( I remind senators that the question may be put on any proposal at the request of any senator.
The Greens won't be moving amendment (3) on sheet 8882, but I will just clarify some of the issues around the period of employment. I will just remind people about some of the issues that we had about that particular matter. We had concerns around the fact that, as it reads, it's unclear whether 'employment period' refers to the number of days in a person's pay cycle or the period during which a person worked, and this could lead to people misreporting their employment period and being penalised for using the wrong period. The reason why we were trying to move the amendment was to better explain what 'employment period' actually means. I did listen carefully to the point that the minister was making in terms of when the income was earned and the point about the amount, so what we're seeking therefore is that, as the minister touched on before, the pay period will be addressed in the Social security guide. I'm seeking a commitment that the guide will outline what the term 'employment period' means for people who work weekly, monthly or in work of an unpredictable nature, with irregular hours. We're also seeking that the guide will provide working examples or scenarios of how 'employment period' should be interpreted for people working weekly, monthly or with irregular hours—in other words, point it out but also provide worked examples, because we are very concerned this is going to be confusing. We think it's important to clarify this so that people know what 'employment period' means and what they need to provide to Centrelink when they are reporting their employment income. We're concerned that confusion around what is meant by 'employment period' could cause people to provide the wrong period and misreport their income. That's why we want to make sure that both the explanation and case examples are there, because that often helps people interpret it. Can the minister guarantee that that will be in the guide?
In answer to your last question: yes, I can. Certainly the definitions will be clearly outlined in the Social security guide. There will also be working examples that people can use. Particularly in the early stages, as people are transitioning to this different way of reporting, we will make sure there are adequate resources if people wish to speak to somebody about what their pay period is. To be clear, it's not the number of days worked; it's the period of employment on the payslip. All of the detail around the definitions around these will be included in the guide. In doing so, the reason we want it in the guide as opposed to the primary legislation is to give that flexibility, because we do understand there will be special circumstances along the lines that you've just mentioned—irregularity of work, people who may be paid on an ad hoc basis, people who may not be paid until the end of the month, et cetera. We're very keen to make sure we've got the flexibility to deal with those issues.
I appreciate the minister guaranteeing commitment on that issue. As I said, we won't be moving that amendment. I will just flag that I suspect this is something that is going to come up during the review over the first 12 months to see how easily it is understood and whether it has caused problems.
I move Greens amendment (1) on sheet 8885, which relates to the secretary's discretion:
(1) Schedule 1, item 37, page 10 (after line 32), after subsection 1073BA(2), insert:
(2A) For the purposes of subsection (2), when determining such period a person is taken to have received employment income over, the Secretary must consider the following:
(a) the nature of the person's remunerative work;
(b) the nature of the person's employment income, including the matters in subsections 8(1A)-(1C);
(c) any hardship which may be caused to the person by attributing employment income over such period;
(d) whether the employment income relates to remunerative work that was undertaken at a time when the person was not receiving a social security pension or a social security benefit.
I indicated in my second reading contribution that we had some concerns around this, in making sure we articulate what the secretary's discretion is to attribute employment income that does not have a corresponding time frame, such as a Christmas bonus over a certain period. There are currently no guidelines or limitations on how the secretary should exercise their discretion, which we are concerned about. We think there need to be some parameters or an outline around that. The way income is assessed has consequences for how people manage their budgets, eligibility for income support payments and whether the secretary attributes a bonus; for example, a Christmas bonus and any other bonus over two or 52 weeks has potential real-life implications. We think this amendment will significantly help to clarify that and will put some guidance around the form of the secretary's discretion.
Senator Siewert, we believe this isn't the appropriate place to describe that discretion. Therefore we think the amendment is not necessary. I can confirm that, when we determine payments that are paid in respect of a particular period, consideration can be given to a number of factors, including the recipient's employment, the payment frequency, individual circumstances, hardship, et cetera. In drafting the legislation we quite purposefully avoided defining some terms in order to give the flexibility to enable us to deal with unique circumstances. As we all know, whilst the majority of people are paid in a reasonably uniform way there are a number of people who aren't. Employment often changes; we've seen significant changes in the nature of work over recent times. So we wanted to make sure we had the maximum flexibility built into that discretion. For that reason we thought it best to make sure that the issues and the details were set out in the guide as opposed to the primary legislation. So we don't support this amendment, because we believe that it will have a negative impact on our ability to have greater flexibility in what we do.
I hear what the minister is saying. I understand flexibility, but there is flexibility not to do the right thing as well, so we have concerns about that. I took on board what the minister said around the employment period, but on this one we are very concerned about the fact that it isn't better defined in the legislation. Things can go two ways. I'm not casting aspersions on the secretary and the department, but into the future the lack of interpretation in the legislation could in fact be interpreted in a different way, a way that perhaps was never intended in the first place. We think putting this in place in legislation that actually provides for the secretary to exercise discretion is a better approach. We think the way this is drafted still enables the flexibility to which the minister refers but provides much better bounds around that discretion.
This amendment by the Greens fundamentally addresses concerns that have been raised by the principal stakeholders and is similar to a Labor amendment, so we don't have any problem with it.
The CHAIR: The question is that amendment (1) on sheet 8885, as moved by Senator Siewert, be agreed to.
I move Labor's amendment (1) on sheet 8889:
(1) Schedule 1, item 37, page 10 (after line 32), at the end of subsection 1073BA(2), add:
Note 1: When determining the period, the Secretary might take in to consideration the following:
(a) the nature of the person's remunerative work;
(b) the nature of the person's employment income;
(c) the person's financial interests;
(d) any financial hardship which may be caused to the person;
(e) whether the employment income relates to remunerative work that was undertaken at a time when the person was not receiving a social security pension or a social security benefit.
Note 2: The period determined by the Secretary should be fair and reasonably beneficial, taking into account the financial interests of the person receiving the social security pension or social security benefit.
There is a slight amendment to the text of the substantive amendment, which I understand has the concurrence of the minister. I thank the minister for that indication.
During the inquiry into this bill, a number of stakeholders raised issues with the lack of clarity around how irregular income would be treated. Concerns were that the bill could be implemented in a way that could leave people worse off if the government deliberately averaged income to minimise social security payments. The government said that this will not be the case, and we take the minister at her word. However, the amendment will insert an interpretive note to make it clear into the future. If a case ends up before the AAT, the note will help clarify the matter in terms of the commitment and intention. We have chosen an interpretive note over a substantive amendment to the bill because this area of law is incredibly complex and we realise some flexibility in implementation is necessary.
This amendment is designed to ensure that income is averaged in a way that is fair and that the reasonable financial interest of the social security recipients is reasonable. For example, if a person was a victim of a wage theft which occurred when they were employed and that is back paid when they are on a benefit, that payment should not be used to reduce the person's current benefit. Or, if a person is paid on a four to six week cycle but only actually worked in one week of the cycle, this will ensure the income is not averaged across a longer period in such a way as to unfairly reduce the income support that person would receive over time.
The Greens will be supporting this amendment. As I articulated before, we would prefer such instructions and requirements to be in the legislation. We still believe it would enable some degree of flexibility but also make sure that this is taken into account. This is a very important issue. Providing notes at least will guide the secretary in terms of what the secretary needs to take into account to determine the period, so we will be supporting this. We think it is a significant improvement to the way that the secretary can exercise their discretion.
As per my previous comments on the previous amendment that was moved by the Greens that had a similar intent as this amendment that's been moved by the Labor Party, we believe it is unnecessary. We take on board the comments made by both senators in relation to the certainty and surety that they're seeking by this, but I would once again reiterate that, in trying to embed that level of certainty, you actually create a level of rigidity into the legislative instrument, removing the flexibility that we were so clearly trying to have with this to make sure that the secretary has the flexibility to be able to move when particular circumstances of people are outside the normal circumstances that most people find themselves in when they're paid either weekly or fortnightly. It's always been a longstanding position of the government, and we believe that it's consistent with best practice by making sure that we use the appropriate instruments to embed the particular issues in. In this instance, we once again believe that the social services guide is the appropriate place for the definitions to be included because it does allow that flexibility for unanticipated issues when they arise. Whilst we certainly acknowledge the intent of this, we believe that it would be far better delivered with that information contained in the social services guide, so we don't support this amendment.
Question agreed to.
I stand to speak in relation to the Labor Party's amendment on sheet 8883. This amendment seeks to stop the unfair robodebt disaster that this government has presided over from ever happening again. Labor's amendment will prevent another robodebt by preventing social security debts being raised based solely on the income averaging of the Australian tax office data, making it clear that there is a statutory duty of care on the government to ensure debts are accurate, ensuring human oversight before debts are issued and requiring the government to use all available powers, resources and data across government to verify the accuracy of alleged debts before they are issued.
The Morrison government has admitted, in its defence to the robodebt class action filed in the Federal Court, that it had no basis in social security law to lawfully collect robodebts calculated using income averaging alone. This amendment seeks to make that crystal clear. However, the government is also claiming in the Federal Court that it does not owe a duty of care to social security recipients. This is a brazen attempt to shrug off the liability it has to thousands of people who have been harassed, worried and hurt by the robodebt scandal. The government says it has stopped the robodebt scheme. If this is true, it should be supporting this amendment.
I move opposition amendment (1) on sheet 8883:
(1) Page 31 (after line 16), at the end of the Bill, add:
Schedule 2 — Amendments relating to debts due to the Commonwealth
A New Tax System (Family Assistance) (Administration) Act 1999
1 After subsection 77(1)
Insert:
(1A) The Secretary must not give a person a notice under subsection (1) unless the Secretary is satisfied that:
(a) employment income averaging based on data obtained from a taxation officer was not the only information relied on to determine whether the debt was due to the Commonwealth; and
(b) information gathering powers in Division 1 of Part 6 were used to verify that the debt is due to the Commonwealth; and
(c) the existence and quantum of the debt owed has been verified by an officer.
Note: The duties of officials under the Public Governance, Performance and Accountability Act 2013 include the duty of care and diligence; and the duty to act honestly, in good faith and for a proper purpose.
Social Security Act 1991
2 After subsection 1229(1)
Insert:
(1A) The Secretary must not give a person a notice under subsection (1) unless the Secretary is satisfied that:
(a) employment income averaging based on data obtained from a taxation officer was not the only information relied on to determine whether the debt was due to the Commonwealth; and
(b) information gathering powers in Division 1 of Part 5 of the Administration Act were used to verify that the debt is due to the Commonwealth; and
(c) the existence and quantum of the debt owed has been verified by an officer.
Note: The duties of officials under the Public Governance, Performance and Accountability Act 2013 include the duty of care and diligence; and the duty to act honestly, in good faith and for a proper purpose.
Student Assistance Act 1973
3 After subsection 40(1)
Insert:
(1A) The Secretary must not give a person a notice under subsection (1) unless the Secretary is satisfied that:
(a) employment income averaging based on data obtained from a taxation officer (within the meaning of Division 3 of Part 10) was not the only information relied on to determine whether the debt was due to the Commonwealth; and
(b) information gathering powers in Division 2 of Part 10 were used to verify that the debt is due to the Commonwealth; and
(c) the existence and quantum of the debt owed has been verified by an officer.
Note: The duties of officials under the Public Governance, Performance and Accountability Act 2013 include the duty of care and diligence; and the duty to act honestly, in good faith and for a proper purpose.
The Greens will be supporting this amendment. This basically puts into legislation what the court found and makes it crystal clear that it shouldn't be done. The court has already said this is illegal. The government are trying to argue in court that they don't have a duty of care to people, which quite plainly is absolutely ridiculous given we're talking about social security payments. This makes it crystal clear that you can't use solely income averaging to levy a debt against people. When we look at the hundreds of thousands of notices that have gone out and the distress that has been caused to our community, this is sensible in absolutely clarifying that you cannot use that very simplistic process to raise debt. In particular, it means that, when people have no idea and have never received the notice, notices won't be going to the ATO for their tax returns to be garnished so that the first time anybody knows about it is when their tax return is garnished. At the moment, those notices are solely based on income averaging under the current robodebt processes. This amendment will stop a lot of hurt to our fellow Australians.
The government will not be supporting this amendment, because we believe the amendment has absolutely nothing to do with the bill. The bill which is before us at the moment is legislation to change the way people report income. This is not an income compliance bill. So we will not be supporting the amendment.
The CHAIR: The question is that amendment (1) on sheet 8883, as moved by Senator Dodson, be agreed to.
I move:
That this bill be now read a third time.
Question agreed to.
The Australian Business Growth Fund Bill 2019 authorises the government to invest $100 million in a Corporations Act company that will become the Australian Business Growth Fund. The fund itself is intended to increase access to finance for small to medium-size businesses through equity funding by the government and partnering financial institutions such as banks and superannuation funds. The fund is based on the model proposed in 2018 by the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, and was informed by similar funds that exist in the UK and Canada.
The fund will provide long-term equity capital investments between $5 million and $15 million to eligible Australian businesses where they have generated annual revenue between $2 million and $100 million and can demonstrate three years of revenue growth and profitability. It can only have an investment stake of between 10 and 40 per cent of an eligible business, with SME owners maintaining a controlling interest. The fund itself will not be a Commonwealth company. The Commonwealth will not have a controlling interest in this fund.
Labor strongly backs and supports small and medium-size businesses in Australia. SMEs are an important driver of the economy. There are currently more than three million SMEs, and they employ around seven million Australians. Labor has always supported this bill in principle given the importance of SMEs and the serious challenges they face in accessing finance. As the Reserve Bank, the Australian Small Business and Family Enterprise Ombudsman and others have pointed out, SMEs have faced big challenges in accessing finance in the post-GFC environment. Labor wants to see the fund work effectively with strong governance arrangements and greater operational transparency. We want it to best benefit commercially viable SMEs that need finance but are currently unable to access it. That's why Labor is proposing an amendment to bolster the review mechanism so we can properly assess whether this investment is well targeted and increases SME access to finance. The amendment will ensure the review looks at the impact of this proposal on the demand for equity investments by business, the overall access to capital for small- and medium-sized businesses, the competitive impact of this fund on capital markets used by SMEs and the governance arrangements around the Commonwealth's participation in the fund.
We have also received undertakings from the Treasurer that key operational details of the fund will be made public, including the investment mandate and key governance arrangements. The Treasurer has also provided assurances that the government supports the fund's potential to underwrite investments that are consistent with the investment mandate, which is good for providing broader investor access to SME investment opportunities.
Let's be very clear, this bill will not be enough to turn around the economy that has been floundering on the government's watch well before the onset of the coronavirus and the events of this summer. This bill also doesn't fix the government's failures when it comes to small business. The government has let down small business by failing to act to ensure small businesses get paid on time, delaying any action on unfair contract terms and only taking action to combat illegal phoenixing after ongoing pressure from Labor and after refusing to take action on this issue for years. Whether it is payment times, unfair contract terms or phoenixing, it is clear that the Liberals and Nationals take small business for granted. Labor will continue to hold the government to account to ensure small businesses are not left exposed by this government failing to manage the economy.
Under the Liberals, our economy is defined by below-trend growth, stagnant wages, weak consumption, falling business investment and record-high net debt. The economy has been floundering for six years under the Liberals and Nationals and has substantially deteriorated since the current Prime Minister and Treasurer took over. Even before the bushfire crisis and the coronavirus hit, growth had already slowed since the election and almost halved under the current Prime Minister and Treasurer. Quarterly growth slowed in the September quarter and annual growth was already well below budget forecasts and well below trend. The government's own midyear budget update downgraded growth and wages and said unemployment would rise. The private domestic economy had gone backwards for two quarters, wage growth had been stagnant, consumption was growing at its slowest pace since the GFC and consumer confidence was well below trend. Business investment and productivity were going backwards and household debt and net debt were at record highs. All of these things had occurred before the coronavirus hit and before the recent bushfires. Because of the Morrison government's economic failures, Australia meets the serious challenges and uncertainties of the fire season and the coronavirus outbreak from a position of weakness, not strength. After six years of economic mismanagement under the Liberals and Nationals, Australians are crying out for economic leadership and a plan, but the Morrison government is offering neither.
I too rise to speak on the Australian Business Growth Fund Bill 2019. This is legislation that authorises the Commonwealth government to participate in the formation of, the acquisition of shares in and the acquisition of debentures of the Australian Business Growth Fund. The bill appropriates $100 million for this purpose.
The Business Growth Fund comes out of some international experience in this area. In particular the UK business growth fund is a model which has shown some significant benefits in the UK economy about directing capital into small- and medium-sized enterprises that were otherwise finding it difficult to attract the capital that they needed to grow rapidly in environments where the ability to quickly scale up is very important, particularly when you are in highly competitive markets such as the technology sector. There's also some experience in Canada, where a company collectively owned by the financial institutions provides long-term capital and business guidance to small and medium sized enterprises.
This concept of patient capital is a very important one, particularly in small and medium sized enterprises. There are very good ideas out there, ideas that have the potential for relatively rapid growth, but they need patient capital to support them as they go through that growth phase. Patient capital is not always available to these businesses. This was a clear gap in the market that the Ombudsman identified and that the government is now responding to.
The government is a huge supporter of small and medium sized enterprises, and none more so in the government than Minister Cash, who is in the chamber. It's important to recognise that what we do for small and medium sized enterprises in this country flows through to the entire economy. Small and medium sized enterprises are the engine room of the economy; they are the engine room of growth; they are the engine room of employment and the jobs of the future.
The Australian Business Growth Fund will be offering growth opportunities to established entrepreneurs and established companies with patient capital and strategic support to assist them to reach their full potential. Businesses seeking support can come from across Australia. I would particularly encourage businesses in regional Australia to look at this fund as it is established and to see how they can utilise this fund. Often businesses in the bush, in regional and remote Australia, have even more challenges to face than those in the metropolitan regions. The choice and availability of capital to grow a business is somewhat limited, so this fund will be particularly attractive to businesses in regional Australia who see the opportunities for growth with the support of some patient capital and business advice.
Established Australian businesses will be eligible for long-term equity capital investments of between $5 million and $15 million where they can demonstrate three years of revenue growth and profitability and a clear growth vision. The investment stake will be between 10 and 40 per cent, allowing business owners to maintain control. That is very important, because the success of small and medium sized businesses comes from the fact that those business owners, the people who actually run and operate the businesses, have skin in the game and have the passion for the product or service that they are developing. So it's very important that we keep those business owners in the controlling interest position whilst providing that patient capital to allow them to achieve their full growth potential.
The initial capacity of the Business Growth Fund would be around 10 investments a year, aiming to increase to around 30 per year if and when additional capacity is made available. Obviously that will come as a result of the Business Growth Fund showing that it can successfully operate in the marketplace. To facilitate sufficient support for the small business market, using international precedent as a guide, the BFG's initial fund size is anticipated to be around $500 million, but it has the potential to grow. It is entirely possible to see that grow to around a billion dollars, but the size will be dependent on the participation of the banking industry and the amount they decide to invest. Obviously that will flow from their analysis of the market opportunity and demand.
Finally, I wish to go through some support for this bill, in particular the support of small business. Again, those on this side are very strong supporters of our small business community and it's good to see that the small business organisations of Australia, COSBOA, are very supportive of this bill. This is a letter that I'm sure many in this place have received from Mark McKenzie, the chair of the Council of Small Business Organisations of Australia. He writes:
I am writing to communicate our strong support for the expedient passing of new legislation for the establishment of the Australian Small Business Growth Fund (ASBGF).
The need for this fund has long been recognised in the small business community, owing to limitations in both the structure and nature of competition within Australia's private equity markets. COSBOA is firmly of the view that these limitations give the whip hand to private equity interests in Australia who currently price business development risk at an unsustainably high level.
The Council of Small Business Organisations of Australia sees, just as the ombudsman does, a gap in the market for this kind of patient capital to invest in the small and medium-sized businesses of Australia to give them the opportunity to grow and to compete on a world stage. We know Australian businesses can do it if they're given the opportunity. The Australian Business Growth Fund Bill 2019 will be a part of this government's overall response to the needs of small business and desire to support the small business community of Australia.
I rise to speak on the Australian Business Growth Fund Bill 2019. Like most pieces of legislation that come before us in the Senate, we have a policy background and a policy perspective, and we have a political background and a political perspective. I think it's worth talking about the political perspective. This was an election commitment by the coalition going into the last election. Why would they be promising a government led initiative, a funding initiative, a financing initiative in the small and medium enterprise sector? There was a lot of concern from the business community about a drawing up of capital, about a change in risk appetites. Much of this had to do with pressure that came from the royal commission into banking, the changes that we've seen recently with a risk appetite of banks after a tightening of prudential standards by APRA, and some very strong jawboning from the Reserve Bank of Australia more generally about credit conditions in Australia. The irony of this, of course, is that most of this had a very solid basis and had come from the fact that most capital in this country has gone towards property and speculative investment, and not towards small and medium enterprises, or even to business investment in general. There was concern about the royal commission at the last election, concern about the stunning revelations of Hayne and concern that businesses weren't borrowing enough and therefore not investing enough.
By the way, there have been no attempts to fix the structural problems in our economy that have led to this speculative bubble with credit going into real estate—non-productive real estate investments, speculative real estate investment that doesn't do any good for anyone except for those that can afford to buy their second, third and fourth home in this country thanks to the very generous capital gains tax concessions and negative gearing concessions from the government. There has been so attempt to fix those structural problems that have led to this massive boom in unproductive investment which absolutely has taken away business investment in Australia. There's only a set pool of funds that are available in this country. No attempt has been made to change the structural problems in the economy; rather here we have the fig leaf—I must say, very socialist principles—of the government led initiative to try and get businesses to lend more and invest more.
