax system.
This government inherited a tax system that had not kept pace with developments in global trade and investment and digital commerce. It was left to this government to reverse the years of inaction on tax integrity, and ensure that the tax loopholes are closed and multinational entities operating in Australia pay the right amount of tax.
We are determined to have the strongest rules against tax avoidance; to level the playing field and deliver a fairer tax system for all.
In 2015 the government introduced a package of three key reforms to combat multinational tax avoidance.
The first was the Multinational Anti-Avoidance Law to stop multinationals with significant Australian activities booking profits overseas to avoid paying tax in Australia. We are already seeing positive results from this measure, with many multinationals now restructuring to book their income in Australia.
The second was to double the penalties for large companies that enter into tax avoidance or profit-shifting schemes — making them think twice before engaging in these behaviours.
Thirdly, we introduced country-by-country reporting which requires large multinationals to report to the Australian Taxation Office their income and tax paid in every country in which they operate.
But we are aware that more needs to be done.
The Diverted Profits Tax does not apply to managed investment trusts or similar foreign entities, sovereign wealth funds and foreign pension funds. These entities have been excluded as they are low risk from an integrity perspective, as they are widely held and undertake passive activities. This exclusion will ensure that such entities do not face unnecessary compliance burdens as a result of the introduction of the Diverted Profits Tax.
Similarly, the Diverted Profits Tax does not capture entities with Australian income of $25 million or less.
The Diverted Profits Tax contains a number of key features that will encourage greater cooperation between uncooperative multinationals and the ATO. As a result this will reduce the length of disputes between the ATO and multinationals.
These key features include:
Increased p enalties
Schedule 2 of this bill increases the administrative penalties that can be applied by the Commissioner of Taxation to significant global entities for breaching their tax reporting obligations.
From 1 July 2017, the government will increase the maximum penalty 100-times for these entities where they fail to lodge tax documents on time or take reasonable care when making statements to the ATO.
The penalty regime that was in place when we came to government was wholly inadequate and was not commensurate with the gravity of reporting offences that could be committed by significant global entities.
As a consequence, this bill which I am introducing today, will raise the maximum administrative penalty for significant global entities who fail to comply with their tax reporting obligations from $5,250 to $525,000 when taking into account the increase in the value of Commonwealth penalty unit announced in the 2016-17 Mid-Year Economic and Fiscal Outlook.
The government is also doubling the penalties for these entities when they make false or misleading statements to the ATO.
These changes will make the penalties applicable to significant global entities more commensurate with their turnover, and provide greater incentive for them to lodge tax documents on time and take reasonable care when making statements to the ATO.
We also announced that we would enhance the ATO's ability to detect tax avoidance by progressing work on developing a disclosure regime requiring advisers to report aggressive tax schemes to the ATO. We have also committed to new protections for whistleblowers who report tax misconduct to the ATO.
This government also announced in the 2016-17 Budget that Australia would implement OECD anti-hybrid rules to ensure that multinationals are not able to take advantage of differences in how countries tax hybrid financial instruments or hybrid entities.
We have ensured a level playing field for all domestic suppliers by passing legislation that ensured GST is charged on digital products and services imported by consumers. But we are now going even further and will remove the low-value imported goods GST threshold. This means that GST will be charged on all low-value goods imported into Australia regardless of their price.
The government is taking a strong, world-leading, but balanced approach to multinational tax avoidance.
The Turnbull government has said that enough is enough when it comes to multinationals diverting profits offshore and failing to meet their tax disclosure responsibilities.
Adopting the changes in this Bill will keep our transfer pricing rules in line with international best practice and help ensure that profits made in Australia are taxed in Australia.
Full details of the measures contained in the bill are outlined in the explanatory memorandum.
DIVERTED PROFITS TAX BILL 2017
SECOND READING SPEECH
The Diverted Profits Tax Bill 2017 forms part of a package of bills to combat multinational tax avoidance.
This bill imposes a new Diverted Profits Tax that is targeted at multinationals who enter into arrangements with off-shore related parties that lack economic substance so as to divert their Australian profits to related parties in lower tax countries, in order to avoid paying Australian tax.
This bill imposes an upfront Diverted Profits Tax liability payable on the amount of the diverted profits at a penalty rate of 40 per cent.
This has the effect of encouraging greater cooperation between uncooperative multinationals and the ATO. As a result this will greatly reduce the length of disputes between the ATO and multinationals, and lead to timelier dispute resolution.
Further details of the bill and the new Diverted Profits Tax are set out in the explanatory memorandum for the Combating Multinational Tax Avoidance Bill 2017.
Debate adjourned.
On behalf of the Chair of the Legal and Constitutional Affairs Legislation Committee, I present the report of the committee on the provisions of the Crimes Legislation Amendment (International Crime Cooperation and Other Measures) Bill 2016, together with documents presented to the committee.
Ordered that the report be printed.
This bill is big. This bill is bold. Only once before in our parliament's history have we ever commissioned an inquiry in the way that this bill, the Banking and Financial Services Commission of Inquiry 2017, sets out. This essentially is a royal commission that is instigated by the parliament and that reports to the parliament. This is a parliamentary commission of inquiry. Only once in Australian history have we done this.
The UK had a select committee looking at the use of parliamentary commissions of inquiries, and drew the conclusion that in a modern parliament we should see a lot more of this kind of stuff, because ultimately this is the parliament holding the executive to account.
When we went down this path, we thought to ourselves, 'This Prime Minister is never going to call a royal commission into the Australian banks; this Prime Minister is running a protection racket for the financial services industry in this country,' and we looked at how we could hold the Prime Minister to account, to do the job that the Australian people put us in parliament to do.
Recently the Small Business and Family Enterprise Ombudsman, Kate Carnell, highlighted the fact that there have been 17 parliamentary inquiries over the last decade into financial misconduct, broadly, in the financial services sector, and into the banks. She lamented the fact that there has been little change following those parliamentary inquiries. Greg Medcraft, the head of the Australian Securities and Investments Commission, at Senate estimates only a few weeks ago, said he still thinks there is a cultural problem in the Australian banks and in the Australian financial services industry. I have had another count, and there have been 28 different parliamentary inquiries across different states.
What is a parliamentary inquiry? All the senators in this chamber are familiar with parliamentary inquiries: Senate inquiries. It is what we do. The key part of our job is holding Senate inquiries. I have sat on dozens of Senate inquiries in the five years that I have been in the Senate. We do the best possible job that we can, but we are limited in our time, our resources and, ultimately, our powers to get to the bottom of these issues.
I want to give senators in the chamber here today, and anybody else listening, a very brief history. Back in 2013-14, this Senate, through the Economics References Committee, instigated a very important inquiry looking into the Australian Securities and Investments Commission—what kind of job it was doing, what kinds of resources it needed and what kinds of powers it needed to better do its job. During that inquiry, a whistleblower came forward, a brave whistleblower called Mr Jeff Morris, and gave the committee evidence of a financial scandal that had been uncovered at the Commonwealth Bank. That inquiry ended up running for nearly nine months—nearly nine months of work—and went across a whole range of things.
At the end of that very long and important Senate inquiry, our conclusion and recommendation—and it was the key recommendation from the chair, who happened to be a Labor chair, former senator Mark Bishop—was that we needed a royal commission into this scandal of the Commonwealth Bank. An economics committee made the recommendation that we needed a royal commission. I was sitting on that committee during that inquiry, and I can tell you that the reason underlying that key recommendation was that we did not have the powers that were necessary, and neither the resources nor the time, to get to the bottom of this scandal. We also did not believe, based on the evidence we saw in this inquiry, that the regulator was sufficiently able to get to the bottom of this issue, levy penalties and implement deterrents to make sure this kind of thing did not happen again.
Senate inquiries very rarely, if ever, compel witnesses to appear. We do have the power to do so, but it is extremely difficult. We need to get political support to do that. Unlike a royal commission or a parliamentary commission of inquiry—which is what the bill we are debating today is about—we cannot search premises, seize documents or offer immunity to witnesses. We know that in the US parliamentary system their Senate can do those things; certain US Senate committees are set up with those kinds of powers. That is why we have royal commissions in this country—because of the separation of powers. A royal commission that reports to the executive has those kinds of powers and has the resources. And, no, they are not cheap; they are expensive. But how much do 17 parliamentary inquiries cost over 10 years? And what is the cost to us if we do not act on those recommendations? This parliamentary commission of inquiry into banking and financial services will have the resources, and it will take time to get to the bottom of these issues.
That was one recommendation of one inquiry. Then the whole issue went quiet. It was not supported by the Liberal and Labor parties at the time because it was a pretty bold thing to do—for the Senate to put their hands up and say, 'We have done all we can, we have done the best job we can; we need another avenue to get to the bottom of this.' I went along with that, and then a couple of years later we had another important inquiry in the economics committee. It was an inquiry into the disaster, the calamity, that was forestry managed investment schemes, FMISs, where $4 billion of investors' money was wiped out in this country. It was a miniversion of the GFC here in Australia. In many ways it was entirely predictable. Senator Dastyari, who was chairing the committee, is in the chamber. We heard from so many witnesses not only heartbreaking stories about how they had lost their money investing in those schemes but also that they had even been leveraged into those schemes. Their financial planners and accountants had suggested that they borrow the money to get a tax deduction, which you get in a managed investment scheme, and they were losing their houses. Even today they are having their assets repossessed by the banks—which, by the way, underwrote, in the majority of cases, the finance companies of these forestry managed investment schemes. Let me tell you that those banks were all care and no responsibility.
When we heard the evidence, I lamented the fact that this was so big and so complicated. There is no way our committee could get to the bottom of just this issue, so the Greens, in a dissenting report, also called for a royal commission. But that was the turning point for me. Most of these people have not been let off the hook, often because of financial misconduct. There have been a few advisers involved in these companies and promoters who have been held to account, although, effectively, they have had a slap on the wrist, whereas literally hundreds and thousands of Australians have lost their savings and in some cases their homes.
Fast forward to now, a couple of years later, and what have we seen? We have seen pressure being brought to bear. The regulator has been given extra money. It has been trying to step up, being a cop on the beat. We have seen more parliamentary inquiries. We have seen CEOs being called into parliament in dog and pony shows to answer questions. We have seen that, but what else have we seen happen? We have seen a whole number of scandals brought to the surface in this country right across the board. Just about every bank and major financial services company has had a scandal.
I remember asking a question of Senator Brandis a couple of years ago on the need for a banks royal commission, and I have asked the same question of Senator Cormann. No doubt there will be some conservative politicians in here today who will say the same thing: 'It's just a few bad apples.' I would argue that the culture within these organisations has a systemic problem, and I am not the only one arguing that. Mr Medcraft himself admitted this in the recent estimates. He still does not believe that that culture is changing fast enough.
We have the power to institute our own royal commission that reports to parliament, a parliamentary commission of inquiry. I will say today that, yes, it is going to be a bumpy ride. It is going to be a bumpy road, although I have crossbench support for this bill already—a number of them have signed it today—and I have Labor's support, and I thank them for that. I have no doubt there will be plenty of back-seat drivers on this journey, and there will probably even be some attempted carjackings. There will even be some obstacles put on the road. I am expecting everything to be thrown at this inquiry by the Liberal government. They will do anything to prevent a commission of inquiry. But let me tell you that we are very close. We believe we have the numbers and the support in the Senate, and I think we have the support for a vote in the House. I am confident. It is a bit tricky because we need a majority of 76 to get standing orders suspended in the other place.
Senator Smith interjecting—
We are just one short, Senator Smith, and that is one scandal away from getting the person we need, I can tell you. There are a lot of people in rural and regional Australia who want to see a thorough examination of the issues that matter in this country.
The terms of reference in this parliamentary commission of inquiry bill are deliberately broad. That is the legal advice we received. But they also cover matters of significant public importance because we under law are legislated—parliament is legislated—with responsibilities around banks, insurance companies and financial services companies. That is the law. We provide bank deposit guarantees to the banks. We are here to represent community standards. I am still receiving emails every day about people who feel that they have been victims of misconduct. We have a very important role to play here as a parliament.
I have to say that those terms of reference will look at some really important issues in this country, not just the extent of misconduct; that is just the first one. There are a whole range of things there about the vertically integrated structures within banks. Have a look at the terms of reference. I implore all the senators here to have a look at those things. They are all very important. I appeal to Senator Hume, who is here today, who does a good job chairing the Economics Legislation Committee—
Senator Smith interjecting—
and Senator Smith. I know how busy you are. I know how many inquiries you have on at the moment and your workload. Understand this: if we had someone—an individual, a QC—appointed with the resources to go with that just to look at this specific issue, and we had a couple of years to do it, imagine what we could actually achieve.
I believe, and I know from individuals who have spoken to me, that more people will come forward with allegations about misconduct. We in this place can take confidential information. We can have in-camera briefings, but the committee can decide if it is for the public good to release that information. We cannot offer immunity, but this commission of inquiry will be able to. I have no doubt, from what I have been told, that people will come forward, and this is what we need to do.
Let me say that, for all the BS that I have heard about how this is going to be bad for the financial system, how it is going to cause instability and how it is going to cause damage to the reputations of the banks, I actually argue the opposite. I think this is what is needed to restore faith and trust in the banks and the financial services system. And do you know what? If I am wrong, I will stand up here and admit it. If it uncovers nothing, at least we will have had a look at it, and the issue will go away—because, the next time we get a scandal, we will have another parliamentary inquiry and nothing will end up getting done, or we will get sweet nothings whispered in our ears by a bank CEO when they come into parliament for their dog and pony show.
This will give us the ability to get to the bottom of some of these scandals. I do believe, especially in cases like forestry managed investment schemes, that a number of people have not been brought to justice. The issue is so immense. The scale of loss is so big. The misconduct across a whole range of different groups is so great, from promoters to the companies themselves to the people who value these companies to the people who finance these companies. It is such an incredibly big scandal.
One thing this commission of inquiry will look at is law reform and what is necessary in this country. Let's look at Storm Financial. Storm Financial was one of the biggest scandals we have seen in recent years, and ASIC did its job. It used civil prosecutions to go after individuals at Storm Financial, and it took five years to get a conviction under our current legal system, so one thing we want looked at is law reform. We want whistleblower protections looked at. We want penalties for white-collar crime looked at. These are all essential parts of a very important whole if we are actually going to tackle this problem. We want to see compensation schemes set up so that we can actually get a proper and, I think, more moral judgement on whether many of these victims we have met have been wronged.
This is actually very important for the banks and the financial services industry. This is an inquiry that could potentially give them a clean bill of health. Based on what I have seen, I would be surprised, but I think it is really important, if we are going to get cultural change in this country, to have a deep dive into this sector to get that cultural change. A slap on the wrist and platitudes are not going to do the trick. They are not going to fix this problem.
That is why I urge senators to consider what I am saying here today. Consider this bill and the fact that, in this day and age, we should be masters, not servants, of our economy. A lot of Australians feel like its servants. A lot of Australians have a social contract with the banks. I am one of them. I have a mortgage with a bank—and, by the way, in my case it does a very good job. But remember how many scandals we have seen in this country. And it is not just banks; it is other financial services companies and financial planners right across the board. This will give us the ability to actually get to the bottom of this. I urge senators to consider that, in this day and age, the process and the legislation before you are something we should be considering in a modern parliament. Having the ability on really important issues—and this is what the UK parliament select committee found. There is a need under the Westminster system to have more parliamentary commissions of inquiries.
If this gets sent off to committee, so be it; let's have this discussion. But in a modern parliament, on critical matters, why can't we have a system that gives us the resources and the focus that we need to get to the bottom of some of these issues, especially if the executive will not act? In the case of the UK parliament, it was about getting an inquiry into their involvement in the Iraq War—which, as a small adjunct, would be a very good thing to do here too. Nevertheless, where the executive will not act and it is a significant matter of public interest—and nobody can argue that an inquiry into misconduct at the banks and in the financial services industry is not one of the biggest political issues we have seen in this country. This is a significant matter of public interest.
This is a bold and brave piece of legislation that has only been seen twice and introduced into this parliament. I do not have the details to go into why it was introduced last time—it was a different set of circumstances—but we have provided an explanatory memorandum that gives you this detail. I look forward to the debate today. Unfortunately, we will not have a chance to vote on this, but I look forward to the debate from all senators. I hope that we can do something different in a modern parliament: actually do our job and get a result for the people that put us here who are, rightly or wrongly, losing trust in us and are sceptical about us being self-serving. This is a chance to represent them and do the job properly.
I do not think it will come as any surprise at all to find that the government does not support a royal commission or a parliamentary commission of inquiry into the banking and financial services sector. Such a commission will not benefit consumers and nor will it benefit the Australian economy. A royal commission will cost taxpayers millions and millions of dollars. It will take so many years to complete. It would undermine the confidence that we have in our banking sector, and this is so important. It will harm investment in the banking sector, it will harm investment in the economy and it could put at risk our AAA credit rating, which is so important for our prosperity and progress. Not only that; most importantly, it will do nothing to assist consumers in any practical way at all.
While others in this chamber pursue headlines and populist politicking—and I certainly do not limit that criticism to the Greens, Senator Whish-Wilson—this government is actually delivering on some of the most ambitious financial systems reforms in modern history. The coalition's reform agenda is wide-ranging and it is comprehensive. It will strengthen the financial regulator, ASIC, and it will ensure that consumers get a much fairer deal.
The government's commitment to a strong and stable financial sector started long ago with the commissioning of the financial systems inquiry—the Murray inquiry. You may remember as far back as 2010, when the coalition made an election commitment to conduct a broad, root-and-branch inquiry into Australia's financial system. On coming to government , it delivered on that promise. It appointed David Murray to head that commission. David Murray is a man of great knowledge who has the admiration and respect of many people in this chamber but also so many people in the industry.
The Murray inquiry was arguably the most thorough report into the banking sector in a generation. It was an inquiry which, unbelievably, disingenuously, was not supported by Labor. In fact, when he was the Treasurer, Chris Bowen, said: 'The financial system is strong, well-regulated and well managed and I have not seen a case for a full-blown inquiry.' This is Chris Bowen when he was Treasurer: 'I have not seen a case for a full-blown inquiry.' The Labor Party opposed the Murray inquiry, despite the fact that most of the notable scandals and collapses such as Trio Capital, Great Southern and of course Storm Financial, which Senator Whish-Wilson mentioned, happened on Labor's watch. Yet Labor opposed the Murray inquiry, when the Leader of the Opposition, Mr Bill Shorten, was the minister responsible for financial services. The irony just abounds. What a surprise that in six years of government Labor did not call for a banking royal commission. Labor was in government for six years and never once looked to review our financial system.
Let me just remind the chamber of Labor's positions on the banking sector at that time. The member for Maribyrnong, Bill Shorten, now the Leader of the Opposition, was Minister for Financial Services and Superannuation for over 1,000 days. At that time he had the power to propose inquiries and to draft laws and yet he did nothing. When Bill Shorten was the minister, he said:
Australia has some of the best banks in the world. It is partly because of our excellent regulatory system and prudent management.
Don't you remember FoFA?
Your leader said that, Senator Dastyari, when he was minister for financial services—
Senator Hume, if you do not mind, make your remarks through the chair. And Senator Dastyari, I certainly do not want to curb your enthusiasm, but your interjections are becoming much louder and more frequent, and the senator does have the right to be heard in silence.
I will also remind the chamber of what the member for McMahon, Chris Bowen, said when he was Assistant Treasurer, again for more than 1,000 days. He had the power to propose inquires and to draft laws, but he also did nothing. When Chris Bowen was the minister, he said, 'Our two market guardians are the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission. The standards they set are world's best practice.' That is what the Labor Treasurer at the time said, and that was reported in The Sydney Morning Herald in 2008, yet now there is a call for a banking royal commission. The irony abounds.
In 2015, Senator Whish-Wilson will recall he put forward a motion for a royal commission into the financial services industry, and Labor voted against it. They voted against it in 2015. Let me remind you about the Murray inquiry, for those of you that have not read it. I in fact have, and I was employed to read it before I came into parliament. The Murray inquiry was—
Senator Dastyari interjecting—
I was.
I trust your judgement.
Thank you very much. I was employed to read the Murray inquiry and to comment on it. The Murray inquiry was incredibly comprehensive. The government has accepted the overwhelming majority of that inquiry's recommendations, and it also included six additional measures that were consistent with the inquiry's underlying philosophy.
The government response included commitments to unprecedented improvements to consumer protections, to banking stability, to governance and to ASIC powers. And just so far since the Murray inquiry report was tabled, the Turnbull government has enacted critical consumer protection reforms that lift professional, educational and ethical standards of financial advisers. It has limited the incentives paid to financial advisers for sale of life insurance products, to limit the risks that products will be sold to consumers that are not in their best interest. The Turnbull coalition government has also introduced reforms that will ensure that retail client moneys are protected where financial firms become insolvent and it has strengthened the resources and powers of ASIC.
After completing the capability review of ASIC in April last year, you will remember that the government announced a $217 million funding package for ASIC to bolster its enforcement capabilities and to accelerate reform measures recommended specifically by the Murray inquiry. Mr Medcraft was questioned on that funding during the last estimates, and he said that it proved an adequate amount to do what ASIC needed to do to actually implement those reform measures.
The Turnbull government has for the first time called on the major banks to appear, at least annually, before the House of Representatives Standing Committee on Economics to explain pricing decisions and to discuss their progress in responding to various issues raised in previous parliamentary inquiries. This is a process that has been highly publicised, highly successful—
They all welcomed it.
Nobody wants to attend an inquiry where they feel they are part of a witch-hunt, yet the banks and the financial services organisations have approached these inquiries with an open mind and have been extraordinarily candid and extremely helpful. I do not think we could be expecting any more of them than they are giving us now. The first of those hearings was held on 4 to 6 October last year and 3 to 8 March this year, respectively, and the committee has already tabled its first final report in November 2016.
The Turnbull government has also commissioned a number of critical reviews, including the Ramsay review of the financial system's external dispute resolution, EDR, framework, headed by Ian Ramsay, a man of great respect and admiration on both sides of the chamber. The government has committed to establishing a one-stop-shop dispute resolution scheme that will provide consumers with independent and timely access to justice and access to compensation where appropriate. The Ramsay review released its interim report in December 2016 and it will produce its two final reports to government in March and June this year.
The government has also commissioned a review into the small business lending practices of the major banks—the Carnell review. The government has released the Carnell report and the government response. It released those on 3 February this year. The Carnell report makes 15 separate recommendations, four of which are for the government and the remaining 11 are directed to the banking industry itself. Those recommendations are targeting where reforms need to be made.
In total, the inquiry considered 23 of the most egregious cases that were presented to the Parliamentary Joint Committee on Corporations and Financial Services inquiry into the impairment of customer loans. Of those cases, a third were a result of poor business decisions, another third were a result of both poor business decisions and poor bank practices, and the final third were representative of poor bank practices and possible unconscionable conduct on the part of the banks involved. The Carnell report has addressed those specific cases.
In respect of the recommendations for the banking industry, the government expects the industry to give the highest priority to very careful consideration of the 11 recommendations that focus on changes to the way banks deal with their small business customers and to provide a considered response to the report and a proposed plan of action to address the issues of concern raised in the report. In respect of the recommendations for government, the Carnell report provides further support for the establishment of the one-stop-shop EDR scheme that I mentioned earlier. That has already been agreed by the government. The government has extended and strengthened the Ramsay review terms of reference to allow that expert panel to make recommendations, rather than observations, on the merits and potential design of a last-resort compensation scheme and to consider the merits and issues involved in providing access to redress for past disputes as well. Finally, the report on extended issues will be delivered by the end of June this year.
The Turnbull coalition government has also commissioned a review of the specific allegations made against CommInsure—this is a very high-profile case; it was on the 7.30 report and has been in an awful lot of financial media as well as mainstream media—and also the broader insurance sector. ASIC released its report on the sector on 12 October 2016 and it will produce its findings on the CommInsure matter in the first quarter of 2017 as part of the ASIC reviews.
In response to the financial system inquiry, the Murray inquiry, the Turnbull government has announced the terms of reference for an ASIC enforcement task force, which is currently reviewing ASIC's enforcement and penalty powers, which is something Senator Whish-Wilson mentioned, and will report to the government in the second half of this year. Finally, it is worth mentioning also that the Minister for Finance, Senator Cormann, on behalf of the Turnbull government, recently announced the Open Government Partnership National Action Plan. This is a very ambitious plan that includes action across a broad spectrum of very important areas of government and, importantly, it commits to review and consult on the new whistleblower protection regime in the tax fraud area, which is again something Senator Whish-Wilson referred to in his broad terms of reference. This is something the government is already dealing with. That new whistleblower protection regime will provide significant enhancements to the current corporate whistleblower protection regime.