In principle, the Greens don't have a problem with that. We've actually floated the idea of a government owned bank, a people's bank. We've talked about an infrastructure bank in the past. We've talked about the need for government to actively finance and lend to infrastructure projects. Right around the country there's a massive infrastructure gap in Australia. So we don't have a problem with governments playing an active role in markets—in fact, we think it's essential that they do. But it's got to be fair and it's got to be equitable, and it's got to be not for the advantage of the big banks. Unfortunately, when I look at the structure—I did go along to the very brief legislative inquiry. It was one hour last Friday afternoon; it is extraordinary how quickly this has been rushed through the Senate. That brings me to the second point about the policy background and the policy perspective. The political momentum is there for the government to be seen to be helping small business, but that should not put at risk the chances of us looking at this legislation—scrutinising it properly, getting full consultation and bringing in the stakeholders who are going to be impacted by this legislation to help properly design it to make sure we get it right.
One of the most striking trends we have seen in modern finance is the shift in the profile of bank lending. Thirty years ago banks lent twice as much for business as they did for housing. Now, as I mentioned earlier, it's the other way around, with banks lending almost twice as much for housing as they do for business. This shift has been driven by a number of factors, including the advent of mortgage-backed securities, which have turned housing into a liquid asset for banks, and tax incentives for investors that have increased the demand for housing. However, a much overlooked factor is the incentive given to banks to lend to housing by prudential standards. These standards are set by the Basel Committee on Banking Supervision and adopted locally by APRA, one of our key regulators.
Since the Basel I accord in 1988 there has been a lowering of the amount of regulatory capital that a bank must hold against mortgages—even more so for those banks authorised to adopt an internal-risk-based approach, an IRB, to establishing mortgage risk weights. The result of this is the cheapest money in history. Let's put that on the table. Interest rates have never been as low as they are now. The cheapest money in history is going towards more speculation in real estate than towards productive investment in business. Is this legislation before us today the way to fix that? I strongly argue that it's not. Without tackling the problems that we have with speculative investment in real estate, which has totally crowded out business investment in this country, you've got no chance of getting that reallocation towards business investment, towards employment and towards sustainable economic growth.
For small and medium enterprises, SMEs, the effect has been doubly crippling in this country. As well as skewing bank lending towards housing rather than towards business, prudential standards skew bank lending towards businessowners who own housing rather than towards businessowners who don't. In other words, it's not the merit of the business that matters; it's whether they own land. The Productivity Commission explains this and the effect this is having. It said:
Continued reliance on having a home as security for a business loan—in an era when home ownership in the key entrepreneurial period of life is at a low—will increasingly inhibit SME growth. Around one third of major bank SME loans, and often a higher proportion of smaller lender SME loans, are secured by a home.
The Productivity Commission is clear on what the policy response should be:
… the reform that would most significantly improve SME access to finance to be changes to the underlying prudential requirements for SME business lending compared with lending for residential mortgages.
The Productivity Commission also goes on to explain how the existing rules favour those banks with IRB accreditation. I recommend senators read that Productivity Commission report.
In the context of this bill, the Australian Business Growth Fund will provide a concession on the risk weighting of loans to SMEs for participating banks. The major banks and Macquarie Bank are five of the six participating banks—and some, may I say, are reluctantly participating. The major banks and Macquarie also happened to be five of the six banks that are privileged in having the IRB accreditation. It's not the only privilege they have, let me tell you. Many times in this place we've talked about being too big to fail. In other words, those banks that have already been given a competitive advantage through preferential prudential rules will be given a further competitive advantage through even more preferential prudential rules. Instead of providing the structural reform needed in order to direct capital towards more-productive investment, including in the transformation to a low-carbon economy—which I believe is the No. 1 challenge for this country and the biggest opportunity for Australia—the Australian Business Growth Fund will further entrench the market power of the major banks.
The government's rush to establish the ABGF is both very concerning and very telling. The two weeks given to this committee to conduct an inquiry into this bill was ridiculously short. This haste might be explained by the failure of the government to have gathered even the most basic information about the market that the ABGF is seeking to intervene in, let alone establish what the problem is and why the ABGF is the solution. I actually have a copy of the questions I asked the Treasury officials last Friday. I asked them how many SMEs have revenue from $3 million to $100 million in Australia, and no data was given to the committee on the most basic classifications of what is an SME market. I also asked, of these SMEs, how many sought minority investment from the private sector last year. Nobody seems to know. I asked how many did not receive funding. Nobody seems to know. I asked how an Australian Business Growth Fund that cherrypicks the best SMEs will expand access to equity for SMEs that do not receive it today—and so on and so forth. Then I asked some questions about the comparisons with overseas examples, because of course there is the UK Business Growth Fund.
The government has been unable to provide this basic information—the number and size of SMEs seeking access to equity finance, for example. It follows that the government has not been able to identify the actual market failure that the Australian Business Growth Fund would address. Anyone who understands economics knows there's a role for governments to play when markets fail. That is why, for example, it's so critical that we have a real policy on tackling climate change in this country. That is the biggest market failure of all time, yet this government refuses to act on that, because we have a political problem in this country where they're refusing to take any action because it might impact on their donors in the fossil fuel industry.
So, the underlying bias in prudential regulations has not explicitly been identified by the government as a problem, which also explains why it has been only incompletely addressed and addressed only at the expense of competition. Further, Treasury did not invite non-bank and non-superannuation financiers to participate in the round table to discuss the design of the ABGF. As a result, the government has not considered the proposal to instead use the Australian Business Growth Fund to provide underwriting for equity financing from all sources, rather than simply giving the banks a leg up over direct investors. Much has been made by the government of the Australian Small Business and Family Enterprise Ombudsman of the Reserve Bank of Australia and its study into access to finance for SMEs. But, tellingly, while examining the concept of a business growth fund, the RBA did not specifically recommend the establishment of this fund as constructed by the bill.
While we accept that there is a need for the government to help small businesses to get better access to finance, this legislation is not the answer. We believe that the Australian Business Growth Fund is a con. It neither harnesses the power of the market nor makes a constructive government intervention. The ABGF is simply crony capitalism, giving more money, more power and more market concentration to the big banks in Australia. We have no doubt that it will help lower the cost of capital for some SMEs—the cherrypicked SMEs—but it will do so by providing a government subsidy for the major banks. This is not in the long-term interests of SMEs, the investment environment or the wider economy. As a said, we have very strong views in the Greens about government intervention and the need for government intervention in markets, even for direct financing investor means by government. The Australian government took a step forward in this regard with the establishment of the Australian Small Business Securitisation Fund. But we believe that this particular fund would be a step backwards in that regard.
I'd just like to finish by addressing something Senator Brockman raised in relation to a letter from COSBOA. Now, I'm a fan of COSBOA. I've had a lot to do with the small business community over the years and have been very proud that the Greens have done some great work in relation to legislation in this place regarding the small business community.
But let me tell you about that letter. Some of the contents of that letter, which were reported in the Australian Financial Review yesterday—I note that the AFR has retracted and printed a new version—were misleading. COSBOA misled, going by yesterday's uncorrected paper version, and misrepresented the underwriting proposal that we're going to be hearing from Centre Alliance today. The amendment was not proposed by private equity but in fact was by public offers, so mum and dads can invest. We heard from the other stakeholders in relation to this last Friday. The current bill makes the Business Growth Fund a giant private equity fund which, as I mentioned earlier, is prudentially advantaged, taxpayer funded and bank controlled; whereas the amendment that COSBOA wrote to us about would help make this a lot fairer. I was hoping that Senator Patrick would come in and talk to his amendment—I'm not sure if he's still on the speaking list—but I do support at least a process where SMEs and small businesses who can't get access to any finance, be it public, private, debt or equity, can go to a lender of last resort kind of fund. That is exactly the thing we should be looking at, not a process that cherry-picks and is disadvantaging existing finances.
I rise to speak in support of the Australian Business Growth Fund Bill 2019, which gives effect to the government's 2019 election commitments to increase the availability of patient capital for small and medium enterprises. It has been acknowledged that one of the very real impediments to small business growth in Australia is the shortage of capital. Small businesses are the foundation of Australia's economy. They train apprentices; they innovate; they take risks; and they employ a significant number of Australians. We always strive to support their growth.
This bill is important not only for Australia; it also represents a great opportunity for my home region of North Queensland, with government providing capital and strategic support to businesses to help them achieve their goals. Reports released by the Australian Small Business and Family Enterprise Ombudsman and the Reserve Bank argued that there are not sufficient sources of capital available for high-growth-potential SMEs in Australia. In particular, the ASBFEO's report identified the need to address a critical funding gap for long-term patient capital to enable our up and coming high-growth-potential SMEs to flourish.
Both reports argue that debt finance for SMEs is impeded because there is usually a time lag between investing in a business's future growth and realising sufficient profits to repay the debt. Traditionally equity finance is also not attractive to SMEs because of the loss of management control of the enterprise. It is critical to understand that, for those people who have run a small business or a medium sized business, it is the innovation of the entrepreneur and that direction which is critical to the ongoing success of the business. That is why the management control is so important. It is claimed by the report that as a result many SMEs delay expanding their businesses until the expansion can be funded from retained profits.
This bill complements other coalition government initiatives to support SMEs, including establishing the $2 billion Australian Business Securitisation Fund, which helps small businesses get the funding they need at a better rate; increasing and expanding the instant asset write-off to $30,000 for businesses with a turnover of up to $50 million; providing tax relief for businesses with a turnover of less than $50 million; and reducing the tax rate from 30 per cent to 25 per cent—the lowest rate in 50 years.
Under this bill, established Australian businesses can apply for long-term equity capital investments of between $5 million and $15 million where they can demonstrate three years of revenue growth and profitability and a clear growth vision. The Business Growth Fund investment state will be between 10 and 40 per cent, allowing small business owners to maintain control of their business while allowing for the BGF to promote growth. Similar models in the UK and Canada, where a company collectively owned by financial institutions provides long-term capital and guidance to small and medium businesses, have been tried and tested and have demonstrated successful growth.
Small businesses, as I've said, are the engine room of our economy, employing more than 4.7 million people. In fact, small businesses with fewer than 20 staff make up nearly 98 per cent of the 2.31 million businesses in Australia. Almost 70 per cent of these businesses are family owned. In 2016-17, small business contributed $393 billion to the Australian economy, and that amount is increasing. To provide enough support to the small business market, and using international examples as a guide, the fund's initial fund size is anticipated to be around $500 million, with potential to grow to around $1 billion. Equity funding is also being contributed by the big four banks, which are committing $100 million each. HSBC and Macquarie will commit $20 million. The fund size will be dependent on the number of banks that participate and the amount they invest and will be subject to further analysis of market opportunity and demand.
As reported by the Western Investor news website, the Toronto based Canadian Business Growth Fund, which started in June 2018 with a $545 million war chest, has invested in eight businesses to October 2019. The Canadian fund seeks to invest between $3 million and $20 million in mid-market companies with $5 million or more in annual revenue, a demonstrated growth trajectory and a clear vision for accelerated growth. It is independent but is backed by 13 major lenders in Canada. Western Investor states that the Canadian fund addresses a common problem where companies enjoy some success but then have to sell to bigger entities before they can reach their full potential. As is intended with the Australian fund, Canadian business owners can now expand without having to sell control or go into more debt.
The UK has had a business growth fund for nine years, and just last month it was reported it has invested more than 2.1 billion pounds, or A$4.1 billion, in over 300 companies, making it the most active investor in the UK. As proposed by the Australian bill, the UKBGF is a minority, non-controlling equity partner, with a patient outlook on investments, based on shared, long-term goals with the management team it backs. It invests in growing businesses in the UK and Ireland through its network of 14 offices. Some of the businesses the UK fund has invested in are wood product companies, surveyors, financial technology, digital consultancies, food growers, information technology, pharmaceuticals, restaurants and a coffee shop chain. There are many more business types on the list, which shows the near limitless potential for this country.
One UK example I will highlight is the Mexican street-food chain Barburrito, which has benefited from a 3.25 million pound injection from the UK fund. Having started as a single unit in Manchester in 2005, the business now operates from 21 sites and employs around 350 people thanks to the funding injection. The owners of Barburrito wanted to roll out the award-winning formula to a national customer base but knew they needed additional funding. Morgan Davies, joint MD and founder of Barburrito, stated:
BGF—
the growth fund—
has demonstrated that they not only share our enthusiasm for the sector but can bring valuable advice, expertise and high level contacts to the table.
There are literally dozens of examples available on the UK fund's website of how established businesses have boomed thanks to this collaboration, and there's no reason to think this won't be mirrored in Australia. In fact, just this week, on Tuesday, the managing director of product additive company Titomic, Mr Jeff Lang, called on the Senate to support and pass this legislation. He said:
"If fully realised as outlined, the BGF, could translate into new, value-added industry growth and global export opportunities for Australia … The BGF will allow SME's much needed access to patient investment capital providing certainty for their growth opportunities."
By sponsoring investment and, importantly, sound business acumen and mentoring, the federal government can boost a sector that is so critical to our economy. In North Queensland, I can foresee growth in agribusiness, mining technology, transport and logistics, fintech and Indigenous enterprises. The food sector especially is a part of North Queensland's economy that will benefit, particularly aquaculture, which is undergoing strong growth. Using the Canadian and UK examples, it makes perfect sense for the federal government to sponsor this bill. The framework is already there to draw on. We just need to back our entrepreneurs and our businesspeople so they can employ more people and keep our economy strong.
This is an election commitment, because this is the government, this is the coalition of parties, that believe in business and that understand that it is successful businesses that grow our regions, employ our people and train our young people—unlike those opposite, who just want to tax people into the ground, who just want to shut down industry and who are aren't interested in innovation and only want to be critical of those who have success. This bill will allow for more businesses to grow, to be successful and to innovate, particularly in the area of fintech, where we're seeing real opportunities for Australia, with our great opportunity for food and fibre production, natural resources and mining resources.
This is a country that is only limited by our imagination, and the technology that is coming in now will allow for greater communications for people to work remotely and for business to grow in ways that we've previously never imagined. Our regions especially rely on locally owned businesses, so I commend this bill to the house in the knowledge that they will benefit from it.
I'm pleased to have the opportunity to speak in support of this bill, the Australia Business Growth Fund Bill 2019. Just before I do, though, I would like to touch on a couple of comments that Senator Whish-Wilson made before. I actually agree with him when it comes to an infrastructure bank. I think we need an infrastructure bank in this country. I think some of the projects we should spend that money on should be dams—in particular, the Bradfield scheme in North Queensland and also the Clarence River in northern New South Wales. As Senator Whish-Wilson would know, Tasmania's booming because of all the dams that have been built in Tasmania. So, yes, let's bring on some dams, and maybe we can fund some nuclear power stations as well. I know the Greens would support us on that! It's all carbon emissions free, so that's got to be good for the environment.
I'd also like to point out something about a banking royal commission that took place in 1937. One of the recommendations of that banking royal commission was that the government should control the volume of money in the system. Then the retail banks would basically control the distribution of it, with the central bank keeping an eye on that distribution of money. That was all turned upside down and on its head in February 1985 when a bloke by the name of Paul John Keating let all the foreign banks into the country. Basically he gave up the country's sovereignty when it came to monetary policy. Then later their year he brought in capital gains tax and left housing out of it. That has inflated the housing market. Then seven years later he introduced superannuation. There wasn't an election or anything; he just introduced it. So young people who want to pay their mortgage off aren't allowed to do that. No, they have to give their money to someone they've never met and they aren't going to get it back until they're 60, and they're going to be charged fees on their deposits and fees on their home loans. So they're getting shafted from both ends. That's one of the reasons why our banking system's gone topsy-turvy—because it's all against mortgages backed by foreign debt. That's not the way to do quantitative easing in this country. It should be done constructively by investing in capital stock to build infrastructure to provide essential services and income to pay for schools and hospitals. That's the way to do it.
Anyway, I digress. I'll come back to the bill. I'm proud to be part of a Liberal-National government that is committed to putting small and medium Australian business first. We know that small and medium business enterprises are the backbone of our economy, employing more than seven million Australians. The Australian Business Growth Fund is another way that this government is backing small and medium Australian businesses to create jobs, encourage innovation and boost economic growth.
Business growth funds backed by large financial institutions have proven successful in the UK and Canada where such initiatives have bridged the gaps between SMEs and accessing the competitive finance they need to grow. To date there has been no comparable fund to emerge in Australia, which is why the LNP has secured a $100 million funding commitment from each of the big four banks, as well as $20 million each from HSBC and Macquarie Bank to establish the Australian Business Growth Fund. Additionally, the federal government has committed $100 million as an initial investment in the fund, bringing the initial total balance to $540 million. With responsible management, and as the fund matures, it has the potential to increase in value to $1 billion.
Access to capital is a major obstacle for SMEs looking to expand their operations, particularly for those looking to avoid taking on unserviceable debt or relinquishing control of their business. The establishment of the Australian Business Growth Fund will give SMEs the assistance they require to clear this hurdle by providing a source of affordable, long-term equity funding, while allowing them to retain control of their businesses. Currently the equity funding market for SMEs is largely dominated by venture capital and private equity firms seeking quick returns and substantial control over a business.
The Australian Business Growth Fund will work collaboratively with small SMEs to provide patent capital equity with a long-term expectation for business growth. The UK and Canada business growth funds demonstrate demand for such capital from businesses looking to secure a relatively low-risk source of funding. Applicants will be eligible to receive an initial investment of between $5 million and $15 million, with the fund's investment share limited to between 10 and 40 per cent. This ensures owners will maintain a controlling stake while enabling the Australian Business Growth Fund to have meaningful representation and make a contribution to key business decisions.
In addition to equity funding, the Australian Business Growth Fund will also offer strategic advice and other consultative services to the businesses. Management of the fund will operate at arm's length from both the government and the participating financial institutions. It will be based on the model used in the UK and Canada business growth funds where a board and an executive team are responsible for management. The fund will be run in a commercially viable manner and will be restricted from investing in risky business. To be eligible businesses must have a record of revenue growth and profitability in addition to reasonable plans for growth.
The Australian Business Growth Fund is part of the Liberal-National government's plan to improve access to finance for Australian SMEs. Last year we introduced the $2 billion Australian Business Securitisation Fund, making funds available to smaller lenders to offer competitive finance to small and medium businesses. Helping SMEs access the funding they need to grow is part of this government's broader commitment to Australian businesses and the families they support.
Already we have introduced a significant package of taxation reforms, which show that this government is serious when it comes to backing small and medium businesses. For businesses with a turnover less than $50 million we reduced the corporate tax rate to 27½ per cent, the lowest it's been in over 50 years, but we won't stop there with the rate soon to be cut to 25 per cent in 2021-22.
We've expanded and extended the instant asset write-off, because we want to make it easier for small and medium businesses to be able to invest and grow. This means 3.4 million small and medium businesses can claim deductions for every business asset up to $30,000 in value until 30 June 2020, building on the success of this scheme over recent years under this government. Our deregulation taskforce is working to cut red tape, removing burdensome regulations and reducing the cost of doing business so that businesses can invest and hire more staff.
We've created a level playing field for small businesses, by stopping big corporations from abusing their market power to engage in anticompetitive practices or entering into unfair contracts. To show we're serious about giving small business a fair go, we established the Small Business and Family Enterprise Ombudsman to ensure a strong independent voice for disputes involving small business.
The Liberal-National government has a strong track record when it comes to backing small and medium Australian businesses, whether it's by removing red tape, cutting taxes or making finance more accessible. The Australian business community can rest assured that only a Liberal-National government can be trusted to put them first.
The Australian Business Growth Fund Bill introduces a much-needed new source of equity funding for small and medium business to further expand and prosper. We know that when businesses flourish they pay taxes and create jobs, the very jobs that are essential to keeping our economy strong, to provide the services and security that Australians rely on. I commend the bill to the Senate.
I rise to speak on the Australian Business Growth Fund Bill 2019. The bill is designed to increase investment in Australian small- and medium-sized enterprises by establishing a fund to provide patient capital to SMEs across a range of industries and locations. I must say that the bill's aim is noble, and I don't think I've heard anyone in the chamber saying that they don't want to assist small businesses in making investments. The difficulty comes with the implementation of the bill. I will walk through some of the concerns and reservations that I have in relation to it.
Firstly, if the bill is passed into law, the government will be partnering, using $100 million of taxpayers money, with the big four banks—ANZ, Commonwealth, NAB, Westpac, along with Macquarie Group and HSBC—to establish the $540 million fund. After the royal commission into misconduct in the banking, superannuation and financial services industry, one would have thought that the government would be a little more cautious about who they jump into bed with and, indeed, would want to be very meticulous in laying down very clear rules of engagement. But the memory of the federal government appears to be very short. We recall the abhorrent conduct—facilitating sexual exploitation of children, fees charged to dead people and money laundered for criminals. These are the organisations that we are jumping into bed with, to the tune of $100 million.
During the committee stage I asked the department who they consulted with in the setting up of this proposal. The Treasury has come back with a list of people who were consulted: the Treasurer; the Minister for Employment, Skills, Small and Family Business—these are the people involved in a round table—Westpac, NAB, Commonwealth Bank, HSBC, Macquarie Bank, Australian Super and so forth. But in amongst that list are none of the small banks—none of the co-ops and mutuals. I put it to the chamber that what we should be trying to do is perhaps create more competition in the banking sector. What we're doing here is actually feeding into the bigger banks, making it harder for the smaller, hungrier community based banks to compete. The question that I have, and I will ask this in the committee stage, is: why did we not engage some of those smaller players? Why didn't we give them an opportunity, because the more we grow the smaller banks, the more competition we will have for the bigger banks?
What will happen in this instance is that the government will end up owning 19 per cent of the fund and the banks will own 81 per cent. Indeed, clause 13 of the bill prevents the government from having control over the board. So we're going to pass $100 million of taxpayers money across to the banks, with no control, or very little control, over what happens thereafter.