There are, as mentioned, 17 current or past parliamentary Senate, joint or House inquiries into the banking sector and financial services. My committee, the Senate Economics Legislation Committee, is considering a number of them as we speak. One thing Senator Whish-Wilson wants to cover is white-collar crime. We are already covering white-collar crime. We are looking at criminal, civil and administrative penalties for white-collar crime. The reporting date is 23 March. If you can just wait a day, Senator Whish-Wilson, we will have an answer and a report for you.
We are looking at Australia's general insurance industry. That report is due on 22 June. Again, this parliament is already looking at these issues. We have already looked at the scrutiny of financial advice. The reporting date for that is 30 June this year. Finally, as Senator Gallagher will well know, we are looking at consumer protection in the banking, insurance and financial sector. Again, it is another inquiry with very broad terms of reference. This parliament is already dealing with these issues. It is unnecessary to take it to a further inquiry with royal commission powers or a commission of inquiry.
The financial system inquiry, the Murray inquiry, the inquiry that Labor said was unnecessary, was unprecedented in its breadth, was very thorough, was highly comprehensive and was very well received by industry and by consumers. The Turnbull government's response to the FSI has been also equally wide ranging, comprehensive, extremely well considered and timely. There are an awful lot of recommendations in that report and the vast majority of them have been taken on board. They have been considered and they have been dealt with in a timely and comprehensive manner.
If a royal commission or a commission of inquiry goes ahead, all of these important initiatives will be delayed indefinitely. We will be plagued by inertia waiting for yet another inquiry—an incredibly expensive and totally unnecessary inquiry. A royal commission or a parliamentary commission of inquiry will cost the taxpayers millions and millions of dollars. It will take so many years to complete. It will undermine the confidence in our banking sector and our banking system. It will harm investment in the system itself and investment in the economy and, most importantly, it will risk our AAA credit rating. It is a witch-hunt; you are after a witch-hunt. It is totally unproductive. It will do nothing to assist consumers in any practical way.
Senator Whish-Wilson interjecting—
You are absolutely right, Senator Whish-Wilson, when you say this Prime Minister has no intention of holding a royal commission into the banking and financial services industry. You are absolutely right when you say this Prime Minister has no intention of holding a parliamentary inquiry into the banking and financial services sector. You have said that the executive will not act. On the contrary, this government is acting right now to respond to those 17 inquiries that you referred to. It is acting right now to strengthen our financial system. It is acting right now with funding to ASIC. It is acting right now with critical reviews into small business sectors. It is acting right now with critical reviews into white collar crime and the ERD framework.
This government is focused on implementing the reforms that are needed to strengthen the financial system, not risking delay to those reforms by holding unnecessary, expensive, time-consuming inquiries which are populist politics and a waste of taxpayers' resources. How many of these discussions do we need to have? How many of these discussions do we need to go through? Just in the economics references committee we have so many of these inquiries.
Senator Whish-Wilson interjecting—
Senator Whish-Wilson is involved with many of these inquiries—and yet he wants more.
Senator Whish-Wilson interjecting—
Senator Whish-Wilson has the opportunity to commit to those inquiries, to attend those inquiries, to hear from the witnesses who are in front of those inquiries and to contribute to the reports—and yet he wants more. This is yet another popular stunt. In the past, it was the Labor Party that put the kibosh on the Murray inquiry. Now they disingenuously call for a banking royal commission and the Greens are calling for a parliamentary inquiry. When does this end? Let this government focus on implementing the reforms needed to strengthen the financial system rather than risking further delay to those reforms by holding unnecessary, expensive, time-consuming, populist politics driven inquiries.
Senator Hume finished her contribution by saying, 'When does this end?' Well, it will end when there is a royal commission into Australia's banking and financial services sector; that is where all the continual inquiries we have been having over recent years should culminate. Labor is strongly of that view. The reason we are debating this legislation on a commission of inquiry, the reason the bill has been drafted, is the complete lack of leadership from the Turnbull government in tackling issues that are publicly well-known—and, we suspect, many more perhaps are not—that are affecting Australians in terms of their interactions with the Australian banking and financial services sector. That is why this legislation is here and that is why we are having a debate: the complete absence of leadership and the seemingly unending protection racket for the banks that this government seems intent on keeping in place.
Labor's firm position is that a royal commission into Australia's banking and financial services sector is the only way to get to the bottom of all the rip-offs, scandals and misconduct we have seen across the sector in recent years. However, in the absence of leadership by the government in refusing to establish a royal commission—and, indeed, arguing that there is no reason for one—Labor is supportive of the commission of inquiry legislation in a very broad sense, subject to going through out normal party processes.
Labor welcomes this bill because it reflects the government's complete lack of action when it comes to standing up for consumers, small businesses and ordinary Australians who have been victims of poor practice, misconduct and scandal across the banking and financial services sector. The message that this bill sends is loud and clear, particularly with those members of the crossbench who have signed on to this approach. In fact, it really is only the Liberal Party and the National Party that are not getting behind this approach here in the Senate.
We believe the Prime Minister needs to take responsibility and call a royal commission . Certainly, Labor will not stop arguing for that. As Prime Minister of Australia, his first responsibility is to stand on the side of ordinary Australians and not continue the protection for the banks and his banking mates. Labor strongly supports a strong, profitable and well-led banking and financial services sector but we do not think that should come at a cost to ordinary Australians. Our decision to call for a royal commission was not taken lightly. It was a decision taken under very careful consideration over a long period of time, and it was in response to the fact that there have been too many scandals, too many examples of misconduct and poor practice. Since we announced our support for a royal commission around a year ago—it was actually probably longer now—more examples of misconduct have come to light. I will go through some of those later in my speech. We need to get to the bottom of the systemic and cultural issues in an independent, thorough and transparent way. We need Australians to have confidence in their banks and financial institutions to uncover and deal with any unethical behaviour that compromises that confidence—and that is exactly what a royal commission would do.
Again, it is important to say that we support a strong banking and financial services sector. It is crucial to our economy. What we will never support is practices, systems and cultures that allow consumers to be ripped off, small businesses owners doing the right thing to lose their livelihoods and retirees to lose their savings. I have spoken to many people who have been affected by banking misconduct since taking over the role of the shadow minister. Their stories are almost unbelievable, traumatic and devastating not just to them but to their families, their livelihoods and their health. It has affected their lives very, very deeply. Some have lost loved ones over this. Families have been rorted out of hundreds of thousands of dollars. Their life savings are gone and they have no access to compensation and no ability to get back what they have lost, often under shonky arrangements with dodgy providers doing dodgy deals. I have met small business owners who have lost everything despite paying their bills on time, paying their debts to the bank on time and having those contracts renegotiated or determined by the banks. They have been called in, having no ability to pay, and have lost everything. Life insurance policy holders have been denied justice. I have spoken to plenty of those as well.
Over the last year, since Labor first called for a royal commission, we have seen around 20 inquiries launched into the banking and financial services sector. They have included inquiries set up by the government to try to deflect attention away from its inaction on a royal commission. They have included those various processes by the Australian Bankers' Association, which admitted recently that the banks had been galvanised to do something after Labor's calls for a royal commission. While any positive change that comes out of these is welcome, these inquiries can only ever be piecemeal. They do not have the powers of a royal commission to investigate and to get to the bottom of what is going on, and they do not have the scope of a royal commission. In relation to the processes by the Australian Bankers' Association, these are inquiries that relate to their members only. Although a number of them are headed by independent and eminent Australians, they are paid for by the ABA and their members. I think there is an argument there around whether they are truly independent reviews. Even Andrew Robb, a former senior minister in the Turnbull government, has said in recent times: 'Let's get on with it. Let's have a royal commission. Let's get it done and restore confidence.' But the Prime Minister is refusing to listen to Mr Robb's advice and respond to that.
If we turn to some of the inquiries we have going on at the moment, there are a number of government-initiated inquiries, parliamentary committee inquiries and industry-led reviews. I note that Senator Hume was using this as an argument to not have a royal commission or, in the case of the legislation being debated today, a commission of inquiry. I would argue that the fact there are 20 various reviews going on is exactly an argument for why we need a royal commission into the banks. The reason we have these inquiries is every single person, every member of parliament and every party knows that there is a problem.
The government acknowledges there is an issue here. They acknowledge it by commissioning various reviews, strengthening the powers of ASIC and providing some more funding. But they acknowledge that there are problems, that customers have been let down and that there has been unethical conduct, misconduct, illegal activity in some cases and failure to protect consumers' best interests. That acknowledgement is there loud and clear in the fact that these various reviews have been commissioned by the government. Labor argues and acknowledges the same problems, but we argue that the vehicle is best met through a royal commission, and other parties support that approach. So let's not pretend that there is not a problem to address here and that everything is hunky-dory. Everybody acknowledges there are issues around banking culture and behaviour which has let Australians down and needs a strong response. We have the various inquiries from the government. The parliament has acknowledged the extent of the problems and instigated various reviews into life insurance, whistleblowers, consumer protection and general insurance. We now have the One Nation Select Committee on Lending to Primary Production Customers. They all acknowledge particular elements of the problem, but there is nothing that looks at it holistically.
We also have, of course, the review of the four major banks that the House Standing Committee on Economics schedules. This was one of the responses from the Prime Minister: to bring the CEOs of the four major banks before the House economics committee, which is chaired by the government and controlled by the government. We have had two of these sessions of the CEOs coming to town for a three-hour session and a cup of tea and then heading off again. The hearings saw each CEO appear before the committee. I think, certainly in the first round and to a certain degree in the second round of hearings, they spoke of very common themes, with very similar answers and very similar approaches: apologies for previous behaviour, acknowledgement of failure to meet customer expectations and promises to do better. But there were examples when the committee asked questions and those questions were not answered, where important reports were not reports and where responsibility for the failures of their own organisations was not really apparent. Adele Ferguson said after the first hearings:
It meant complex questions were impossible to raise and answer, allowing many specific questions to be glossed over, evaded, put on notice or given enough spin to render them meaningless.
The fact is that the government's response has been to bring the bank CEOs in front of a government-dominated committee which can never get anywhere close to the bottom of all of the issues have been raised. The members of parliament, it is clear from the two sessions that have been held, have limited time. The CEOs themselves, highly paid professionals, are professional in their approach but highly skilled in ducking and weaving in those hearings and leave the Australian people completely unenlightened about what is actually going on in the banking sector.
I often hear from people who do not support a royal commission, namely government members, that all of the problems that happened are problems in the past and everything is fine now. Many of the scandals that have wrecked so many people's lives have all been dealt with and the banks are going through their own program of reform and compensation. I think it is worth just having a look at the various instances of banking misconduct that have come to light in just the last 12 months—that is, the ones that we know about. You can go to any month, looking back to January 2016, and see example after example of the banning of bank advisers for misleading, deceptive conduct with Westpac, ANZ, NAB or Commonwealth Bank, and the banks having to pay millions of dollars in compensation whether it be for bad credit limit practice, breaching responsible lending laws and other penalties imposed by ASIC. Of course, banks had to refund $20 million here and $29 million there and there is the ASIC report into fees for no service. It is a staggering $180 million having to be paid back as compensation by AMP, ANZ, CBA, NAB and Westpac, because they failed to do the right thing by their customers. The report revealed that Australia's biggest bank has spent years charging over 200,000 customers fees for services they never received. The bank had to return $180 million to customers because of that seemingly 'standard practice'. It was not until they were caught out that they had to change their ways.
In terms of the job that I have been doing, going around and talking to people, the personal stories of how banking misconduct has affected individual lives have been the most difficult to listen to. I sat down with people who had done no wrong other than that they wanted to secure their financial future and were preyed upon, often by shonky financial planners or advisers, and then let down by the lending institution who doctored their documents or did not check the information properly or changed a few digits here so that they could lend more money to people who clearly could not afford it to get them involved in deals, lending and investments that they did not understand and did not know and were, in some cases, told the complete opposite. People who put trust in the professional advice they were getting have been screwed over and have lost everything. It is difficult to listen to a 70-year-old woman tell you that she has had to go back to work part time and her husband, in his early 70s, is not well and is still working, because they lost all of their super. They owe the bank hundreds of thousands of dollars and the bank wants to take their home to pay for it. What do you say to them? 'Don't worry. The bank is coming to the House's economics committee. They come down, and we ask them the tough questions, and then after three hours they all walk off again.' How can you say that to somebody who is working as a cleaner, because they have lost everything? You can't. These people often do not expect to get that money back when they are talking with me. They understand and feel guilty, because they signed a document at some point that holds them legally liable. They do not actually even feel like they can make a fuss about the fact that they were duped into losing their life savings, but they want to make sure that it does not happen to anyone else. They definitely want to see that. They do not want anyone else to have to go through what happened to them. They also want to make sure that, in the future, there is a fair hearing for people affected and that, if they are affected by banking misconduct, there are appropriate avenues to have that dispute heard.
Labor will continue to fight for a royal commission because of stories like that. From stories like that, there has to be an answer from the parliament to say that what happened to you is wrong and we can fix it, but we need to understand exactly how it happened, why it happened and how it can be stopped from happening again.
We have had inquiries going back some years now into this. The Senate Standing Committee on Economics for one has heard inquiry after inquiry, but nothing changes. Banks still get fined. You still have ASIC coming out and telling them that they should pull their socks up. Nothing changes. Senate committee inquiries are useful. They can pull out issues, identify issues and give a voice to those people that are affected, but they do not have the powers of a royal commission or, in this case, a commission of inquiry that would have significant powers to call for documents and take evidence, in camera or otherwise, to get to the bottom of what needs to be uncovered so that we can restore faith in Australia's banking and financial services system.
I agree with Senator Whish-Wilson when I hear the only argument put to me by banks when I ask them: 'Why do you fight so hard not to have one? Wouldn't it be in your interests, considering the 20 various inquiries underway? Wouldn't it be in everyone's interests to just have a royal commission and focus on the terms of reference and have it run as efficiently and quickly as possible and not necessarily stop all the other reforms,' as Senator Hume has argued?
They say it will shake confidence in the system and that is going to be bad. I say that confidence is shaken, well and truly, and the only way to restore that trust and that confidence is to allow a process that the Australian people have trust in and that they know is truly independent and has available powers similar to those of the judiciary to allow scrutiny and uncovering of those issues to occur. That is why we will continue to argue for one.
I am very happy and privileged to support this motion by the Greens for the second reading of the Banking and Financial Services Commission of Inquiry Bill 2017, and I also want to congratulate the Labor opposition for the years they have spent working on this, demanding a royal commission, because in this case the government of Australia has refused the people of Australia a royal commission into the banks for far too long. If the calls my colleagues are getting are anything like the calls and emails that I have been receiving over the years, long before I got into politics, you know that people are desperate and fed up, not with what is going on but with what is not going on—that nothing seems to be happening. They want answers, they need answers and they deserve answers.
A parliamentary inquiry into the banking and financial services sector is the closest thing you can get to a royal commission without actually having a royal commission, and it seems we will not be getting a royal commission, even though the sector is central and vital to the Australian economy, and even though a fair, functioning and honest system is vital for public confidence. The inquiry will, I know, try to call out misconduct, and you hope that, by doing that, it can protect everyday Australians, because the banking sector and the broader financial sector have the power, if unmanaged and unchecked, have the power to abuse people, rip people off and ruin people's lives. We usually only hear about the terrible instances of misconduct which have gone on after somebody has lost their life savings, has lost their home, has lost their health or has lost their life—because we know there have been suicides brought on by the misconduct of some of the banks, and losing the farm as well. We need to start stopping this from happening, rather than just reacting with the predictable sympathy. Sympathy only goes so far, because people's patience has run out.
I think the current system, as it is, does not pass the pub test. We need to fix it now. The government obviously knows that there is a problem, because, if there were not a problem, why would the government hold their Claytons inquiry, through the House Standing Committee on Economics, where they get the bankers down here, they come in front of the TV cameras, they stand there for three hours, they all go home and, as Senator Gallagher said, nothing happens? They have done two of these now. Nothing has happened.
So I warmly support the Greens on this one. I congratulate you on it. As I said, I thank the Labor Party for pushing it so hard.
Do you know what is more dangerous for the Australian people than bad practices in the banking industry? It is the full-on Corbynisation of the Australian Labor Party, and we have seen it on display here in the Senate this afternoon. This is an Australian Labor Party which has flicked the switch to full-on left-wing economic populism. This is an Australian Labor Party which has abandoned any pretence to responsible—
Senator Dastyari interjecting—
Senator Dastyari, I gave you a lot of indulgence when you were interrupting a previous speaker, but I would point out that the previous speaker Senator Gallagher was heard in silence, so I would ask for a little more respect for the speaker.
This is an Australian Labor Party which has abandoned any pretense of responsible economic management and any prudent fiscal responsibility, and this is just the latest example of this. Of course I expect the Greens to indulge in bank bashing and economic populism, but from time to time the Australian Labor party has in the past shown some ability to resist that and not indulge in that. But I am sorry to say that this is one new instance where it has shown no ability to do so.
Unfortunately, this has been quite a recent road to Damascus for the Labor Party. This is quite a new position of theirs when it comes to banking. It was not that long ago that in this very place they were voting against motions put by the Greens to establish a royal commission into the banking industry. It was not that long ago, when they were in government themselves, that they said there was no need for a royal commission and did nothing to set up a royal commission of their own. It was, in fact, Bill Shorten himself, as Minister for Financial Services and Superannuation, who said, 'Australia's banking industry is largely well run, is largely well regulated, and there is no need for an inquiry of this kind.'
It is not the only area in which the Labor Party has embraced economic populism, but it is the most dramatic and the most recent. It was in June 2015, in this chamber, that the Labor Party voted against a royal commission. It was the Minister for Financial Services and Superannuation, Mr Bill Shorten, who said in 2012:
AUSTRALIA has some of the best banks in the world. It is partly because of our excellent regulatory system and prudent management.
Mr Shorten recognised as minister that, fundamentally, our system was sound.
I am not here tonight, and none of my colleagues are here tonight, to say that the banking industry is perfect—far from it. Any industry which has tens of thousands of employees and which has such large organisations is bound to make mistakes and should be held fully and absolutely accountable for those mistakes, and that is exactly what the government is doing. The government, though, is doing this in a responsible and prudent way. We are not doing this in a reckless way like the Labor Party. We are going about setting policy in this area in a sensible and rational way. We go to experts like David Murray to hold a holistic inquiry into the financial services system, look at it carefully and provide recommendations for us about that, and then we are implementing those recommendations. We are requiring bank CEOs to come before the parliament to answer for their conduct.
Senator Gallagher certainly thinks that that is insufficient and does not go far enough, but it is one thing more than your government did when you were in power. It is very easy for you to say now in opposition that this is a critical issue, but are you seriously arguing that, when you were in government only a few years ago, everything was fine, there were no problems with Australian banks and there was nothing to worry about but that all of a sudden, when the government changed in 2013, these problems emerged and this previously perfect industry now needs a tough cop on the beat in the form of a royal commission?
This is a very recent conversion. It is not the only conversion on economic policy. It mirrors very closely Bill Shorten's abandonment of his own support for company tax cuts. As a minister in the Gillard and Rudd governments he was an advocate for cutting company tax, because he believed that there were great economic benefits to come from it. Now, as opposition leader, he has gone down the Jeremy Corbyn line and is embracing economic populism and opposing company tax cuts that he, himself, had made very elegant arguments for. This is the Leader of the Opposition who, as a minister in the previous government, presided over the largest influx of 457 visa holders in Australian history—more than ever before. Now, as the opposition leader, he is suddenly the friend of the Australian worker, railing against foreign workers in the most crass and populist way, in the most xenophobic way.
Just because the Labor Party have abandoned their pretence of supporting sensible and measured economic policy does not mean that the government will. The government is engaging in this debate and addressing these issues in a prudent, responsible and reasonable way. We are following the advice of people like the former Treasurer, the member for Lilley, Wayne Swan, who said in 2010:
The last thing the system needs is another inquiry.
Crass populism does not work here. What works here is a methodical application, the detail of getting it right and getting it in place so that reform is enduring for the long term. Well, I wonder where that attitude has gone in the Australian Labor Party.
We have a bit of an insight into the way in which the Leader of the Opposition developed his policy in the area, because he was very frank and very open when he was on Neil Mitchell's program in April last year. He said:
There are problems with bank and some of the - I wrote down a little list as I was coming in here because obviously this is a key issue.
He goes on to say:
I think a Royal Commission will have to look at vertical integration—
and so on and so forth. So you have the Leader of the Opposition on the way to a talkback radio interview sitting in the back of a Comcar and taking down some notes that perhaps we should have a royal commission. This is his little list. This is sophisticated policymaking for serious public policy issues that the Australian Labor Party is engaged in today.
That is not the approach that the government will take. We will not do the easy populist route and go after easy targets. Yes, Australian banks are profitable, but what would you rather have: the profitable banking industry that Australia has, or the alternative elsewhere in the world where, during the global financial crisis, taxpayers had to bail out banks left, right and centre?
It is vitally important that the government of the day supports confidence in the financial system. That is not a trivial point. That is a serious point. If ever in the future there is a mass breakout of lack of confidence in our financial system, we will have a very serious problem on our hands. This is not an area to make cheap political points. This is not an area to make cheap political gains, as the opposition is seeking to do. This is an area which requires prudent, reasonable management and prudent policy, and that is exactly what this government is doing.
My colleague Senator Hume carefully and in detail outlined the measures and steps that our government is taking and the measures and steps the parliament has taken through its committees to examine these issues. This is not an area where there has been an absence of activity. In fact, there has been more activity in this area under this government than any previous government, and it is more than those opposite can say for their time in office. It is disappointing but not surprising to see them embrace economic populism here tonight. It is disappointing to see them being dragged by the nose to the left by the Greens, but perhaps it is not surprising.
I look forward to Senator Dastyari's contribution to this debate shortly, because I know, as a proud man of the New South Wales Right of the Labor Party, in times past he would have stood with the economic reformers like Paul Keating and Bob Hawke and supported rational economic policies. He might have even supported his colleague Chris Bowen, the member for McMahon, who, as Assistant Treasurer and former minister for financial services, said the following:
Our two market guardians are the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission … The standard they set is world's best practice.
Where is that attitude now? Where has that attitude gone? It has gone the way of Jeremy Corbyn as the Leader of the Opposition seeks to make cheap political points and make cheap political gains at the expense of serious policymaking to address serious issues, which we all acknowledge exist in the banking industry. This government has a plan and a process to address and deal with these issues; those opposite have no plan to address or deal with them, but hope that a handpass to a royal commission or commission of inquiry will fix the problems. It will not.
I rise to support some action in relation to the banking scandals that we have seen over too many years. Before I commence my contribution I just want to make a comment in relation to the contribution by Senator Paterson. He accused Labor, after having changed its position in recent times on the question of a banking royal commission, of being left wing and populist. If he had cared to look over his left shoulder whilst he was making those comments he would have seen a fellow senator on his side of the chamber, a person who is well regarded and respected in this place, who is well-known for his attention to detail in relation to the misbehaviour of banks over a number of years. Senator Williams has formed the view that there is a need for some dramatic intervention in relation to the banking industry and the financial sector, and he, in recent times, has called for a royal commission. I wonder if Senator Williams is a left-wing populist? Mr Entsch, from North Queensland, is a left-wing populist. I also note that Mr Robb, a former senior government minister, has come out and made his view clear: 'We just need to get on with the royal commission. Let's get it done.' Unfortunately, the arguments being advanced by government senators in relation to this matter are really scraping the bottom of the barrel. It is disappointing that we see government senators coming into the chamber with very little in the way of arguments against a royal commission into banking.
Labor believe that a royal commission into Australia's banking and financial services sector is the only way to get to the bottom of the rip-offs, the scandals and the misconduct that we have seen in this sector over many years.
It is true, as both Senator Hume and Senator Paterson have said, that that has not always been the Labor position. Both Senator Hume and Senator Paterson seem to suggest that that is actually a weakness in the opposition's principal position on this matter. Yes, it is true that at one stage we did not have that view that there should be a royal commission. But we continue to see scandal after scandal. We see bank executives coming before various inquiries—20 or so over recent times—apologising and saying all the right things when the cameras are there, but just going back to business-as-usual when they get back to the office. They refuse to learn about how to improve their behaviour. When we continue to see that over a period of time, the only rational response is to change our position and to adopt the view that there is something more dramatic needed other than a run-of-the mill inquiry, something more dramatic other than a slap over the wrist from the House Economics Committee a couple of times a year. That is not achieving the results that the Australian people are crying out for when it comes to our banking sector.
I also acknowledge Senator Whish-Wilson's contribution in this area. I note that he made reference to the contribution by former Labor Senator Mark Bishop, who was the chair of the Senate Economics References Committee, and made reference to the report that was handed down in June 2014 calling for a royal commission. I note that Senator Williams was a part of the committee at that particular time. So Labor have been looking at this issue for some time. There have been ongoing scandals and the fact is these banking institutions refuse to be accountable for what they are doing. They simply consider any fines and legal action as a cost of doing business in the sector. With such deep pockets, they are just going to continue on with business as usual until something dramatic happens. That dramatic intervention that I talk about is a royal commission. That is what is necessary.
In Australia, I believe we have a very proud tradition of facing up to the problems we have in our society. I instance our recent royal commission into institutional abuse of children. That was a very difficult situation and there was a great need for us to shine a light on that very difficult issue. When it comes to facing up to difficult issues, I am sure Australia is robust enough and our democracy is robust enough to grasp the nettle on this particular issue. After all, this is what the Australian people demand. Every Australian uses a bank. We all rely on the integrity of the banking system. It is fundamental to our economy. I note that Senator Paterson made this point, that we need to retain the integrity of our banking system. Unfortunately, the integrity of our banking system has been compromised.
Australian families trust banks with their home loans. Small businesses count on them for capital. Older Australians depend on banks for securing their retirement savings. So we would say that trust and confidence in the banking system is vital for the health of our economy. If you lose that trust then you need to do something to regain it, and that is the situation we are in right now. Unless we have a royal commission into our banking and financial services system, we are going to see ongoing lack of trust and that does have a negative impact on the economy.
We welcome this bill, but we would prefer a royal commission into the banking sector. However, in the absence of leadership from the government to establish one, we are broadly supportive of the commission of inquiry legislation, subject to it going through the normal internal party processes that we have. This bill highlights the lack of leadership on the part of the government to tackle this issue on behalf of thousands of ordinary Australians, who have been the victims of poor practice, misconduct and scandals in the banking and financial services sector.
The message that this bill sends is loud and clear. The Prime Minister needs to take responsibility and call a royal commission. He needs to actually side with ordinary Australians and he needs to stop defending the banks. He has become the chief shop steward for the banks. He is running a protection racket for the banks. In fact, after all of the misbehaviour that we have seen from the banks, the government is proposing, at least at this point in time, to provide to the banks, who are experiencing record levels of profits, a further $7.4 billion tax cut. That is the sort of payback that we see for the misbehaviour of the banking sector.
We do support a strong and profitable banking and financial services sector. Our decision to call for a royal commission has not been taken lightly. It has been taken after a long period of careful consideration. We have seen too many examples of scandals and misconduct come to light, and we need to get to the bottom of the systematic and cultural issues in an independent manner through a transparent means. We need Australians to once again have confidence in their banks and financial institutions to uncover and deal with the unethical behaviour that compromises that confidence.
On many occasions as chair of the Senate Economics References Committee I have heard Mr Medcraft, the head of ASIC, talk about the culture that exists within the industry which is driving this poor behaviour. Try as ASIC might to address these issues of culture, and ASIC itself is not immune from criticism, the issues persist.
I am going to talk about another recent example of this toxic culture within the banks that reinforces, in my mind, the need for a royal commission. We will never support practices, systems and cultures that allow consumers to be ripped off, allow small business owners doing the right thing to lose their livelihoods and allow retirees to lose their life savings. One of the things that the government has introduced to fend off a royal commission into the banking sector is the Small Business and Family Enterprise Ombudsman, who has certain powers to seek to provide access to justice for small business owners who are the victims of malpractices by the banks and, in particular, the major banks. I note the frustration of the ombudsman, Ms Carnell. The report that she recently authored into banking practices found that lenders are not being fair when they enter into contracts with small and medium-sized businesses. She said that the big four banks are the main culprits and that they refuse to improve their practices. This is the government's own mechanism for seeking to improve the situation identifying that there is an ongoing problem. In fact, Ms Carnell, who appeared before us recently, told us that she was fed up with the behaviour of the banks. She pointed to the fact that she had looked at 17 inquiries over quite a number of years where the banks had made promises that they were going to change and then did not. They then kicked the can down the road, as she said, to find another reason not to change.
This is a government that pretends to stand up for small business. It pretends to be interested in small business as the engine room of our economy. But we know that, as Ms Carnell has found, banks have a power under the contracts that are currently in place to revalue assets and do a range of things that mean that loans can be defaulted, even when borrowers are paying back the money that was stipulated under the contract. Senator Williams is well aware of this particular issue. The ombudsman looked at 23 of the worst examples of banking practices, but she made the point that the problem goes well beyond the small number of cases that she investigated. I reiterate that she believes that the big four banks are the main culprits. Ms Carnell has said:
I think though what we've got is a banking industry in Australia, particularly the big four banks, that believe for whatever reason that they can continue with business as usual and they don't have to change
This is the government's own small business ombudsman, in frustration, identifying that what has been happening up till now is not working. It just is not working. Let's face the facts, let's look at the empirical evidence of what is going on and let's form the view that something more dramatic is required to drive the change of attitude and culture that is absolutely necessary.
We know that over the years since Labor first called for a royal commission we have seen 20 inquiries launched into the banking and financial services sector. These have included inquiries set up by the government. The Australian Bankers' Association has set up its own internal processes to try to improve the behaviour of the banks. My response to that is: it is too little and it is too late. The most instructive comment that was made by the head of the Bankers' Association was when he admitted that the banks had been galvanised, to use his word, to do something after Labor's calls for a royal commission. The threat of a royal commission is what it took for the banks to finally admit that they have a problem and to get together to try to address this issue. If it is the threat of a royal commission that prompts them to do that, it is the reality of a royal commission that will be necessary if any positive change is going to take place. We do not believe that the banks themselves are capable of getting together and fixing this issue. I think that you would have to be very naive to believe that that can happen. They have appointed former Queensland Premier Anna Bligh to head the Bankers' Association. We congratulate Ms Bligh and we hope that she will be successful in her endeavours to reform the practices within the banking sector. We wish her all the best in that regard, but that does not deflect us from our position on the need for a royal commission. All of the efforts up till now do not have the powers of a royal commission to investigate and to get to the bottom of what has gone on, and they do not have the scope of a royal commission.
It is just astonishing to me that the Prime Minister, who many would say is an intelligent person, is refusing to look at the facts of the situation. He is refusing to look at the empirical evidence and refusing to take the advice of Mr Andrew Robb, a former senior minister within the government who has come out and said that there is a need to launch a royal commission. Senator Gallagher has already talked about the other government solution, which is a manifest failure: the House Economics Committee hearings. These are just friendly chats with the banks a couple of times a year. We have seen CEO after CEO appear before the committee. They appear, they refuse to answer direct questions or to release important reports or to take any genuine responsibility for the failings of their banks. We see nothing actually happening. As respected journalist Adele Ferguson said after the first hearings:
… complex questions were impossible to raise and answer, allowing many specific questions to be glossed over, evaded, put on notice or given enough spin to render them meaningless.
So, with all due respect to our friends in the other place and to their attempts to get to the bottom of these banking malpractices, this is not the appropriate way to do that. It is a flawed process. It is entirely inadequate to the task of dealing with this systemic problem that we have. The MPs have a limited time. The CEOs duck and weave. And the Australian people are left completely unenlightened about what the banks are going to do to fix up their issues.
I mentioned that there was another recent event that has reinforced and fortified me in the view that only a banking royal commission can deal with this issue, and it concerns the work of our Senate economics committee in relation to the issue of unpaid super. If there is any financial institution which should understand the rules about paying superannuation to its workers, it should be a major bank. Yet recently we saw the Commonwealth Bank being caught out by the Finance Sector Union for not paying its part-time staff members their full 9½ per cent superannuation guarantee entitlements, going back as far as 2009. I commend the Finance Sector Union for raising this issue.
We took the opportunity, as part of our inquiry into the issue of unpaid super, to call the Commonwealth Bank before us to provide us with an explanation as to why they had got themselves into this situation, and, lo and behold, a very short time before the Commonwealth Bank was due to appear before our committee, the bank advised the FSU that they had changed the view that they had held previously and that they were going to pay and to back-pay the 9½ per cent or relevant superannuation amount, over the years, back to 2009, for these part-time staff members. There were about 7,000 part-time staff in the Commonwealth Bank who were working beyond their contract hours, and not at overtime rates; there was no argument about that. These were low-paid workers—probably the lowest paid workers within the Commonwealth Bank structure—who were being denied superannuation. So, as far as I am concerned, this is a sector which refuses to learn from its mistakes and will continue to do so until a royal commission is imposed upon them.
I rise to contribute to the debate on this bill, the Banking and Financial Services Commission of Inquiry Bill 2017. It is not a secret—even you, Mr Acting Deputy President O'Sullivan, know—that, in a bit over two years' time, I will be leaving this place. And one thing I do not want to do while I am here is to make a hypocrite of myself.
How did I ever get involved in this finance space? Let me explain. In January 2009, I had been in the Senate 6½ months. I got a call from a John McLennan who used to work for Westpac. It was when the Storm Financial crash was about. And many, many people—of 60, 70 or even 80 years of age—were looking at being thrown out on the street. Why? Because they had gone with Storm Financial. How did that work? Well, if you had a house worth, say, $800,000 and you were debt free and you were 65 years of age, then the banks would give you a loan for, say, $400,000—half the value of the house. That $400,000 would then be used as a deposit on a bigger loan to factor you up—to multiply you up into shares; it might be $3 million worth. The Storm Financial plan was: 'We will mortgage your house. We will buy all these shares. And these shares are going to be wonderful. They are going to pay the bank the interest; they are going to give you a pension of $50,000 or $60,000 a year to retire on and take it easy. And all is going to be just beer and skittles.' That was fine. But something happened: the stock market went the other way. And of course these people were very heavily geared. They were encouraged by the banks to gear up, to borrow more; they even, as we found out in the inquiry, revalued your assets and, if your assets had gone up, they would offer you more loans. The banks were happy to just lend the money out—until the wheels fell off the car. So that is how I got involved in the finance side of things.
In January 2009 I went to Redcliffe in Queensland, where I spoke to a gathering of Storm Financial victims. And it was not a pretty sight. I promised them that I would come back and pursue a parliamentary inquiry into this sort of thing and into Storm. When I made it public that I was pursuing that inquiry, guess what happened? The then Rudd government—Labor was in power—all of a sudden came out and said, 'Oh, we'll take control of the inquiry under the Parliamentary Joint Committee on Corporations and Financial Services, chaired by Mr Bernie Ripoll MP.' So, quickly, it was taken off me. I wanted to run it through the economics references committee or even to have a select committee to look at these very issues. So we had the inquiry. We heard a lot of sad stories. That is what FOFA came out of—that very first inquiry into Storm Financial and the crashes and the devastation. That was the start.
Then I launched a bank inquiry in 2011. One of the things that came out of it was this, for example. David St Pierre was a bank manager up on the Gold Coast in Queensland. He is now enjoying striped sunlight, because he is in jail. What he did was: he went to people and said, 'Look, I'll mortgage your house; I'll lend you the money'—because these bank managers had targets to beat each month. They were loans officers et cetera, and they were set targets—and probably still are today. I recall that at one of the inquiries I asked a representative of the Westpac Bank: 'Why did you give a 30-year loan to a 97-year-old lady who was in an aged care facility?' And Senator Doug Cameron interjected—which is not unusual—and he said: 'How old did you say she was, Senator Williams?' I said, 'Ninety-seven, Senator Cameron.' And he replied: 'It must be a bloody good aged care facility!' It must, if you are going to give a 30-year loan to a 97-year-old lady. Of course, it ended in tears. They were guaranteeing 15 per cent return on her money. A good return, 15 per cent; you can't go wrong! What is the old story? If it sounds too good to be true, it usually is. It ended in tears. Of course, ASIC got involved. And just recently ASIC had a media release, dated 9 February 2017: 'Former Westpac Home Finance Manager sentenced to 3 years imprisonment after pleading guilty to dishonest use of his position'. Now, when I grew up—that was a fair while ago, or am I still growing up?—you respected the people in your town. The bank manager was one of those people. I remember people like Malcolm Axford in Jamestown, where I grew up, got offered a job with the bank and it was the talk of the town. You got a job in a bank and you were set for life! Now, you do not get people staying in a bank job for life; so many of them are there for 10, 15 or 20 years and the next thing they are gone. The bank manager was one of the most respected people in your town. I hope those days return.
The Westpac home finance manager was just one case of wrongdoing. I said back then, 'We need a royal commission into white-collar crime.' I stand by that and I support this bill. The reason being that there are things in this bill that I do support. I refer to the industry super funds and their ties with the union movement. I just want to get some answers to some questions. Mr Acting Deputy President O'Sullivan, you might be amazed to hear this: millions of dollars each year—I think last year it was $4.8 million—go from the industry super funds to the union movement. Why and how I do not know, but I would like to find out. I will bet you London to a brick that if the union movement gets hold those millions of dollars, guess where it is going to end up? In the Australian Labor Party's coffers come election time, sure as I talk to you now. This bill includes industry super funds and their ties, so it will be very interesting to see, if this bill proceeds, whether Labor tries to amend the terms of reference to throw out the industry super funds because they might be a little bit embarrassed about it all.
Senator Doug Cameron and I are political opposites, but in actual fact we get on very well together. We were in Senate estimates and ASIC was in front of me—
Senator Dastyari interjecting—
Sorry, Senator Dastyari?
Someone yelled out that you are both socialists, but I do not know who it was.
Neither of us are socialists. Anyway, we were in Senate estimates and I asked ASIC Deputy Chair Peter Kell: 'Why did it take you 16 months to act against Commonwealth Financial Planning after a whistleblower'—namely Jeff Morris, a person who I think commands enormous respect for the courage he has shown—'contacted you?' He said: 'Senator, we got a great result. We got an enforceable undertaking.' I said: 'I didn't ask you what result you got. I'll ask you again: why did it take you 16 months to act?' The reason I asked the question was Jeff Morris told me that the 'ferrets', as they were called then, were feeding information to ASIC about the wrongdoings of the financial advice industry and Commonwealth Financial Planning, but ASIC were doing nothing. Finally, Jeff Morris went around to ASIC and banged on the door and said: 'Are you going to do anything? What are you doing? They're sanitising files et cetera.' Mr Kell said, 'We got a good result.' Well, Senator Cameron came in behind me and then said to me outside, 'We should have an inquiry into ASIC', which we did. We launched an inquiry into ASIC. That inquiry showed all the financial planning rorts and the wrongdoings, hence the inquiries and the compensation to follow.
I have got a list here somewhere of some of those financial planning matters. I will take you through them. ASIC have lifted their game, and they certainly had room to do that. I have been looking at ASIC's website; have a listen to this. On 22 March—that is not long ago—'ASIC permanently bans Queensland former financial planner for dishonesty'. These are financial planners; these are the people you are supposed to trust to give you advice on where to put your money and what to do with it. On 20 March, 'Former director fined for failing to notify market of share trading'. On 17 March, 'ASIC acts against Melbourne-based financial advice provider for alleged contraventions of FoFA obligations'. There was another one on 15 March, 'ASIC accepts enforceable undertakings from Westpac and ANZ to address inadequacies within their wholesale FX businesses'. On 10 March, 'ASIC permanently bans former Morgan Stanley Wealth Management financial adviser from providing financial services'. He was banned permanently; done for life. On 10 March, 'Former company director in court on charges of misappropriating investors funds'. And on 10 February, 'ASIC bans financial adviser for five years'.
Mr Acting Deputy President, if you ever leave this place, I have got a job for you. You would make a great detective. You could go through and clean this area up, if you are ever looking from another job. I know that you do not find that humorous. I am just being a bit humorous with you, sorry.
I will tell you another story, this time about Dr Roger Munro. Senator Dastyari will be keen to hear this. I rang this Dr Munro—I do not know what he is a doctor of—about 2½ years ago and I said: 'My name's John Williams. I'm a senator for New South Wales. Can I have a chat to you?' He said: 'Yes. What would you like talk about? Politics?' I said, 'No, I just want to ask you one question.' He said, 'What's that?' I said, 'What did you do with the $60 million?' He said: 'I'm not talking to you. Cheerio.' He hung up. I thought, 'Hung up, hey?' I then made a few phone calls. ASIC banned him for life from financial services and the ASIC media release on 17 March stated:
Dr Roger Gareth Munro was arrested by Queensland Police officers today and brought before the Southport Magistrates Court, where he was formally charged with five counts of fraud under s408C of the Queensland Criminal Code, following an ASIC investigation. Each charge carries a maximum period of imprisonment of 12yrs.
The DPP are running the case. I will not say any more, I will leave it to the court, but I know some of the people who are wanting their money back.
Senator Ketter mentioned earlier the inquiry we had in the economics committee, which was chaired by a very capable bloke. It was chaired by Mark Bishop. We went through the financial planning industry et cetera and the inquiry recommended a royal commission. But what did Labor do then? What did you do when Senator Mark Bishop, who was chairing the economics committee, recommended that royal commission? I will tell you what you did: you did nothing. You did not do a thing. I stood my ground; I was consistent and I supported the recommendation that a royal commission be held into this very issue. Kate Carnell, the Small Business and Family Enterprise Ombudsman, did a report recently. Ms Carnell said she was concerned by another inquiry she conducted, the impairment of loans inquiry, where she found that one-third of the banks' behaviour may well be 'unacceptable and possibly unconscionable' conduct. We need to find out more. I think Kate Carnell is doing a great job. There are a lot of problems there.
Now the parliament is doing an inquiry into the life insurance industry and I am quite amazed at what is coming forward. ASIC put a report out today on CommInsure—they have been doing an investigation—and there is more news to come out of that. But I am very concerned about the life insurance industry. The good thing about these inquiries is that you learn a lot as you go through. There are basically three types of life insurance. There is the group insurance you get with your superannuation. Nearly all Australians have it, and I think there are millions and millions of Australians who do not even know they have life insurance with their superannuation, but every month the premiums are taken out. Many of them do not know what the policy is for. They do not read it; they get the bit of paper; they do not care. We have a real problem there, and no doubt the committee will make recommendations on that. Then there is retail insurance, where you go and see your financial planner. The planner goes through the questions—what you want, what your family needs and the size of the mortgage on your house. What would happen if the money earner fell off his or her perch tomorrow? How would the family be left? Then you take out a policy and it is underwritten because you have answered 20, 30, 40 or 50 questions. You are underwritten; you are insured.
But then you have direct insurance, where you might see an advert on TV, you ring up the number and you think you are insured. I will give you an example, Senator Ketter. There might be a married couple of 35 years old. A bloke and his wife have one child and she is pregnant again. They have a mortgage on the house and he might say, 'Look, if I get run over by a bus tomorrow, how am I going to keep my wife and my two kids in the house? Will the bank sell the house? I need insurance.' So he may ring up and take out some life insurance, let's say a $300,000 death policy. In many cases, he is not underwritten; he just has a policy. He goes to bed at night and puts his head on the pillow thinking, 'I'm covered; I've got the family covered.' He might have a heart attack and drop dead. Then the insurance company might go back through his medical history and say, 'Oh, the young fellow at two weeks old had a valve replaced in his heart—he was born with a problem. Therefore, we won't pay. That was part of his history.' They do not pay under some circumstances like that. They will refund the premiums paid, but in the meantime the wife and the kids are kicked out of the house because there is no money earner. It is unacceptable when people think they have life insurance and actually do not.
We have seen the scandals about the medical criteria. A bloke, James Kessel at Wee Waa, had a heart attack. In the Guyra hospital his heart stopped beating. Mr Acting Deputy President, that would be pretty serious, wouldn't it, when your heart actually stops beating. They got him back to life. He told me he heard the nurse say, 'I think we've lost him.' Then it was ruled by the insurance company that he did not have a heart attack, because the criteria are outdated. This is crazy and it is why people become cynical about the industry. I am very pleased to see that Minister Kelly O'Dwyer has been involved in this. She is now bringing forward the standards for financial planners to see that they are educated, they have proper exams, they are doing the right thing and the standards are maintained all the way through. I commend Minister Kelly O'Dwyer for her work and wish her well with the upcoming birth of her baby. We have done a lot of work in the area of liquidators. Those new rules came in on 1 March and there are more to come on 1 September.
A solicitor in Adelaide told me once, 'Years ago, people robbed with a knife or a pistol. Now they rob with one of these'—a pen. It is sad and it is too common. I stand by what I said. I support a royal commission and would like it to include the industry super funds. We need to have a good, clean financial sector—and I am sure we have made a lot of progress. I am sure the banks have got the message. I have done a lot of work with Steve Munchenberg from the Australian Bankers' Association. He is a very decent man, in my opinion. Banks are picking up their game and picking up the standards of their financial planners. I still have a serious problem with vertical integration. When the companies have the financial products and they have their own advisers, I think there is biased advice there—it cannot be helped. That is a serious problem I have with it. But, in time, let's hope we get it right. I am not going to make a hypocrite of myself. I wish you lot over there had backed me when I said, many, many years ago, 'We need a royal commission into white-collar crime and the finance sector.'
Senator Dastyari interjecting—
No, you all went underground. You were not with me at all. So suddenly you have come out and—
I was, Wacka.
Yes, Senator Whish-Wilson, you were with me. You have seen me cross the floor on this very issue. I have sat alongside the Greens. Senator Dastyari has called for a royal commission but never had the stomach to cross the floor. Do you know why? Because in the Labor Party if you do that you get booted. That is the democratic Labor Party. You happen to vote against what your team thinks and you are on your bike. Your career is finished. In the National Party and the Liberal Party crossing the floor is not common, but at least we are free to have a free vote on how we like on any issue and we do not get expelled from the party.
You get expelled from the Labor Party.
In your party, Senator Dastyari, if a young fellow like you crossed the floor, the next thing you would be back pushing a pen in head office—or you might not even get a job back there if you got booted out of here.
No way.
No way, you reckon.
That's why I'm here—they moved me on from there.
You might get a job in a bank, Sam.
Order!
Or you might be an export manager for China or something—who knows!
I'll work for you on your farm.
No, you would not be good enough to work on a farm, mate.
Order! Senator Williams, return to the debate.
We need to have good, viable, hardworking people on the land, Senator Dastyari.
I support this bill. When I leave this place in a bit over two years time, all I want is to see the sector cleaned up. I want to see ASIC doing their job better and see people getting good financial advice and having confidence in our institutions. Strong banks are vital. We are lucky in Australia: we have strong, profitable banks—and that is essential. Look at Ireland when they went over. The taxpayers had to bail them out. We did not have to do that, and so our banking system is essential to our economy and essential to virtually everyone in the nation. We need to make sure the banks do not just put profit before people and do the right thing by their customers. It is up to us to see that happens. So let's see how it pans out in the future. I have no doubt this bill will pass the Senate going on the numbers. My vote will probably make very little difference, but, as I said, I am not going to leave this place in a bit over two years time saying that at some stage I made a hypocrite of myself. I am not that sort of person.
There is a famous quote: 'Sunlight is the best disinfectant.' It is from Justice Louis Brandeis, the US Supreme Court judge—
Did you have any in the Health Services Union?
We had plenty there, let me tell you. We were the sunshine, Senator Williams. It is a famous declaration. It reads in full:
Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.
I do not want anyone to confuse Justice Brandeis and Senator Brandis. One was a very senior, respected jurist; the other is merely applying in the next round of judicial appointments or other appointments that might come along.
I rise to support the Banking and Financial Services Commission of Inquiry Bill 2017. Our position is that a royal commission into Australia's banking and financial services sector is the only way to get to the bottom of the scandals and misconduct that have plagued the sector in recent years. In the absence of any leadership from the government to establish one, we are broadly supportive of a commission of inquiry and the legislation, subject to it going through our normal internal party processes.
This bill responds to the numerous examples of misconduct that have been uncovered over the past few years, which have mainly arisen as a result of whistleblowers within the institutions themselves or as a result of regulatory investigation. The bill seeks to exhaustively examine, through a commission of inquiry, the extent of the misconduct that has occurred and establish the causal factors for the misconduct. This process will bring to our attention the key issues that lead to misconduct in the sector and point towards potential vehicles for change.
Labor's preferred position is a royal commission, which will most comprehensively address the issues facing the sector. However, as the previous investigations initiated by the government have been severely limited by the constraints of time and resources available to parliamentary committees, a commission of inquiry will bring us much closer to getting the answers that we need. A commission will dedicate resources to very specific terms of reference and allow for the use of expert legal cross-examination and forensic analysis.