People have talked about the UK and the Canadian funds. Of course, those funds exist, but the interesting thing is that in the UK and Canada the taxpayer didn't contribute a cent. The banks simply went off and did that. So one has to ask the question: why are we spending $100 million of taxpayers' money in circumstances where we probably could have simply encouraged the banks to set up a regime, as occurred in the UK and Canada?
The other interesting point is that, right now, there is a resolution before the Commonwealth Bank which will be voted on at the AGM which will prevent or prohibit the Commonwealth Bank from engaging in this particular scheme. So there is a risk that one of the partners may not actually be able to be involved, by direction of the shareholders. I asked the department: 'What happens if that $100 million doesn't come?' And they said: 'Well, that's okay. The fund can operate on $440 million.' That begs the question: why do we need to put taxpayers' money in there? There must be lots of it just floating around, except for, perhaps, some of the social services that are required.
The other problem I have is that no governance details—nor, indeed, an investment mandate—have been laid before the Senate. Think about that for a moment. What entity in their right mind would commit to spending $100 million of their own money without having an understanding of the governance arrangements or the investment mandate? I make it very clear that the Senate goes into this blind, and the government could have taken a different approach, just as the banks are. I can absolutely assure you of what's happening with the banks at this point in time: preliminary approval has been given to negotiate and talk. I can guarantee you that final board approval will not be given to committing their $100 million until all the details are on the table. So, in that sense, the government is reckless.
The next concern I have is about competitive neutrality. The government has a policy of competitive neutrality, and it's been in place since 1996. The idea is that governments don't engage in the market in a manner that in some way biases or advantages another player in the market. The economics committee wrote to, and received advice from, the Australian Government Competitive Neutrality Complaints Office, and they confirmed that the growth fund is organised so as to bring it within the complaints jurisdiction of their complaints office. I can almost guarantee you that there will be a complaint raised in respect of this fund, and the government may well find that this fund is in breach of its own policy—a longstanding, bipartisan policy. The difficulty there is that the government may simply choose to ignore the policy, but that will undermine the policy for all future circumstances.
The final point I'll add goes to one of the amendments, and I foreshadow that I will move two amendments in the committee stage. It goes to the fact that this fund is being set up to be only operated by the banks. Consider what that means. Let's say there are 20 companies that are seeking funding, of which 10 are really good—they're almost sure-fire things that deserve investment—and the other ones are a bit questionable but worth a punt to an investor. The difficulty with this arrangement is that the best 10 companies will simply go to this fund, which can offer cheaper money than any other funding entity or organisation. That simply means that the banks will fund these better options and leave, perhaps, the more risky options to the mum-and-dad investors. That's one of the problems with this: we are cutting out the opportunity for there to be mum-and-dad investors, which would not occur if this were an underwriting fund. If we could have this as an underwriting fund where someone wanted $10 million and we invited mums and dads in, they may take up the entire $10 million. They may supply or invest up to that $10 million or they might fall short by $3 million, so only $7 million would be covered off and the underwriting growth fund would cover the difference. That would be a fairer arrangement, and that is what one of my amendments goes to in setting up some underwriting arrangements or having the fund as an underwriter. That's about fairness and allowing mum and dad investors to participate in the market.
I just wanted to rise and state some clear reservations that I have in respect to the implementation. Again, I repeat that the aim of this is very noble, and I don't think anyone in this place has any difficulties in setting up regimes that will help small to medium businesses. It simply comes down to the way in which this is being set up. I ask the Senate to consider the points that I've made.
Firstly, I'd like to thank those senators who have contributed to this debate. The Australian Business Growth Fund Bill 2019 introduces new legislation that authorises the Commonwealth government to participate in forming and acquiring shares in or debentures of the Australian Business Growth Fund—the BGF—and appropriates $100 million for that purpose. The government recognises the challenges small and medium enterprises face in accessing capital and the lack of a patient capital market for SMEs in Australia.
Through the Australian Business Growth Fund, the government will offer growing, established companies patient capital and strategic support to assist them to reach their growth potential. The government is making a substantial contribution to the BGF, which will have an initial investment capacity of around $500 million, with potential to grow to around $1 billion as it matures. The BGF will make patient equity investments between $5 million and $15 million in small and medium businesses where they can demonstrate three years of revenue growth, profitability and a clear growth vision.
The government wants to take the opportunity to thank the other banks involved in the establishment and investment in the BGF, who are NAB, CBA, Westpac, ANZ and HSBC. The government also wants to take this opportunity to thank stakeholders that have assisted with the development of the BGF. The government has worked together with the banks and stakeholders throughout the design phase and will continue to do so ahead of the BGF making its first investment.
The BGF compliments other coalition government initiatives to support SMEs, including: establishing the $2 billion Australian Business Securitisation Fund, which helps small businesses get the funding they need at a better rate; increasing and expanding the instant asset write-off to $30,000 for businesses with a turnover of up to $50 million; providing tax relief for businesses with a turnover of less than $50 million; and reducing the tax rate from 30 per cent to 25 per cent—the lowest rate in 50 years. With this bill, the government is delivering upon its election commitment to invest over $100 million to help establish the Australian Business Growth Fund and its wider promise to support Australian small businesses. I commend this bill to the Senate.
Question agreed to.
Bill read a second time.
Minister, you heard me asking about consultation in my second reading debate contribution. There was a roundtable held by Treasury in 2018. They invited the big banks along. They invited the big players along. That's not in question; I'm not seeking an answer on that. I just want to understand why the government hasn't engaged some of the co-ops and mutuals in relation to this. What was the logic behind doing that—only sticking with the big banks?
Apparently the proposal was in fact shared with COBA members. The issue of access to patient capital for small and medium enterprises was flagged in separate reports in 2018 from the Reserve Bank of Australia and also the Australian Small Business and Family Enterprise Ombudsman, who identified that there was a long-term patient equity capital market for SMEs absent in Australia.
Just to clarify my understanding of your answer, I do understand that Treasury and, indeed, the Small Business Ombudsman had produced a report. I am just talking about direct contact. We all live busy lives and we don't all have time to keep a watch on what the Reserve Bank governor or the Small Business Ombudsman are putting up on their websites. There's that old scene from The Hitchhiker's Guide to the Galaxy, where they said, 'Yes, of course, there was consultation. It was down the broken stairs in the locker room where the lights didn't work, in a safe with the doors shut and the combination lock twisted; of course, there was consultation'. I am really trying to get to the level of consultation that took place with those smaller banks.
The business growth fund is open to all ADIs and the Australian Business Securitisation Fund, which you would also be familiar with, is there to support lending by those smaller banks. More importantly, as I said in my last answer, the proposal was in fact provided to COBA members in February 2019—and perhaps they're still down the end of the corridor in the back of the safe—and the Bank of Queensland and Rabobank also participated in the BGF working group.
Did any stockbroking organisations examine the proposal or were they consulted?
No.
I would like to ask a follow-on question. The Australian Shareholders Association have written to the committee and to senators saying that they're very concerned that the Business Growth Fund could lead to the disenfranchisement of retail investors by excluding them from investing in SMEs that otherwise would have been conducted by initial public offerings on the ASX. We heard evidence last Friday from a company specialising in offering IPOs. Why haven't you consulted with the stockbroking fraternity on this, given their clear concern that, due to the prudential advantages, which have been outlined in our second readers, from the taxpayer funding, the Business Growth Fund will have an unassailably low cost of capital that no other investor will be able to match?
The Business Growth Fund is designed to fill a specific gap in Australia's equity finance market. As I said earlier, there were separate reports from the RBA and Australian Small Business and Family Enterprise Ombudsman that identified that specific gap in the long-term patient equity capital market. The gap is not directly addressed by venture capital and neither is it addressed by private equity. That patient capital can provide entrepreneurs with the finance that is needed to expand without relinquishing control of their businesses. Equivalent funds have been established in the UK and in Canada, and they have shown that there is in fact a need for this type of finance and that patient capital investment can be very profitable for investors while supporting new businesses. It is important to note that there are around 40,000 SMEs in the target market for the BGF and that, when fully matured, the BGF will invest in around 30 to 50 SMEs per year. So it will not compete with private equity or venture capital.
Minister, there is growing concern from the Australian people that our industries and manufacturing businesses are being bought out by foreign investment. This bill states, as the Treasurer said in his speech on the floor of parliament on 5 December:
Established Australian businesses will be eligible for long-term equity capital investments between $5 million and $15 million.
Minister, is it in the bill that they have to be Australian businesses—Australian owned businesses?
For businesses to be eligible to accept an investment from the BGF they have to be incorporated in Australia and operate in Australia.
Yes, they are operating in Australia, but we're looking at an input of $100 million from the Commonwealth government, $100 million from the big four banks and $20 million from each of the smaller banks. That's a total of $540 million. If we're going to put that money into businesses here in Australia, people would like to know that it's going to be propping up Australian owned businesses and companies in Australia. We're now selling a lot through foreign investment. A big concern is selling lines to the Chinese milk company. Look at the sale of the Van Diemen's Land Company. Under the foreign trade agreement, the Chinese agreed to inject $100 million into that investment. That never happened. They're now asking the government for a handout to the tune of $100 million. Would that company now be eligible under this bill for that loan, considering it is a Chinese owned dairy company that exports two plane loads of milk back to China every week?
The intention of the Commonwealth with this bill is that it will be for Australian-owned and majority-Australian-owned businesses. This will be fleshed out in the shareholder agreement, which will be finalised very soon. It's absolutely the Commonwealth's intention that this fund will support Australian-owned and majority-Australian-owned businesses. In addition, the bill specifically refers to its objective being to increase investment in small and medium Australian enterprises. That's specified in section 3 of the bill.
I direct my comments to the chamber—Senator Patrick, this amendment would fundamentally alter the proposal to make it strictly an underwriting fund with no ability to make direct equity investments. While Labor believes there may be merits to the fund underwriting investments, we do not believe that altering the bill via legislative amendment is the right approach in this instance. The Commonwealth is only a minority shareholder in the proposed fund, which means any substantive change would need to be renegotiated by the remaining shareholders, and the proposal has not been subjected to sufficient analysis or stakeholder consultation. Labor has sought, and been provided with, undertakings from the government that it supports the fund's potential to underwrite investments that are consistent with the investment mandate.
Thank you, Senator Sterle, for that information. I just wonder if that clarification is in writing.
I think you understand that the clarification has been made, Senator Patrick, but it's not being tabled today.
Just to clarify: is the clarification to the Labor Party in writing or is it verbal?
Senator Patrick, we've got an agreement with the opposition. Obviously those sorts of discussions are private between the government and the opposition.
Actually this is a fund where we're spending $100 million of taxpayers' money. I presume you're suggesting here that the chamber not be allowed to see what that investment mandate is. If it exists, even in draft form, it would be proper for you to table it and make it available for people to see.
Senator Patrick, we have agreed to publish the investment mandate, but it is not ready for publication yet.
At this point, what exactly is not ready about it? We know that this fund will take some time to set up. We know the banks are considering it. There's work going on. It begs the question: why would you ask the Senate to vote on it when we are blind as to the mandate? Indeed, if there is a draft mandate that is in existence that you've provided to Labor, why would you simply not table that in draft form, understanding all the caveats around that, and provide it to the Senate?
We are only one shareholder in this fund, and this bill simply enables the Commonwealth to invest in that fund.
Minister, are you suggesting in some way that the banks wouldn't be open to tabling the document or that some permission would need to be sought from the banks?
Because we are only one shareholder, obviously the details of the mandate need to be fleshed out with the other shareholders, with the banks that are involved, before it gets to a position where we can publish it. But, when it is ready, it will be published.
We note that you have, however, handed the mandate to the Labor Party. Did you seek permission from the shareholders to do that or was a decision made unilaterally?
No, perhaps I haven't made that clear, Senator Patrick: we haven't handed the mandate to the Labor Party. What we have done with the Labor Party is agree to publish the mandate when it's ready.
I have some questions in relation to competitive neutrality. It is an issue that was raised at the economics committee. There clearly would be some concern in respect of the government breaching its own competitive neutrality policy. It's a longstanding policy. It's been around since 1996. What due diligence have you done in relation to that? When did you do that due diligence? What is the contingency the government has in circumstances where the complaints office finds that it is a breach of the policy?
On 9 February this year, the Australian Government Competitive Neutrality Complaints Office advised the Senate Economics Legislation Committee that its preliminary view was that the BGF would be subject to competitive neutrality policy. That agency has not yet considered whether the design of the BGF is consistent with the policy. In a full assessment of any competitive neutrality complaint, the AGCNCO would hear from all parties and consider all the evidence in coming to a judgement.
That just clarifies that it does fall within the jurisdiction of the complaints office. The latter part of my question—and I appreciate that it was a long question—went to the government's contingency in respect of a complaint being made and the office making a finding that indeed the growth fund does breach the policy. In the future, it's clearly a possibility. Would that mean that the government would cease to engage in the fund? What's likely to happen? What would your response be to a negative finding?
I think that it's very hard to anticipate what that claim of breach of competitive neutrality would look like in advance. Of course, you would have to consider it at the time. More importantly, though, an amendment has been put forward by the opposition to review the Business Growth Fund within a period of three years, and I would imagine that that would be one of the major considerations that would come up during that review.
Minister, can I have clarification over your comments about Australian businesses. As you may have seen, I've circulated an amendment to this bill. One Nation's amendment is to, after 'enterprises', insert the words 'which are enterprises that are either Australian owned or majority Australian owned'.
As I said before, we are seeing a lot of these companies here in Australia—and I understand they employ a lot of Australian workers—that do not pay tax in Australia. I have a problem with this. A lot of these people come out here, buy up Australian businesses and don't pay their fair share of tax in Australia, which I have been on about since 1996. The government has done a little about addressing that. I think you addressed it and you pulled in an extra $125 million in taxes from foreign companies in Australia. Here we are, expecting the Australian taxpayers to put out $100 million to prop up businesses. One Nation is very supportive of small to medium-sized businesses, and that's why we supported your corporate tax cut—up to $50 million turnover. What I want is an assurance from the government that their moneys will not go to propping up foreign companies that, at the end of the day, do not pay their fair share of tax in this country. That is One Nation's amendment. I want a guarantee from you to the Australian people that these will be Australian owned or majority Australian owned companies that this money is going to. Is it written in the bill?
The objective of the bill is quite explicit in section 3. It says:
The object of this Act is to increase investment in small and medium Australian enterprises by the Commonwealth participating in, and investing in (together with other persons), the Australian Business Growth Fund in accordance with this Act.
That is quite explicit. However, I understand your concern. We are working out how to make that more explicit as part of the shareholder agreement, and I think that should be an adequate response.
Minister, I'm sorry. It is not. All you're saying is 'Australian enterprises'. You are not saying that these are majority Australian owned, and we know that is the case. Will the government have any concerns about supporting One Nation's amendment to put in after the word 'enterprises' the words 'which are enterprises that are either Australian owned or majority Australian owned'? Do you have a problem with One Nation's amendment?
We don't have a problem with the intent of One Nation's amendment, but we do think it is superfluous because it is already quite explicit in the bill and will continue to be explicit as part of the shareholder agreement.
It's a very interesting concept that has been raised by One Nation here. Minister, if you'd been here for the endless debates we had around the Trans-Pacific Partnership Agreement and other international trade agreements, you'd know you'd be in breach of those agreements if you did that and no doubt would attract a state-to-state dispute or an investor-state dispute if you were to give any preferential treatment in the financing of Australian businesses over foreign interests—which, by the way, I voted against because I didn't support this raft of trade deals that actually tied our hands behind our backs in being able to look after Australian businesses. I'd perhaps ask that you go away and consider that, in terms of your response to Senator Hanson.
Minister, I raised in my speech in the second reading debate that there's no apparent market failure here. You talked about the Reserve Bank. My understanding, from having read that Reserve Bank report, is that they're talking about an overarching failure of finance to go to small business versus other sectors in the economy like real estate. Minister, did the Reserve Bank explicitly recommend a business growth fund to solve a market failure?
The RBA report didn't specifically recommend a business growth fund. The business growth fund is modelled on similar funds that are set up in the UK and in Canada. In both of those countries, the government played a critical role in getting those business growth funds off the ground. The RBA report specifically identified a gap in long-term patient equity market capital in Australia.
I just ask you if you could perhaps review the last comment you made there, about equity market capital. My understanding is that the Reserve Bank didn't actually specify what kind of financing they were talking about. They were talking about overarching finance, which of course could include equity but could include various other forms of debt.
Minister, you mentioned earlier 40,000 SMEs. Could you please just reiterate that that is your understanding of the number of SMEs in Australia? What definition are you using there for SMEs? Is it revenues between $3 million and $100 million?
Senator Whish-Wilson, I'm sorry. Perhaps I wasn't clear. There are in fact around 86,000 SMEs in Australia, but there are around 40,000 SMEs that fit the target market for the BGF, which includes things like three years revenue growth and a profitable business.
Thank you, Minister. I'm trying to get an idea. Even though the RBA didn't talk specifically about a market failure in this type of financing that we're looking at here, can you tell the Senate how many of those SMEs that you have identified in your target market—the 40,000 or so—have actually sought minority investment from the private sector, either last year or in the last three years?
There's no amendment before the chair at the moment. Senator Whish-Wilson.
Yes, I was wondering about that myself, because I didn't hear Senator Patrick move his amendment. But can I just ask that question again to the minister, because I'm not sure if she heard my question. Of the 40,000 SMEs that you've identified, how many sought minority investment from the private sector last year—any kind of investment? I'm happy if you want to give me the data on equity investment or private equity investment, which is what this fund is going to essentially be. It would be very useful to know that fact, because that would, of course, help us identify a market failure.
There is no amendment before the chair.
I have a question for the minister. Our office has unearthed a number of questions here. First of all, we support small business very strongly. It's the engine room for the Australian economy. We understand that this bill is modelled on a similar scheme in the United Kingdom. We are concerned, though, that there is feedback that some of the banks do not want this scheme and that there is a motion coming up at the next Commonwealth Bank board meeting to not participate. Are you aware of anything of that nature?
The banks have been particularly cooperative.
What happens, though, if a bank does not enter or if a bank withdraws after it's entered?
I'm sure that will be specified in the shareholder agreement.
I understand that there is no mention of administrative expenses in the proposal, so isn't that something that would be considered in the shareholder agreement?
Yes.
Minister, for those in the chamber here today who are here to witness the Senate doing its job, which is scrutinising government legislation and holding you to account, I note that you can't even provide some of the most basic information that we need to make a decision to pass this legislation today. You can't even, for example, tell us how many SMEs weren't able to access capital that's required to, for example, expand their businesses. You've said that there's a need for patient equity or patient investment in SMEs, yet we don't even know how many SMEs have been asking for that patient investment. I understand if you don't have the information. You can choose not to answer the question, or you can just stand up and say, 'Senator, we haven't assessed what the market failure that we're trying to address here actually is.' But I think you've got to be honest, and fundamentally honest, with the Senate about this. We are about to give $100 million of taxpayers' money at a time when your government is riddled with scandals from pork-barrelling—using public funds for your own personal and electoral benefit. You're about to take $100 million of taxpayers' funds and put it into a private equity fund that will have enormous power in this country. It is essentially going to be run by the big banks at a time when we have worked as a chamber over many years to breakdown the power of the banks and the concentration of the banks in Australia. Why give them a leg-up, by essentially giving them control of an enormously influential private equity fund in the area of small and medium enterprise financing?
You've admitted to the Senate today that you haven't even talked to some of the existing IPOs, the public equity financers, who have clearly raised concerns with us as a Senate about the fact that they're going to be crowded out. They will not be able to compete. They are providing capital to hundreds, if not thousands, of small businesses already, and successfully providing capital. They have rung the loudest alarm bell you could possibly ring about your fund.
We all know in here why this is happening, because this government made an election promise that they would put in place a business growth fund. The amendment we have before us today from Senator Patrick is a very sensible amendment. When I first heard about this—it's been very rushed; I didn't know anything about it—my immediate assumption was that the Reserve Bank said we need to do better to help small businesses, everybody agrees with that. My immediate assumption would be this would a lender of last resort facility for those SMEs and others who couldn't access finance. My second thought was they'd be very high risk. They'd be very high risk SMEs if everyone else had knocked them back. But there are valid reasons why some Australian businesses won't get finance in a tough environment. And, yes, it's true, APRA, ASIC and others have been a lot tougher, as they need to be for our systemic market risk. Why are we not considering, as a chamber, Senator Patrick's amendment that would at least make this fund provide finance, or be in a position to potentially provide finance, and funding as an underwriter to those SMEs that can't access finance? Where's the information on where that market failure is?
The numbers we've seeing here are that up to 30 per cent of SMEs—the best small and medium enterprises, the ones with the best balance sheets and the best investment propositions—are going to be cherrypicked by this bank-funded, massive private equity fund of enormous influence. The benefits of that are going to flow straight back to the big banks. It'll give them more money and more power and the SMEs that actually really need the funds aren't going to get anything. Those investors out there at the moment—be they the concerns of the Australian Shareholders' Association, be they stockbroking companies—those that provide private equity are going to get left with the SMEs that are the highest risk and potentially lowest return, while this massive private equity fund, that we're essentially giving to the banks through your initiative, is going to cream the profit off the top, to use the name for Senator Patrick's dissenting report. It doesn't make sense. Minister, you have a background in finance. I know you understand this stuff better than most people in this place so I know that you can answer these questions.
I wanted to clearly put it on record today that you can't tell us how many SMEs have even applied for funding. You can't tell us how many have been knocked back from funding, be it a debt funding stream, be it a private equity funding stream, be it an IPO stream through initial public offerings on the share market. We don't know what benefits the UK BGF have delivered for their economy—no information could be provided to us on that. We have never really got a response from your government and Treasury as to why banks only put aside 25c in the dollar. Why is the very sensible proposal to make the Business Growth Fund an underwriting fund not being considered, rather than this flawed current proposal? It's also not being considered by the Labor Party either. I'm very surprised about that after what we've been through. I don't think we would have seen the Labor Party supporting it and giving the big banks more power and more money in the last parliament.
I'm very troubled by the idea that Labor will support this proposal today. This is a proposal to give it to the big banks and many of them are reluctant. It has been reported in a number of media articles that at least three of the big banks are reluctantly participating. We've heard from the minister today that they're still working through the details with those big banks. They're not quite sure exactly what that participation is going to look like. Minister, have you had personal conversations with those banks about their doubts and will you be able to provide the chamber today some background as to why even some of the banks that we're giving more money to—and the Australian public are giving another leg up to—have concerns over this fund?
I will take that 7½ minute question as a comment.
The Parliamentary Library, of course, give you advice on all different topics. The more I read into and understand the advice that's here from the Parliamentary Library, it concerns me even more. Their advice here is:
It is not clear what rate of return the Government will seek on behalf of taxpayers for its $100 million investment. According to The Treasury, the ABGF is expected to make a commercial return for shareholders.
Is that the banks' shareholders? Is it the taxpayers' shareholders? I would like an explanation of who is regarded as the shareholders in this?
It's the Commonwealth as well as the banks that are involved in the Business Growth Fund. They're the shareholders.
Complementary to what Senator Hanson was asking: normally in the Commonwealth, where there is a shareholder, there is a shareholder minister. Can you advise which minister would be the shareholder?
It's the Treasurer.
You have been very hard to hear as you're directing your comments, and I'm the closest. Could I bring you to the mic so I can hear as well, thank you.
I didn't receive an answer to your previous question about consultation with stockbrokers. I'm wondering, was there any consultation with stockbrokers?
Senator Patrick, yes, you did. I said no.
I apologise. I genuinely didn't hear what the answer was, so thank you for clarifying that. The UK business growth fund has 157 staff and costs about $62 million per annum to run. Can you please advise the chamber what the expectation is in terms of the number of staff for the Australian Business Growth Fund. Indeed, how much do you anticipate this will cost on an annual basis?
It depends on the shareholders, and that will be worked out as part of the mandate.
Just to talk on this issue: banks are reluctant to give businesses loans in the state of the economy, but here we have the banks wanting to give $400 million to put into this bill to give loans to businesses. What deal has been done with the government? What are they going to get in return for their money? It doesn't state here what the rate of return is, so I'd like to know why banks are getting involved in this with the government to prop up businesses in the country, when, if a business goes to them, they are reluctant to loan them the money.
Progress reported.
Pursuant to notice given yesterday on behalf of the Standing Committee for the Scrutiny of Delegated Legislation, I withdraw business of the Senate notice of motion No. 1 standing in my name for two sitting days after today proposing the disallowance of the Financial Sector (Collection of Data) (reporting standard) determination No. 30 of 2019 and business of the Senate notice of motion No. 1 standing in my name for 13 sitting days after today proposing the disallowance of the Jervis Bay Territory Rural Fires Amendment (Miscellaneous Measures) Rules 2019.
I present the third report for 2020 of the Selection of Bills Committee and seek leave to have the report incorporated in Hansard.
Leave granted.
The report read as follows—
SELECTION OF BILLS COMMITTEE
REPORT NO. 3 OF 2020
1. The committee met in private session on Wednesday, 26 February 2020 at 7.45pm.
2. The committee recommends that—
(a) the provisions of the Australian Education Amendment (Direct Measure of Income) Bill 2020 be referred immediately to the Education and Employment Legislation Committee for inquiry and report by 1 May 2020 (see appendix 1 for a statement of reasons for referral);
(b) the Commonwealth Electoral Amendment (Donation Reform and Other Measures) Bill 2020 be referred immediately to the Finance and Public Administration Legislation Committee for inquiry and report by 30 June 2020 (see appendix 2 for a statement of reasons for referral);
(c) the Environment Protection and Biodiversity Conservation Amendment (Climate Trigger) Bill 2020 be referred immediately to the Environment and Communications Legislation Committee for inquiry and report by 14 October 2020 (see appendix 3 for a statement of reasons for referral);
(d) the Intelligence and Security Legislation Amendment (Implementing Independent Intelligence Review) Bill 2020 be referred immediately to the Finance and Public Administration Legislation Committee for inquiry and report by 25 June 2020 (see appendix 4 for a statement of reasons for referral); and
(e) the provisions of the National Radioactive Waste Management Amendment (Site Specification, Community Fund and Other Measures) Bill 2020 be referred immediately to the Economics Legislation Committee for inquiry and report by 12 June 2020 (see appendix 5 for a statement of reasons for referral).
3. The committee recommends that the following bills not be referred to committees:
4. The committee deferred consideration of the following bills to its next meeting:
(Dean Smith)
Chair
27 February 2020
Appendix 1
SELECTION OF BILLS COMMITTEE
Proposal to refer a bill to a committee
Name of bill:
Australian Education Amendment (Direct Measure of Income) Bill 2020
Reasons for referral/principal issues for consideration:
Possible submissions or evidence from:
Committee to which bill is to be referred:
Education and Employment Legislation Committee
Possible hearing date(s):
To be determined by the committee
Possible reporting date: 1st May 2020
Senator Anne Urquhart
Appendix 2
SELECTION OF BILLS COMMITTEE
Proposal to refer a bill to a committee
Name of bill:
Commonwealth Electoral Amendment (Donation Reform and Other Measures) Bill 2020
Reasons for referral/principal issues for consideration:
Possible submissions or evidence from:
Committee to which bill is to be referred:
Possible hearing date(s):
14 April, 20 April
Possible reporting date:
30 June 2020
Jacqui Lambie
Appendix 3
SELECTION OF BILLS COMMITTEE
Proposal to refer a bill to a committee
Name of bill:
Environment Protection and Biodiversity Conservation Amendment (Climate Trigger) Bill 2020
Reasons for referral/principal issues for consideration:
Possible submissions or evidence from:
Committee to which bill is to be referred:
Possible hearing date(s):
Possible reporting date:
Rachel Siewert
Appendix 4
SELECTION OF BILLS COMMITTEE
Proposal to refer a bill to a committee
Name of bill:
Intelligence and Security Legislation Amendment (Implementing Independent Intelligence Review) Bil1 2020
Reasons for referral/principal issues for consideration:
Possible submissions or evidence from:
Committee to which bill is to be referred:
Legal & Constitutional Affairs
Possible hearing date(s):
24 April 2020
Possible reporting date:
13 May 2020
Rachel Siewert
SELECTION OF BILLS COMMITTEE
Proposal to refer a bill to a committee
Name of bill:
Intelligence and Security Legislation Amendment (Implementing Independent Intelligence Review) Bill 2020
Reasons for referral/principal issues for consideration :
Policy issues that would benefit from input from the affected agencies and other interested stakeholders in civil society.
Possible submissions or evidence fr om :
Committee to which bill is to be referred:
(this is the committee to which other proposals for reform of PJCIS have previously been sent. The bill relates to portions of the Intelligence Services Act which are the responsibility of the Prime Minister under the Administrative Arrangements Order. )
Possible hearing date(s):
To be determined by the committee
Possible reporting date:
25 June 2020
Senator Anne Urquhart
Appendix 5
SELECTION OF BILLS COMMITTEE
Proposal to refer a bill to a committee
Name of bill:
National Radioactive Waste Management Amendment (Site Specification, Community Fund and Other Measures) Bill 2020
Reasons for referral/principal issues for consideration:
Possible submissions or evidence from:
Committee to which bill is to be referred:
Possible hearing date(s):
To be determined by the committee
Possible reporting date:
12 June 2020
Senator Anne Urquhart
SELECTION OF BILLS COMMITTEE
Proposal to refer a bill to a committee
Name of bill:
National Radioactive Waste Management Amendment (Site Specification, Community Fund and Other Measures) Bill 2020
Reasons for referral/principal issues for consideration:
Possible submissions or evidence from:
Committee to which bill is to be referred:
Possible hearing date(s):
Possible reporting date:
Rachel Siewert
I move:
That the report be adopted.
Question agreed to.
I move:
That—
(a) government business orders of the day as shown on today's Order of Business be considered from 12.45 pm today; and
(b) government business be called on after consideration of the bills listed in paragraph (a) and considered until no later than 2.00 pm today.
Question agreed to.
I move:
That general business notice of motion No. 512 be considered during general business today.
Question agreed to.
I move:
That the following general business orders of the day be considered on Monday 23 March 2020 at the time for private senators' bills—
(a) Banking Amendment (Deposits) Bill 2020; and
(b) Telecommunications Amendment (Repairing Assistance and Access) Bill 2019.
Question agreed to.
I seek leave to amend business of the Senate notice of motion No. 1, following a request from the government to insert the words 'or other' in paragraph (c) after the word 'Government'.
Leave granted.
At the request of Senator Pratt, I move the motion as amended:
That the following matter be referred to the Education and Employment References Committee for inquiry and report by first sitting day in May 2020:
The announcement, by General Motors on 17 February 2020, to withdraw the Holden brand and operations from Australia, with particular reference to:
(a) the impacts of that decision on:
(i) Holden employees,
(ii) the Holden dealership network (small and medium sized businesses and family enterprises, and their employees),
(iii) the Holden research and development facilities, and
(iv) owners of Holden vehicles (including service and repair);
(b) the role of the Franchise Code and the Government's proposed dealership amendments to the Franchise Code;
(c) Government or other policy settings on manufacturing, research and development, business support and transition, and employee support; and
(d) any related matters.
I seek leave to make a short statement.
Leave is granted for one minute.
Australians are angry and disappointed by the General Motors decision to retire the Holden brand. The government are standing with those workers and dealers most impacted, and we are determined to ensure General Motors fulfils its obligations to them.
I seek leave to make a short statement.
Leave is granted for one minute.
The Greens support this matter going to an inquiry. Hundreds of workers at Holden are set to lose their jobs within weeks. We really need to look into the impact of this government's lack of future plans for our industry and manufacturing sector. Holden's shutdown should be a wake-up call to the Morrison government. We need to urgently deliver a coherent, forward-looking, clean and green industry, with decent jobs that value workers. Now is the time to ensure that Australia is on the path to be a renewables powerhouse. As we face the twin crises of climate emergency and economic inequality a green new deal can transform our society and build a more just future for all. A resurgence of a sustainable Australian industry and manufacturing sector is fundamental to this new future.
Question agreed to.
I move:
That—
(1) The Senate notes that:
(a) since the last sitting of the Senate, two more women have been killed by violence in Australia taking the national toll since the start of 2020 to 9, as reported by Counting Dead Women Australia from Destroy The Joint;
(b) there is no national government reporting program to record the ongoing toll of women killed by violence in real time and ensure that these horrifying statistics receive ongoing public attention;
(c) on average, one woman is murdered every week by her current or former partner;
(d) according to the Australian Bureau of Statistics Personal Safety Survey 2016:
(i) more than 370,000 Australian women are subjected to violence from men each year,
(ii) 1 in 3 Australian women has experienced physical violence,
(iii) 1 in 5 Australian women has experienced sexual violence,
(iv) 1 in 6 Australian women has experienced physical or sexual violence by a current or former partner,
(v) 1 in 4 Australian women has experienced emotional abuse by a current or former partner,
(vi) Australian women are nearly three times more likely than men to experience violence from an intimate partner, and
(vii) Australian women are 2 times more likely to be hospitalised for assault injuries arising from family and domestic violence than men, with hospitalisation rates rising by 23% since 2014-2015;
(e) in 2017, young women aged 15-34 accounted for more than half of reported sexual assaults;
(f) there is growing evidence that women with disabilities are more likely to experience violence;
(g) Aboriginal and Torres Strait Islander women report experiencing violence at 3 times the rate of non-Indigenous women;
(h) in 2016-2017, Indigenous women were 32 times as likely to be hospitalised due to family violence as non-Indigenous women;
(i) the Fourth Action Plan of the National Plan to Reduce Violence against Women and their Children 2010-2022 states that the overall prevalence of violence against women will only start to decrease in the very long term as gender roles change; and
(j) the Fourth Action Plan recognises that demand for domestic and family violence services has increased, and will continue to increase.
(2) The Senate calls on the government to:
(a) recognise domestic violence against women as a national security crisis;
(b) adequately fund frontline domestic, family and sexual violence and crisis housing services to ensure that all women seeking safety can access these services when and where they need them;
(c) legislate for 10 days paid domestic and family violence leave so that women don't have to choose between paying the bills and seeking safety;
(d) ensure that all government funded counselling services for domestic and family violence are delivered by expert family violence service providers in accordance with the National Outcome Standards for Perpetrator Interventions;
(e) implement all 25 recommendations of the 2015 Senate inquiry into domestic violence in Australia; and
(f) maintain and publish an official real-time national toll of women killed by violence Australia.
I seek leave to make a short statement.
Leave is granted for one minute.
The Morrison government is committed to preventing, addressing and ultimately ending family, domestic and sexual violence in Australia. Violence against women and children is an issue that this government is responding to, with the largest-ever Commonwealth investment of $340 million to support the Fourth Action Plan of the National Plan to Reduce Violence against Women and their Children. Delivery of frontline domestic and family violence services is, however, a matter for the state and territory governments.
I seek leave to make a short statement.
Leave is granted for one minute.
One Nation will be opposing this motion. We oppose all forms of domestic violence, male- and female-generated, because we care for and respect both women and men and especially children and families. So, we cannot support this one-side, biased motion.
I seek leave to make a short statement.
Leave not granted.
A division having been called and the bells being rung—
Senators, I have had a request from a senator to divide the motion. I seek leave of the chamber to cancel this division to allow parts of the motion to be voted on separately. Am I granted leave to do that? In that case, there being no objection, the division is cancelled. Senator Ruston.
I seek that we vote separately on parts (1) and (2) of notice of motion No. 503.
The question now is that paragraph (1) (a) to (j) of motion No. 503 be agreed to.
Question agreed to.
The question now is that paragraph (2) (a) to (f) of motion No. 503 be agreed to.
Question negatived.
At the request of Senator Gallagher, I withdraw general business notice of motion No. 506.
At the request of Senator Pratt, I move:
(1) There be laid on the table, by the Minister responsible for the Australian Research Council, or when that minister is in the House of Representatives, the minister in the Senate representing that minister, by not later than 15 days after the end of the previous calendar month, a letter of advice that a list, meeting the requirements of paragraph (2), of all Australian Research Council grant recommendations received by the responsible minister each month, has been published on the Internet.
(2) The list of grant recommendations must be published in a machine readable format and specify the following information for each recommendation:
(a) identification or application number;
(b) title of application;
(c) scheme or stream;
(d) date received by the responsible minister;
(e) whether the grant was approved or not approved by the responsible minister;
(f) date of the responsible minister's decision;
(g) date the applicant was informed of the grant outcome;
(h) the amount of funding granted (if any); and
(i) whether the grant was publicly announced and, if so, the date of the announcement.
(3) If the Senate is not sitting when the letter is ready for presentation, the letter is to be presented to the President under standing order 166.
(4) This order is of continuing effect.
I seek leave to make a short statement.
Leave is granted for one minute.
The Greens support this order for the production of documents, given the lack of transparency in the Morrison government and how they have politicised research grants. It is absolutely shameful. It wasn't too long ago that the Liberals inserted a jingoistic so-called national interest test for ARC grants. It wasn't too long ago that Senator Birmingham vetoed research grants that had gone through rigorous processes to be recommended for funding. During the election, the Morrison government used ARC grant announcements to try to gain electoral benefit. Academic research funding in Australia should be completely independent of the government of the day. That is why the Greens have a bill to take away the minister's unilateral veto of research grants. This political interference in research grants is despicable and it must stop.
I seek leave to make a short statement.
Leave is granted for one minute.
The government recognises the importance of promoting the value of billions of dollars invested in research—$3.3 billion over the next four years—to the people who pay for it: taxpayers. In October 2019, in response to representations from the sector, the minister asked that, in future, the ARC notify applicants of their outcomes under embargo in advance of any government announcement, ensuring that they are informed sooner than ever before, and that projects can be commenced and recruitment therefore undertaken.
Question agreed to.
At the request of Senator Chisholm, I move:
That the time for the presentation of the report of the Select Committee on Administration of Sports Grants be extended to 24 June 2020.
Question agreed to.
I move:
That the following bill be introduced: A Bill for an Act to amend the Banking Act 1959, and for related purposes. Banking Amendment (Deposits) Bill 2020.
Question agreed to.
I present the bill and 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 table an explanatory memorandum relating to the bill.
Leave granted.
I table an explanatory memorandum and I seek leave to have the second reading speech incorporated in Hansard.
Leave granted.
The speech read as follows—
This Bill will avoid doubt as to the meaning and intent of various provisions in the Banking Act 1959 in relation to bail-in.
Bail-ins are where money held in bank accounts is taken by the bank, and converted to shares in the bank.
This happens when banks are under extreme pressure during such events as the GFC.
The effect of the Banking Amendment (Deposits) Bill 2020 will be:
1. to confirm that the conversion and write-off provisions of the Banking Act I 959 do not apply to deposit accounts as defined in the Bill; and
2. to confirm that nothing in the Banking Act 1959 or any other Commonwealth legislation extends power to APRA to implement or authorise or direct the implementation of bail-in in respect of deposit accounts as defined in the Bill.
Since the passing of the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018, there have been doubts as to the meaning and intent of various provisions in the Act as to the extension by the Act of power to APRA to implement, authorise or direct bail-in to deposit accounts where the instruments relating to the creation of such accounts did not provide for a power of bail-in being the writing off or conversion of deposit accounts.
This Bill will remove those doubts by confirming that the conversion and write-off provisions introduced into the Banking Act 1959 by the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018 do not apply to deposit accounts.
The Bill will further remove doubt by confirming that nothing in the Banking Act 1959 or any other Commonwealth legislation extends power to APRA to implement or authorise or direct the implementation of bail-in in respect of deposit accounts.
Deposit accounts are defined in the Bill and include those accounts commonly understood as current or cheque accounts conducted by customers with Australia's banks.
I want to make it perfectly clear that money in deposit accounts held by our banks on behalf of everyday Australians cannot be taken from them.
Our banks should not need bailing out. We have a banking oligopoly with the most profitable banks in the world.
Yet this Government produced legislation in 2018 that went right to the issue of bank bail-ins.
Is the Government worried about the banks reliance on real estate to support their loan book?
Certainly the value of Australian banks mortgage loan book has risen from $400 billion to $2 trillion since 2000.
2 trillion in mortgages?
Trillions more in exposure to securitised instruments.
Remember when banks lent to small business? Remember when they had a diversified loan book that insulated them against downturns and disasters?
Not in 2020 Mr President.
In allowing their loan book to become so narrow, our banks are displaying a level of recklessness that may just come back to bite them.
The Financial Sector Legislation Amendment (Crisis Powers and Other Measures) Act 2018 was designed to make sure that, should a catastrophic event occur, the damage would accrue, not to the banks, but to their customers.
One Nation is introducing this bill with a simple message: hands off the savings of hard working Australians.
I commend the bill.
I seek leave to continue my remarks later.
Leave granted; debate adjourned.
I wish to inform the chamber that Senator Hanson, Senator Siewert, Senator Steele-John, Senator Patrick and Senator Marielle Smith will also sponsor this motion. I move:
That the Senate—
(a) is not of the view that the Morrison Government's announcement of the National Commissioner for Defence and Veterans Suicide Prevention is "better than a Royal Commission";
(b) calls on the Morrison Government to establish a Royal Commission into Veterans Suicide, with a clear start and end date; and
(c) invites the Royal Commissioner to recommend that a standing, permanent capability be established to oversee reform, should the Commissioner see fit to do so.
I seek leave to make a short statement.
Leave is granted for one minute.
Subject to legislation, the National Commissioner for Defence and Veterans Suicide Prevention will have powers equivalent to a royal commission. This will include undertaking broad-ranging inquiries, hearing from any relevant party, conducting public and private hearings, compelling the production of evidence and summoning witnesses. This includes an inquiry into past suicides in line with the terms of reference set by the Prime Minister, with a formal interim and final reporting date for the publication of findings and recommendations. This approach ensures an enduring and unwavering focus on addressing the complex issue of suicide in the veterans community.
I seek leave to make a short statement.
Leave is granted for one minute.
One Nation acknowledges the Morrison government's creation of a permanent national commissioner to investigate suicides amongst Defence Force personnel and veterans. More than 400 known veteran suicide cases have been recorded since 2001, leaving thousands of family members haunted by the inaction of the Liberal and Labor governments. It's time this government acted with the same courage and rigour as our Defence personnel and establish a royal commission into veteran suicide. One Nation is a co-sponsor of this motion and therefore supports it wholeheartedly.
I seek leave to make a short statement.
Leave is granted for one minute.
The Australian Greens proudly co-sponsor this motion today. I do so along with my colleague Senator Siewert. Anybody who has spoken with a family that has been touched by veteran suicide will know the pain that they feel and the urgency that is demanded by so many for an independent and rigorous investigation that is able to look under every rock and stone and get an answer to the question why so many veterans are being driven to take these actions. I met a few days ago with Julie-Anne Finney, who came into this building to bring the voices of over 300,000 Australians who have so far signed a petition calling for the government to take this action. We proudly support this motion in solidarity with Julie-Anne and all veterans' families who have experienced this disgraceful outcome.
Question agreed to.