The terms of reference outlined in the bill attempt to address the issues from a number of perspectives. It provides for the discovery of misconduct within the sector, an examination of the effect of misconduct on the financial system and on the economy more broadly, as well as the examination of incentives both for individuals and embedded within corporate structures that lead to misconduct. It also provides for an examination of the risk borne by the Commonwealth in acting as an implicit guarantor to the sector, theoretically responsible or obliged to bail out the banks when misconduct leads to misfortune, as we saw during the global financial crisis.
Labor supports a strong and profitable banking and financial services sector. That does not mean, however, that we condone the actions and ongoing practices that have led to this point. There are countless stories of families—the mum-and-dad investors that those opposite love to go on about—being ripped off to the tune of hundreds of thousands of dollars. We have just heard government speakers speak at length about how much they support small business, voting in favour of cuts to penalty rates. But, when it comes to supporting small businesses that have been swindled by the big end of town, their mates in the banking sector, this government is missing in action.
We know this government does not care about pensioners—that much is clear through its cuts to pensions, which came into effect on New Year's Day. We would have hoped then that this government would support those going into retirement attempting to be lifters, not leaners, and funding their own retirements, who have watched their hard-earned savings disappear as a result of banking malpractice. Some bankers have, as we know, 'taken advantage of fellow Australians and the savings they've spent a lifetime accumulating, seeking only dignity and independence in their retirement'. Those are the words of the Prime Minister—the Prime Minister who has failed to act so far.
The banking and financial services sector is built on trust and integrity. The reputation of our banking institutions is integral to their function in Australian society and in the Australian economy. Gone are the days of hiding your savings under the mattress or burying them in a tin in the garden. Generally, we trust that banks will look after our savings and will give us advice that is accurate and in our best interests. Such was the confidence in our financial institutions that Australians were able to weather the darkest days of the global financial crisis and continued to support our banks. But this confidence is eroded every time another scandal about malpractice or improper conduct comes to light.
There have been recent headlines—and I have pages of them, so I will not read them all—where tens of millions of dollars of penalties have been assigned to banks for breaching lending laws, for example, or about refunds of $1.1 million in brokerage fees, and $29 million was refunded by the ANZ as a result of more than 390,000 banking accounts having unclear fee disclosures—et cetera et cetera. There are too many prosecuted and proven cases of malpractice and misconduct to list, aside from the very real damage that is done to the victims of misconduct, those that lose their homes or their businesses. We should pause because it is very easy to just hear those words and not think about the effect that that has on families. When these victims of misconduct lose their homes or their businesses, there is the consequent erosion of trust in our institutions, which is the damage that the banks do to themselves. In turn, of course, this damages the economy at large. In my view, it is in the bank's interests to face a royal commission and start to work towards reform. It will benefit all Australians, not just the ones that have lost everything.
For the most part, we are very generous to and respectful of the banking sector. We do not begrudge them their big salaries, their massive bonuses or the megaprofits, because we know that a strong, robust banking system is vital for our Commonwealth. But it cannot be a one-way street. With great privilege must come a degree of accountability and scrutiny. As I said at the start, sunlight is the best disinfectant. Even in the words of the Prime Minister, the one who has so far failed to act, 'There have been too many troubling incidents over recent times for them simply to be dismissed.'
Australians, who have placed their trust in our financial institutions, are entitled to ask hard questions of the banking and financial services sector. These questions deserve to be answered, and answered properly. Once again I will quote the Prime Minister, who said, 'These questions are legitimate—dismissing them as bank bashing misses the point.' It is not class warfare or a vendetta against big business that leads the Labor Party to call for a royal commission. It is not bank bashing and it is not condemning all bankers as untrustworthy to call for a royal commission. It is restoring confidence in a system that is such a big part of the lives of all Australians and is vital to our thriving economy.
I will have to disagree respectfully with Senator Williams with regard to the industry super funds. Those funds have done nothing but provide greater security for their members, but, sure, let us include them in a royal commission so that we can prove that. After all, a royal commission ought not be calculated to punish but to shed light, without fear or favour, on previously unexposed truths. A royal commission into banking ought not be allowed to repeat the corruption of the Dyson Heydon royal commission, where a former judge turned Liberal Party fundraiser launched an attack on the union movement in a sad, desperate attempt to wound the Labor movement. I do not want an equivalent of that farce to inquire into banking. I want the banks to be able to explain their role and to explain it properly. I want to examine their mistakes and how we can make banking work better for everyone, because that is what it should do. I do not want a repeat of the outrage when MinterEllison won a multimillion dollar contract, in the order of about $16 million or $17 million, from a former employee of that firm. That is right, that would be the current Attorney-General, who was a former employee of MinterEllison, the very solicitors who acted in the royal commissions into trade unions. I do not want a repeat of the sham where Jeremy Stoljar and MinterEllison's James Beaton did not want to know about the corrupt practices of Kathy Jackson, who is currently facing fraud charges, because she was on side with the government. As I earlier assured Senator Williams, we were the sunlight.
We want a fair and balanced inquiry that will not only shed light on the problems in banking but will also positively focus on how it can work better for battlers, for farmers such as Senator Williams, and for pensioners, students, workers and stay-at-home parents. I understand why former merchant bankers like the Prime Minister do not want scrutiny on banking. They worry about what might be uncovered. Every industry, every business, has its embarrassments, its rogues and its mistakes. Labor wants accountability for the banking sector. Of course we do, it is in our DNA. My predecessors in the era of Chifley and Curtin saw what the panicked banks did to families and businesses in the Great Depression, and vowed 'never again'. My predecessors in the era of Hawke and Keating saw a sclerotic, uncompetitive banking industry that shut out too many from equal access to banking and delivered much more competition, in foreign banks, and a modernised banking sector that is, for all its faults today, much better than it was in the seventies, when you had to know a bank manager in order to get a loan, and of course when women could not get a loan without the guarantee of a male.
I think it is good that the Greens political party is on board with this. I note the excellent Facebook page 'Greens taking credit for things', but, given the wide support in the community and in the Senate for this inquiry, other than from the government, this inquiry should happen. As the Leader of the Opposition has said, we need Australians to have confidence in their banks and financial institutions, to sweep away the doubt and to uncover and deal with unethical behaviour that compromises that confidence. Retirees who have had their retirement savings gutted, families who have been rorted out of hundreds of thousands of dollars, small business owners who have lost everything, life insurance policyholders denied justice: there are literally tens of thousands of victims, if not more. Enough is enough. It is the Leader of the Opposition who has taken leadership on this issue on behalf of Australians.
Labor has a long history of being willing to fight for a banking system that works better for Australians. In this and in so many other things, Labor has had the courage to take on the big risks, the big challenges, without regard to the kind of cosy arrangements where prominent bankers can pull the strings in the Liberal Party. After all, in the Victorian division of the Liberals, there is reported to be a $100 million, largely secret, fund in the form of the Cormack Foundation, currently run by ex-mining boss Hugh Morgan, but established and run for many, many years by ex-banking titan and long-time ANZ chair Charles Goode. They owe him plenty. That is why the government cannot be trusted to deliver anything like real accountability from banks—only Labor can. Only Labor's royal commission into banking can begin the long struggle to make banking relevant, accountable and a strong, robust servant to the people of Australia.
We are coming up to a year since Labor first called for a royal commission. Since then there have been around 30 different inquirers launched into the banking and financial services sector. Those inquiries have been predominantly an attempt by the government to deflect attention from their failure to initiate a royal commission, and although they may lead to some positive change, it will always be piecemeal. We need a holistic investigation of the issue using the scope and powers of a royal commission to get to the bottom of it and provide meaningful recommendations for change. Even Andrew Robb, formerly a senior minister in the Abbott-Turnbull government, has said that we should just get on with it. Get it done and restore confidence in the sector and to consumers.
What I do not understand is why, despite Mr Robb's advice, and when the facts speak so loudly for themselves, the government, and in particular the Prime Minister, is refusing to take decisive action on this issue by calling a royal commission. There was a procession of CEOs who went before the House Standing Committee on Economics. But when the CEOs of the big four banks attended the hearings, they refused to answer direct questions, release important records and reports or take genuine responsibility for the failings of their banks. It is not enough to call CEOs to hearings and let them avoid answering substantive questions. In Adele Ferguson's words, in the first hearings:
… complex questions were impossible to raise and answer, allowing many specific questions to be glossed over, evaded, put on notice or given enough spin to render them meaningless.
As a relatively new senator who sits on a number of different Senate committees, I can appreciate the value of committee hearings and the important information that comes out of these processes. However, it is clear that the issues with the banking and financial services sector are deep seated and require more evidence and deliberation than can be offered by a few hours with banking CEOs. We need to shine a light on what is happening in the sector and work through pathways to reform. We need a royal commission.
Last year, Prime Minister Turnbull spoke at Westpac's 199th birthday celebrations. This birthday is coming up again. (Time expired)
Order! It being 6 pm and pursuant to order the time for this debate has expired. The Senate will now return to the consideration of legislation.
I rise tonight to speak on the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016 as put forward by the government. This, of course, is a bill that has been on the table for quite some time. It deals with the issue of overhaul and reform of the current childcare funding system. It is something that has been promised to be dealt with for a number of years now in this place.
Just to be absolutely up-front with everybody here tonight: I do not think there would be many people in this place who would argue that the current funding model for the way our childcare system runs is adequate. We know that it needs to be streamlined and we know that it needs to be fixed substantially. We know that every week, every fortnight and every month, month-in month-out, parents continue to struggle with the rising costs of child care. But we also know that the importance of early childhood education and care in relation to our youngest citizens becomes more and more crucial.
The current situation, where we have two separate funding models—two funding streams—with the child care rebate and the child care benefit has been a confusing and ineffective way of funding child care for some time. We do need to have that fixed and to have it streamlined. The Greens support the principle in this bill that allows for both of those payments to be streamlined into one single payment. We also agree that we need a significant injection into our childcare funding bucket. We know that parents have been crying out for relief and support in funding and paying for childcare fees for an awfully long time.
We also know, of course, that in some places even if people could afford the childcare fees, or find some way of affording the childcare fees, they would struggle even to get their children or child into a childcare centre that is close to them in terms of where they work or where, perhaps they may live. The issue of vacancies and access is another topic—one that is not dealt with through this legislation, but one that I hope we can have another conversation about in the months to come. In some places the waiting lists for getting children into care remain very tight.
In some other places, particularly in rural and regional areas, there just simply is not the child care available on a consistent basis because of the lack of support and funding that make it hard for centres to operate under a viable business model. We need to go some way to dealing with that.
This bill, as outlined by the government and put forward by the minister, is something that has been looked at several times through a number of Senate inquiries, and it has had much community consultation. However, it seems that the feedback that has been given to the government in relation to this bill has fallen upon deaf ears. We know that there are fundamental flaws within this piece of legislation. Yes, an extra $1.6 billion is slated to be injected into child care, but that comes at the cost of funding being halved for access to care for some of the country's most vulnerable children.
It is astounding that we could have a package where more money is being put into the bucket and yet some people—the most vulnerable people, the most vulnerable children in our community—will get less. Why is that? It is because the government is cutting and reducing the base level amount of access. At the moment a family can access 24 hours of care per week for their child. The government wants to slash that to 12 hours. Of course, they also want to put a very low bar there in terms of where the safety net comes in relation to where one or both parents would have to participate in work activity. That bar is set at $65,000, which is not a very high bar for many families.
Maybe your family is one that is struggling to find work because of the high unemployment rate in this country, or your family is one, let's say, where one of the parents works at the Hazelwood power station in rural Victoria—that power station is closing tomorrow. If you are a dad working in that power station and tomorrow you do not have a job, then under this legislation, under this package, your child will have their child care slashed in half because their dad is not working anymore. How is that fair, that we punish the child because a parent is not able to secure work or has lost their job? We know that in these rural and regional areas the unemployment rate is increasingly difficult to manage and it is getting worse and worse every quarter.
Of course, it is not just in rural and regional areas. In my home state of South Australia, in the northern suburbs of Adelaide unemployment is at record highs, and, come October, the Holden plant is going to be shut down. Holden are leaving. They are buggering off back overseas and they are going to leave hundreds of workers without a job. Under this package, the children of those mums and dads who worked at Holden will lose their access to child care. They will not be able to get their 24 hours of care. In fact, they will not even be able to get two days of care. They will be punished if their mum or dad has not been able to find work.
We know that investing in early childhood education and care is one of the most important things that any government can do if it wants growth in productivity, and if it wants to futureproof in relation to educational and health outcomes. Investing in early childhood education and care is the best bang for any government's buck. The World Bank suggests that you get a $17 return for every dollar you spend making sure that a child has access to good early childhood education and care, and we know that means education for children under the age of five. It is absolutely essential for the social, educational and health development of our nation's next generation. So why on earth would the government want to reduce the amount of child care for some of our country's most vulnerable children? It is beyond me.
If this bill, and this package as outlined in the bill, is not fixed, if we do not put in place a proper safety net for families on some of the lowest incomes and for some of the most disadvantaged children in this country, we are going to see tens of thousands of children affected. Tens of thousands of children will suffer because their hours of child care are going to be reduced and their access to safe, essential care and education is going to be reduced. The government's own figures—their own figures—say that over 52,000 families who earn under $65,000 a year will be worse off under this package. We know that families with an income between $65,000 and under $170,000 are going to be worse off; that is another 55,000 families. And we are not sure what this will do to another 25,000 families. They will not be better off. They might not be worse off, but they might be. Tens of thousands of children in this country, about 100,000 altogether, will be worse off, with less access to care, if the government's package goes through as it is.
If you go out to childcare centres and talk to some of the early education teachers, and talk to parents, it is clear that the people working in these centres and the relationship that they have with the children that they care for is so important. It is one of the key reasons why all the evidence points over and over again to the essential nature of allowing children to have consistency in care, so that they are not being pulled in and out of care. We the Australian Greens are extremely worried that, under this bill as outlined by the government, if we cannot fix it, children are going to be negatively impacted upon because they are going to be pulled in and out of care based on whether their parents are working or not. That is just unacceptable.
We also know from talking to carers and educators in some of the country's hardest working childcare centres, in communities where there is high disadvantage and low socioeconomic status, that sometimes the childcare centre that a little girl or boy gets sent to is the only safe place that child has each week. And here we have a bill put forward by the government that is going to reduce that child's ability to access that safe space every week. I would not want to be the minister, standing there tonight and saying that a child who needs that consistent care, love, education and nurturing week in, week out is about to have that cut.
We know that the minister has all this information. The experts have put it to him. We have heard for a number of years now, over and over again, from the childcare sector, from education experts and from parents themselves that, yes, parents want more relief when it comes to paying their childcare fees. But, most importantly, we need to make sure we put the needs of the child at the centre of any reform. I can tell you that the needs of the child are not slashing their ability to access child care each week by half, from two days down to one day.
The Australian Greens will be moving amendments to this piece of legislation tonight, to fix the flaws in this bill. We will move an amendment that increases from 12 to 15 the minimum number of hours available to low-income and vulnerable families. That would allow children to go to a childcare centre for two days a week, giving them that essential learning and nurturing environment, and ensuring that we do not take that away from those children for whom it is their only safe place.
We will also move an amendment to lift the safety-net income threshold to $100,000 because we know that many families struggle to pay for their child care in a household with one income of under $100,000. It is not cheap to put a child into child care when there is only one parent working and perhaps the other parent is in and out of jobs, works casually, works on a seasonal basis or does not have job security—or indeed, like the parents at the Hazelwood power plant or the parents at the Holden plant, is about to lose their job. Why should their children be punished because job security is at an all-time low in this country?
We will move these amendments, and I appeal to all of the members of the crossbench to think very hard about what they are about to do in relation to this piece of legislation. Yes, we all want more money injected into the childcare system, but we do not want the people who suffer the most to be the most vulnerable and disadvantaged children in the country. Those children deserve the ability to get the best out of life, and that means the best opportunity in those early years. Do not condemn a little three-year-old girl from Salisbury, in South Australia, to being behind in her educational development for the rest of her life because the government decides to cut her access to child care. Do not condemn the little boy who lives in regional Victoria to being unable to access the only safe place he has each week, because his family situation at home is deeply dysfunctional. That is not that little boy's fault.
We know that unemployment in this country is getting worse. We know that job security in this country is getting worse, and we know that the pressure that that puts on families is immense. Do not condemn the children from these low-income and disadvantaged families to the dustbin just because they do not fit the profile. They currently access two days of care a week. Why would we rip that away from them? It is one of the only things they have going for them to get them out of that situation and to make sure that, when they get to school, they can read and write, that they do not think that they are behind the rest of the class and that there are people who believe in them. Do not make it harder for childcare and early-education workers in these centres, who would have to look parents in the eyes after these laws pass through and say: 'Sorry, but you just can't bring your child here for another day each week. The government has cut your funding.'
There is consensus across most parties around this chamber that we need to be funding child care more, and I think that is fantastic. There is a consensus that the funding model needs to be streamlined. Tick that—that is great. Let us make it work best. This is an opportunity for this chamber and this parliament to, for the first time in a very long time, get the system right. But condemning the children from the most vulnerable families in the country to less care than kids whose parents are lucky enough to both have a job is only going to continue to widen the gap of disadvantage and inequality.
When we look around at what is going on in Australia and we look at what has happened in the United States and we look at what has happened in many other countries, particularly in the United Kingdom, members of the community are getting sick and tired of the growing gap between the rich and everybody else. Let us try and make sure that we do not condemn these children to being considered less important in our education and care system because their parents cannot both get a job. These children deserve better than that. They deserve a government and they deserve members of parliament who are prepared to have their back, to help them up, to look after them and to protect them, because we know they are coming from families who cannot necessarily do that themselves. I appeal to the crossbenchers tonight: let us put the 15 hours in to protect those children, because the government is not doing it.
I rise to contribute to the debate on the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016, a bill that unfortunately falls very far short of what is needed in relation to addressing serious concerns about child care in our country. Labor has serious concerns indeed about this childcare package. These serious concerns not only have been raised by Labor but have been raised by experts, academics, workers and so many stakeholders that it is not funny. I am sure the minister has had so much correspondence and contact in relation to those in the early childhood sector that he knows very well why his package falls short.
That is why again, unfortunately, like my Labor Senate colleagues, I have to highlight some of the areas where this package falls short. But in doing so I make the invitation open to the government that Labor is still willing and waiting to work with the government to try and make this childcare package what it should be, which is a package that is the best for our young Australian children, who need our protection and our care.
We know that these current changes will halve the access that children from vulnerable and disadvantaged families get from two days to one day. That is a 50 per cent reduction. It will halve the current arrangements that are in place, making it a very flawed package indeed. It will have a devastating effect on the youngest and the most vulnerable Australians. We know very much from all of the research that the early years of a child's life are the most critical. Those years from zero to seven are critical for their educational development, for their intellect and for their wellbeing, and yet this is the very area that this government wishes to halve.
Of course, there is nothing new about the problems in this package that the government brings forward. Firstly, we have had two years or even more of total inaction from this coalition government—two years, of course, that have also let down families and let down the system. But now the government has decided to quickly bring this package forward, and in doing so we have ended up with the same old problems that the government brought forward all of those years earlier.
Labor has been pointing out these flaws for years now, and yet the government does not seem to have listened not only to the opposition but also to its own stakeholders in this field. I understand there have been something like three Senate inquiries into this very issue, and Labor has repeatedly pointed out flaws that need addressing raised by early childhood experts themselves.
One of the areas we are incredibly concerned about, though, is the threats to Indigenous and remote childcare services. The other area, of course, is the unfair activity test. I would like to go to the heart of those two issues particularly, but before I do that I want to highlight the fact that today, Thursday, 23 March, we have here an opportunity to actually get something right, to have an outcome in this Senate that is not for this generation but the next generation, to set them up in life to have the best opportunity that they can get. Halving the access that children from vulnerable and disadvantaged families will have from two days a week to one day is not going to help them. That is not going to help them in 15 years time when they are in a position in life where they are ready to enter the workforce and become young adults. It is these early years that are so crucial. If the government would listen to its own stakeholders, it would know very clearly about that.
Those Senate inquiries themselves reported on the fundamental flaws which were in this bill, seeing those children going backwards in terms of access to critically important early childhood education in this country. I remember when under the Gillard government there was an incredible amount of investment in the early years. It was actually first the Rudd government, in fact, and I was then in the state parliament in Tasmania. I remember being part of that very inaugural moment of early childhood ministers all over the country joining with then Deputy Prime Minister Julia Gillard for the launch of a new early years strategy. That was an incredible moment because there were state, territory and federal governments all working together, all with the commitment for this next generation, to set them up in life to ensure that they had the best opportunities possible in life, that there was an investment in these early years because so much research and advice was provided to show that, if you can invest in those early years, it will make such a difference to that child's life as they move forward.
Reflecting on that and reflecting on where we find ourselves on this day, I have to say, makes me feel a little bit sad that we are having to defend some of our own legacy and having to fight as well for the government to realise its own flaws and shortcomings when it comes to this bill. At the same time, we are also here to lobby the crossbench, because this is an opportunity for you tonight to listen to some of the outcomes of those Senate inquiries from the experts that provided advice. I wanted to highlight who some of those advocates were that made very clear why this package is flawed and why we need to do something about it: Australian Childcare Alliance, Early Childhood Australia, Early Learning and Care Council of Australia, Family Day Care Australia, Early Learning Association Australia, the Creche & Kindergarten Association, Uniting Church in Australia, Mission Australia, Anglicare Australia, the Benevolent Society, Social Ventures Australia, United Voice, The Parenthood, Affinity Education Group, Goodstart Early Learning, KU Children's Services, Early Childhood Management Services, SDN Children's Services, bestchance Family Child Care—and the list goes on and on.
That is just a small snapshot of some of the stakeholders that I am sure Senator Birmingham is all too familiar with. If he was all too familiar with them, he would know the kind of advice that they have been providing him, as have some of the academics such as the Social Policy Research Centre from the University of New South Wales. I highlight them because I want to talk about the flawed activity test in this particular bill. It is flawed because it is unfair. Professor Deborah Brennan and Dr Elizabeth Adamson provided in their submission to the previous Senate inquiry into this bill that the new, three-tier activity test introduces a level of complexity never seen before in the Australian childcare system. They said that this bill introduces provisions that will increase complexity and reduce accessibility and affordability for some of the most vulnerable children and families.
I am sure Senator Birmingham has read their submission and I am sure he is aware of their input. But for me, reading over their submission, this part was the most compelling:
The activity test … is also out of touch with international best practice, which has seen many countries expand universal provision for preschool aged children.
They have expanded. They have not gone backwards or halved; they have actually expanded because they recognise the importance of investing in the early years. I really wish that Senator Birmingham would see the error in his ways in some of this package, because reading some of this expert advice provided into these three Senate inquiries really made me realise how flawed this package is before us.
Labor stands firmly for improving our Australian childcare system. We have said again and again, so many times, that we are up for the job of sitting down and working with the government to fix some of the flaws in this package. We want to see a package go through the Senate that can offer some of the best assistance, the greatest assistance, to Australian families. We want Australian children to be better supported, not not supported or half supported. Surely Senator Birmingham wants the same thing, and, if he does, why doesn't he work with Labor?
I know that our shadow minister, Kate Ellis, has been so vigilant in explaining and highlighting, time and time again, how willing Labor is to work with the government to fix some of these issues and flaws. I do not understand why the government has ignored that collaborative approach, which I know so many Australians would prefer our parliament to work in. We should not end up having to fight in this place to ensure that we are protecting those families and children, when instead we could have just had a really good package before us in the first place. What Labor wants to see is the childcare sector and the childcare workforce supported by this parliament. But this bill in its current form falls short, and the government knows that it does. All of the advice that has been provided through the submissions and the Senate inquiries and through all its stakeholders, including academics, shows that it does.
We hope that, in the passage of this bill, the amendments that have been put forward, along with some amendments Labor will put forward as well, will be considered. We also hope that through that process the government considers and supports Labor's amendments. But we also hope that the crossbench, particularly Senator Kakoschke-Moore, realises the fact that there is a chance here for the crossbench to help fix this flawed package with Labor. The Xenophon team and other crossbench senators—and I acknowledge that Senator Bernardi is going to make a contribution after me—have an opportunity to join with Labor in helping to fix this package, ensuring we stand up for children. At least in doing so they can support the increase to 15 hours of care as a baseline, to allow the most vulnerable children to get access to two days per week rather than one. Early Childhood Australia have made it very clear and consistently argued that a minimum of 15 hours of early childhood education per week is in the best interests of children. And if that were included we would be more on the right path here—including, of course, the changes to the activity test that I highlighted earlier as well.