I move:
That the Senate—
(a) notes that:
(i) 3 baboons made a bid for freedom in Sydney this week,
(ii) the baboons were from a colony bred for use in research,
(iii) animal testing causes harm and suffering to animals, and
(iv) the episode has highlighted the community's concern for the welfare of animals used in experimentation and research;
(b) wishes the baboons well; and
(c) calls on the Federal Government to:
(i) ensure national transparency and accountability in the use of animals in research, and
(ii) invest in the methods and technology needed to end the use of animals for research purposes.
Question agreed to.
I move:
That the Senate—
(a) notes that:
(i) support and assistance dogs can help guide those living with trauma and Post Traumatic Stress Disorder (PTSD) back to a sense of safety, helping to improve interpersonal connections, encourage engagement in the community, improve the overall quality of life and can be particularly helpful for survivors of child sexual abuse, and
(ii) the Disability Discrimination Act 1992 sets out the legal definition of an assistance animal, but there are inconsistencies in laws and policies across the states and territories, and between the states, territories and the Commonwealth which mean that people who use assistance animals face discrimination, uncertainty and a range of associated challenges to accessing the community which often exacerbates their symptoms of PTSD; and
(b) calls on the Federal Government to:
(i) work with state and territory governments to develop a national model or interstate recognition of assistance animal identification,
(ii) ensure that certification that is clear and simple such as a single permit that can be used for a variety of legitimate purposes, so that a person could access public transport, employment and educational settings, and
(iii) ensure that the cost of any certification is accessible to those on low incomes.
I seek leave to make a short statement.
Leave is granted for one minute.
The regulation of assistance animals is a state and territory responsibility. All jurisdictions agree there should be a more consistent approach regarding the wide range of assistance animals and supports available in Australia. Federal government officials are working with their state and territory government counterparts on the assistance animals working group to develop nationally consistent regulations and accreditation of assistance animals. The working group is undertaking a review of national legislation and supports in relation to assistance animals.
Question agreed to.
Before moving general business notice of motion No. 514, I ask that Senator Antic's name be added to the motion. I, and also on behalf of Senators Antic, move:
That the Senate—
(a) acknowledges the 18 years of diplomatic relations and longstanding friendship between Australia and Bhutan;
(b) notes that:
(i) the King of Bhutan, His Majesty Jigme Khesar Namgyel Wangchuck, the Fifth King ('Dragon King'), acceded to the throne on 9 December 2006, and
(ii) His Majesty Jigme Khesar Namgyel Wangchuck celebrated his 40th birthday on 21 February; and
(c) acknowledges the accession of the Dragon King catalysed Bhutan's transition to a fully democratic government, with the adoption of the 'Constitution of Bhutan' under his reign.
Question agreed to.
I move:
That the Senate—
(a) acknowledges the strong and trusted strategic, economic and cultural relationship between Australia and Japan, underpinned by our Special Strategic Partnership; and
(b) notes that:
(i) the Emperor of Japan, His Majesty Emperor Naruhito, acceded to the Chrysanthemum Throne on 1 May 2019, with the imperial era title of Reiwa ('Beautiful Harmony'),
(ii) Emperor Naruhito celebrated his birthday on 23 February, the Emperor's first since acceding to the throne, and
(iii) the Consul-General of Japan marked the celebration of Emperor Naruhito's birthday on 20 February 2020, at an event in Peppermint Grove, attended by the Premier of Western Australia, Opposition Leader, Ms Liza Harvey MLA, Federal and State Parliamentarians, and other representatives of the WA community.
Question agreed to.
At the request of Senators McAllister and Hanson-Young, I move:
That the Senate—
(a) notes that:
(i) any questions going to the operations or financial positions of the departments and agencies which are seeking funds in the estimates are relevant questions for the purpose of estimates hearings, and
(ii) the Senate has resolved that there are no areas in connection with the expenditure of public funds where any person has a discretion to withhold details or explanations from the Parliament or its committees unless the Parliament has expressly provided otherwise; and
(b) expects that at the examination of the 2019-20 additional estimates, the Department of Agriculture, Water and the Environment will be prepared to provide information and answer questions with respect to the following matters:
(i) the Environment Restoration Fund, including but not limited to a list of all commitments made under the fund, including details of the names of projects, amounts allocated and paid, dates commitments were announced, and associated electorates, and
(ii) the Communities Environment Program, including but not limited to:
(A) the number of projects that required re-submission,
(B) the extent of written advice provided or received in relation to the eligibility of schools to be applicants,
(C) funds expended,
(D) training materials provided to departmental staff administering the program, and
(E) any correspondence relating to the award (or attempted award) of Communities Environment Program funds to community members or groups in the electorate of Dunkley, including between the ministerial offices, departments, and the former member Mr Chris Crewther.
Question agreed to.
I move:
That the Senate—
(a) notes:
(i) recent media reports that teenagers are taking up vaping under the misapprehension it is safe, and that concerned parents support a ban on the supply, sale and use of all e-cigarette products in Australia,
(ii) that it is legal to sell only nicotine-free vaping liquids in Australia,
(iii) that, while the sale of e-cigarette liquids containing nicotine is not legal in Australia, it is legal for a person to import a three-month supply of liquid containing nicotine for personal use,
(iv) that it is a simple task for anyone under the age of 18 to access vaping paraphernalia, including e-liquids containing nicotine, via online retailers, and
(v) a 2018 study in the Australian and New Zealand Journal of Public Health cautioned vaping may have a "gateway effect" to cigarette use, with two-thirds of the young people surveyed stating a preference for e-cigarettes containing nicotine;
(b) further notes that:
(i) the Therapeutic Goods Administration (TGA) issued a warning to consumers in January 2019 regarding undisclosed by-products and toxic ingredients including nicotine in e-liquid sold in Australia, despite being labelled 'nicotine-free', and
(ii) the TGA warning was prompted by a study, published in the Medical Journal of Australia, which stated there is little to no regulation of
e-cigarette manufacture, and the frequency with which nicotine is detected in e-liquids labelled "nicotine-free" was concerning; and
(c) calls on the Federal Government to:
(i) regulate the manufacture and labelling of e-cigarette liquid to ensure safety and consistency of ingredients in imported and
domestically-available products, and
(ii) ban the importation of e-cigarette liquids containing nicotine.
I seek leave to make a short statement.
Leave is granted for one minute.
We oppose this motion. Currently, importation of vaping solutions containing nicotine is illegal. There is one exception, allowing an individual to import three-months personal supply of e-cigarette liquid containing nicotine, provided they have obtained a prescription from their doctor. One Nation supports the sanctity of the doctor-patient relationship. If a doctor thinks vaping nicotine is likely to help their patient quit smoking, they should be allowed to be prescribed that. Every state and territory, except for Queensland, has enacted regulations to give effect to this principle. If these products are available on the wider market and if they are being used illegally, it is up to the states to police and enforce their existing laws.
The question is that motion No. 517 be agreed to.
On behalf of Senator O'Neill I move:
That the Senate—
(a) recognises that:
(i) since the publication of the Education and Employment References Committee report, They never came home–the framework surrounding the prevention, investigation and prosecution of industrial deaths in Australia (the report), tabled on 17 October 2018, 183 workers have lost their lives in the workplace,
(ii) 2019 featured a nearly 10% increase in the number of Australians fatally injured while working compared with 2018, and
(iii) as of 13 February, 21 Australian workers have died on the job this year,
(b) congratulates the Victorian, ACT, Queensland and Northern Territory Governments for passing comprehensive industrial manslaughter laws; and
(c) calls on the Federal Government to:
(i) act on the recommendations of the report, and
(ii) implement a federal industrial manslaughter regime.
I seek leave to make a short statement.
Leave is granted for one minute.
Everyone who goes to work should return home safely to their family each and every day. Both the 2018 Senate inquiry and the 2018 review into model workplace health and safety laws emphasised the need for improvements to and greater consistency in the application of enforcement and prosecution of the model work health and safety laws. The government remains open to the proposal of a nationally consistent industrial manslaughter offence, but we are first committed to understanding why there appear to be so few prosecutions for workplace deaths under the current general criminal laws, workplace health and safety laws and existing industrial manslaughter laws. As such, we wrote to state and territory ministers and are working with them to better understand the impediments to prosecutions and will meet to discuss potential changes in this area in the first half of this year.
I seek leave to make a short statement.
Leave is granted for one minute.
It has long been Greens policy to have federal laws on industrial manslaughter and to have them in the Crimes Act so that employers can be held accountable for the tragic loss of hundreds of lives on worksites around Australia. The current patchwork, really, of state and territory laws does not protect workers. I sat on this inquiry, and we heard devastating stories. In many cases the inquest takes so long that the statute of limitations expires, so no-one is held accountable. The system is definitely failing. Funding and resources also must be directed towards work health and safety regulators, who can ensure compliance and allow for more effective preventive measures to be put in place, because our aim should be zero work-related deaths.
Question agreed to.
On behalf of Senator Keneally I move:
That the Senate—
(a) notes that:
(i) Australian public servants work extremely hard to prepare for estimates hearings, with an overriding spirit of acting ethically, respectfully, impartially and with accountability,
(ii) leadership by Ministers and Secretaries is essential to supporting public servants as they prepare for estimates hearings and as public servants prepare responses to questions on notice,
(iii) the quality of the answers to questions on notice provided by the Department of Home Affairs to senators following the October 2019 Estimates round raises questions about whether details or explanations are being withheld from public scrutiny without sufficient explanation as to why,
(iv) Senator Keneally wrote to the Secretary of the Department of Home Affairs on 11 February 2020, and provided the Secretary with five case studies to demonstrate concerns that questions may not be being answered with a spirit of accountability and transparency that the Senate expects,
(v) Senator Keneally asked the Secretary of the Department of Home Affairs to re-examine the Department's responses to all of its questions on notice from the October 2019 Estimates round, and to correct any omissions or lack of transparency, by 24 February 2020, and
(vi) as of 2:00 pm on 26 February 2020, the Secretary of the Department of Home Affairs has not responded to the senator's letter;
(b) in advance of next week's estimates hearings, thanks the Australian Public Service for their commitment to acting ethically, respectfully, impartially and with accountability;
(c) calls on the Secretary for the Department of Home Affairs to re-examine the Department's responses to all of its questions on notice from the October 2019 Estimates, and to correct any omissions or lack of transparency by 28 February 2020; and
(d) ahead of Additional Estimates next week, reminds the Secretary of the Department of Home Affairs of his obligation to the Australian Public Services Values, including to the Australian public's right to know.
I seek leave to make a short statement.
Leave is granted for one minute.
Senator Keneally's motion is a stunt that represents an extraordinary attack on the integrity and professionalism of the hardworking executive and staff of the Department of Home Affairs. This motion, once again, illustrates Labor's long-held contemptuous attitude towards Australia's law enforcement and national security agencies. The men and women of Home Affairs work tirelessly to keep our borders secure and keep Australian families safe, as demonstrated through their outstanding response to the unfolding coronavirus outbreak. Further, it's their work that protects Australian democracy and safeguards the Australian values we hold dear. Senator Keneally is using her position of influence to attempt to bully and intimidate career public servants who've dedicated their working lives to serving the Australian people. This motion is a disgrace, and it should be withdrawn.
The question is that motion moved by Senator Urquhart be agreed to.
I move:
That the Senate—
(a) notes that:
(i) it is women who remain disproportionately more likely to arrange childcare and are assessed under the Government's 'activity test' to access childcare support, and
(ii) under the government's 'activity test', only parents who undertake approved courses of education or study meet the activity test requirements;
(b) considers that:
(i) it wrong that parents studying Masters degrees or PhDs that are not approved by the government do not meet the activity test requirements, and
(ii) this discriminates against women participating in education; and
(c) calls on the Federal Government to extend eligibility for childcare support to all parents undertaking education or study.
I seek leave to make a short statement.
Leave is granted for one minute.
The childcare subsidy is available to all families where both parents meet the activity test and other eligibility requirements. To satisfy the activity test, a parent can be working, studying, training, volunteering or working in a family business. The study can be any TAFE course and any approved university course and includes bachelor's degrees, master's degrees and PhDs. It also includes contact hours, self-directed hours and travel time. Supporting parents with child care whilst studying master's degrees and PhDs already exists, and it is part of the record investment of $8.6 billion that this government is spending to support families with child care.
The question is that motion No. 520 be agreed to.
I move:
That the Senate—
(a) notes that:
(i) the Great Barrier Reef supports approximately 64,000 jobs and generates $6 billion for the Australian economy annually,
(ii) approximately half of the shallow water coral of the Great Barrier Reef has been lost since 2016 due to successive coral bleaching incidents,
(iii) the Centre for Tourism and Regional Opportunities has reported a dramatic decline in domestic tourism since successive coral bleaching events,
(iv) in February 2020, Great Barrier Reef Marine Park Authority survey teams found significant bleaching at three reefs in the Shelburne Bay and Wuthathi region of the Great Barrier Reef,
(v) current National Oceanic and Atmospheric Administration Coral Reef Watch forecasts show a heightened risk of a mass bleaching events in the Great Barrier Reef in the coming weeks, and
(vi) climate change remains the greatest threat to the Great Barrier Reef; and
(b) calls on the Federal Government to:
(i) implement a climate policy that accelerates actions to limit global warming to 1.5°C to protect the Great Barrier Reef and the jobs that it supports,
(ii) take all action necessary to properly protect the Great Barrier Reef and avoid the UNESCO World Heritage Committee needing to place the Great Barrier Reef on the World Heritage In Danger List, and
(iii) develop a clear plan to move Australia towards 100% clean energy, including a plan for a just transition for Australia's regional workforces so that regional economies can thrive and workers are protected.
I seek leave to make a short statement.
Leave is granted for one minute.
The Morrison government is fully committed to the Great Barrier Reef and is investing $1.9 billion implementing our Reef 2050 Long-Term Sustainability Plan.
I seek leave to make a short statement.
Leave is granted for one minute.
One Nation will be opposing this. It's important to understand that bleaching is a natural reaction to natural weather events. In the winter of 2008, we had record cold temperatures in southern Queensland and the reef bleached. The Barrier Reef was formed in warmer times 6,000 to 8,000 years ago, and the Barrier Reef is in fine condition right now. The Chief Scientist has said that there'll be no impact whatsoever from completely shutting down Australia's hydrocarbon use. So there's no benefit, but look at the costs. The intermittent energy has huge costs, sending jobs overseas and hurting families in the hip pocket. No benefit—huge cost. It's a no-brainer.
I seek leave to make a short statement.
Leave is granted for one minute.
Labor accepts the majority of this motion—in particular with respect to the threat that climate change poses for the health of the reef and the over 64,000 jobs that it supports and the need for much stronger action than we have seen under this government, including net zero emissions by 2050. As a party of government concerned with delivering real change rather than posturing in protest, we cannot support Greens motions that seek to dictate specific policies. We have in Australia a government that is dominated by climate change deniers who continue to see political benefit in peddling conspiracy theories and attacking real action on climate, even as the cost of their inaction becomes increasingly clear to all Australians.
The question is that motion No. 521 be agreed to.
I have received a letter requesting changes in the membership of committees.
I move:
That senators be discharged from and appointed to committees as follows:
Economics Legislation Committee—Appointed—Substitute Member: Senator Sheldon to replace Senator Kitching for Additional Estimates 2019-20.
Question agreed to.
The committee is considering the Australian Business Growth Fund Bill 2019. The question is that the bill stand as printed.
I have a question for the minister in relation to the cost associated with running the Business Growth Fund. Minister, can you confirm that there is no business plan associated with this growth fund?
Hopefully that's some advice that can be provided. We are just waiting for the officials to return to the chamber—and, of course, Senator Hume as well, who would, I am sure, be well placed to answer your question. Obviously this is an important piece of legislation and a major proponent to help small business, and I would love to give you a full and frank answer. The officials are watching, and they will be able to provide information as you requested. Senator Hume is now here; so perhaps if you ask another question we can provide you the information you need.
Thank you for that very informative answer! I might just ask the question in a different way, to make sure I clearly understand what the answer was. Minister, we were talking earlier about the cost of running the Business Growth Fund. You weren't able to provide answer—which I think is unusual in the context that normally government bills have to be costed. Can you clarify that no costings were done in relation to how much would be expended?
There is no cost; this is a $100 million investment. Yes, of course, there will be administrative responsibilities, but that will be sorted out between the shareholders.
Can you confirm whether or not there is a draft business plan in place between the government and the banks that describes how this fund might be operated from a logistical and operational perspective?
That is something that will be negotiated between the shareholders and the Commonwealth. Again, this bill only enables the Commonwealth to invest in a fund like this.
I just want to be clear and to make sure where we are up to in terms of this bill. So we've got no analysis as to the problem; no governance rules; no investment mandate; no contingency plan in relation to a breach of competitive neutrality policy; and no business plan. Do I have all that correct, Minister?
I think that that's an unfair characterisation of this bill, Senator Patrick—and you know that there will also be significant oversight of this bill during the estimates procedures.
Clearly, the committee stage of the bill is where we are supposed to tease out all of the issues, rather than at estimates, where we might in future look at the operations of the bill. But, in order to be able to inform the Senate properly, once again, I'm very surprised that the government hasn't provided these sorts of details to the Senate.
In the operation of the fund, there is a board. I presume there will be a Commonwealth member on the board. Perhaps you could answer that and provide any advice as to whether there will be any other Commonwealth employees involved in the operation of the fund other than the board members.
The Treasurer is the shareholder, and the Treasurer will appoint other board members. They will appoint a board member on the Commonwealth's behalf.
Thank you. That's helpful. Just to be clear, there's only one member that will sit on the board?
Yes, one board member will represent the government.
Would there be any other Commonwealth employees at all involved in the day-to-day operation of the fund?
No.
I have to start with an aside first, because two remarkable events have happened in the Senate this week: yesterday we had an apology from Senator McKim, and today I must wholeheartedly compliment Senator Whish-Wilson for his comments and questions earlier on. We've seen, as Senator Patrick, Senator Whish-Wilson and Senator Hanson have said, that there's no mention of administrative expenses in this proposal. We've seen no provision for the sharing of profits or losses between the shareholders. As I see it, the Senate's role is to be a reviewer, and that reviewer's role is to protect the taxpayer. Now we have a situation where the constitution of the body has not been determined as to how profits and losses would be shared and what arrangements they would be made under. We're committing taxpayer dollars with this bill without knowing any of the government's arrangements for that money, including funding the losses. So, Minister, how can we proceed with this when those arrangements are not made and we're just putting the taxpayer on the hook for this and there's no accountability?
The investment is in a private company, and there are a number of other shareholders, so the administrative costs of running that private company will be worked out with the shareholders. The investment mandate will be worked out with the shareholders—that's happening at the moment—as will the division of profits from the fund between the shareholders.
Let me understand then, Minister: the money that the taxpayers have to put in is determined now, but the liability—'Well, we'll sort that that out later.' We're protecting the taxpayer. That's what we want to do.
Each one of the shareholders has the same responsibilities. There's only one single class of share.
I understand that, but, as Senator Patrick has stated and as you've stated, the expenses are not known yet. There are many, many unknowns in this investment. So you're asking the taxpayers to pour in $100 million, and we don't even know how it will be managed.
The organisation has a profit motive, and the government is confident that it will return a profit.
With due respect, Enron had a profit motive too. So did HIH. So we need more than that before we can commit the taxpayers' funds.
I have raised this issue here, and I wanted a guarantee from the government: would it only be for Australian majority owned companies? Australians are fed up with foreign investors in Australia that don't pay their taxes here. You're setting up a fund of $100 million of Australian taxpayer funds to prop up businesses and companies, and you're not prepared to give a guarantee that they must be majority Australian owned. I'll go back to the question that Senator Whish-Wilson raised about the ISDS. For the people who are listening in the gallery, that's interstate dispute settlement. That is under free trade agreements. If multinational companies have a loss of profits, they can sue the Australian governments for that loss of profits—or not the government but the taxpayer. So under this—it was a legitimate question—where does it fit into in this agreement that you are reluctant to make it Australian owned companies because it could interfere with our free trade agreements under the ISDS?
Australia will always stand by its international obligations. The explicit objective of this fund, in the words of the bill, is it will invest in Australian companies.
Progress reported.
Labor will support this bill. This bill seeks to enable the extension of the Unique Student Identifier, USI, from vocational education and training to higher education students. A USI is a secure online record of a student's nationally recognised training. Students and prospective employers will be able to generate a consolidated record of achievement prepared by a single authoritative agency.
Labor developed the proposal for a national USI scheme almost a decade ago. USI for the VET sector was introduced by Labor in the 43rd parliament but was not voted on before lapsing when parliament was prorogued. It was reintroduced by the coalition government in 2014 and then passed into law. The coalition government has neglected the education sector by wasting time, when they could have been extending this important scheme to include higher education, and failing to extend the scheme to all education sectors.
The March 2018 Gonski review reported to achieve educational excellence in Australian schools and recommended to:
Accelerate the introduction of a national Unique Student Identifier for all students to be used throughout schooling.
Labor understands the importance of evidence based policy. Labor took a $280 million commitment to the 2019 election to establish a national evidence institute to evaluate what works and what doesn't work in Australian schools. Labor believes that to give students the best education we need to put an end to the decades of ideological battles about school education. Education policy based on credible research, along with data collection through a national USI scheme, would improve outcomes for all students.
The bill seeks to enable a single student identifier to record a student's entire tertiary education journey by decommissioning the Commonwealth Higher Education Student Support Number and expanding the Unique Student Identifiers to higher education.
However, for school students and their parents and carers this bill does nothing to alleviate a problem of a school student's educational history being left behind when a student moves from school to school. The 2018 Gonski review said this was an important problem that needs addressing. A USI that included all school students would facilitate a smooth transition to a new school for students and would result in less impact on their learning development. It is important that the national rollout of the USI to school students is accelerated, as recommended by the 2018 Gonski review. The benefits to students, employers and the education sector will be enormous. It will be important to ensure that the new system is protected by a adequate security safeguards and the information is used only for the purpose for which it was collected. Labor will support this bill.