I am also very concerned about the effects of this package on Indigenous children. I am really worried about what these changes will mean for Indigenous children, who, in every state and territory, already have lower childhood enrolment rates than average. We already know that they are below the average in that sense. This childcare package ends that current, budget-based funded program that provides direct subsidies to 300 mostly Indigenous services that reach 20,000 children. These are the services that are often in the most remote parts of our country. They are simply not financially viable, without ongoing support from government. The government knows that. It has to be a basic government provision in this package that they need to look at. These are our Indigenous children, who are already below the national average, who are now potentially going to be even worse off if the government does not provide that support for that program.
Deloitte Access Economics has found that the changes to the budget-based funded program that I just mentioned will disadvantage Indigenous children through 54 per cent of families facing an average fee increase of $4.40 per hour. Also, 40 per cent of families will have their access to early education reduced and over two-thirds of Indigenous early childhood education services will have their funding cut. That is absolutely devastating. There is no way that a fair country does something like that. There is no way that Labor, nor the crossbench, should dare support such measures that send our young Indigenous children backwards. How does that fit in with closing the gap? Each year we all make contributions in this place on how far we have moved on closing the gap. It certainly does not help when a minister comes in this place with a child-care package that has that effect on some of our most vulnerable children in this country—our Indigenous children, who, as I said, are already behind in that sense.
Finally, as I made clear, we have really serious concerns—not small concerns but big concerns—with this proposed child-care package. This is the same package they brought forward some two or more years ago. You would think in all of that time with all of those inquiries they would have educated themselves and learnt from the errors of their past package and presented to the parliament today an improved package because listened to the experts in the field and the stakeholders who made it very clear that there are terrible flaws that need to be addressed. Instead, we are back here where we started. It is like a revolving wheel with this government.
The same thing seems to be happening with the racial discrimination changes. In 2014 we were debating the government wanting to change section 18C. Then it was off the table and now it is on the table again. It is the same with this child-care package. It was on the table, then it was off the table and now it is on the table again. It is the same package. I do not understand why this government cannot move forward and have some kind of strategy and understanding of what it is doing. Today is the opportunity. Today this government can learn from all of those in this sector and learn from Labor—and I would really love to say learn from the crossbench coming on board—and support what is right for children and what is right for families.
I do not have young children anymore, but I really relied on child care and family day care when I was a young university student with my first child. I know the importance of child care and I know a lot of people in this place and those who have young children as well know the importance of child care. Wouldn't you want for some of the most vulnerable children in this country the same level of care and the same important level of input in those early years that you want for your own children? If you do, support Labor's amendments and get this package changed.
Not for the first time and I suspect not for the last time, on behalf of the Australians Conservatives I am going to take the path less travelled, if I may put it like that. I may be the only person in this place who thinks that $8.5 billion per annum spent on child care in the last 12 months, rising to $12 billion by 2020, for the government to pay service providers to look after families' children, is more than enough. As I said, already the figure is scheduled to rise to in excess of $12 billion in the next three years. That is $12,000 million that is being given to parents effectively to pay other people to look after their children.
It is another significant cost to the budget. It is absolutely created and sustained by delivering more debt that those very children, who all of us in this place want to help and bequeath a good, positive, healthy country to, are going to be forced to repay. Once again I come back to it. Our debt in this country is spiralling out of control and there does not seem to be any real determination to redress it. That is a moral obligation we owe to our children. So throwing another couple of billion dollars into child care here and there is not going to solve the problem, but it will indeed create greater problems, which will be magnified by the effect of interest and growth over time. Every child who is purported to benefit from this package will actually end up paying a very hefty price for it from the multibillion-dollar largess that is starting today, and I can promise you the demands will increase in the future for it to continue.
Australian Conservatives know that there is a better way. There are three key areas in which I can believe that this can be more effectively addressed. Firstly, we have to break this nexus between a government subsidy and a rise in the price of child care. It seems to be a catch 22 where every time the government puts more money into the system it creates more demands for the child-care operators and the prices go up and there does not seem to be that greater benefit for the Australian families under the current guise. Secondly—and I congratulate the government for its endeavours in this regard—there needs to be a determined effort to stamp out the significant rorts that are in this space. Thirdly—and this is very important to me and I have communicated it to the minister—we need to remove the mandated prejudicial policies that disadvantage so many families and effectively establish a pecking order of who is allowed into the child-care system first.
Let me deal with the subsidies and costs. From a person who seeks less involvement in government it is far better for us to stretch every government dollar by streamlining processes and deregulating the sector. Every time we add additional compliance, additional requirements, additional reporting or any other additional regulation the cost of administering and providing child care escalates, sometimes exponentially, and I will detail some of those figures in a moment.
We need to end the 'money shuffle', if you will, where we collect taxes from people, throw it through the bureaucracy where sometimes it returns 50 or 60 cents in the dollar—sometimes less, sometimes more—and then give it back to those we deem worthy of it to subsidise the care of their children. I think that is inefficient. It would be far more efficient for the government to allow tax deductibility, up to a maximum threshold, for childcare services. It would enable families to take responsibility for administering those costs themselves. It would allow families to claim it on a weekly or monthly basis with the ATO, as they do with other tax concessions, or on an annual basis. It would make child care more affordable. With no guaranteed government funding, people could distinguish for themselves the service they want and the hours they want. That would create a much more competitive environment.
You mentioned the link between subsidies and costs. I want to take you back briefly to some research by the Australian National University which demonstrates the runaway price rises attached to child care in recent years. Starting with March 2000 as our baseline, there was effectively parity between the market price of childcare services and the subsidy; in medical parlance, there was 'no gap'. Soon afterwards, a couple of years later, there was a modest gap, which parents were expected to meet, but there was virtually no difference between the subsidy rate and the market rate. But then between July 2002 and July 2007 the gap expanded. By July 2007 the subsidy rate was 175 per cent of the March 2000 price. Not surprisingly, because of the additional onerous burdens on the childcare sector and the increase in subsidies, the cost of child care had risen by about 225 per cent. So there was about a 50 basis point difference between the subsidy rising and the cost of child care. So no matter what levels of money were thrown into it, families will pay more.
What happened then was that there were cuts in 2007 and 2008 but the regulations continued to load up on the childcare service providers and there became a huge gap between the subsidy rate and the market price. The market price has continued to track upwards. It has been higher than inflation ever since 2002, when, dare I say it, the sector recognised that by putting their prices up they could prompt demands in this place for more subsidies to be thrown at them and those demands would inevitably be met—just as we are discussing today. You cannot blame the sector for doing that. If they can get away with it, they will continue to do it. We have to consider not capping it or putting any other forces on them but putting market forces on them. We need to allow parents to make determinations about where they send their children so that the market itself will put pressure on the costs and prices.
So the gap—or gulf as it was then—went from about 50 basis points to about 150 points. It tripled in real terms. And then the subsidy rate returned to the March 2000 rate but child care prices keep going up and up and up. At last check, that gulf is still widening. The market rate is about 460 per cent of the March 2000 price. In 17 years it has gone up 4½ half times, well in excess of inflation, and it has been fuelled by the money that has been thrown at it from this place.
And it is because of compliance. Since 2008, compliance has become so burdensome that the gap between the subsidy and the cost has risen from 50 basis points then to 300 basis points now. That has a deleterious effect for every family and it is not going to be fixed by us throwing more money into the system. We have to take pressure out of the system. If we can reduce compliance, if we can reduce bureaucracy, if we can reduce regulations and red tape, child care will be more affordable and parents will have more choices. And that will be sustainable because it means we will not have to throw more than $12 billion a year into the system; every dollar will go a lot further.
The second area in which Australian Conservatives believes there can still be significant improvement is in the area of rorting. Lest anyone think I be uncomplimentary, I do want to congratulate the government and the minister for making significant efforts in this regard but, dare I say it, they are not enough. I think there needs to be more diligence and more application to stamp out the rorts that are ripping off the taxpayer. I want to give you a few examples. In 2015, an investigation in Albury in New South Wales revealed a $4 million family day care fraud. in August 2016, authorities swooped on an operation in Lakemba in Sydney. One of the accused was actually someone with alleged links to Islamic State. That did not stop them from profiting from and ripping off the childcare system. They stood accused of collecting over $27 million since 2012. A known Islamic State sympathiser has been involved in an operation that has gathered $27 million of taxpayer funds, rorted within the childcare sector since 2012, and there are suggestions that some of that money has found its way to funding Australia's enemies abroad.
The information I have is that in New South Wales, where these rort occurred, there are 324 services in operation but only 19 of them have been audited. If the other 305 underwent an audit, imagine how much more of this rip-off money they might find. In 2016, at Point Cook in Victoria, authorities raided families in the Somali community who in 18 months had claimed almost $16 million in grandparent childcare benefits. Remember, these were additional payments brought in to assist grandparents who were looking after their grandchildren. But the $16 million worth of care was never provided— just the money was delivered.
Then the coalition government, to their credit, made the child swapping rort illegal on 12 October—bravo! Child swapping was where a childcare worker put their child in the care of another childcare worker and vice versa. Before that, an estimated 11,000 parents were receiving $8.2 million per week, swapping over 31,000 children. That is $8.2 million per week of people just saying, 'You take my child and I'll take yours, and we'll both make money out of the operation.' It is wrong, and congratulations to the government for stopping it.
In 2016 a Melbourne woman of Sudanese origin was accused of claiming $800,000 a fortnight in a western Melbourne system that allegedly took $15.8 million in false payments. That $800,000 a fortnight is not a bad gig if you can get it, unless you are the taxpayer having to fund it. That is what is going on in our current childcare system.
A woman running Aussie Giggles, a family day care centre, was found guilty in 2016 in the New South Wales District Court of 81 fraud and forgery offences designed to defraud childcare benefits to the tune of $3.6 million in special childcare subsidies for children from disadvantaged backgrounds. She claimed that as many as 14 of these children from disadvantaged backgrounds were in her care when they were not. And yet this was never picked up in an audit.
In 2016 the Queensland Labor government confirmed a trend in childcare rorting and noncompliance in ethnic communities. Nationwide, almost all the family day care services hit with restrictions or closure were run by Somali, Sudanese or other African migrants. One Sudanese migrant received $1.6 million in 16 months to run a family day care network which authorities could not confirm involved people he claimed were employed by him.
There is a problem here. The minimal audits that have taken place and the maximum exposure of rorts—I have highlighted just some of them today—says we can do much, much better and stretch every one of those $12 billion much, much further.
The final aspect of where my concerns lie I raised during estimates. It is that there is a priority list for allocating places in childcare. Some may defend that. I may describe it as prejudice. It was news to the minister and to the department when in estimates I quoted to them words from their own guidelines:
A child care service may require a Priority 3 child to vacate a place to make room for a child with a higher priority.
In simple terms, if you are a white, middle-class person and your child is in child care, and if the government says there is someone more needy—I will get to what neediness is—your child can be removed with 14 days notice to be replaced by that child they think is more needy.
In some of these areas there is genuine need. The first priority for allocating places is 'a child at risk of serious abuse or neglect'. Instinctively, a child at serious risk of abuse or neglect needs much more than child care. They should not be put into child care for the day—the eight or 10 hours or whatever it is—and then returned to an environment where they are at serious risk of abuse or neglect. It needs to be dealt with at the very root cause of it. If they are not safe with their own parents they need to be taken out of that environment permanently.
The second priority is 'a child of a single parent who satisfies, or of parents who both satisfy, the work/training/study test under Section 14 of the A New Tax System (Family Assistance) Act 1999'. To be honest, I do not get that. I do not understand why one parent working is more important or less important than another parent working or another parent choosing to study or undergo training. The idea is to provide this resource to Australians so that they can further their careers, their education or whatever the circumstances may be. I just do not buy it that we should all be paying and prioritising one person over another because of the job they are doing.
The third priority, of course, is 'any other child'.
Within these categories there is even more entrenched prejudice. There is a priority list within the first priority group, the second priority group and the third priority group. If you are a child in an Aboriginal or Torres Strait Islander family, you get priority. A white kid can be removed from a childcare operation with 14 days notice to be replaced by an Aboriginal kid. I think that is wrong.
A child in a family which includes a disabled person gets priority. I am not making light of the difficulties that disabled people and their carers undergo, but I cannot come to terms with the fact that because you have a disabled sibling or a disabled parent you should have priority and someone should be removed from an existing childcare place because they deem you to be more worthy. I am not underselling the difficulties of it, but who are we to say: 'I'm sorry, bad luck. Out you go and in you come.' It is wrong. Even the department eventually admitted it was wrong.
Then, of course, we discriminate on the basis of income. Apparently, if you do not earn enough money or if you do not have a job you are actually a greater priority for child care than the person who is actually out there earning money, paying more taxes and maybe employing other people—I do not know. They can lose their place because they are earning above a threshold or they actually have a job—God forbid! Isn't child care meant to be for getting people back into the workforce?
Finally, this is the one that really strikes me as odd, considering all the rorts I outlined before: children in families from a non-English speaking background get priority. I am not sure where they rank in the list, actually. I am not sure whether coming from a non-English speaking background trumps being a low-income earner, having a disabled or less abled sibling or parent or having an Aboriginal or Torres Strait Islander family. I do not know whether it is the colour of your skin or the language your parents speak. I cannot determine this. What I know is that any critical or reasonable assessment of it says it is wrong to remove someone in an existing place because of the colour of their skin, the language their parents speak or the income their parents have in favour of someone that a government of any stripe or persuasion deems more worthy.
Earlier, Senator Gallagher asked about deals that are done and things, and I have my doubts. I think that is very clear about the wisdom of throwing more money into this sector until other aspects of it are absolutely cleaned up. I made it very clear to the minister that I have an open mind with respect to this package, but there are some things I would like addressed. I really believe that if you are going to make child care available to every family, you are going to subsidise it to the cost of $12 billon-plus per year and more on the horizon, then it has to be available equally to every single family. There should not be a priority allocation. You should not be able to kick a child out because their parents happen to be the wrong colour, speak the wrong language or happen to be able-bodied and earn money. I think that is wrong.
I rise to speak on the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016. Before the 2013 election, the Liberals promised more affordable and accessible child care, but this government has been an absolute failure. From day dot, when it comes to dealing with child care, they are left wanting. They have wasted the last two years arguing that there could not be any change to child care unless it was linked to the cruel omnibus cuts. While we are pleased that child care has been separated from the omnibus bill, Labor still has serious concerns about the proposed childcare package. These are not new concerns. We have been pointing these out over a number of years. We are concerned about the unfair activity tests and threats to Indigenous and remote childcare services. We have said we will support the government's proposed changes if they fix their package, but, unfortunately, they have brought it before the Senate today and it is still not fixed. It is time for the government to listen to the experts, fix their package and stop playing political games. I know firsthand of the success of programs for access to child care for people living in regional Tasmania.
I want to remind people what happened on Mother's Day in 2015 when the government referred to new mothers as 'rorters' and 'double-dippers'. They did this in the name of calling it the 'same time' and said it would be better to focus on child care. That was back in 2015 and what has happened? Here we are, two years later in 2017, and they still have done absolutely nothing to support families struggling with the cost of child care. Mr Turnbull's government has been completely ridiculous when it comes to child care in Australia, playing games and wheeling and dealing about what they think is right for children and families. They did come to their senses and dropped the link between child care and the omnibus bill, but only because of another grubby 11th hour deal with One Nation and the Xenophon party to take money off Australian families. Thanks to this dirty deal, the government has rolled over and stopped insisting that the only way we can pay for childcare changes is by cutting family payments. But, as I said, we still have serious concerns about the proposed childcare package, which the government has dug up from the last Abbot government's budget. This package is fundamentally flawed and is entirely inadequate to deal with the challenges that the Australian childcare system faces. It has one purpose: to take away money from those who can least afford it. It attacks low-income families, single parents, Indigenous families and our most important people, our kids, the young people of this country.
Labor have written to the minister to outline the flaws that need to be fixed so that we can support the legislation. We have shown good faith and have offered to work with the government to secure a better deal for families who use child care. But, unfortunately, this has fallen on deaf ears time and time again. We are not the only ones who have repeatedly pointed out the flaws in this package. There have been three Senate inquiries and they heard evidence from early childhood experts and the sector. Despite being warned about the serious flaws in their childcare changes for years, the government have done nothing to fix them and here we are today with a flawed piece of legislation.
The government's childcare policy remains unchanged and they are trying to force it through the Senate yet again—a sign of a very dysfunctional government, who are desperate to try and get something through this chamber before they bring down their budget. They are prepared to use our kids' future. The most important time of our children in their development is those first five years. That is not just my view. You have heard it before from other contributions, but it is the expert view on this.
We will not support a package which will see some of the most disadvantaged children go backwards in life, because they have not had access to early childhood education. And we will not support a package that limits opportunity for any child. There are some measures which we would support. We would support simplifying the system. We would support measures to try and limit the inflationary nature of childcare fees. We would support ways of offering better assistance to children with disabilities. But, as it stands, the government has not been able to explain how this bill will do any of these things.
Only a few short days ago, the Prime Minister was out on the airwaves supporting a pay cut for thousands of low-paid workers, and now the government are going after funding for early childhood education. This is how out of touch and arrogant this government is. At a time of such uncertainty and inequality, the government should not be exacerbating these social problems. An analysis by the ANU shows these childcare changes will leave one in three families worse off, 330,000 families will be worse off and 126,000 will be no better off.
There are two fundamental points that Labor would not support in this bill. Firstly, the government must ensure that vulnerable and disadvantaged children are guaranteed access to at least two days of early education each week. At the moment in Australia, every child has access to two days of subsidised early childhood education. The introduction of the new, complicated activity test in this bill would remove this current entitlement. This means that children from very disadvantaged families or unsafe homes will only have access to a safe and secure environment and quality early childhood education one day per week, a child in a family earning less than $65,000 will have their subsidised access halved, and a child with a parent who stays at home in a family earning over $65,000 will be pushed out of the system altogether. This bill will deny access to early childhood education for children from dysfunctional families or disadvantaged backgrounds.
Childhood education is one of the most effective ways of breaking the cycle of disadvantage. This demonstrates again how out of touch this government is and how, as I see it, it just does not care enough. The importance of early childhood education cannot be stressed enough. Ninety per cent of a child's brain development occurs in the first five years of their life. It has been proven that children who attend quality education go on to do better in school, in employment and generally in life. Locking children out of the benefits of early education is not only unfair; it shows a lack of understanding about the enormous economic and social benefits from having children access quality early education. Access to early education, unfortunately, is not a value that this Liberal government shares with us.
The government will argue that this is about workforce participation and the decisions parents make. But not one of the three ministers who have had responsibility for developing this policy has been able to successfully explain how their proposed changes will increase workforce participation. The minister went on in Senate question time this afternoon about how their package would make child care more accessible. But, in reality, the government's child care changes create an unfair catch 22: parents will not be able to work because they cannot get child care, but they are unable to get child care because they do not have work.
There is a very long list of experts, including care providers, early childhood experts, academics, Australian charities and parents, who have been absolutely unanimous in their opposition to the proposed activity test. There is absolutely nothing innovative or agile about this agenda—just cuts to programs designed for people who need them the most. The minister must for once put his money where his mouth is and amend this bill to allow its flaws to be fixed. Then we can support it. Then we will support it.
The harsh activity test is not the only flaw in this bill. Labor is also concerned about the future funding of Australia's Indigenous Budget Based Funded services and mobile services. I spoke earlier about those and about the benefits from the mobile services in my home state of Tasmania. As part of this package, the government is proposing to end and cut back the funding for both of these services. The BBFs are services which were set up decades ago in communities where children would not have had access to child care unless the government stepped in and funded them directly. Some of these services are quite advanced and some operate out of tin sheds, but they provide a safe place for children where they have access to healthy food and early childhood education.
As part of this proposal the government has said, 'Let's cut the funding for these services and transition them into the mainstream and deal with the consequences later.' But we know that this is just not going to work. You cannot put your head in the sand and say, 'This is all too hard.' The BBFs and mobile services cannot be funded in the same way that early childhood centres are funded. That is the reality, and any government worth its salt would know that, when it comes to providing health services or aged care into remote and regional areas and to our Indigenous brothers and sisters, there are real challenges, and those challenges are already there as far as education is concerned, so there is no reason why it would be any different for early childhood education. The rationale for setting up these services was to help families and children who live in places where the mainstream system simply will not work, where the market was not viable and where parents just were not able to pay fees. These changes are not viable, and these services will close down as a result. But as usual the government insists on turning a blind eye. But I say that is not good enough.
There are just weeks and weeks of debate in this place about a range of issues, but there is nothing more important than the future of our children. We talk in this place, and people get up and beat their chests about wanting to be the government that is going to close the gap for our Indigenous brothers, and what do they do in this very piece of legislation? They are enshrining the fact that there is still going to be this gap. It really is shameless. Access to quality early childhood education is one of the most important investments that we can make to close the gap. The most important investment any government can make is in our children, because they are our future. The Secretariat of National and Islander Child Care has warned:
These changes will diminish our kids' potential to make a smooth transition to school … Children will fall behind before they have even started school …
I plead with the government: do not turn your back on these services. I plead with the crossbench: do not let the government turn their back on these important services. Do not allow them to turn their back on those families from very disadvantaged backgrounds and dysfunctional families, on our Indigenous brothers and sisters and on those people who live in regional areas. Do not allow the government to turn their back on them.
There are things in this bill that we said we could support. One of the areas that very few people have made a contribution on is in relation to the early childhood educators themselves. We do not do enough to support them. They are highly professional, highly skilled people. I speak from experience, because our youngest daughter was an early childhood educator before she became a mother and chose to stay at home to raise her children. The reality is that we know the demand that is placed on those early childhood educators every single day that they have our children in their care. We know that they have been fighting for recognition. We know that they have been fighting to ensure that they get remunerated to the extent that they should be, with the respect that goes with that. We know that earlier this month they walked out of their childcare centres, not because they wanted to but because they need to have a voice. They need to be heard. They need the government to listen to them.
And what do the government do when they have the opportunity to show some respect and give some support back to these early childhood educators? They want to turn their back on them. They want to turn their back on the families. It is becoming almost routine for the government that, whatever legislation they bring into this place, they attack the most vulnerable and they attack families. They talk about being a family government, wanting to ensure that people have equal opportunities and being all about jobs. The reality is that they have failed on that. They have failed on the account of giving the support to these very families that I have just been speaking about. They are turning their back on giving them the same opportunities as those people living in urban cities. They are turning their back on those who live in regional and remote areas. They are turning their back on families who need support from the government. They have turned their back on the lowest paid workers in our community. They are putting under threat other people's penalty rates in other sectors.
We know that, in the early childhood education area and child care in general, it is hard to attract and keep good staff because they do not get remunerated to the level that they should. We know that they have been fighting for a stronger voice, and I think that they have achieved respect from the community. They are not seen as 'just babysitters', as they have been referred to by others on the other side of this place. With all of these cuts that the government continue to make, it is those who need their support the most that they are turning their back on.
I say and Labor say to the crossbench: look at our amendments. Join with us to ensure that the government can no longer attack another group in our community—some of the most vulnerable young kids who need this support. They need this opportunity to have the doors open to be properly prepared to go on to primary education. Do not allow the government to do this. We owe it to the Australian kids. I owe it to the kids of the families in my state of Tasmania—and Senator Bilyk is here. Senator Dastyari is here supporting New South Wales.
We have to be serious about this. There are other ways of meeting budget demands. Using young people and the most vulnerable families in our community has to stop. It has to stop. I am sure you will hear from Senator Bilyk in her contribution. She worked in this sector. I have a daughter who worked in it. I used both home day care and centres when my children were growing up. I know the value of it. I also know that it is not just the education of learning their ABC and learning to read and write; it is about learning to socialise. It is about building the self-esteem and the confidence of these children.
That is why we were elected in this place: to make tough decisions. We owe it to these children to ensure that they get the opportunities that we have all had. Some of us have not had the same opportunities as each other, but what we have been able to do is make our way in life to end up here. I want to ensure that the crossbench think about these things. I know they are all—or at least most of them are—good people. I want them to put the kids of our country and their families first and to think about these early childhood educators when they come to vote for amendments and the passage of this bill.
I rise to speak on the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016. We all know that prior to the 2013 election the Liberals promised more affordable and accessible child care, but what has happened? They went the whole last term of parliament without doing anything at all about childcare costs for ordinary Australian families. A child born when the Liberals first promised more affordable child care will be in school by the time the government deliver. Early education and care are an investment in our future. The government need to listen to the experts, fix their package and just stop playing silly political games.
Labor still has some quite serious concerns about the childcare package. It is interesting that after two years the government are insisting that the only way we can pay for childcare changes is by cutting family payments. They will argue that they are freezing the family tax benefit. But, if freezing that is not cutting it, I am not quite sure what is, because, unfortunately, the cost of living will still keep going up every year, and the family tax benefit will not. It was quite encouraging yesterday to see them finally cave in after I do not know how long—months and months—and remove the link to the omnibus cuts. I still have not worked out what deal was done—I am sure eventually we will find out—but they at least separated them.
There is nothing new about the problems with this bill. We have been pointing out the flaws to the government for years. As Senator Polley said, there have been no fewer than three Senate inquiries where concerns have been raised. Concerns have been repeatedly pointed out by us, over many months and years, and they have been raised frequently by early childhood experts and the sector. So it is not just Labor that has these concerns. Today I read a media statement by Early Childhood Australia. I will read it into Hansard, because I think it is a very sensible media release. It is headed 'Crossbench must stand firm on childcare bill amendments in best interest of children,' and reads:
Early Childhood Australia calls on the cross bench to stand firm in negations with the Government around the child care package or block the bill in the Senate if key amendments are not made.
"We are calling on the Xenophon team and other Crossbench Senators to at least support an increase to 15 hours of care as a baseline to allow the most vulnerable children consistent access to 2 days of care a week,” CEO Sam Page said.
"Early Childhood Australia has consistently argued that a minimum of 15 hours early childhood education per week is in the best interests of children and that we only supported the Bill if this was included.
"We call on the Senate to block the Bill today, unless there is an amendment to increase the base entitlement to 15 hours a week.
"We also need the income threshold for a base level of care increase to $100,000 and make changes to the activity test to make it more flexible for families who are in casual or unpredictable work situations.
"Without these amendments families with only one partner working and earning more than $65,000 per year would receive ZERO child care subsidies and face the full cost of child care fees. They are unlikely to be able to afford this on such a low wage and their children risk missing out on the benefits of quality early learning.
"The Bill also needs to lift the support to Indigenous children who are twice as like to enter school developmentally vulnerable, and who need guaranteed support to at least 3 days of care under the new package. Then we may actually start to see the gap actually closing on early learning indicators.
"We are concerned at reports that the Government has stepped away from their commitment to increase the hours for the most vulnerable children in the community," …
That was put out by Early Childhood Australia, which is the peak advocacy body for children under eight and their families and early childhood professionals.
It is not only Early Childhood Australia and the Labor Party that have concerns. Twenty-one experts and early childhood stakeholders signed a letter saying they did not support the changes in their current form and that they wanted to see an increase in the proposed level of base entitlement for subsidised care to a minimum of two days, not the twelve hours proposed in this bill. These stakeholders and organisations are Australian Childcare Alliance, Early Childhood Australia, Early Learning and Care Council of Australia, Family Day Care Australia, Goodstart Early Learning, Early Learning Association Australia, Early Childhood Management Services, KU Children's Services, The Creche and Kindergarten Association, UnitingCare Australia, Mission Australia, Anglicare Australia, SDN Children's Services, Gowrie Australia, Bestchance Child Family Care, The Benevolent Society, Social Ventures Australia, Brotherhood of St Laurence, United Voice, The Parenthood and Affinity Education Group. These are the people who work in the childcare industry. They do not sit behind a desk all day, every day. They understand the industry. They know what they are talking about. They know what is required for the children of Australia. It is high time that the government started to listen to people. We know it does not in other areas and has had to do numerous backflips in a range of portfolio areas, but this sector is the future of Australia.
We have said we would support the government's proposed changes if it fixed its package. Unfortunately, it has brought it into the Senate today, and it is still not fixed. Analysis by the ANU shows that these childcare changes will leave 330,000, or one in three, families worse off and 126,000 no better off. That is almost half of all families—555,000 families—that will be worse off or no better off. Over 71,000 families with an income below $65,000 will be worse off. The harsh activity test will leave children in 150,000 families worse off.
Experts and people in the industry have been calling on the government—it seems like forever—to drop its cynical political link between family tax benefit cuts and childcare changes; fix its harsh activity test, which will hurt vulnerable children; and better protect Indigenous children and services, but the government has not been listening. Many of these organisations have called on the government, as I said, to make sure vulnerable and disadvantaged children continue to have access to at least two days early education a week. The international best practice benchmark is 15 hours. But the bill before the Senate will cut in half access to early education for many vulnerable and disadvantaged children. As someone who worked in the childcare industry as an early childhood educator for nearly 12 years, can I say that cutting access to early education will only exacerbate the problems of these children.
Early education should be recognised for its powerful ability to solve social problems and to address disadvantage in the long term. I have heard things about this in this chamber before. I doubt that anyone else in this chamber has worked in this industry but me; I am pretty sure that none of the men on the other side have worked in the childcare industry. In fact, I am pretty sure that none of the men on this side have either! But let me just say that when I hear a senator come into this place—this happened a few weeks ago—and talk about early childhood educators, that all they do is wipe snotty noses and stop fighting between the kids, I am gobsmacked. Am I allowed to say 'gobsmacked', Mr Acting Deputy President?
You certainly are, Senator Bilyk.
I am gobsmacked! To me, that shows the absolute ignorance of that senator, that he knows nothing about the childcare industry and yet he deigns to get up and make those ridiculously stupid comments.
Just to get back on track a bit: as I said, we are worried about the impact that the government's changes will have on Indigenous children, who in every state and territory already have lower early childhood enrolment rates than average. The childcare package will end the current Budget Based Funded Program that provides direct subsidies to 300 mostly Indigenous services that reach 20,000 children. These services are often small and in remote locations, and a lot of them are not financially viable without ongoing support. A lot of them need that ongoing support. They will probably never be able to be financially viable without ongoing support, but that does not mean they are not important. Trust me, they are very important.
Deloitte Access Economics has found that the changes to the Budget Based Funded Program will disadvantage Indigenous children and that 54 per cent of families will face an average fee increase of $4.40 an hour. Forty per cent of families will have their access to early education reduced and over two-thirds of Indigenous early childhood education services will have their funding cut. The government must ensure that children can access two days of care, not just 12 hours.
I am concerned. I think that the introduction of the new complicated test would remove the current entitlement of all children to have that two days of early education. And of course if a child's parents work casually or part-time we have more concerns. Their likelihood of being able to access stable, subsidised early education is seriously compromised under the changes. We know, as Senator Polley mentioned, that 90 per cent of a child's brain development occurs in the first five years of life. I am glad that people are actually taking in some of the things that I have been saying for the nine years I have been in this place. Children who attend quality early education go on to do better in school, better in employment and better in life. Early education has to be recognised, as I said, for its ability to assist in solving social problems and in addressing disadvantage.
When I was an early childhood educator, the Tasmanian state government actually allocated me a special licence. I worked predominantly with children from disadvantaged backgrounds. I had care of children who had been treated so appallingly that people would cry if they saw it. I worked with these children for five days a week to try to improve the outcomes of their future lives. I think this is important, and I do not want to misquote Senator Bernardi, but what I think Senator Bernardi said, as I understand it, when he was talking about children at risk of abuse and neglect, was that they should not be given priority of care for two days and then be returned to their families. I am sorry, Senator Bernardi, they should. They should be given priority. They need every bit of help they can get from those fantastic early childhood educators.
Most of them, in fact, probably do not go back to their families. If it has been proven that they have actually suffered from child abuse or neglect—if there have been charges and things—then they will have been removed from their parents or whoever did the abuse. They may well be with other family members. They may be living with grandparents. I have had situations like that. I worked with two young brothers, one just over three years old and the other just under 12 months old. These children had been removed from their mother and were living with their father and his mother, who was 64 years old, in Hobart. Of course, this was back in the eighties, so listeners would have to take this in that context.
She had very severe health issues, but she had taken them in. The only work the dad could get was on the west coast of Tasmania, so rather than go on unemployment, or family support or whatever was around in those days he would go to work, when he could get work, on the west coast of Tasmania and these children would be left with a very loving, but not necessarily very capable, grandmother. She was not capable of chasing around after these two children so they came to early childhood education. They came into care. In those days they had access to four days a week, I think it was, of care. With the childcare workers putting in all that special effort and special programs, and with the childcare workers being professionals and knowing what these children needed, we did turn those two little boys' lives around.
I will never forget the day I resigned and left childcare work. This specific dad was standing there with a little posy of flowers he had picked from his mother's garden, embarrassed and apologising to me because that was all he could afford, because he would have liked to have given me the biggest bouquet of flowers he could find in the whole of Hobart because my colleagues and I had managed to get his three-year-old to talk, to finally have some language skills, and we had managed to toilet-train his three-year-old. For those of you who have never toilet-trained a child, let me tell you it is not particularly easy, especially when they have a whole lot of other problems. And in the next year or so his child would be able, with the extra-special care he was still going to receive, to be enrolled in a normal school, with normal kids, with the neighbours who lived around his mother's. This father was just so grateful.
People know I have a bit of a bad memory—I have had brain tumours, so people work with me on that—but I think I will remember till the day I die that father's sadness at me leaving, which was quite complimentary, and also his gratitude that someone had been able to help his child. I think every child in a situation like that deserves to be helped. I think it is our job as legislators to make sure that no child gets left at a stage where they cannot reach the best that they can be. But, if we leave it to this government, that is not going to happen. That is not going to happen.
There is clear and longstanding research to show that vulnerable and disadvantaged children have the most to gain from early education. As I said, I do not want to see any child not reach its full potential, and I know that my colleagues on this side certainly do not want that. Yet we have independent research by the ANU that shows that the government's proposed changes will leave over 71,000 families with an income below $65,000 worse off. Do you know what that says to me? That says to me: 'If you are maybe not as well off as other people, then bugger off; you do not deserve anything extra-special. You could all pull yourself up by your bootstraps and get on with it.' Well, that is not how it works. If you lock a child out of the benefits of early childhood education and care—the education component, the socialisation, the learning to get on with people, the ability to develop their minds—then not only is it unfair but it shows a complete lack of understanding of the absolutely enormous economic and social benefits of those children having access to quality early education.
In the few seconds I have left to speak, I note that none of the three ministers who at various times have had responsibility for developing this policy has ever been able to successfully explain how these proposed changes will increase workforce participation. I would love another 20 minutes—but it is not going to happen, is it! (Time expired)
I thank all contributors to the debate on the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016. I am particularly honoured to be able to close this second reading debate on what is a very important and significant piece of policy reform that will make childcare and early education services in Australia more affordable for the vast majority of Australian families, and certainly for low-income, hardworking Australian families; and for middle-income families. It is a substantial reform that will improve their ability to juggle work and family responsibilities, and choose to work the hours that best suit them in the circumstances that best suit them.
This bill brings on major reforms. The childcare package contained in this bill has been before not one or two but three Senate inquiries, as well as of course a comprehensive Productivity Commission analysis that preceded it. I thank the Senate Education and Employment Legislation Committee and the Senate Community Affairs Legislation Committee, as well as all those who contributed to those inquiries. The government welcomes and accepts the recommendation from each of the majority reports that the bill be passed. I would also like to particularly thank Senators McKenzie and Duniam for so ably chairing successive inquiries on this bill.
We are committed to investing in child care to provide parents with more choice and opportunity to work, and to provide children with high-quality early education. That is why these measures come with an additional cost to the budget in excess of $1½ billion. That is a significant cost, and the government has worked hard to ensure that it is fully funded within the budget so that it is achieved without needing to drive up taxes or debt for future generations.
This bill delivers genuine, much-needed reforms for a simpler, more affordable, more accessible and more flexible early education and childcare system. Around one million Australian families who are balancing work and parental responsibilities will find this package to be fairer and beneficial to them, providing the greatest hours of support to the families who are working the longest hours, and the greatest financial support to the families who are earning the least.
Our reforms give hardworking lower income families an increase in their effective rate of subsidy on their childcare costs from around 72 per cent to 85 per cent. This tapers down to 80 per cent for higher income families. A family earning only around $60,000 a year whose childcare centre charges around $100 a day would pay just $15 per day for the care of their child, and with just one child in child care would be around $2,000 per annum better off as a result of the proposals the Turnbull government is putting forward. Families earning $60,000, $70,000 or $80,000 per annum, hardworking families, will find they are all significant beneficiaries of these changes.
Family eligibility for the childcare subsidy is determined by a three-step activity test that more closely aligns hours of subsidised care with the combined amounts of work, training, study, volunteering or other recognised activity undertaken. This is an important part of the reform that was recommended through the Productivity Commission process, and it ensures that the greatest number of hours of support go to those families who are working, studying or volunteering the longest number of hours in their lives. It is estimated that our reforms will encourage more than 230,000 families to increase their involvement in paid employment. 'Why is that?' I heard Senator Bilyk ask before. It is because, importantly, either they will find that they have less out-of-pocket costs when it comes to meeting their childcare bills, or they will find that they no longer hit a $7½ thousand cap in terms of their annual support—or indeed they may well benefit in many cases from both of those reforms. It means that childcare costs for low-income, hard-working families are no longer a barrier to their employment participation or a limit on the number of hours that they work.
New data released earlier this week show that there are nearly 18,000 approved childcare services nationwide caring for roughly 1.25 million children. But the data also illustrate significant flaws in the system. We saw in June 2016 an annual quarter fee spike of almost eight per cent. While the Turnbull government have done much to try to reduce fees in the current system and have succeeded in keeping fee increases lower than they were during the previous government's time in office, it is clear that we need changes to address these fee increases.
Our reforms will place downward pressure on what have been incessant childcare fee increases through an hourly rate cap, as well as abolishing the current childcare rebate cap for most families and increasing it from $7½ thousand to $10,000 for higher income families above $185,000. We will introduce new compliance powers to further strengthen the government's efforts to clamp down on fraud—which I note Senator Bernardi acknowledged in his contribution—provide a childcare safety net for the most vulnerable children and slash red tape so that services can offer more flexible hours.
Our package also includes a number of other important measures that are not formally part of the legislation. This includes the Community Child Care Fund, which will help new and existing services, particularly in rural, regional or vulnerable communities, to increase the supply of places in areas of high or unmet demand. Much has been said in the House of Representatives debate and in the Senate inquiry and debate about budget based funded services, otherwise known as BBFs, under this package. There are 300 BBF services nationwide caring for about 22,000 children. Amongst those are around 5,000 children in about 45 mobile services. It is very important to stress that the BBF Program is not a legislated program. It is a budget measure. Each of these services operates under vastly different arrangements at present in terms of the way in which subsidies are paid to it. That is one of the reasons why it is not a legislated program—because of course each of those payments has been structured over a historical period to reflect the different natures of those very different services.
In order to address concerns with the current block funded program, which is capped and closed and has been a problem for some time, this package will bring those budget based funded services that are delivering child care into the broader funding model for the first time. That means that, for the first time ever, families using these services will receive direct support from the Australian government through the new childcare subsidy or, for those requiring extra support, through the additional childcare subsidy. I again stress that those families at present are not eligible, as BBF families, for the childcare benefit or the childcare rebate. They will be eligible for the first time ever for the new childcare subsidy and the additional childcare subsidy.
Recognising that many of these services go to great and costly lengths to operate in isolated communities and to travel to small communities with limited numbers of children, our third funding source for BBFs, including mobile and Indigenous services, is the Community Child Care Fund, which is an annual fund of $110 million. However, we acknowledge that there have been concerns about accessing this fund from BBFs, whose current budget funding is $61.8 million. As a result of representations made by many—Senator Nick Xenophon and his team, Senator Hanson and her team, Senator Hinch and my own colleagues the member for Farrer, Ms Ley, Senator McKenzie and many others—I acknowledge indeed that during this debate and other previous discussions, as I said before, these issues have been raised comprehensively. They have been raised by the Greens and by Labor. They have been mentioned in many different quarters.
As a result of those representations from many different places, the government is committing that $61.8 million of that fund—exactly the same amount of funding as is currently provided to BBFs—will be quarantined as a supplementary funding stream to BBFs that can receive that support in order to remain viable without it being contestable funding as the CCCF had originally been intended. This provides a guaranteed level of funding equal to—and indexed into the future—existing funding to BBFs. That means that the BBFs will attract—guaranteed—more funding under this package because, in addition to that stream of funding under the Community Child Care Fund, they will still have the new eligibility for the childcare subsidy and for the additional childcare subsidy. Put together, this guarantees nothing but being better off for those BBF services into the future.
I thank those who have made arguments in favour of taking action in this place. The government has listened to the need to provide certainty. To provide further certainty, I can assure the Senate that BBFs will benefit not from annual arrangements under this but from longer term grants of between three and five years which will be renewable. Great care has been taken to ensure that we can ensure accurate support to each of them under the childcare reforms, including service based reports for each individual service that have been developed by PwC. This careful work will continue after the bill has been passed, particularly with regard to further consultation on the guidelines governing the Community Child Care Fund, which will be published by July 2017. We will also examine this program, along with every other provision of the bill, as part of the post-implementation review scheduled to commence within one year of implementation.
I stress that the remaining funds in relation to the Community Child Care Fund will be able to be used to see expansion in terms of new services. So BBFs will no longer find themselves capped in terms of their numbers, places or dollars, as those will increase under the childcare subsidy and additional childcare subsidy with each new young Indigenous child, remote or regional child or other eligible child they have in their service. Their funds will go up, unlike the current capped arrangement, and of course they can choose to expand their services. The Community Child Care Fund will provide opportunity for expansion of similar services in localities that have not been able to access such support because of the closed and capped nature of the BBF Program previously. These are changes that I hope will be welcomed by all senators and will allay fears in relation to the future of those BBF services.
Much has also been said about the provision of minimum hours under the Child Care Safety Net. As noted earlier, an activity test has been incorporated into this package in order to ensure childcare subsidies are targeted to those who work the hardest and depend upon child care in order to work, train, study or volunteer. The activity test is light touch. It starts at requiring just four hours of activity a week and scales up from there, as I said before, in order to ensure that those working the longest hours are able to access the greatest hours of subsidised care.
We know children from disadvantaged backgrounds benefit most from quality early childhood education and care, which is why we are providing additional support to those who need it most. The Child Care Safety Net will support families earning around $65,000 or less who do not meet the light-touch activity test, by providing up to 24 hours per fortnight of subsidised care. This is equivalent to two weekly six-hour sessions and will be provided at the highest rate of subsidy for these families, which I again note increases from the 72 per cent support that they would receive at present to 85 per cent support under our reforms.
I say it provides two sessions per week because, remember, these are families who are not working, not studying, not volunteering, not meeting the activity test. They do not need day-long sessions of care like those who might be engaged in the workforce. They need sessions of care to meet early education opportunities, and early education opportunities should be provided within a reasonable window of time. The government believes that six hours provides that capacity. It is consistent with the type of timelines that preschool services provide in terms of opportunities for early education. It is broadly consistent with the length of time that children spend at school during a school day, so it is not unreasonable to believe that early educational opportunities can and should be provided to these children for six hours a day, guaranteeing two sessions of care.
I have heard a range of different examples from others talking about the activity test and I want to touch on a couple of those quickly. Senator Hanson-Young spoke about jobseekers—people who lose a job—and whether that means they will lose access to childcare services. People who go onto Newstart, of course, have mutual service obligations in terms of looking for work. Looking for work is an eligible activity under the activity test. Those people will not lose their eligibility for childcare services. They will continue to be eligible because they will be meeting the activity test in the future.
I have heard much said about children who are at risk. The additional childcare subsidy component we are providing guarantees access for children at risk, not just people identified in a child protection service at a state level but, indeed, for interventions before children enter such higher levels of risk. There are clear processes there which services themselves can identify and commence to guarantee that those children receive access to 50 hours per week of childcare support and that that 50 hours per week is paid not at a proportion but, indeed, at the full cost of delivery for that childcare support. Again, it is a clear, careful thought from the government to make sure the disadvantage has been carefully considered and acknowledged through this process.
The government does encourage and expect services to provide flexibility for families. The Jobs for Families Child Care Package does not include any requirements for services to alter their charging practices or how they deliver their sessions of care, but we do and we are lifting a number of requirements from them. Services are currently required to operate a set number of hours per day and a set number of days per week. Those regulations will be lifted, which will enable in regional or rural communities more services to operate in a flexible way that meets the demand in those communities. It will also enable services to tailor specific packages for people to access early education services under the safety net if they have the entitlement to those two six-hour sessions per week. These services and this access, of course, comes in addition to access to preschool services that the government supports with the states and territories and ensures universality of early education access at that level.
Some services, to their credit, already offer shorter sessions of care or casual places, and the changes we are making will make it even easier for more services to follow suit in that regard. Offering more flexible options is especially important for those vulnerable families, and I urge services to do so and note that there are a range of different provisions within the minister's rules that can be applicable to make sure that that is the case if necessary in the future.
I want to thank those who have preceded me in responsibilities in the childcare portfolio for their contributions to the development of this work. The members for Farrer and Cook, of course, oversaw different stages of the development of this policy work, but I am very pleased to bring to the chamber tonight and to bring to a vote tonight reforms that will provide enormous benefits to around one million Australian families—families who will see greater support in terms of their childcare costs in the future. They will no longer be crippled by an annual cap or cliff that they fall off of each year. They will see a new mechanism in place to constrain incessant fee growth. They will be empowered to make choices about how and when they work and the hours they work without fear of crippling childcare costs.
These are important reforms. They are going to make a very big difference to help hardworking Australian families. They are going to make our system of childcare payments and benefits far more effective in future. I endorse them to the Senate and hope that all senators can see the merit in the overwhelming elements of this package that benefit hardworking low- and middle-income Australian families.
Question agreed to.
Bill read a second time.
I would like to refer interested senators to the Greens amendment on sheet 8109. This is in relation to lifting the number of hours in the safety net from 12 to 15. We have heard consistently from the sector, the childcare providers as well as education experts, that we should not be reducing the number of hours available for vulnerable and low-income families, and children in particular.
This safety net can only operate as a safety net if it indeed gives children the protection that ensures they are able to succeed and benefit from the care and educational experience and opportunities they are given. This amendment goes to put into practice the idea that two days of child care and early childhood education would be available to vulnerable and low-income families. These are families who do not meet the activity test for a variety of reasons. This might include single parent families or families where one parent is at home and not able to work or is transitioning through different work arrangements.
I heard the minister in his speech just now trying to argue that 12 hours of care is sufficient, but it is just not. Currently, these families have access to 24 hours of care a week. The current bill, unless this amendment is accepted, would halve that access for some of the most vulnerable and disadvantaged families we have. I would like to keep it at 24 hours per week, but I am being realistic here tonight that there has been a lot of consultation and compromise from people on many fronts to accept that 15 hours would be the bare minimum. The rationale for 15 hours is that it is neatly split between two days, at 7½ hours per day, which ensures children can get the maximum benefit from that care.
We also know that from a provider's perspective—that is, each individual childcare centre—that it is more realistic for them to be able to operate a system where they can provide 7½ hours of care each day, or 15 hours of care split evenly over two days. It makes their whole system more viable. Centres have told us this, and we have all of the evidence provided through the various Senate inquiries. There is very little belief that centres, particularly small-business operators and those in rural and regional areas or outer suburbs, will be able to be viable and provide services if they can only provide six-hour blocks. It is just not viable or realistic for those centres to operate under those circumstances.
To be absolutely frank and honest with those in this place, the government has cut in half the current safety net for all children. For vulnerable kids and kids from low-income families and families where only mum or dad is working for whatever reason, it is just unthinkable that we would punish those children by forcing them to get access to only one day of care per week. It flies in the face of everything we have seen from experts and evidence about how we get the best benefit out of funding early education and care.
This is a big package. There is a lot of money in this package, but it is not going to be able to do its real, good work or have a significant benefit for children if we cut off our nose to spite our face and force kids into one full day 12-hour session or bits and pieces over a week. That is not how you deliver a comprehensive, effective education and care service.
In my speech on the second reading I also spoke about children who are on the margins in terms of vulnerability. For many of these kids sometimes the childcare centre is the safest place to be. And we are about to say to those children, 'It might be the safest place you can be, but you're only going to get half the time there now.' I just think that is unacceptable. How can we say to these kids, who are amongst the most vulnerable and disadvantaged in our community, that they deserve less because others who happen to have both their parents working are going to get more. These kids deserve a decent safety net, a proper safety net. And lifting the hours from 12 to 15 seems like a small amount, but it will make a significant difference to ensuring that these children do not fall between the cracks.
I plead with the government and I plead with my fellow crossbenchers: three extra hours a week will make a huge difference to the lives of these children. This is an opportunity to fix it tonight and an opportunity not to throw these children and their families under the bus. This is an opportunity to work with our small, independent mum and dad operators of childcare centres out there and ensure that they can continue to care and deliver services to vulnerable kids and low-income families. I plead with the committee: this amendment is a huge compromise, but it will go a long way to fixing the major flaw in this legislation. With that, I move:
That the House of Representatives be requested to make the following amendment:
(1) Schedule 1, item 41, page 49 (line 23), omit "24", substitute "30".