I commend the bill to the Senate.
Question agreed to.
Bill read a second time.
As no amendments to the bill have been circulated, I shall call the minister to move the third reading unless any senator requires that the bill be considered in Committee of the Whole.
I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
Labor supports the passage of the Export Control Bill 2019 and related bills. Whilst these bills are being passed through the Senate as non-controversial, Labor puts on the record that the Liberal-National third-term Morrison government failed to progress these bills in the previous parliament. Due to the Morrison government's failure to prioritise agriculture legislation through the Senate, the Morrison government has had to defer the sunsetting of 19 legislative instruments under the Export Control Act 1982 and the Australian Meat and Live-stock Industry Act 1997 due to expire on 1 April 2020 until 1 April 2021
Labor recognises the importance of reducing the regulatory burden on agriculture businesses. The explanatory memorandum states the bills before the Senate seek to improve the current legislation by making it more relevant, responsive and efficient for exporters, farmers and other primary producers. It claims to continue to provide strong regulation while removing duplication and ensuring consistency across commodities where possible. However, this legislation is only one part of ensuring export regulations are modernised. Commodity-specific rules will need to be developed with individual sectors over the coming months.
Labor urges the Morrison government to work closely with the agriculture sectors during the development of these commodity-specific rules, as this is where much of the specific export regulation and related costs will be applied.
I commend the bills to the Senate.
Question agreed to.
Bills read a second time.
No amendments have been circulated. Does any senator require a committee stage? If not, I shall call the minister to move the third reading. Minister.
I move:
That these bills be now read a third time.
Question agreed to.
Bills read a third time.
Labor will be supporting the Statute Update (Regulations References) Bill 2020. This bill makes a series of minor technical changes to 10 principal acts to update references to regulations. It appears that the changes made by this bill really are, as the government claims in its explanatory memorandum, minor technical changes that constitute no more than statutory housekeeping. However, given the government's track record, we did have to check. I commend the bill to the Senate.
I also commend the bill to the Senate.
Question agreed to.
Bill read a second time.
No amendments have been circulated. Does any senator require a committee stage? If not, I shall call the minister to move the third reading. Minister.
I move:
That this bill be now read a third time.
Question agreed to.
Bill read a third time.
by leave—I move opposition amendments (1) and (2) on sheet 8890 together:
(1) Clause 21, page 9 (lines 21 and 22), omit subclause (2), substitute:
(2) The review must include:
(a) the effectiveness of this Act in meeting the object of this Act; and
(b) the effectiveness of any investment by the Commonwealth in the Fund in relation to the following:
(i) demand for equity investments by businesses;
(ii) the impact of the creation of the Fund on the overall access to capital for small and medium Australian enterprises;
(iii) the impact of the creation of the Fund on competition within capital markets in relation to small and medium Australian enterprises;
(iv) the operation of the rights and powers of the Commonwealth in relation to the governance arrangements of the Fund.
(2) Clause 21, page 9 (line 24), at the end of subclause (3), add "The report of the review must not include information that is commercially sensitive.".
Amendment (1) seeks to strengthen the review mechanisms built into the legislation. The strengthened mechanisms will ensure that we will be able to properly assess whether the investment is well-targeted and whether it increases SME access to finance. The amendment will ensure that the review looks at the impact of this proposal on the demand for equity investments by business, on the overall access to capital for small- and medium-sized businesses and on competition within capital markets used by SMEs, and at the governance arrangements around the Commonwealth's participation in the fund.
The government wants to ensure that its investment in the Australian Business Growth Fund is improving financing conditions for Australian SMEs. It is important that a comprehensive review is undertaken as early as possible to ensure that the Business Growth Fund is meeting its objectives. The government is satisfied that these amendments do not frustrate the purpose of the review and have appropriate protections for sensitive commercial information. Therefore, we will be supporting the amendments.
Question agreed to.
(Quorum formed)
I move amendment (1) on sheet 8896:
(1) Clause 5, page 3 (line 7), after the definition of rules, insert:
small and medium Australian enterprise means an Australian business with an annual turnover (within the meaning of the Privacy Act 1988) of less than $100 million.
What this amendment seeks to do is to define what a small to medium enterprise is. The bill is purported to allow investment opportunities for small to medium enterprises, but it doesn't actually define what a small to medium enterprise is. So, the first part of my amendment inserts a definition as to what a small to medium enterprise is and basically puts a threshold in there, a criterion in there, of an enterprise with an annual turnover of less than $100 million. Currently the bill only refers to this term within the objects of the bill. My amendment will provide clarity that only Australian based businesses that have an annual turnover of $100 million are the types of businesses that the business growth fund may invest in.
The government will oppose Centre Alliance amendment (1) on sheet 8896, because the definition of a small to medium Australian enterprise will be established as the investment mandate, and that will be finalised with shareholders over the next few months. The investment mandate will also be made public. The establishment of the fund will be open-ended, so it won't have a defined termination date. And of course if it's very successful it could continue for many, many years. Setting a threshold in the legislation, while it sounds like it makes sense today, would become an inhibitor in the future.
In the event that the amendment doesn't get up—and I know you're not supporting it—one must ask the question: what's your starting position? What's the starting threshold with which the government is going into negotiations with the banks? And on what basis was that particular threshold selected? So, really I'm just trying to understand the current state.
That's not something that we're going to make public. It's part of the negotiations.
In the normal course of negotiations of course you don't want to disclose anything that is confidential, but in fact the other parties will all know what your starting position is. It's not as though you're holding something secret from someone else. So, how could you possibly suggest that the Senate and the public couldn't know, when all of the parties do? There's no confidentiality associated with this.
There is, because the investment mandate isn't set yet. That's set by the shareholders and is yet to be done. When it's done and finalised it will be made public.
So, let me get this right: the investment mandate is going to be set by the shareholders, which includes a whole range of different considerations, including the governments of this fund. And the key shareholders are the big banks—the four big banks, and Macquarie Bank and HSBC. So, here we have a situation where we're being asked to provide $100 million of public funding with virtually no information about the investment mandate. We've been told to trust this government with their economic management—that they know what they're doing—without even the most basic information about what a small to medium enterprise is or how many SMEs are actually even needing this finance and how many have tried and failed. We're being asked to just trust the government.
None of this information is provided to this nation's premier house of review, the Australian Senate—this chamber where we stand today. We're doing our job in here, Senators. We're scrutinising this government's legislation. Senator Patrick's asked a very simple question: what do you define as a small or medium enterprise? And that's led, through a chain of questioning, to a disclosure by this minister that the shareholders in this fund—this very influential private equity fund that is essentially the big four banks—are going to set the details. The details are going to be set by the shareholders. We know some of those banks were reluctant in the first place to even be part of this election policy by the government. We know that they were reluctant, and we find today that they haven't even discussed how it's going to work.
What is that investment mandate going to be? Like you, Minister Hume, there are people in here who do have a basic understanding of finance and economics, and we should have this information. You want us to vote for this and yet you can't provide that basic information. How could we, in good conscience, support this? I think what we need to do is actually have a decent inquiry into this—that is, not a one-hour inquiry on a Friday afternoon with three pre-selected witnesses. We actually need to have a proper inquiry into how we're going to spend $100 million and what impact it is going to have. Is it fair and equitable? I would argue that it isn't, and I have very strongly laid out the case for that in our second reading speech.
I want to deal with something that Senator Hanson raised in relation to the question: would only Australian or majority Australian owned companies have access to this finance? I think it's something that Australians would be very interested to know about. Why are they putting their public funds into a fund that's going to be shareholding with the big banks and that could, for example, be accessed by foreign companies. They could be foreign companies with subsidiaries in Australia or others. I raise the issue with the minister that the plethora of trade deals that we've signed specifically have chapters in them relating to finance and all those chapters and all investments—whether it's a trades and services agreement; or whether it's a Trans Pacific Partnership agreement and what that morphed into in the end; or whether it's bilateral trade agreements—have very clear stipulations that a government, party to those deals, cannot be discriminatory in their policies. Even if we, as a chamber in the Australian parliament, may feel it's in the public interest, we're precluded from legislating in the public interest if it breaches those trade deals. That's why I have spent so much time in this chamber arguing against these shady trade deals that are signed by the executive before they even come to parliament. Parliament has had no input into the construction of these trade deals. If we're lucky we might get a briefing. I have sat on the JSCOT committee, which essentially gets to rubberstamp these trade deals, and I have argued, as have other people in this chamber, that what they have done is essentially tied a hand behind our back in terms of how we regulate for this country. This is a classic example of it.
If we wanted to set up a fund that was only available to Australian majority owned businesses, we can't, because London to a brick it would attract one of two things. It would attract a state-to-state dispute, in other words where a foreign country or a foreign government sues our government through an international arbitration court. Or, if a company felt that they were discriminated against—like in Senator Hanson's question if a foreign SME wanted to access this pool of capital and were told they couldn't because they weren't a majority Australian owned company—they would have rights under these trade deals to immediately lodge an investor-state dispute settlement clause, an ISDS clause, under investor-state dispute settlement arbitration. And we all know about ISDS. Hopefully we've all heard about ISDS—talk about shady tribunals: we don't know who appoints the lawyers, there's no avenue of appeal and we know corporations have gamed the system by using these ISDS arbitration disputes to, in effect, force regulatory chilling—that is, to make sure legislation or regulations are put up in their interests and not in the public interest. This is a classic example of that.
Minister, I would ask that you go away and get some advice. I suspect Senator Hanson's not going to support your bill today unless you can actually, in black and white, say that these are going to be available to only majority Australian owned companies and if that that is actually legal under our trade system. I would ask that you seek some advice, if you don't already know that, and provide it to the Senate.
I want to put this in perspective: this is $100 million of public money that we are being asked to put into a fund, and we just don't know how it works. We could do a lot with $100 million in this country. There's been a perfectly sensible suggestion here today from Senator Patrick that provides for an underwriting fund for small and medium enterprises—for those that really do struggle to access capital, for those who, for whatever reason, are not able to get capital through their banks, through initial public offerings or through private equity, which are the three main sources of capital. There may be good reasons for that and no doubt those applications and risks are assessed on their merits. But if we are putting up public money and we're not expecting a high return, because we want to facilitate business investment, we want to see those SMEs that are struggling—not the ones that this government plans to cherrypick through this fund, the 30 per cent that probably would have gone somewhere else to get their funding without any problems. It makes sense that if they're a good investment proposition they're not going to have any problem going through an IPO process, an initial public offering process. They're not going to have any problem finding private equity investors and they may even be able to get debt, traditional debt, through a bank.
But what we're doing here is crowding out those other sources of funding that already exist, without even the slimmest, or even a glimpse, of an explanation as to why there's some kind of market failure right now. The minister has openly said, and admitted, that the Reserve Bank didn't recommend this way forward. So, why are we passing it? Why are we allowing ourselves to be rushed? Why is the Labor Party rubber-stamping this? Why is the Labor Party giving the Liberal Party and the National Party a win to give more money to the banks and more power to the banks? That's another question that we haven't explored yet, but it absolutely needs to be explored.
We have a chance to actually get this right, to scrutinise it properly, and to consider what I think is a very good amendment to this that actually would provide equity or some kind of financing in place on a market failure. So, Minister, could you please provide to Senator Hanson the advice in relation to whether providing finance for majority Australian-owned businesses would be in contravention of our trade deal obligations, specifically in relation to investor-state disputes and state to state disputes.
My understanding is that when you first announced the fund you said that $50 million was the cap. That was in the press release. I raise that to see whether or not there has been a change in relation to that and also it raises questions again as to the claim as to confidentiality.
It has always been 100.
Can I just confirm that, because you weren't going to tell us the number but you've just said it's 100. Is that the cap: $100 million in turnover?
Sorry, Senator Patrick, my misunderstanding. It's a $100 million investment. You're after the size of the organisation in which it will invest. No, that hasn't been.
Just because there was a misunderstanding: in your original announcement of this fund you basically indicated that the companies—and I apologise for not being clear—that could receive funding under this fund had to have a turnover of less than $50 million. Noting that was what was announced, is that still the case? Is that still what you are planning in respect of your negotiations with the banks?
The announcement said that it was expected to back 30 to 50 businesses each year with annual turnovers between $2 million and $50 million. That wasn't a hard range. That's something that will be negotiated with the banks, who are the other shareholders.
Let's say—fictitiously, just for the sake of understanding the question—you set a limit of $100 million for turnover. It could be $50 million; it could be $20 million. In some sense it doesn't matter. If that's set and worked into the agreement—noting, if my amendment doesn't pass, it's not a legislated number, and noting clause 13 of the bill and the lack of control that the government has over the operation of the fund—what's to prevent the bank saying, 'Well, we're going to override our 19 per cent Commonwealth shareholder; we have 81 per cent control of the company, and we're now going to expand the threshold to $500 million'? What protections are in place to prevent that sort of change being made at a board level or an investment mandate level?
The objective of the fund, Senator Patrick, is explicit. It will be outlined in the investment mandate, which, we said, isn't publicly available yet but will be made publicly available when it's confirmed.
I'm sorry if I didn't ask this clearly enough. Once it's defined, as a first instance—and noting the government have not got control over this; they're a 19 per cent shareholder—what prevents the banks holding a meeting and resolving to lift the threshold to companies that have a turnover of less than $500 million or some other number? It's about what protections and controls are in place.
Senator Patrick, that would be a change to the terms of agreement, which would need the approval of all shareholders. There is always the ultimate ejector seat. We can sell our shareholding, as well, as can any other shareholder.
That would require that you understand what you're going to get back for your shares, as well, and perhaps how successful the fund might be. But I'll move on. In terms of the investment mandate, we've got $540 million in the fund, and you mentioned in your press release that it might talk about the range of investment capital that might be granted under the fund. Have you landed on a place now as to the maximum amount of money any particular company can seek through the fund?
Senator Patrick, $5 million to $15 million is what has been announced.
And that is currently what is being worked into the current agreement, just to be clear?
The agreement isn't finalised, but, yes, that's the objective of the bill and that will be worked into the agreement.
During the committee hearing, I asked Treasury officials for some understanding of what due diligence had been done, noting these banks normally don't conduct these sorts of activities. They conceded that, in principle, the banks will be starting from scratch. This is not something they normally do. What processes are going to be put in place to train people so that we end up with skilled people managing and looking after the fund?
There will be an independent board and an independent management team that will put all of those processes in place.
My question goes not to the constitution or arrangements in place but, in effect, the qualifications. Where do you draw these people from? How does the Commonwealth make sure that the right sorts of people, which you simply can't just make, will in fact be employed by the fund, such that we're protecting our investment?
The independent board has a vested interest in seeing the fund succeed. I'm sure that it has the ability to employ the right people to make that happen.
Is there any mentoring and training built into this program in terms of costs for the operation of the fund but also for people who may wish to apply for the funding?
There's no training to actually make the applications. But, because there is a vested interest in seeing the fund succeed and making sure that the small and medium enterprises that are accessing the finance do well, there will be some assistance there.
I'd also like to go to the constitution of the board. We know, I think, from an earlier answer that there'll be one member of the government. There will presumably be one from each of the banks, but I'd like that clarified. Are there going to be any independent board members?
There will be three independent directors, and then the banks will have representatives on the board as well.
There are the banks—the Commonwealth, NAB, Westpac, ANZ, HSBC and Macquarie—so that's six, plus three independent directors, plus one Commonwealth director. Is that how it's constituted?
Sorry, I should've made that a little bit clearer. The big four banks will each have a director. HSBC will have a director. There'll be three independent directors and then a Commonwealth government director, no Macquarie.
The more I hear about this bill, the more greatly it concerns me. I don't think you've been really up-front with the Australian people. This is based on the UK and Canadian equivalents, but in the UK and Canada there's no public money in it; it's all private investment. So my concern is: why would the Australian government want to get involved in this at this stage? Why don't the banks just put their money in and have something to do with it, not the Australian government and taxpayers' money? In fact, John Roskam, the executive director of the Institute of Public Affairs, suggested that the use of $100 million of taxpayers' funds to invest in small-business enterprises was 'picking winners' and 'smacks of state socialism', and he indicated there were more important policy issues to resolve than access to credit for SMEs.
I know the government has been involved in other enterprises and the supply of funding. That was the case with the Regional Investment Corporation. RIC administers $2 billion for farm business loans and $2 billion for national water and infrastructure loans. The RIC is a corporate Commonwealth entity, and the Regional Investment Corporation Act 2018 provides for its governance arrangements, including the establishment, function and membership of the board. But this bill does not provide such governance arrangements in relation to the fund.
The unique status of the ABGF, the Australian Business Growth Fund, appears to be reflective of the government's intention of working with the banks and having the fund operate commercially, independent of the government. You're basically propping up the banks. The banks are going to get the majority of the loan here. I can't understand why the government would want to get involved in a commercial enterprise. Why are you getting involved in propping up the banks here when this is based on what's happened in the UK and Canada? They did not put any public moneys into this, and yet this government is intending to. As I said before, I want to know what returns you're going to get back on it.
Yes, Senator Hanson, you are absolutely right. The Business Growth Fund is a brand-new financing model. It's unlike anything that we've done before in Australia, and it didn't exist in the UK and Canada until their business growth funds were set up. You're right, though. While ultimately government funding wasn't necessary in the UK and Canada, the governments of both of those countries did play a very critical role in getting their business growth funds off the ground. But it was decided that there is a level of leadership required for these big decisions to create an entirely new level of financing, an entirely new option, for small and medium enterprises in Australia, and the Morrison government is showing that leadership.
When you say 'small to medium businesses' you're talking people that employ up to 199 staff. Senator Patrick has an amendment to make it up to $100 million turnover. Yours, I think, was unlimited. The government did not limit the turnover.
No—
Minister, under your bill, what is the limit of the turnover for a company?
It was $2 million to $100 million turnover. That was the range that was given.
So that company can have a turnover between $2 million and $100 million; is that correct?
Yes, that's correct.
In that case, is there any concerns if you're propping up these businesses? They've got to show revenue from a profit for the past three years. So these businesses are doing okay. You won't give me or the Australian people a commitment that they are Australian owned companies. You keep going back to the fact they are Australian enterprises. So they're not Australian owned companies. We could be propping up foreign multinational companies that don't pay their taxes in Australia. They're supposed to be profitable, but we're going to invest in them to actually help them further. Is it the case then that you investing in these companies is going to give them a benefit over their competitors? There are companies out there that are struggling and don't meet the criteria and who possibly need a helping hand. What you're doing is propping up businesses who are going to get this benefit from you and the banks. It's like the big companies Woolies, Coles and Aldi saying, 'We're going to just move aside those smaller ones, like the IGAs and corner shops and people who are trying to make a living out there.' So you're going to prop them up with cheaper loans and then allow these bigger companies to actually take over smaller Australian businesses. How are you going to make sure there is competitiveness? My belief is it's not the government's job to do this. You are investing in businesses in this country and you're going to give them unfair competitiveness against other businesses in Australia.
This entire bill, this entire process, is about helping Australian owned small and medium enterprises to grow further, to reinvest in their own businesses and to employ other Australians. It's about providing a brand-new form of financing. It's financing that simply isn't available right now in Australia—long-term, patient capital that doesn't dilute those businesses' equity holdings. The fund isn't about to invest in businesses that need 'propping up', as you put it. In fact, we are looking for businesses that have a record of revenue growth and profitability, which is exactly what you would be looking for in a fund that intends to make a profit.
These businesses, as you say, have to show profit for the last three years, so these businesses should be going on alright. It goes back to the competitiveness of this. I quote:
As reflected in the Senate Selection of Bills Committee's reasons for referring the Bill to the Senate Economics Committee for inquiry, there are concerns that the ABGF may cause competition issues in Australia's financial markets. From the supply side, other providers of equity finance may be disadvantaged—it may crowd out their ability to provide equity capital because of the better terms available for those seeking funding under the ABGF.
We hear from economists, and I'm going to let the people know what Adam Creighton, the economics editor at The Australian newspaper, said:
The Australian Business Growth Fund … will be another case of crony capitalism, bringing together the government and the biggest financial institutions in a cosy venture that will crowd out existing private sector investors … Not content with giving the big banks the right to join a fund that will enjoy artificially low borrowing costs by virtue of government involvement, the banking regulator even has agreed to pervert prudential regulation so the banks can treat high-risk investments through the fund as loans.
This double whammy of market manipulation will ensure the ABGF has a huge advantage in the market for providing equity finance to small to medium enterprises.
What do you say to that, Minister?
Thank you, Senator Hanson. There is absolutely no evidence that there will be crowding out of the equity market. In fact, I'm surprised at your line of questioning, because I genuinely thought that your party in particular would be delighted if there were an investment by Australia in the Australian Business Growth Fund, because that would result in increased Australian ownership of what might otherwise end up as a foreign owned business. This is like buying back the farm. This is a good thing for Australian businesses.
I can't believe that you actually said that. Yes, I am interested in Australian owned businesses here. I have asked you repeatedly: is this purely for Australian owned companies and businesses? You can't even answer that. You can't even say that the ISDS with the international free trade agreements is going to have anything to actually override this. Your answer before the break was, 'Yes, our commitment is to the free trade agreements first and foremost.' That's where your head is at. It's not about Australian businesses. Don't put on me that I should be supporting this, because I support businesses in this country but I will not be propping up multinational companies in Australia to get money from taxpayers' dollars when they can't even pay their fair share of tax in Australia. What I ask you is this: does this have anything to do with the ISDS of international free trade agreements under which we can be called to account if we give moneys to Australian companies, and is that why you are reluctant to look at my amendment and put in that it's not just about Australian enterprises? It's about having majority Australian ownership, and it should be 100 per cent Australian ownership as far as I am concerned. You can't even give me that guarantee. You can't even give the guarantee to the Australian people. So, as far as I'm concerned, you have answered the questions. That satisfies me and the Australian taxpayers.