Statement pursuant to the order of the Senate of 26 June 2000
Amendment (1) is framed as a request because it potentially increases expenditure under the standing appropriation in section 233 of the A New Tax System (Family Assistance) (Administration) Act 1999. The amendments will increase the maximum number of hours for which child care subsidy can be paid in relation to a low income result individual and thus may have the effect of increasing total expenditure under the standing appropriation.
Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000
The Senate has long followed the practice that it should treat as requests amendments which would result in increased expenditure under a standing appropriation. If the effect of amendment (1) is to increase expenditure under the standing appropriation contained in section 233 of the A New Tax System (Family Assistance) (Administration) Act 1999, then it is in accordance with the precedents of the Senate that the amendment be moved as a request.
I welcome the opportunity to speak at this stage of the debate tonight. I would like to open by saying that Labor has always been willing to work with the government to improve the early education and care system in Australia. We have been consistent about that for two years and about what needs to be fixed in the government's child-care changes. Indeed, two years ago the shadow minister, the Hon. Kate Ellis MP, wrote to the then minister, Scott Morrison, outlining Labor's preparedness to work with the government around improvements for early child care and education, making it clear that we want those discussions to be as productive as possible and really putting out the hand of collaboration and cooperation to make sure that particularly low- and middle-income families, single parents and disadvantaged and vulnerable children were appropriately protected in any reforms to the child-care system. That letter goes back two years now to where we find ourselves this evening.
We still have some serious concerns with what the government is proposing through this package. I think we all realise that we are here until the bitter end tonight and that this really is the last chance for the parliament to fix the outstanding problems with the government's reform package. There have been around two years of warnings about how many children will be worse off and how in particular vulnerable and disadvantaged children will be hurt. Unfortunately, the government has chosen not to listen to that nor change its position.
The changes will cost $1.6 billion but will halve access for some of Australia's most disadvantaged children, as Senator Hanson-Young has already drawn the chamber's attention to. It is hard to believe that the government can actually be spending so much money and at the same time leaving so many of the most vulnerable and disadvantaged children worse off. Over the last months of debate, particularly as this legislation has been nearing its conclusion in the Senate, early education experts and the sector have been calling on the government to fix particular elements of the child-care changes and this really is the last opportunity to do it.
Labor will strongly argue that the government and the crossbench have a moral obligation to join with Labor to simply make sure that these changes will not damage some of Australia's most vulnerable children, the exact children that this parliament should be working to protect. The early childhood sector issued a final plea to the Senate today, with Early Childhood Australia's Sam Page saying:
We call on the Senate to block the bill today unless there's an amendment to increase the base entitlement to 15 hours a week.
That goes to the request that is before the chamber. The Australian Childcare Alliance has written to all senators warning that the sector cannot be satisfied with the current reduction in access for low-income families. Goodstart Early Learning has claimed that up to 100,000 lower income families could be worse off if the activity test is now fixed.
For two years now Labor has been campaigning on the changes we need to see to support this package. Along with experts and the sector, we have been trying to convince the government of the changes that are needed. We strongly believe and urge the government to fix the activity test so that vulnerable children do not have their access cut in half and at the very least increase access from 12 to 15 hours a week so children can access two days care in line with what experts and the sector have been recommending.
I note the comments of the minister in the second reading stage that he believes that two sessions from nine to three are adequate. For many children that does not necessarily fit. Their life does not fit into convenient nine-to-three boxes. Anyone who has worked in child care and anyone who has any understanding of the children who would fit into this category would understand that two sessions from nine to three probably do not meet the needs of this particular group.
So we strongly support the request that has been put by the Greens tonight. We do believe it represents some improvement for vulnerable and disadvantaged children, although we note it is well short of the 24-hours access currently received. This is what the sector and experts have outlined as the absolute minimum if two days a week are to continue to be provided. However, Labor does not think that this is the best solution. There is no clear explanation of how it would work for all children in all centres. We have concerns about the workforce implication for the educators if it means moving to a system where shorter sessions become common. The same is true for parents looking to get back into the workforce. Short sessions are not much help when telling an employee your availability. If this request is successful, it is vitally important to see that this is delivered as two or more days in practice and we would want to see the government work with the sector and with employee representatives to do that in a way that protects the workforce and delivers the best educational outcomes for those children.
We do support this request, despite serious reservations, which I think also Senator Hanson-Young touched on, because Labor have maintained through the whole process that we are willing to compromise. This is indeed a compromise. I hope the chamber will be able to support it tonight.
Before I conclude—and I do not wish to delay the chamber unreasonably—I want to respond to the minister's comments in his second reading speech around BBFs and the commitments he gave in the second reading stage around ensuring access to the quarantined funding that will allow them to continue to provide care to the children who use that service. We welcome that commitment. It is something that the Hon. Kate Ellis has been arguing for and certainly raising as a major concern with the legislation. We are pleased that the government has come to the chamber and given that very strong commitment to ensure that those services will continue and that they will be given funding certainty and adequate funding to enable them to do their job.
Senator Gallagher, thank you for your acknowledgement and words in relation to BBFs. I appreciate that; and I appreciate the discussions I have had with Ms Ellis and many others in relation to that, as indicated before.
As I have said, the government agrees that we should see young children in circumstances of disadvantage being able to access two sessions of care a week under our reforms and we are confident that the reforms enable that to be the case. We do not support this amendment, though, because we do not believe that it is necessary for that to be the case.
I think the Senate should, firstly, step back from the 12 hours as opposed to 15 hours and again remember how the activity test works. The activity test necessitates only four hours of activity per week. That four hours can encompass working, studying and volunteering. It encompasses other activities such as looking for work, as I indicated before. So it is a very light-touch activity. The volunteering elements can be accessed through parents engaging in volunteer activities through their school, enhancing areas of parental engagement across the community, with the educational benefits that come from that. So it is not hard, or a high barrier, for families to meet the activity test.
Nonetheless, we have indicated that there are safety net provisions in a number of circumstances. Firstly, there is the safety net provision in terms of additional childcare support and subsidy for children who are at risk. Senator Hanson Young, in moving this amendment, said that sometimes an early education or childcare service is the safest place to be; sadly, sometimes it is. But in those cases those children can be identified by the centre and verified by the different state bodies. As I indicated before, that does not mean they have to be children who are in the formal protection or care of the state; they can be identified because of mental health circumstances—for example, in the home environment involving a parent, a sibling or the child themselves. In those circumstances, they will not be eligible for 12 or 15 hours per week; they will be eligible for 50 hours of care per week, essentially for full-time attendance in an early education or care setting. And it will not be 85 per cent of the fees that will be paid; it will be all of the fees that will be paid. So there is a strong safety net there in place for children who are identified as being at risk.
That leaves the remaining element of the safety net, which is for children who are not identified as being at risk but who are in low-income families that do not meet the activity test requirement of four hours of activity per week. Under our reforms, those families will be eligible for 24 hours a fortnight, or 12 hours a week, of care. As I indicated in my second reading contribution, the government believes that that can and should be delivered as two sessions of care by service providers who have expressed a desire and commitment to early education opportunities and facilitating those early education opportunities. At present, many service providers are providing a number of hours in a session of care that are simply not utilised. That means taxpayers and parents are making contributions that are not actually resulting in care or education benefits for the hours that are being paid for. We believe that this tighter alignment can ensure two sessions of care are provided without services being in the position of being able to take advantage of the system by charging longer hours of sessions of care for people who are not in the workforce, who are not engaged in the activity, and therefore not requiring those 10- or 12-hours sessions of care for their children.
It is for those reasons that the government does not support this amendment. As I have indicated, there will be a post-implementation review of this act and the overall changes. In that post-implementation review, we absolutely commit to ensuring that the application of these measures is considered. As Senator Gallagher acknowledged, I also commit to making sure that, as widely as possible, the 12 hours is delivered as two separate sessions of care.
The CHAIR: The question is that the request for an amendment on sheet 8109, of schedule 1, item 41, be agreed to.
The next amendment that I would like to move is on sheet 8110. This is in relation to the income threshold for the safety net.
We have just now seen One Nation and the Nick Xenophon political party line up with the government to cut in half the access to child care for some of the country's most vulnerable children. We have just seen the Nick Xenophon political party slash in half care to vulnerable children overnight. We have seen the Nick Xenophon political party, One Nation and the government line up and say to those low-income families: 'It doesn't matter. It doesn't matter whether you struggle or whether you live in an area where there is massive unemployment, where you have been retrenched, where Holden has closed its doors, where Hazelwood Power Station has had to close or a rural or regional area where there just isn't job security. It doesn't matter about that. Because you don't have two people working your kids don't deserve proper access to child care.'
Families have just been kicked in the guts tonight. They have lost 12 hours of care just like that, despite everything the experts have said and despite the promises that have previously been made. I do not think that the member for Mayo, Rebekha Sharkie, is going to be particularly happy when she has to go back to her electorate and explain that she was not able to keep her promise of protecting two days of child care for South Australian children. I do not think that families in Queensland, particularly those in rural and regional areas, are going to be particularly happy to hear that Pauline Hanson and One Nation have just kicked them in the guts. Their children, apparently, do not matter. Unless, as a child, your parents are both working, apparently your access to child care does not matter. You are not as valuable to this government; you are not as valuable to One Nation and you are not as valuable to the Nick Xenophon political party unless both your parents are working. Why are those children being punished? Because there is a deal that has been done here tonight.
Yesterday, they cut and slashed the family tax benefit payments and took money directly out of the pockets of families, and now, tonight, they have taken at least a day off families being able to send their kids to child care and early childhood education. It is appalling the way this government is getting these reforms through tonight by putting vulnerable children and low-income families in the dust bin. Those kids do not matter, apparently. They are not as valuable to the government, because both parents are not working or are not able to find work. It is an appalling situation to see the most vulnerable kids being hung out to dry by this government, the Xenophon political party and One Nation. They had an opportunity to fix this tonight; instead, they have rolled over, squibbed the opportunity and sunk the boot into low-income families right across the country.
We could redeem some of this in the next amendment, which would at least lift the income threshold for the safety net to $100,000 per annum per household. That would at least mean that for some families who are struggling to keep both parents in work, struggling to ensure that work is stable, and who are earning under $100,000, which, if you have kids in child care, is not an awful lot of money, because childcare fees continue to rise, this is an opportunity to at least broaden that safety net in terms of the income threshold. Kids are still going to be left in the lurch because the government and the crossbenchers have just voted to cut their access in terms of two days down to one, but at least lifting the income threshold from $65,000 up to $100,000 would ensure that a family on $75,000 a year or those on $80,000, $90,000 or up to $100,000 a year can still at least put their kids into child care with some support to pay those high childcare fees.
I appeal to the crossbench. You have just sent a pretty nasty message to families right across this country that if children come from a low-income family and if both their parents are not working then those children are worthless. You have just sent that message. You have just kicked those poor kids from vulnerable families. How about at least dealing with the income threshold level and lift it to $100,000 so that we do not see even more families left in the lurch, left out in the cold and told basically that they are not worthy to this government because they do meet the government's activity test? We have heard a lot about productivity from this government in relation to this bill. How about we hear something about the value of caring and educating our nation's children? How about we hear a little bit about understanding what it is like to have two kids or one kid in child care and a baby at home and struggling to pay the bills on one income?
Most people in this country, regardless of where they live, want to be productive members of our community, but we have a massive unemployment rate in this country. And whose fault is that? The government has done nothing to deal with unemployment in Australia. Unemployment continues to rise. The only answer the government has to that is, 'Let's give $50 billion worth of tax cuts to big corporations.' Somehow that is magically going to trickle down. Everyone knows that is bollocks. Meanwhile, here you are making it tougher and even harder for some of the lowest income families in the country, those who cannot manage to get into the workforce, to give their kids the best start in life.
Corporations can get $50 billion in taxpayer-funded tax cuts but families who have kids in child care are going to have a hard time affording the care their children need. It is money to big businesses, money to tax cuts for big businesses and less money for parents who are doing their absolute hardest to give their children the best start in life. There is money for tax cuts to big businesses and less money for parents who are doing their absolute hardest to give their children the best start in life.
This government has its priorities totally backwards. Do not give me any of this bollocks about the fact that you cannot afford a proper safety net to look after children in child care and cannot fund proper access to early childhood education. You are spending $50 billion on tax cuts. Do not come into this place and pretend that you do not have enough money to support parents who are trying to do their best.
I present the requested amendments, and I urge the Senate to support them. I seek leave to move the requests together.
Leave granted.
I move:
That the House of Representatives be requested to make the following amendments:
(1) Schedule 1, item 4, page 4 (after line 26), after the definition of extended child wellbeing period, insert:
extended low income threshold has the meaning given by subclause 13(3) of Schedule 2.
(2) Schedule 1, item 41, page 49 (line 31), omit "lower income threshold", substitute "extended low income threshold".
(3) Schedule 1, item 41, page 49 (after line 33), at the end of clause 13, add:
(3) In this Act:
extended low income threshold means $100,000.
Note: This amount is indexed under Schedule 4.
(4) Schedule 1, item 47, page 53 (after table item 18), insert:
(5) Schedule 1, item 48, page 53 (after table item 18), insert:
(6) Schedule 4, item 5, page 221 (after line 6), after paragraph (1) (a), insert:
(aa) extended low income threshold;
(7) Schedule 4, item 5, page 221 (line 20), after "items 18,", insert "18A,".
————
Statement pursuant to the order of the Senate of 26 June 2000
Amendments (2) to (6)
Amendments (2) to (6) are framed as requests because they potentially increase expenditure under the standing appropriation in section 233 of the A New Tax System (Family Assistance) (Administration) Act 1999 . These amendments will increase the income threshold for which the low income result is available, so that more people can access the higher level of hours for which child care subsidy can be paid under the low income result provisions. Thus, they may have the effect of increasing total expenditure under the standing appropriation.
Amendments (1) and (7)
These amendments are consequential on amendments (2) to (6). Amendments (1) and (7) should therefore be moved as requests.
Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000
Amendments (2) to (6)
The Senate has long followed the practice that it should treat as requests amendments which would result in increased expenditure under a standing appropriation. If the effect of these amendments is to increase expenditure under the standing appropriation contained in section 233 of the A New Tax System (Family Assistance) (Administration) Act 1999 , then it is in accordance with the precedents of the Senate that these amendments be moved as requests.
Amendments (1) and (7)
These amendments are consequential on the requests. It is the practice of the Senate that amendments purely consequential on amendments framed as requests may also be framed as requests.
I indicate that I and my colleagues will not be supporting this, and I just want to address some of the matters raised by Senator Hanson-Young, my colleague. We made it very clear that we were particularly concerned that the Budget Based Funding program was not going to be funded and that that was going to cause serious issues, particularly as 80 per cent of services under this Budget Based Funding program supported over 19,000 Indigenous children in this country, in communities where the service could not be sustained on a market basis. As a result of the commitment from the government after we and others put that to the government, the $61.8 million under that program will be quarantined over forward estimates, and $48 million in addition to that would be an amount that these services for the most vulnerable Australians could be bid into, and in addition to that the childcare subsidies would apply. So that was a very significant concession for some of our most vulnerable Australians in remote and Indigenous communities around this country, and that is something that must be noted and put into context in relation to this.
Senator Hanson-Young raised a number of important points. She talked about people losing their jobs at Hazelwood in just over a week's time, at the power station, and people that will lose their jobs at General Motors Holden on 20 October this year; there is not that long to go. Can the minister indicate the basis on which those people who have lost their jobs will be able to access childcare services in addition to 12 hours per week. I know you have covered it, Minister, to some degree, but I think it is important to emphasise and expand on that. What are the criteria? I know there is a four-hour activity test, but could you indicate: where a parent may be suffering from depression, mental health issues, substance abuse or those sorts of issues, what assistance can be provided? Does the activity test apply? In other words, how broad is the category that people can apply for to get additional help beyond the 12 hours per week?
I thank Senator Xenophon for the question. I am disappointed in the misrepresentation by Senator Hanson-Young in her comments. I have twice already in the space of the last couple of hours informed the chamber that job seeking is an eligible activity under the activity test. An Australian who loses their job in difficult circumstances, moves onto Newstart and is simply meeting their job seeking obligations under their Newstart payments meets the activity test threshold and therefore would continue to be eligible to access childcare subsidy for 36 hours per fortnight at the minimum threshold of activity. Of course, if that individual were to undertake some form of training subsequent to losing their job and that training, over the space of a fortnight, exceeded 16 hours of activity—so more than eight hours of training per week, or more than eight hours of combined job searching and training per week, maybe with some volunteering as well—then they would be eligible for 72 hours per fortnight of childcare subsidy. This is a tiered activity test. It is an activity test that is absolutely accessible to Australians to ensure that they can continue to receive that support. Indeed, somebody who has lost their employment, if they are out there looking for a new job, will of course continue to receive eligibility without needing to fall into the safety net that we have been debating.
I want to follow up on that. I also asked about parents that may have a mental health issue or a substance abuse issue. Also, if there are child protection issues, my understanding is that, if a child welfare agency of a state or territory is involved, that would automatically trigger additional assistance. But, short of that, what about those broader categories, such as if there is a mental health issue? There may be a severely depressed parent that cannot meet that activity test. Also, does the activity test include, for instance, volunteering at a childcare centre? Is it as broad as that?
To answer the last question first, yes. Again, as I have indicated to the Senate, the volunteering components of the activity test do encourage parental engagement and mean that volunteering at a school, a preschool or a childcare centre is an eligible activity. This, of course, encourages parents to, hopefully, read with children, enhance their skills, contribute and, overall, benefit from that engagement, as well as meeting the eligible activities.
In terms of children at risk, again, I outlined to the Senate before—and I will go through it in a little more detail if you like—that the government has clear policies to provide not just a 12- or 15-hour safety net for children who are at risk, as has been debated, but indeed a 50-hour safety net for children who are at risk, and not just a subsidy of 85 per cent or less for their childcare fees but a full subsidy for their childcare fees. Children in those circumstances are not just children who are in the child protection system; they are children who have been identified as being at risk before they reach such a crisis point.
The additional childcare subsidy under this safety net component is initially applied for by the childcare provider. Parents who may be in such circumstances of mental health difficulties—or others that you have identified, Senator Xenophon—do not need to be the ones making the application. The provider itself makes a certification that the child is at risk.
If we are talking about a child in the child protection system and that child is known to the child protection system, then essentially automatic eligibility is granted, and the provider need take no further action in that regard. But if the provider is identifying them for other reasons, such as family mental health difficulties, then the provider must take steps to provide that evidence over a period of the first six weeks. The proof of doing so is that a provider must be receiving a letter or statement from a state or territory body which was notified during the six-week period, or other evidence from a relevant professional, regarding the child's situation. That can include mental health services or other family welfare services and is part of the rules governing the childcare subsidy. The states and territories are working with us to identify who those relevant bodies for notification during that period are.
But it is absolutely intended as a subsidy mechanism to step in and to ensure that assistance is there for children at the earliest possible opportunity, before they reach crisis point. It is available not just if there are particular issues with their parents but also potentially if there are mental health issues impacting on siblings or others in the home environment, or other circumstances that might involve the engagement of family members in the criminal justice system or those types of threats to wellbeing that could eventuate down the track.
I thank the minister. In respect of mental health issues, for instance, does that mean that a letter from the treating GP of the parents to say, 'There is no reasonable way that the parent or parents would be able to comply with the activity test because of a health problem or a mental health problem,' would be sufficient for the activity test requirement to be waived and the additional childcare support to be provided?
The short answer is yes. Obviously, circumstances have to be assessed on a case-by-case basis. The government would, in all such instances, be ensuring that proper process is being followed. We have enhanced compliance activities, as I have indicated. But, yes, for a genuine mental health circumstance where a child is potentially at risk—
Or general health.
or indeed if there are further provisions, yes, for circumstances where a parent might be, for example, undergoing extensive chemotherapy treatment or the like, then again there are provisions to ensure that they are not falling back on the safety net but in fact more extensive support is available.
This is a question on Senator Hanson-Young's amendment. Labor will be supporting this amendment. Just going to some of the contributions earlier, I agree with Senator Hanson-Young that the lack of support to move from 12 to 15 hours per week is devastating for a particular group of children. I heard from Senator Xenophon about the BBF services, and I have already made a comment on that.
The point around what we have just seen happen is that 100,000 kids—Goodstart say 100,000 kids—are going to have their access to child care halved with the changes that have just been agreed, or the lack of support for the amendment. Our position would be that the government had to deal with the issue of Indigenous children in mobile services. That is not a win. It is expected that they would have to deal with that. Can you image cutting that? The government had to deal with that. They knew it was an issue, and they would have dealt with it—or I would be very surprised if they did not. In order to secure something that I think the government would have had to do, we can trade off the rights of 71,000 kids and halve their access to child care!
The point is not that your life deteriorates to the point that you get special access to additional hours. The whole point of child care and ensuring that kids get the best start to life is that there is universal access for a set period of time that allows kids to get the benefit of access to child care over two days—and the compromise position put was 15 hours. It is not that there is an inadequate amount of hours, and then there has to be a mental illness or some other catastrophe that hits the family for you to be allowed to get further access to subsidised care. That is not the point of a quality early childhood education system. What we want is for every child, regardless of their circumstances, to be able to access at least two days of full-time child care. That is what all the evidence shows makes a difference. But what the Senate has agreed to do tonight is take that away from thousands of kids and their families and then try to dress it up as though it were actually a win and that something was achieved tonight because the government has done the right thing—a must-do thing—to address a problem it had in a particular type of child care that was provided.
Labor will be supporting this amended. We are deeply disappointed with the Nick Xenophon Team, particularly, because of the position it has taken on this and for the families and the sector, who have been pleading with the Senate to reject this legislation tonight if we were unable to secure 15 hours. Each one of them explained why it will not work and how they will not be able to meet the needs of these groups of kids any longer, should these changes go through. This amendment will provide extra support to these families to some degree. It is not perfect—but then this reform package is not perfect—but it is an improvement. It is certainly not how we would design a childcare system, but it would be an improvement on what the government has currently proposed.
I would say to those who did not support the previous amendment, and this flows on from that, that I look forward to hearing your explanation to the sector and to their families who are going to be affected when they come and say to you how this will impact on them. We are strongly of the view that, yes, there should be support provided to families in crisis and children who touch on the care and protection system, but there should be reasonable and adequate safety net that meets the needs of all children, particularly those from low-income families, who are going to have their access to child care halved thanks to this Senate.
The government does not support this amendment. I will touch on a few of the broader comments made by Senator Gallagher and Senator Hanson-Young in their contributions on this before I respond specifically to Senator Xenophon's questions.
Firstly, Senator Gallagher indicates that there should be universality of access to early education. The government agrees. That is why we support universal access to preschool that guarantees every Australian child has access to early education opportunities. The childcare system also provides important early education opportunities, but let us not confuse the two, because the childcare system also provides important care and services that enable Australian families to juggle their work and family responsibilities. Preschool is targeted, of course, at preschool age children. The childcare system applies from birth, and all the amendments we are discussing here about whether we have 12 hours or 15 hours—the safety net for the very small margin of families who cannot or do not meet the activity test—or whether you apply it from $65,000 to $100,000 are not targeted specifically at preschool age children. They are at all children from birth till they start school. In fact, they also apply equally to children in outside-school-hours-care circumstances or even of school-age arrangements. So we have universal access. The government is committed to supporting universal access. We have extended universal access agreements to the states and we are working through processes to ensure universal access continues at a preschool level into the future.
We heard Senator Hanson-Young talking about stories of unemployed people. As I indicated to Senator Xenophon before, it is completely misleading to suggest that Australians who are in receipt of unemployment benefits and Newstart payments, if they are meeting their obligations under those payments, would in any way see themselves fall onto the safety net. If they are meeting their obligations to look for work then they are meeting the requirements of the activity test under these reforms.
Senator Hanson-Young went on quite a little rant in saying that this was a kick in the guts to Australian families. Actually, hardworking Australian families should be swinging from the rafters tonight when these measures pass the parliament, because hardworking Australian families will be substantially better off as a result of these reforms. Let me give you some examples. Let us take a family earning $50,000 with two children in long day care for two days a week at $100 a day. That family will be $2,197 better off as a result of these changes. Another family on $50,000, who might have their children in care for three days a week, will be $3,295 a year better off under the Turnbull government's changes. The same family with school-age children in after school care for two days a week will be $426 a year better off. Or take a slightly higher income family earning $80,000 a year: with two children in long day care, again at $100 a week, they will be $3,424 a year better off. The same $80,000 family will be even better off if their children are in care for more than three days a week, getting into many thousands of dollars. Whilst the subsidy rate tapers off from the 85 per cent high that it is for families earning less than $65,000, which means that some of the benefits diminish, you still see significant benefits for families earning around $94,000. With two children under six at long day care those families will be around $1,771 a year better off as a result of these reforms, or if their children are in long day care for three days a week they will be $2,657 a year better off. These are significant benefits that are helping families who are working, who are studying, who are volunteering in their community. They are helping the lowest income families the most and they will help the hardest working families the most.
The Turnbull government does not shy away from the fact that we want to give the greatest support we possibly can to the lowest income, hardest working Australian families to enable them to work more if they choose to; to enable them to participate in the workforce, where they choose to; to enable them to volunteer in their community, where they choose to; to enable them to up skill through education or training, where they choose to. These are the types of reforms that can help people to participate, to better their lives, to meet their demands. That is exactly what we are backing them to do.
We are backing hardworking Australian families.
I have expressed and detailed tonight all of the different safety net aspects of this to provide important early education opportunities to families. But I will not accept this idea that somehow this package is anything but a net good for the Australian population. Australian families overwhelmingly will be better off—one million Australian families will find themselves benefiting as a result of our reforms that we are voting on tonight.
I cannot believe the idea that somehow the Labor Party and the Australian Greens are going to sit here tonight and vote against providing greater childcare support to the lowest-income hardest-working Australian families. This should have been core territory for the Labor Party. This is the type of reform the Labor Party should have been champing at the bit to support, and yet here we are tonight with them desperately trying to pick holes in it and to create political problems rather than recognising that this is fundamental reform of a broken childcare system that needs to be delivered, and that we trust will be delivered, tonight. We thank those crossbenchers who have worked constructively with us, because clearly they are putting the best interests of the hardest-working Australian families first. They are demonstrating their commitment to help those families juggle their childcare costs and to support us in implementing a system that can keep costs down, and future cost rises down, but which also of course delivers important assistance to those families who need it most.
Senator Hanson-Young spoke about unemployment. Of course, under our government around 534,000 jobs have been created, and we will keep pursuing policies that do that. And these reforms, again, will help. They will help workforce participation. An estimated 230,000 Australian families will choose to work or to engage more in the labour force or, indeed, to re-enter the labour force as a result of the extra support we are providing. Why will they do that? They will do that because they know that they will not get to February, March or April during the course of a year and find that their $7½ thousand cap has been hit, that they no longer get any support and that they end up working for the last two, three or four months of the financial year for no financial reward because of their childcare fees. That problem will no longer exist for those families.
Why will they increase their workforce participation? They might be entering the workforce in a lower-paid job, but rather than facing higher childcare fees they will do so now knowing that 85 per cent of those fees will be paid for.
We have gone through every single element of that the rewards that will flow to the people who deserve them most. We are proud of this package. We believe these reforms will help Australian families who need them most. They deliver the greatest help to the hardest-working Australian families, and that is not something that we will shy away from celebrating at all.
I must say that I am extremely disappointed to hear again from the minister an absolute lack of acceptance of what the experts have said. The minister has spent months in consultation and talk with representatives and experts from the childcare and early childhood sector. For months they have appealed to the minister about the current restrictions on access to the safety net, which are not broad enough. This is going to leave the most vulnerable children out in the cold.
The minister went so far as telling Patricia Karvelas on ABC RN Drive, 'We are committed to doing what the sector and the experts advise us is optimal.' Well, he is doing exactly the opposite tonight—exactly the opposite! He is turning a blind eye to the evidence put before him and rejecting the advice that has been put to him over and over again, that there are going to be vulnerable children and low-income families who lose out.
The minister has spoken a lot tonight about working families. And, yes, if you have a job and if both parents are working then this package is going to be pretty good for you. We all accept that. But for the most vulnerable people in our communities, for those who do not have both parents working for a variety of reasons, those children will suffer. It is the hardest-working first and the most vulnerable last for this government. The hardest-working first and the very vulnerable and the most vulnerable last. That is what we have got from the minister tonight—reject the expert advice, throw low-income families under a bus and put vulnerable children last. It is pathetic.
The CHAIR: The question is that Australian Greens requests for amendments (1) to (7) on sheet 8110 be agreed to.
by leave—I move Liberal Democratic Party amendments (1) to (5) on sheet 8103:
(1) Schedule 1, item 41, page 36, (lines 26 and 27), omit step 4 of the method statement, substitute:
Step 4. Work out the hourly rate of CCS for the individual for each of those sessions of care (see clause 2).
If the applicable percentage is 0% for each of those sessions of care, the amount of child care subsidy for the individual for the week, for those sessions, is nil.
Otherwise, go to step 5.
(2) Schedule 1, item 41, page 38 (after line 8), at the end of subclause 2(1), add:
Note: If the applicable percentage for a session of care is 0% (see table item 5 of subclause 3(1)), the hourly rate of CCS for the individual for the session of care is nil.
(3) Schedule 1, item 41, page 39 (table item 5), omit "20%", substitute "0%".
(4) Schedule 1, item 41, page 40 (line 16), omit "$184,290", substitute "$134,290".
(5) Schedule 1, item 41, page 40 (line 18), omit "$274,290", substitute "$284,290".
I did not give a speech during the second reading debate on the bill, so I have a few remarks to make now. I do not like this bill. Putting more money into child care is a bad idea, and $1.6 billion is a lot of money. Childcare subsidies take money from taxpayers and give it to people who have children and choose to send those children to child care or family day care. The taxpayers who pay this money are both rich and poor. Some have children and some do not. Many of them enjoyed no subsidised child care when they were a child. They might have been raised by a stay-at-home parent, a relative or a neighbour, or their parents may have paid for their child care without a subsidy. So why do we subsidise child care?
It is true that childcare subsidies go to disadvantaged families, for whom child care represents an important complement to their personal efforts to raise their own children. But childcare subsidies also go to families that are not disadvantaged, for whom child care is no better than their personal efforts to raise their own children. The only argument for providing childcare subsidies to families that are not disadvantaged is that the subsidies might prompt parents to return to the workplace, where they pay tax. But this argument has nothing to do with the welfare of the child.
Getting a parent back to work paying tax helps the government and the economy. It might help the parent in the long run too because they are less likely to lose their job skills. But we should not pretend that it is for the benefit of the children.
We should also admit that the argument about childcare subsidies prompting parents to return to the workforce does not apply to parents in high-income families. For these families, the decision about whether to stay at home or go back to work depends on nonfinancial motivations. The idea of someone deciding whether or not to return to work based on a childcare subsidy of a few thousand dollars a year while earning several hundred thousand dollars a year cannot be taken seriously.
So, while a case can be made for childcare subsidies for disadvantaged and low-income families, there is no reason whatsoever to provide childcare subsidies to high-income families. In fact, it is immoral to force low-income couples, some of whom have tried and failed to have children, to fund the childcare subsidies of high-income couples who have won the jackpot by having children but do not wish to stay at home to look after them. It is like forcing those in wheelchairs to pay for the running shoes of the able-bodied. My amendment is a measured attempt to confront this immorality.
The government's bill sets childcare subsidies as a percentage of the lesser of the actual childcare fee and a fee cap. The government intends this percentage to drop below 50 per cent once family income exceeds $250,000. The government's bill outlines how the subsidy would then fall on a sliding scale until family income reaches $340,000, where it would remain at 20 per cent of the actual fee or fee cap, up to a maximum of $10,000 a year.
My amendment would commence that reduction in the subsidy below 50 per cent at incomes over $200,000, not $250,000. It would apply the same gradual rate of subsidy withdrawal as in the government's bill, but the withdrawal would not stop at $340,000. It would continue so that, once income reached $350,000, the subsidy would drop to zero.
The government has agreed, in negotiations with me and Senator Hinch, to cease childcare subsidies at $350,000. I commend it for that. However, the government has so far only committed to support Senator Hinch's amendment, which calls for a sudden cessation rather than a sliding decline. A family on an income of $349,000 would go from receiving 20 per cent of the actual fee or fee cap to nothing, simply by receiving a $1,000 bonus. It is not the best way to do it. Unlike this alternative amendment, my approach would reduce the subsidy for high-income families in the range of $200,000 to $350,000.
Paying money to people with incomes of that kind cannot be defended. It is classic middle-class welfare. In many cases, the money is coming from the taxes of people who are earning far less than that. It leaves less money in the budget to help people who genuinely need help. Back-of-the-envelope calculations suggest that my amendments could affect around 100,000 high-income households and reduce government spending by around half a billion dollars over the forward estimates period. This is important because continuing deficits and growing debt represent a grave disservice to the next generation. My amendment is an opportunity to go some way to reducing this disservice. I commend these amendments to the Senate.
Senator Bernardi, do you want the call?
I do want to address a matter with the minister, but it is not related to these amendments, so I thought it would be more appropriate to deal with the amendments and seek the call afresh. It will only take a few moments.
Yes, that is good advice, Senator Bernardi.
I am standing to support Senator Leyonhjelm's amendment. I preferred my own, but in negotiations I can see where he is coming from. I think that anybody earning more than $250,000 a year should not be getting childcare money. I had my say about how I felt about these issues at the second reading ,so I will not say any more, but I stand to say that I support Senator Leyonhjelm.
Labor will not be supporting Senator Leyonhjelm's amendment. I disagreed with so many aspects of his contribution tonight that I think the answer is just no.
The coalition government will not be supporting Senator Leyonhjelm's amendment either. We understand the arguments behind it. In framing these proposals we have sought to be judicious, as best we can, with taxpayers' money whilst not undermining the intent of the childcare system to provide support to families to maximise workforce participation, to enable choice about working and, of course, to support early education opportunities. That is why the government presented a package of reforms that for high-income earners does reduce their current level of eligibility. When those opposite talk about people who might lose under the government's reforms, they are always counting people on very high incomes who lose under the government's reforms. At present somebody on, for example, a cabinet minister's salary can receive 50 per cent of their childcare costs paid under the childcare rebate. We proposed reducing that to 20 per cent.
I note that Senator Hinch has an amendment that will make a change that does not go quite as far as Senator Leyonhjelm's. I can indicate that the government will support Senator Hinch's amendment in terms of saying that there is a point at which support can end. Senator Hinch has proposed that at $350,000. The government believes that Senator Leyonhjelm's amendment is well intentioned in terms of trying to save money. We absolutely acknowledge that and acknowledge that the amendments that were just defeated during various debates have avoided costs of around $260 million—or in excess of that—being added to the cost of the proposals.
Senator Leyonhjelm, your votes and actions to date have already helped to ensure a reduction in the cost of this proposal. Your support for Senator Hinch's amendment, if that occurs, may see further cost reductions. But we do not support yours, as we believe that it starts to enter a territory that could have notable negative implications for workforce participation and the benefits that flow from that, particularly given the research and work that has been undertaken by the Productivity Commission in terms of the design of the proposals.
The Australian Greens will not be supporting Senator Leyonhjelm's amendment. We reject the premise that Senator Leyonhjelm has put forward that support for families who are working to help pay for their child care is not a legitimate need and service. I must say, as a mother who has relied my entire parenthood on paid childcare in order to be able to do my job, as many other working mothers around this country do, I find it galling to be told by a middle-aged bloke in this place that it is not a legitimate service to offer support for working mums in terms of paying for child care. It is pathetic.
Parasites.
We know that the educational outcomes for children are an important investment for any government. We know that, for working families—particularly with professional women—allowing them to have support to go back to work, to participate in the workforce, to pay taxes and have childcare funding to help them do that is significant to the productivity of this nation. We had an entire Productivity Commission report into how we could lift the level of workforce participation of women in this country, and they said that, overwhelmingly, proper funding for child care is what is needed.
We have one of the lowest participation rates of university educated women in the OECD. We send a lot of women to university. We help pay for their university degrees, but, once they have children, we do not give them the support that they need. Here we have a middle-aged bloke in this place telling professional working mothers that they do not deserve support in child care. Women across this country—working mothers across this country—would be appalled to hear that we have a senator in this place who thinks that they do not deserve assistance in being able to go back to work, to pay taxes and to contribute to this country, having a bit of support along the way in terms of child care.
Rich parasites.
Senator Leyonhjelm calls these working mothers across the country 'rich parasites'. That is what Senator Leyonhjelm thinks of working mothers in this country.
Senator Hanson-Young, try to ignore the interjections.
Senator Leyonhjelm has just referred to working mothers across this country as parasites. Rise up, I say. Women across this country will tell you directly to your face, through their letters, through their phone calls, in the street that the only parasite in this place is a middle-aged white guy drawing a huge wage from the taxpayer.
I would like to put on the record that I think it is inappropriate to be describing senators according to the colour of their skin, their age or their gender, quite frankly. I think that, if the boot were on the other foot and I started talking in those sorts of terms about Senator Hanson-Young or anyone else, that would be truly inappropriate. We would not accept that in relation to child care. I raised before with the minister the point that referring access to child care or replacing people because their skin colour is wrong or their age is wrong—not in this case but in other circumstances in those sorts of descriptive terms—is false and wrong.
So I stand in this place and I say that the descriptions and emotional assessments that have been taken by Senator Hanson-Young in relation to Senator Leyonhjelm's skin colour or melanin content, his age and his gender do not have any real place in this discussion.
Whilst I am on my feet with 13 minutes and 37 seconds to go and we are discussing the idea of race and the idea of preferential treatment and things of that nature, I would like to thank the minister for responding very promptly to my earlier concerns. To remind the Senate: I was concerned—and I made this point during my speech on the second reading—that during Senate estimates I discovered that someone who had a place in child care for their child could be replaced at 14 days notice because someone deemed more worthy was going to access that place. Those more worthy characteristics related to the language one's parents spoke at home. If you were from a non-English-speaking family background, you could boot out the English-speaking, Australian-born child that had already got a place in child care. I thought that was wrong. Similarly, if you are from a low-socioeconomic background, your child can take the place—and I mean replace at 14 days notice—a child from a non-low-socioeconomic background. I think that is wrong.
It is the same in relation to skin colour. If you are in Aboriginal child, you can take precedence and replace a child who is non-Aboriginal who has an existing place in child care. They are wrong. I think it is prejudiced and bigoted and racist, you can say whatever you like. Senator Birmingham, to his credit—I know he is under the pump—has written me this letter, which I would like to include in Hansard.
It says, 'Dear Senator Bernardi, further to your questions regarding the priority of access guidelines at additional estimates on 1 March'—which was really prompted by today, Senator Birmingham, let's be frank—'I write to clarify the future arrangements regarding the Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2016. As discussed, under these guidelines, which if used have been used to a very limited extent'—I will have some comments on that shortly—'priority is given to children in Aboriginal and Torres Strait Islander families, children in families which include a disabled person, children in families which include an individual whose taxable income is less than $44,457 in 2016-17, children in families with a non-English-speaking background, children in socially isolated families and children of single parents. These guidelines were reviewed in conjunction with the developments of the child-care package. The draft of the new guidelines, which have already been subject to consultation, will include two priorities which apply to vacant places only as follows:'—that is very pertinent—'the first priority is a child at risk of serious abuse or neglect i.e, a child receiving Additional Child Care Subsidy (Child Wellbeing). The second priority is the child of a single parent who satisfies or of parents who both satisfy the activity tests and are undertaking paid work, whether or not as an employee.'
In respect to what the minister has written there, I make the point that during estimates it seemed the minister and the department were unaware that someone with an existing place could be required to vacate that place with 14-days notice. Then, when they were made aware of it, the department in particular said they were unaware if it had ever been used. I asked them if they are required to be notified if it has ever been used, and they, of course, said no. I asked them how they would know, and they said, 'People talk.' This has been in place for 10 years, apparently, and no-one has bothered to talk about it. But they bothered to talk to me about it. I just find that extraordinary. The department has a tin ear to these things, perhaps. Anyway, they promised to review it and they have reviewed it.
I have also raised with the minister the issue of the activity test, because I had some concerns there. The minister has assured me that the activity test applies not to someone based on their means but on their actions and activities. It is not discriminatory and not prejudicing those people who work more hours or less hours. In fact, it is quite the opposite. It applies to anyone seeking work and it means that people who are actually working will receive priority placements for vacancies, above those who are not working, subject to priority 1.
Minister, I am seeking a confirmation that my understanding of your unsigned letter—you can sign it here in Hansard, virtually—is correct and that there will be no prejudicial placements. I am seeking confirmation that people will not be removed from existing placements under any circumstances, because they speak the wrong language, have the wrong colour skin or come from functional families, rather than your previously preferred priority guidelines.
Senator Bernardi, yes, you raised with me today some issues that we had some questions asked of us at additional estimates, earlier this year on 1 March, as the letter notes. You correctly identified at additional estimates some guidelines which you then identified were used during the enrolment practices of at least a centre, where a constituent had come to you. That centre had advised your constituent that they could lose their place, essentially, if somebody higher on the priority order came along, even after their child had already been enrolled in that childcare centre. You are correct. That exchange at additional estimates was the first I had ever heard of those guidelines in that form, and officials did work out which guidelines you were referring to and that the centre was accurately reflecting the guidelines that had been in existence since 2000.
As we indicated at additional estimates, but did not have all the information in front of us at the time, the department was already out, as they have been across a range of different rules and guidelines, consulting on new guidelines to apply under this package. Officials did indicate at additional estimates that the provisions of concern you had identified were not part of those new drafts that had been out for consultation and discussions.
I can confirm that those new drafts simplify the priority provisions, as you have read out, to a first priority being a child at risk of serious abuse or neglect and a second priority being a child of a single parent who satisfies or parents who both satisfy the activity test through undertaking paid work, whether or not as an employee. They are simple, straightforward priorities. I also note and emphasise that the guidelines apply to vacant places only. In that instance, centres will not be under the guidelines asking anybody to vacate a place that their child is already settled into, to create room for anybody else, even with these much streamlined and simplified guidelines.
These guidelines have been the subject of consultations, and this simplified approach was supported in the sector, which is no doubt happy to be removed of that responsibility of possibly having to ask somebody to move on and take their child out of a place in which they have been enrolled. With that in mind, I am very happy to give you and the chamber an undertaking and confirmation that the government is happy with the draft guidelines that have been consulted on. And we will not be reinserting any of the previous provisions or anything like it.
Senator Bernardi asked about the activity test as well. Yes, absolutely, the activity test applies to everybody. In meeting that, it is about the hours of activity, as defined, regardless of any circumstance that you may face meeting that minimum entry point of four hours of working, studying or volunteering with the various other factors I have addressed tonight, including job searching and the like, and of course noting some of the other safety net elements that have been the subject of debate tonight as well.
The CHAIR: The question is that amendments (1) to (5) on sheet 8103 moved by Senator Leyonhjelm be agreed to.
Madam Chair, I will not be moving the remainder of my amendments. They are picked up in Senator Hinch's amendment.
The TEMPORARY CHAIR: Thank you very much, Senator Leyonhjelm. Senator Hinch.
by leave—I move amendments (1) to (14) on sheet 8108:
(1) Schedule 1, page 5 (after line 2), after item 5, insert:
5A Subsection 3(1)
Insert:
fourth income threshold has the meaning given by subclause 3(4) of Schedule 2.
(2) Schedule 1, item 41, page 36, (lines 26 and 27), omit step 4 of the method statement, substitute:
Step 4. Work out the hourly rate of CCS for the individual for each of those sessions of care (see clause 2).
If the applicable percentage is 0% for each of those sessions of care, the amount of child care subsidy for the individual for the week, for those sessions, is nil.
Otherwise, go to step 5.
(3) Schedule 1, item 41, page 38 (after line 8), at the end of subclause 2(1), add:
Note: If the applicable percentage for a session of care is 0% (see table item 6 of subclause 3(1)), the hourly rate of CCS for the individual for the session of care is nil.
(4) Schedule 1, item 41, page 39 (table item 4), omit "upper income threshold", substitute "fourth income threshold".
(5) Schedule 1, item 41, page 39 (after table item 4), insert:
(6) Schedule 1, item 41, page 39 (table item 5), omit "5", substitute "6".
(7) Schedule 1, item 41, page 39 (table item 5), omit "20%", substitute "0%".
(8) Schedule 1, item 41, page 40 (after line 16), after the definition of third income threshold, insert:
fourth income threshold means the lower income threshold plus $274,290.
(9) Schedule 1, item 41, page 40 (line 18), omit "$274,290", substitute "$284,290".
(10) Schedule 1, item 92, page 82 (lines 13 to 15), omit all the words from "Or, the individual" to and including "the year.".
(11) Schedule 1, item 92, page 83 (line 8), omit "passed;", substitute "passed.".
(12) Schedule 1, item 92, page 83 (lines 9 to 11), omit paragraph 67DB(2) (d).
(13) Schedule 1, item 92, page 83 (lines 12 to 26), omit subsections 67DB(3) and (4).
(14) Schedule 1, item 92, page 83 (line 28), omit "(5)", substitute "(3)".
To save time, and because I did have something to say during the second reading debate, all I will say is that if this bill went through without this amendment you would have taxpayers getting 20 per cent of the cost of their child care paid for families earning $350,000 to $500,000 a year. I think that is a disgrace. If you pass this amendment, it will save the government $100 million over a three-year period if families on $350,000 to $500,000 have to pay their own childcare costs. I was amazed when I discovered that, even now, people earning half a million dollars a year get 50 per cent of their childcare costs paid by taxpayers. The Labor Party and the Greens have been talking all night about hard-up people. I am not anti child care, I do not follow Senator Leyonhjelm all the way, but I cannot see how you can justify voting against this. Are you now going to vote in favour of 20 per cent of childcare fees being paid for people whose family income is half a million a year? By cutting this, we are saving $100 million. In the big picture it is not much, but it is a start. I do not want to take up any more time. I commend the amendment to the Senate.
I rise to indicate that I will be supporting this. This $350,000 cut-off level was negotiated jointly by me and Senator Hinch with the minister and with the Minister for Finance, Senator Cormann. All I want to do is highlight the fact that anyone who opposes this amendment will basically be saying to the Australian public: 'Even though you are earning $350,000 a year or more, you are still entitled to hold your hand out for a childcare subsidy; even though you are earning $350,000 a year or more, you can hold your hand out for other people's money for a childcare subsidy.' And the people who are paying that subsidy do not earn anything like $350,000 or more—not a fraction of it. It is just something to think about. It will be on the record.
As we understand from previous speakers, this amendment has the support of the Senate. As such, we are not going to stand in the way of it. It is not Labor's focus as part of this childcare reform package. We do have concerns, though, that this undermines the universal nature of access to early education. All children, regardless of their parents' income, have access to government subsidised school, including public schools. And up to this point all children have also received some universal subsidised early childhood education. This amendment would end that. It will certainly be taking a different approach in one part of our education system from that taken in the other. I think it also risks early childhood education being viewed through the lens of being a babysitting service and welfare rather than part of the education system. As said, that is not Labor's focus and we understand it has the support of the majority of the Senate.
I will just add my comments to this discussion. I am concerned about the trend that this amendment is taking. The Australian Greens believe that access to early childhood education should be universal, and this goes directly against that. I understand the arguments put forward by Senator Hinch about the level of public funding going towards people on the upper income levels. But I think that is why we means test things. To cut it off at zero really does send a message that early childhood education in care is a luxury or about babysitting, not education. I fundamentally believe that education is the best way of giving our children a good start in life. If we want to have productive members of our community we have to be investing in their education early. All of the expert advice tells us that the real work and effort is put in before a child turns five. We have universal access for kindergarten. I would argue that we need to have universal access in the years below kindergarten as well. It is a matter of principle for the Australian Greens. Having said that, we are not going to stand in the way of your amendment tonight. But just note that we are very worried about the trend and the principle that this sets.
As I indicated earlier, the government supports and accepts the amendment from Senator Hinch, which, as Senator Hinch and Senator Leyonhjelm indicated, has been the subject of discussions. In introducing these reforms, the government had sought to calibrate the rate of childcare subsidy to more closely align with a fair and equitable means testing regime. That is why it goes up for low- and middle-income families under our reforms and goes down for higher income families.
We have accepted the argument that at some point it should cut out, and putting that close to the point where it was going to taper down to 20 per cent in any event seems to be a reasonable point at which we do not believe there would be profound impacts in terms of workforce participation or the benefits we seek to realise through child care. I note, as I have said before in terms of early education, that universality is provided via universal access to preschool. Of course, we have discussed quite a bit tonight all the other opportunities and support to access early education through the childcare service for families, including families with children at risk and low-income families. Of course, these arrangements will not prevent other families from choosing to continue to do so.
Question agreed to.
Bill, as amended, agreed to.
Bill reported with an amendment; report adopted.
I move:
That this bill be now read a third time.
The question is that this bill be now read a third time.
Pursuant to order, the Senate now stands adjourned.
Senate adjourned at 22:01