Senator Hanson, with all due respect, I think I did answer your question before we took the break. I said that Australia abides by its international obligations, but it is absolutely explicit in this bill that the investment is into Australian incorporated and Australian operated businesses.
I might take up that point, Minister. We know that an Australian incorporated business could easily be a foreign business that is incorporated in Australia or has a subsidiary in Australia. I think Senator Hanson's point is that Australians don't want to see their taxpayer funds being used to prop up foreign businesses that might be competing or, for example, potentially buying out Australian businesses. We know that's how a small—
An honourable senator: In the Virgin Islands or something like that.
Yes, they potentially have tax havens in the Virgin Islands—as an aside. But how does a small business become a medium-sized business? How does a medium business become a big business?
Through growth reconsolidation, through mergers and through acquisition. That is why they need capital. Whether they are a patient investor or an impatient investor, it's the same thing: they are chasing capital. That means that there is a very real risk, as Senator Hanson has identified here today, that they may potentially buy out Australian businesses and we may see more Australian businesses become foreign owned—ironically, by using Australian taxpayer funds in the first place. I think it is a very valid concern.
Minister, it's not your fault that we've signed a raft of Australian trade deals. Could you provide advice to us today, please, on whether Senator Hanson's amendment—this is for all senators, because we have to decide if we can vote on it—is workable under the free trade deals that we have signed?
All I can say to you, Senator Whish-Wilson, is the same that I have already said to Senator Hanson—that is, we will abide by our free trade agreements, and the development of the Business Growth Fund is not contrary to that obligation. This bill is about facilitating a fund that will invest in Australian businesses and those Australian businesses will be allowed to grow, to reinvest in their own businesses, and to employ with confidence that they have that long-term patient capital. That is why we're doing this—for no other nefarious reason. This is a good bill, and I would urge you all, despite your objections in the Senate today, to support it for that reason. It is a good bill for all Australians.
Minister, you're prosecuting your case, as you are entitled to do, but my question was: would this amendment from One Nation, which we have to consider voting on, be workable given the free trade deals that we have signed? Could you advise us whether it would be a breach of Australia's free trade obligations under any particular free trade deal—for example, the Trans-Pacific Partnership agreement and the Trade in Services Agreement, which is currently being negotiated? Would it be a breach or would it be considered discriminatory if majority owned Australian businesses—not a foreign business incorporated as a subsidiary in Australia—were to be able to access this fund? Could you please provide that advice or say that you'll take it on notice? I don't mind, but we need to make a decision here today on whether we are going to support One Nation's amendment.
The advice I have received is that under no circumstances will this fund breach any law or treaty.
Just to give Senator Whish-Wilson a bit of a breather—
What about my breather?
You get paid more than me, Minister. My amendment deals with setting a threshold in respect of the revenue of the company that may seek application for funding. I asked you what the revenue cap was and you told me that you couldn't tell me; that it was confidential. I argued that point with you and then Senator Hanson asked the same question. She asked what the revenue cap is and you said it was somewhere between $2 million to $100 million. My understanding is that you have provided this to the Labor Party. You have now provided it to Senator Hanson. Is it the colour of my tie or the way that I am wearing my suit today that you've decided that you are not going to tell me but you're going to tell others? Can you clarify: is that the revenue range? Is that what you are negotiating now? Or is it just to be kept secret from me?
Senator Patrick, I don't want you to take this personally, but, yes, it is your tie! No, it's not your tie. There are a number of issues that will determine what companies the fund will invest in. The revenue range is one of them and profitability is another. But all of the details of this will be outlined in the investment mandate. I can't, hand on heart, stand in front of you today and give you that investment mandate, because it has to be negotiated and worked out by the shareholders themselves. Until this bill is passed and until it is enabled, we can't actually go ahead and negotiate with those other shareholders.
I was simply making the point that you gave an answer to Senator Hanson of $2 million to $100 million. Just to clarify the answer you gave to Senator Hanson: is that the correct answer, or is it still not decided?
That's the intention of the bill. The way the bill has been described in the explanatory memorandum, the whole thing—that's what we have said. However, in terms of the details of it, the investment mandate hasn't been nailed down yet because we can't do that until the bill is enacted.
I want to touch on one of the things that Senator Hanson and indeed Senator Whish-Wilson raised. It goes to the constitution and arrangements of the companies that might seek to make application for an investment and it goes to the nature of tax havens. Sometimes what happens in Australia is that companies with foreign owners will invest in a company. They'll take an R&D incentive, a tax incentive, from the government, and they might get some refunds in relation to tax. They'll develop IP and sell it back to the parent at some very small cost, which then licences it back to them at some very high cost. That's done to transfer profit. Often the company that they might be transferring it to will be in a tax haven. One of the defining attributes of tax havens is a complete lack of transparency. Obviously, we don't want to have a situation, as Senator Hanson was describing, where we invest in a company and ultimately the money ends up going offshore, particularly in circumstances where it goes offshore to a known tax haven. So, in relation to the investor mandate and the criteria for investment, are there any conditions that will be placed on investment in respect of companies that have related entities in known tax havens?
I think the hypothetical you've given us there—and it is a hypothetical; there is no other way of looking at it—would be something that would be considered by the fund at the time. But it's certainly not the intention of the fund. The intention of the fund is to invest in Australian owned, Australian operated, Australian incorporated businesses, because that's what is best for Australia. That's why we're doing it.
I think that, yes, there might be some complicated arrangements that are presented to the committee that is deciding which companies are going to be eligible, but that would certainly come under its radar. It would certainly be part of the consideration. If it had complicated taxation arrangements, I would imagine it would reduce that company's eligibility to be invested in by the fund. To some extent you're going to have to understand that everybody—all the shareholders that are part of this fund—will have a vested interest in seeing Australian incorporated, Australian operated, Australian owned companies do well from this investment.
I'll take you back to the election campaign. You might remember the 'watergate' affair that involved Minister Angus Taylor and the properties of Clyde and Kia Ora in Queensland. I remember the now quite famous interview that Mr Barnaby Joyce gave on radio. During that interview he was asked whether he knew if the company that the Commonwealth was dealing with had any related entities in the Cayman Islands. His answer was no; he had no idea. I'm not saying that in the context of any sort of pejorative remark; I'm simply saying that the process in place didn't necessarily require the Commonwealth to ask the question of the entity they were dealing with whether or not they had related entities in tax havens. So, it was beyond the purview of the minister in making that decision. I put it to you that unless you put active requirements in place to require people who have investment control to look at those sorts of arrangements then it's very likely that they won't. So, again, my question is: is the government placing a requirement on the board to look at that or is it considering placing a requirement on the board to do that? I ask this in the interests of the Australian taxpayers, because we often end up with companies here in Australia siphoning off profits to these places and we don't get tax coming into consolidated revenue. That means we don't pay for education services and health services. We don't get to pay for infrastructure, police services or national security. So it is really important to make sure, particularly noting that we are contributing to this to the tune of $100 million, that that money is not then used to in some way minimise tax. In relation to the board, what protections will the Commonwealth seek where it is known that companies who make application have a related entity in a tax haven? And, if they do, what sorts of requirements might be placed on them with respect to transparency?
This fund has an enormous responsibility. I think that's something that the government is very aware of, but it's also something that the other shareholders will be aware of, too, as will the independent directors that participate in the Business Growth Fund. While there isn't anything explicit in this bill that says that the ownership structures well down the food chain will be looked at, there is no reason why that wouldn't be something that would be considered. In fact, I'd be surprised if it weren't. But, that's not what this bill is about. This bill is about enabling the Commonwealth to be a part of this Business Growth Fund and to invest in the Business Growth Fund. And that investment mandate and all the decisions that are made in choosing the companies in which the Business Growth Fund will invest have to be made down the track. They can't be made at this early stage. I think, too, that you should feel comfort, Senator Patrick, in the safeguards provided by a three-year review, which is Labor's amendment—which I would love you to move. I hope we can get around to moving Labor's amendment, because I think that that three-year review should provide you with the comfort that there is an opportunity to look back on what it is that this fund is going to invest in and decide whether it's doing the job that it set out to do.
Before I go to Senator Patrick, Minister, with great joy, I advise that we already have moved the amendment.
It's all blurring into one.
The minister is forgiven. I understand that it's not in the bill, but the bill seeks to allow for an appropriation and the Senate has a job to make sure, when we are appropriating money, that there are appropriate safeguards in place. Minister, rather than leaving it ambiguous and saying that the independent directors would likely look at it and the board may be familiar with this, simply say back to me, 'Senator, the government would actually place that requirement in any agreements that are set up subsequent to the bill passing.' And then there can be no doubt that there is an obligation upon these board members to ensure that we have transparency in respect of whether or not taxpayers' funds are being used to in some way assist a company that may have related entities in a tax haven.
Is that a question?
I didn't really put a question in there, but will the government mandate or go into negotiations actively proposing that there be transparency requirements in respect of applicants and any relationships those applicants may have to entities that are domiciled in a tax haven?
The advice I have is that that is absolutely something we could put to the shareholders.
Minister, you've said to the chamber that this is an entirely new policy for the government—an entirely new venture, never been done before. I'm not aware if it has been done anywhere else internationally. Could you provide any benchmarks internationally, or any examples of exactly where the government has put in as a shareholder in long-term, patient investments?
What I said was that this is an entirely new form of financing—that long-term, patient-capital, passive equity financing. While it takes an equity stake, it doesn't necessarily dilute the ownership structure or direct operations. That's the new part, not necessarily the structure itself.
Minister, you may be aware that 830,000 Commonwealth Bank shareholders directly expressed to the Commonwealth Bank not to invest in the Australian Business Growth Fund for fear of missing out on potential opportunities. Also issues have been raised about dilution of existing business owners and existing shareholders under your structure. So I don't know if it's necessarily accurate to say that this is going to benefit existing shareholders when some very serious concerns have been put on the table. That's a side issue. I was interested as to what the international benchmarks are here. We've looked at Canada. We've looked at the UK. In that instance the government helped to facilitate access to capital, but it never put its own money in. So my question was: do we know of other examples where the government is a co-financer and therefore the public in those countries are co-financers?
My understanding is that, in the UK model, the government has shareholdings in the banks and the banks are the ones that put the fund together. The Australian Commonwealth doesn't have shares in the banks, so this is a different structure that's entirely unique to Australia.
Was the shareholding in the bank primarily to establish this fund, or was it around bailouts of banks from the GFC or from other situations? Perhaps, Minister, I could get you to explain that in a second. But I just wanted to make this really clear: from the Greens' point of view, this is an entirely new thing for the Australian government. We have no details about the investment mandate here today. As I mentioned before, you also haven't been able to provide us with any of the macro details around the market we're looking at—market failure and exactly who this fund is going to be targeting. On top of that, it's widely recognised—it was reported on, for example, by Adam Creighton, who has been mentioned in here today already, at The Australian and by Jennifer Hewett—that this is not a traditional area of business for the banks; that was the first thing they reported on in their media reports. They're not investment banks; they're retail banks. They have owned stockbroking companies and they've had online share companies, but there's a reason that they're not investment banks.
We've seen Glass-Steagall legislation introduced in the US to break up banks to make sure that they're not both investment banks and retail banks, and there's a very good reason for that: it's to reduce the risk to the system. The concern here—which has been raised by those who are already in this market providing equity capital, be it private equity capital or be it public equity capital—is that this is essentially a backdoor way of facilitating the Australian banks, who are already very big and powerful and have significant market concentrations in their existing areas of expertise. This is a way now of backdooring an investment bank platform or revenue stream. That's essentially what they're going to be. They are going to be long-term—patient, as you call it—private equity investors, which is a role that's played by investment banks. I don't even know—and I'm sure you'll answer it if I ask you the question—how it's going to work when the banks or the government want to sell their shareholdings in these SMEs that are going to be invested in. I don't even know how that's going to work, and maybe that's something I could ask you to elaborate on.
But why are we creating a whole new revenue stream for the banks? This is not an area they've traditionally focused on, and there's been a good reason for that. I will accept that National Australia Bank has done some work in small business lending. The definition of small business can be varied, but we know it's a small turnover amount, or a number of employees. I've owned a small business. My wife owns a small business at the moment. We're talking about maybe six-figure revenue streams or potentially seven-figure revenue streams. What you're talking about here is potentially a $100 million revenue stream. So, you are providing the banks with a new source of revenue, a new source of market power, a new source of concentration. I ask the chamber: what could go wrong? What could possibly go wrong in helping our retail banks now become investment banks?
This is a very serious issue that I don't think we've had addressed here today. There's a good reason that the Glass-Steagall legislation was enacted in the US, and there's a good reason that our banks have not become investment banks. I see this as a back door for them becoming investment banks. We know the fund could potentially grow to $1 billion. I don't think it's going to stop at $1 billion. I'm sure that if this kind of business model is to their liking then we're going to see a lot more of it. Saying that, Minister, we know that it's been reported that both ANZ and Westpac have been particularly sceptical of this fund. We don't have the details of how it's going to work. It's never been done before. I just want you to address those issues, please.
I think the fact that it's never been done before in fact makes it an exciting innovation and something that I would have thought the Greens would grasp hold of and say, 'This is going to be fantastic'! You understand, though, that this is an entirely separate vehicle. The banks are shareholders, and they provide capital, but the purpose of the fund is to help small and medium enterprises to find access to long-term, patient capital that they would never otherwise be able to access so they can continue their businesses, reinvest in their businesses, grow, and employ other Australians. This is not some conspiracy. In fact, it's a really good thing. The banks are shareholders, but there is a professional investment team that is in charge of making the decisions as to where that finance goes.
Minister, will the fund be a Commonwealth company for the purposes of the Public Governance, Performance and Accountability Act?
No.
Because it doesn't come under the Public Governance, Performance and Accountability Act, it is not liable for the duty to keep the responsible minister and the finance minister informed of the company's activities, ensuring that the company has an audit committee, preparing corporate plans and providing budget estimates to the finance secretary in the case of wholly owned Commonwealth companies and providing the responsible minister with certain annual recourse. Do you believe that is in the interests of the Australian taxpayer?
Because the Commonwealth is a shareholder, it will have access to as much information as required.
One Nation supports small businesses, as we've already said. But we don't give free rides to big banks. We've had lots of problems with the big banks and their agents through the receivers. What I would like to know is: if it's so good, why are the banks not currently doing it?
I think that your question has contradictory components. The banks want to be involved in this is because we are encouraging them to. We are showing them the leadership to get them involved. But the purpose is not to empower or to profit the big banks; it is to help small and medium enterprises find access to long-term patient capital so they can invest, grow and employ Australians.
Order! It being 2.00 pm the time for debate has expired.
Progress reported.
My question is to the minister representing the Prime Minister, Senator Cormann. The Prime Minister has claimed his only involvement in the Community Sport Infrastructure Program was passing along information. Why then, on the day before he called the election, did the Prime Minister obtain a colour-coded spreadsheet from Senator McKenzie with projects she intended to approve listed by party and electorate?
The first point I would make is that, as Sport Australia advised the Senate committee earlier today, the brief with the decisions was signed on 4 April. That was a week before the election was called. Obviously, subsequent to that, in the context of usual announcement arrangements you would expect there to be some communications in order to make the necessary arrangements.
Senator Green, a supplementary question?
Can the minister confirm that the final Community Sport Infrastructure Program spreadsheet rejected 73 per cent of the projects recommended by Sport Australia? Can the minister also confirm the Prime Minister obtained it the day before he called the election?
I can confirm, as we have confirmed consistently for a very long time, that the final decisions in relation to successful projects were made by Senator McKenzie as the minister for sport. Indeed, Senator McKenzie ensured that there was a fairer distribution of the available funds to projects around Australia, including by making sure that a larger—
On a point of order of direct relevance. This goes to a very important question of the proportion of projects rejected and also an important question as to timing—the Prime Minister obtaining the brief the day prior to calling the federal election. I would ask the minister to be directly relevant to those questions.
You've reminded the minister of the question. I'm listening very carefully to his answer. He has 34 seconds remaining.
I am being directly relevant, because I am confirming the fact that the decision-maker was Minister McKenzie and the decision was made a week before the election was called. Of course, subsequently, as you would expect, there were communications to ensure that announcement arrangements were put in place, as appropriate.
Senator Green, a final supplementary question?
To be clear, is the Prime Minister aware that Senator McKenzie provided a signed and backdated brief to Sport Australia approving the final round of projects on the day he called the election?
All I can do, in relation to that question, is refer you back to the evidence by Sport Australia to the Senate committee where they made clear that the brief was signed on 4 April.
Order! Before I come to the next question, I would like to draw to the attention of honourable senators the presence in the chamber and the gallery of a parliamentary delegation from the European Union. On behalf of all senators, I wish you a warm welcome to Australia, and in particular this afternoon to the Senate.
Honourable senators: Hear, hear!
My question is to Minister for Aged Care and Senior Australians, Senator Colbeck. Can the minister advise the Senate of the Morrison government's plan to prepare for the global challenge of the coronavirus in the aged care sector?
I thank Senator McLachlan for his question. While we may be faced with responding to a worldwide pandemic, Australia is leading the way in preparedness, including in planning for aged care. The Department of Health's website carries a number of fact sheets on the novel coronavirus named COVID-19 that I would like to table in the chamber today. I'd also like to table a copy of a letter that's been sent to providers by the Chief Medical Officer. COVID-19, as with the influenza virus and other respiratory viruses, particularly affects the elderly. The COVID-19 Plan, agreed to by all governments, is an outline of the measures being undertaken—and now planned—should the risk increase. Under the COVID-19 Plan, Australian governments work to promote the safety and security of people in aged-care settings through infection-control guidelines and safety and quality standards. State and territory governments will establish public health systems that promote the safety and security of people in aged-care settings and support outbreak investigation and management in residential aged-care facilities.
To support the aged-care sector, we will be shortly hosting briefings and forums to inform the aged-care sector about COVID-19 and assist its preparedness and for the possibility of cases. The COVID-19 Plan will consider what is needed to protect the most vulnerable members of our communities and address the needs of special groups, such as the aged-care sector. Under the COVID-19 Plan, the Australian government works to promote the safety and security of people in aged-care settings through infection-control guidelines and safety and quality standards. We continue to work in consultation with state and territory governments and the community.
Senator McLachlan, a supplementary question?
Can the minister advise the Senate of what measures aged-care facilities should be taking to ensure they are prepared?
Under the Aged Care Quality Standards, aged-care homes are expected to take steps to prevent, detect and control the spread of infections. Indeed, facilities should already be prepared for other viruses, such as seasonal peaks of influenza virus. Infection control is paramount. Homes are required to have in place an effective infection prevention and control program that is in line with the national guidelines. Aged-care homes should also have established protocols in place to manage any health emergencies that arise, including service-wide infection outbreaks or broader community epidemics such as COVID-19. An aged-care home provider emergency plan would consider first steps if infection is suspected; arrangements to ensure adequate care of the infected individual; protection measures for other residents, visitors and staff; and notification of families, carers and relevant authorities.
Senator McLachlan, a final supplementary question?
What can families and friends of senior Australians be doing to prepare at this time?
Thank you to Senator McLachlan for the question. Information for families and friends is contained in the fact sheets that I have just tabled. The fact sheets inform residents in aged-care homes, and their families and visitors, how good hand, sneeze and cough hygiene is the best defence against most viruses: washing hands frequently with soap and water before and after eating and toileting, covering coughs and sneezes, disposing of tissues, using alcohol based hand sanitizers, and avoiding contact with others when unwell. It also provides guidance about the travel restrictions initially put in place by the government on 1 February 2020, including the circumstances in which a resident may need to self-isolate in an aged-care home and what it means to be isolated.
My question is to the minister representing the Prime Minister, Senator Cormann. Sport Australia has given evidence to the Senate that it received the backdated brief from the government approving the Community Sport Infrastructure program projects for funding at 8.46 am on the day the election was called. Given the House was dissolved at 8.30 am that day, can the minister explain why the Prime Minister breached caretaker conventions by spending $40 million on the community grant infrastructure program the day he called the election?
Let me firstly completely reject that final assertion. The Prime Minister did nothing of the sort. As Sport Australia said quite explicitly to the Senate select committee inquiring into the highly successful and popular sports grants program, the brief approving the third round of projects was dated 4 April 2019. The caretaker period associated with the 2019 election did not, of course, start until Thursday 11 April. In accordance with the conventions, decisions taken before a caretaker period can be announced during a caretaker period.
Senator Chisholm, a supplementary question?
Why did the government provide a brief to Sport Australia at 8.46 am on the day the Prime Minister called the election, approving the Community Sport Infrastructure Program projects, when the House had already been dissolved at 8.30 am and caretaker conventions were in place?
The decisions were formalised on 4 April. That is when the brief was signed and—
Senator Wong, on a point of order?
The point of order is on direct relevance. The evidence is 8.46 am, after the House had been dissolved.
Senator Wong, with respect, I think that goes to the substance of the answer. Senator Cormann was being directly relevant.
Let me remind Senator Wong and the Senate again of the explicit and clear and unequivocal evidence of Sport Australia at the Senate select committee inquiry into this program. That is that the brief approving those projects was dated 4 April.
Senator Chisholm, a final supplementary question?
Evidence to the select committee has now revealed that the Prime Minister's and Senator McKenzie's offices exchanged at least 136 emails. Over 28 versions of colour coded spreadsheets outlining political and electorate breakdowns were exchanged, and Minister McKenzie backdated her decision on round 3 in breach of caretaker conventions. When will the Prime Minister admit his role in driving the sports rorts scandal?
Constantly repeating false assertions doesn't make them true. Just about everything in that question is false.
Senator Wong on a point of order?
We will give the government leave to explain which of those assertions are false.
That is not a point of order.
As Sport Australia made very clear at the Senate select committee hearing, the brief was dated 4 April, a week before the caretaker conventions kicked in. There is nothing unusual about communications to organise event logistics and announcement arrangements.
My question is to Senator Ruston, the Minister for Families and Social Services. On 18 February 2020 The Guardian reported that the government is arguing in documents filed in the Federal Court that it has no duty of care to income support recipients harmed by the illegal robodebt program. Does the government have no duty of care to all Australians, or is it just people on income support?
I thank Senator Siewert for her question. I will disregard the second part of her question, but in answering directly the first part of her question, the question goes directly to the technical legal matters that are currently before the Federal Court, and it would be inappropriate for me to comment on them.
Senator Siewert, a supplementary question?
I'd challenge that it's inappropriate for the minister to report here. Does the minister have a duty of care, through her role, to aged pensioners, to people looking for work, to students, to single parents? Has the government a duty of care to these Australians who are receiving income support through this government? It's a simple question.
As the Minister for Families and Social Services, I take my responsibility to deliver government policy to assist all Australians, but particularly Australians that come under my jurisdiction as the minister for those particular areas. Australia has a system that supports people in a comprehensive and very targeted way, a social welfare system that looks after all Australians who require some help. As the primary service delivery arm, obviously Services Australia is absolutely committed to providing a level of supportive customer service that is appropriate when dealing with people who require the taxpayers' help when they find themselves in tough times. I think it's absolutely reasonable to expect that the Australian community expects a level of responsible stewardship of their taxpayers' money when we help people out.
Senator Siewert, a final supplementary question?
My question is simple: does the government—do you—have a duty of care to Australians, including those receiving income support?
I can absolutely confirm that I have a responsibility to support Australians who require assistance through the social welfare system. A hundred and eighty billion dollars of taxpayers' money is provided to Australians in need every year, and I have a responsibility to make sure that that is targeted to the people who need it in an appropriate way and that they are supported at a time when they may need a little more support than the average Australian. But we also need to realise that we have a responsibility—
Order! Senator Siewert on a point of order?
I draw the minister's attention to my question. I was very clear: do the minister and the government have a duty of care to income support recipients and all Australians? I didn't ask about responsibility; I asked about duty of care.
With the minister's answer to the first question, I may have misinterpreted your second and third questions, in the sense that I was interpreting them in the common meaning of the words rather than as a legal term. I was allowing the minister to answer the question on that basis. I'm happy if you would like to correct me on that, but that's the basis on which I have been allowing the minister to answer the question.
Absolutely I have a responsibility to make sure that Australians who need my support and the support of the government and the support that is afforded to them through social security payments—
A point of order, Mr President.
Yes, Senator Pratt.
Senator Siewert made it very clear that she was asking about the legal duty of care, and the minister is obliged to answer, because legal professional privilege is not a grounds for not answering the question.
There are a couple of points. I'm sorry. That was my offer to Senator Siewert before.
Senator Siewert interjecting—
Sorry, I didn't see you nod on that basis. On that basis, I do have to advise senators, as the Clerk has just reminded me, that one can't ask a minister for a legal opinion. But, on the basis you would like the question interpreted that way, I will remind the minister of the specific nature of your question and what that term entails.
On the basis of that reinterpretation of the question, I would refer back to my previous answer to the first question, and that is that, if you are referring to the legal matter that is currently before the Federal Court, I cannot comment on that.
My question is to the Minister for Aged Care and Senior Australians, Senator Colbeck. Yesterday, the minister denied in the Senate that the government was seeking to privatise ACAT services. On 15 January, Minister Colbeck told The Sydney Morning Herald that the ACAT tender process would be open to existing assessment organisations, including government agencies and—I quote—'to the private sector'. How does the minister reconcile these two statements?
As I indicated to the chamber yesterday, the government currently doesn't procure directly any assessment service in the aged-care sector. It subcontracts to state governments for ACAT services, and it contracts to other providers—I think about 17 other providers—for the provision of regional assessment services. What the government has said it intends to do is to create a single assessment workforce. That is exactly what we intend to do. I have never conceded that the government's intention is to privatise, as the opposition continue to claim, because that has never been our intention.
You said the tender's open to the private sector.
Senator Wong obviously didn't hear what I just said. The private sector actually already provides some of those services right now. We don't procure any services directly ourselves. I have also said, as a part of this process, that we need to bring the workforce together as one. That is an objective of the government, and it was also a recommendation of the Tune review to bring together a single workforce. That is the government's determination. That is what we intend to do.
We need to reform the way that ACAT services and RAS are delivered, because there are currently duplications in the system and there are too many waiting for too long for a state based aged-care assessment. In fact, as at 31 December last year, 591 people had waited for over 75 days for a state based ACAT assessment.
Senator Keneally, a supplementary question?
Yesterday, following question time, Senator Hanson said:
I have been given an ironclad guarantee by Minister Colbeck that the Morrison government has no desire to privatise ACAT.
Does this mean that the ACAT tender will no longer be open to the private sector, as the minister has previously said it would be?
Senator Hanson was right when she yesterday that the government had no intention of privatising the aged-care assessment process. I've been saying that for a long time. The opposition can pass as many motions and make as many claims as they like, but it's not going to change the fact that the government has no intention, and never has had any intention, of privatising the ACAT process. I said yesterday, and I'll repeat today, that we will work closely with state governments to ensure that senior Australians—
Senator Keneally, on a point of order?
My point of order is direct relevance. I have generously allowed the minister nearly half his time to answer the question. The question was very specific. It was not for the minister to elaborate on Senator Hanson's words but rather to clarify if that means that the tender will no longer be open to private sector organisations, as he previously said it would be.
You've reminded the minister of the question. I am listening carefully. In my view, he was talking about the tender process, but I can't instruct him how to answer the question.
We will continue to work very closely with state and territory governments to ensure that senior Australians get the assessment service that they need as they enter into the aged-care sector. As I said before, on average, for Victoria, New South Wales and Queensland this year, there has been an increase in waiting times of over 60 per cent on the previous six months. Of those, 354 were waiting in New South Wales. (Time expired)
Senator Keneally, a final supplementary question?
Will the minister now provide an ironclad guarantee to the Senate that the ACAT tender will not be open to the private sector, as he previously said it would be?
I thank Senator Keneally for her question. As I have said a number of times today and as I said yesterday, we will work extremely closely and cooperatively with the states to ensure that senior Australians get the assessment services that they require for their entry into the aged-care sector in an appropriate form and in a way that—
Senator Colbeck, please resume your seat. Senator Wong, on a point of order?
My point of order is direct relevance. There are a lot of word games being played, Mr President. The minister has been asked a very specific question in relation to whether or not the tender will be open to the private sector. That is the only question that has been asked in the final supplementary.
Senator Wong, I can't instruct the minister how to answer a question. It was quite specific. In my view, as long as he is talking about the tender process referred to in the question, that is being directly relevant. Senator Colbeck, please continue.
I will repeat for the benefit of those opposite that, just before they say it, doesn't make it so. We have never conceded, we have never agreed and we have never said that we wanted to privatise the assessment of aged-care services in Australia.
Senator Colbeck, please resume your seat. Senator Keneally, on a point of order?
My point of order is again on direct relevance. The minister is not answering the question he was asked. The question is very specific: will the minister give an ironclad guarantee that the ACAT tender will not be open to the private sector?
Senator Cormann, I'll take you on the point of order before I rule.
Point of order. Senator Colbeck was clearly being directly relevant. He was again making the absolute same reassurance that he's made to Senator Hanson, which is entirely accurate. That is because Labor's accusations of privatisations are false.
On the point of order, I am not going to rule on whether or not someone is answering a question, in the sense that that is in the eye of the beholder too often, and there is a chance to debate it after question time. The minister was being directly relevant by addressing the question. If it is not in a way that the person asking the question prefers, there is an opportunity after question time to debate that. Senator Colbeck to continue.
Again, for the benefit of those opposite, we will work cooperatively with the states and territories to ensure that senior Australians get the assessment services that they need in a timely way to support their entry into the aged care system.
My question is to the Minister representing the Minister for the Environment, Senator Birmingham. No remediation is being carried out on the PFAS contamination plumes, now spreading outside of defence bases in Oakey in Queensland, and Williamtown and Katherine. In 2018, Prime Minister Turnbull formed the interdepartmental committee on PFAS, under the environment department, to coordinate the government's response to PFAS. My question is to the Minister for the Environment. Why is the Department of the Environment and Energy not remediating PFAS contamination zones around these defence bases?
In Senator Birmingham's absence, Senator Cormann is representing the Minister for the Environment.
I thank Senator Roberts for that question. Let me just say that, as a government, we have taken the issue of PFAS contamination very seriously and we are taking all of the appropriate actions. Obviously, there is a long history to this and I'm quite happy to facilitate a briefing for Senator Roberts. This is a complex issue requiring an effective evidence based nationally consistent response. Government representatives are in regular contact with community members in areas where PFAS contamination has been detected, and the government is supporting PFAS affected communities by conducting extensive site investigations and delivering evidence based remediation solutions, by providing clean water where necessary, as well as information on other ways to reduce exposure, by providing dedicated mental health and counselling services where needed, and by investing in targeted research to better understand the effects of PFAS contamination, including an epidemiological study and the PFAS health research grants program. The government, as you would be aware, has provided $55 million for a drinking water program for communities surrounding Oakey Army Aviation Centre and RAAF bases Pearce, Tindall and Williamtown, over $60 million in support packages for the Williamtown, Oakey and Katherine communities, including an epidemiological study and associated blood-testing program, and $12.5 million for a national research program into human health effects of prolonged exposure to PFAS, informed by an expert panel established for this purpose. There is much more that we're doing but we are working our way through this in an orderly and methodical fashion.
Senator Roberts, a supplementary question?
Before asking the supplementary question, I just want to say that the people who I have listened to at Oakey have been devastated and they are not being remediated. I will, however, take you up on your offer for a briefing, Minister. Turning to my second question, let me be more specific: the PFAS contamination plume spreading from RAAF Base Williamtown has reached to within 50 metres of the high-tide mark of the Hunter River at Fern Bay. It is already adjoining Fullerton Cove. What is your department doing to stop PFAS contaminating the Hunter River?
The Department of the Environment and Energy is working through these issues as appropriate. I will see whether I can provide further information on notice for Senator Roberts.
Senator Roberts, a final supplementary question?
The contamination zone at Williamtown is in the Hunter Valley wetlands, which is a Ramsar-listed wetland. Your department has direct accountability for the environmental quality of Ramsar-listed wetlands. What are you doing to remediate the damage in the Hunter Valley wetlands?
As I've indicated in my response to the primary question, the government is conducting extensive site investigations and delivering evidence based remediation solutions. In terms of the specific issue that Senator Roberts raises, I will add information to that, as appropriate, on notice.
My question is to the Minister representing the Minister for Infrastructure, Transport and Regional Development, Senator Cash. Can the minister update the Senate on how the Morrison government is delivering on its plan to invest $100 billion into infrastructure, which is creating jobs and driving the economy, including through the delivery of vital projects in regional Australia, particularly in our home state of Western Australia?
I thank Senator Brockman for the question and I acknowledge his commitment to rural and regional Australia—in particular in our great state of Western Australia. One of the hallmarks of the Morrison government is obviously our commitment to building the infrastructure to make our transport networks safer, more efficient and more reliable. Between 1 July 2013 and 30 June 2019 the coalition government has invested more than $5.5 billion in infrastructure in Western Australia. In fact, on 20 November 2019, the government announced an $868 million infrastructure investment boom in Western Australia, including $817 million in bring-forwards.
This accelerated investment will deliver on a range of projects, such as the early construction of the Bunbury Outer Ring Road—obviously very important for us—the Albany Ring Road and the Tonkin Highway Gap and upgrades to the Karratha to Tom Price corridor. These investments will stimulate the economy and, in stimulating the economy, they will support job creation. This government is all about putting in place the policies to ensure that we are creating jobs for Australians.
We're also investing, though, in the Wheatbelt Secondary Freight Network Program. This program of works has targeted 53 freight routes in need of upgrade that cover 4,400 kilometres of road. This is an important safety investment as well as an important economic development. In terms of the wheatbelt itself, one of the reasons this is so important is that 600 jobs will be supported during the project.
Senator Brockman, a supplementary question?
Is the minister aware of whether the recently updated Infrastructure Australia priority list supports the Morrison government's infrastructure pipeline?
The government welcomed this week's release of Infrastructure Australia's 2020 update to its Infrastructure Priority List which reaffirms the Morrison government's delivery of the infrastructure that Australia needs and deserves. The Infrastructure Priority List has delivered the largest list of projects to date, including 147 nationally significant projects across a range of sectors, including transport, energy, water, communications, housing and education. It's about $58 billion worth of projects. The list itself focuses on delivering regional and urban projects to support a growing population, to meet the national freight challenges and to get Australians home to their loved ones sooner and safer. I'm pleased to inform the Senate that the Morrison government is already supporting and investing in a number of projects identified on the updated list.
Senator Brockman, a final supplementary question?
Minister, why is investing in building infrastructure critical to supporting a strong economy?
It is all about ensuring that we're investing in those policies that are going to grow the economy and allow job creation. Certainly our $100 billion investment in key infrastructure projects is part of this government's blueprint for delivering jobs, productivity and economic growth to all Australians. The investment itself, though, will increase freight efficiency and improve road safety but also ensure that local businesses are able to get their goods to market more quickly and more reliably, whether they're in the north of Queensland or Western Australia, regional areas or urban Australia. All Australians will ultimately benefit from our infrastructure investment. The record infrastructure investment—it is a record structure investment of $100 billion—is all about supporting and building the infrastructure projects that are going to ensure that our economy does grow and we continue to create more jobs for Australians.
My question is to the Minister representing the Minister for the Environment and the Minister for Energy and Emissions Reduction, Senator Cormann. Minister, Australians love their oceans, especially their Barrier Reef. Yesterday key US science organisation NOAA put out their prediction for the Great Barrier Reef: there's a 90 per cent chance of coral bleaching by mid-March. This would be the third coral bleaching event in just five years. Minister, I presume the government is watching this closely. Are you concerned? Can you update the chamber on what your observations are and what the prognosis would be for the reef if a third mass coral bleaching were to occur?
Firstly, what I can say—and I'm sure that everybody around the chamber agrees—is that the Australian government is deeply committed to protecting the World Heritage listed Great Barrier Reef. The reef generates—
Greens senators interjecting—
I'm disappointed the Greens would not agree with that. Who would have thought? The reef generates 64,000 jobs and contributes—
Order! Senator Whish-Wilson?
On a point of order: I asked if the government was concerned and whether he could update the chamber on whether they agree with NOAA's prediction of a 90 per cent probability of coral bleaching. There was nothing else—
Senator Whish-Wilson, towards the end of your question you asked very broad questions of the minister such as whether he agreed. I think, with all due respect, that, 23 seconds in, he is being relevant to what was a question with a lengthy preamble and a number of questions at the end. But I am listening carefully. Senator Cormann.
Let me reassure the chamber again: the Australian government is deeply committed to protecting the World Heritage listed Great Barrier Reef. Of course, we understand and fully accept that climate change is a global issue and the most serious long-term threat to the health of coral reefs worldwide, including the Great Barrier Reef.
The centrepiece of Australia's reef protection effort is the Reef 2050 Long-Term Sustainability Plan, jointly developed with the Queensland government. We are working with traditional owners, industry, scientists, farmers and the wider community to implement that plan. The Australian and Queensland governments are investing $2.7 billion between 2014-15 and 2023-24 to implement that plan. It's a plan that addresses the key threats to the reef by improving water quality and coastal habitats, tackling outbreaks of crown-of-thorns starfish, addressing plastics, and protecting threatened and migratory species—
Senator Whish-Wilson, on a point of order?
Mr President, I also asked what the government's prognosis would be for the future of the reef if we had a third bleaching in five years. The minister is yet to address that issue.
Senator, I can't direct the minister to answer part of a question. Senator Cormann.
Let me reassure Senator Whish-Wilson again: the Australian government is deeply committed to protecting the World Heritage listed Great Barrier Reef. We are taking action together with the Queensland government and others to ensure that the Great Barrier Reef is in the best, strongest and healthiest position possible, and that is what we will continue to do. We look forward to your support for that very important work.
You'd of course also be aware that the Australian government has invested historic levels of funding, including a $443.3 million— (Time expired)
Senator Whish-Wilson, a supplementary question?
Given the minister mentioned that this is a World Heritage listed reef and that the biggest threat to the Barrier Reef is climate change—and I thank him for that acknowledgement—does he agree that when UNESCO meets in China in June they should consider the impacts of climate change on the values of the reef and whether the reef is in danger?
I will let UNESCO make its decisions. We will make decisions as the Australian government. The decisions of the Australian government are focused on protecting the World Heritage listed Great Barrier Reef to the absolute best of our ability.
I was about to say, before my time ran out, that the historic level of funding that we are providing as a government includes a $443.3 million dollar Reef Trust partnership with the Great Barrier Reef Foundation. The foundation's 2019-20 annual work plan allocates over $58 million for reef action, including controlling crown-of-thorns starfish and working with farmers to improve reef water quality. Again, let me reassure Senator Whish-Wilson that we are absolutely committed to doing everything we can to ensure the Great Barrier Reef is in the best possible position over the very long term.
Senator Whish-Wilson, a final supplementary question?
Minister, marine heatwaves are devastating not just the Great Barrier Reef but also the giant kelp forests off the east coast of Tasmania and seagrass beds in Shark Bay, Western Australia. We've seen mass fish kills around the Australian coastlines and around the world. Minister, given the impact of such a loss of habitat on marine life and our fisheries and fishing communities, how is this not a crisis, and are our oceans buggered?
I ask senators to try to maintain the dignity of the chamber with their use of language.
Not only would this government not use language like that in this chamber, but we are much more optimistic about the future. We think the future for our oceans is going to be so much brighter because of the actions we're pursuing as a government to support effective policies to improve the health of the oceans moving forward.
My question is to the Minister for Aged Care and Senior Australians, Senator Colbeck. The Australian newspaper this morning revealed that in the days after the Nationals leadership spill, Deputy Prime Minister McCormack lobbied the Prime Minister for a $120,000 grant to keep open an aged care home in the electorate of Nationals' ally Damian Drum. The article also reports that 'Nationals sources questioned the due process conducted ahead of the grant being finalised in four days.' What representations did the Prime Minister or his office make to the minister and when did they occur? Why was the grant finalised so quickly?
I thank the senator for the question. The member for Nicholls arranged for the Deputy Prime Minister to visit the Murchison community on 31 October for discussions on the DP Jones Aged Care facility and those discussions have continued since then. The circumstances surrounding DP Jones nursing home in Murchison are quite unique and as a result require a tailored solution. That is why we negotiated a tailored solution for a longer period of administration. The circumstances in the community of Murchison were quite unfortunate, with the DP Jones facility having a number of connections to other community organisations. There was a strong desire and interest from members of the aged care community to consider a takeover of—
Senator Kitching on a point of order?
On relevance. My question was around representations—did the Prime Minister or his office make representations to the minister? Why was the grant finalised so quickly? This is not relevant.
I'm listening carefully to the minister. I was speaking to the managers then about order of questions. I missed his last contribution. I will continue to listen carefully. It is also in order for the minister to address the quotations and assertions at the start of the question. That is also in order and being directly relevant. I will listen to it very carefully.
The government had provided some assistance to the administrator to extend the period of administration in an attempt to find an alternative provider to take over the facilities of DP Jones. We were coming to the end of that process, and there were still some discussions we wanted to continue with respect to that. The decision was made to provide additional resources to extend the period of administration so that the negotiations with prospective providers could be undertaken.
Senator Kitching, a supplementary question?
The minister's department has said of the nature of the grant that it had not 'provided funding of this specific nature before'. Why was this new precedent set for Mr Drum?
One of the concerns that the government has is the provision of high-quality aged care across the country and particularly in regional Australia. Here we have a community in Victoria that was about to lose its aged-care facility. It had a number of other services attached to it. It had a doctor's surgery, a pharmacy, a community house. All of the services were attached to the provision of care at the aged-care facility. We were concerned about whether those things all had the capacity to continue to be provided in that community. We had a number of providers who were interested in taking over the facility. We extended the capacity of the administrator to continue the administration to see if we could find a new provider for the centre.
Senator Kitching, final supplementary question?
Given $400,000 has already been provided to the aged-care facility in Mr Drum's electorate, can the minister now confirm that the Prime Minister has spent $520,000 of taxpayer money to buy a vote inside the Nationals party room to prop up his preferred Nationals leader?
As I have just indicated, the concern of the government is for the people in the community of Murchison and to ensure that they continue to receive the services that are important to them. As I've indicated, the aged-care facility was supporting a doctors surgery, a pharmacy and a community house. The concern for the government is to ensure that the community of Murchison has the capacity to retain those facilities, if we can assist them to do it.
My question is to the Minister for Defence, Senator Reynolds. Can the minister update the Senate on the coalition government's investment in Defence facilities and infrastructure in Northern Australia, particularly in the Northern Territory?
I thank Senator McMahon for her question and also for her tireless advocacy for Defence personnel and the facilities and support that they get in the Territory.
I can confirm that Australia's north has played, and always will play, an important role in our nation's defence and broader security in our region. That's why this government is investing $8 billion over the next decade in new and upgraded Defence facilities in the Northern Territory. These facilities will support new ADF capabilities, such as the F-35A Joint Strike Fighter and the offshore patrol vessel.
Last week the Prime Minister announced a further $1.1 billion of work at RAAF Base Tindal, taking this government's total investment in the base to $1.6 billion. This is to ensure that we can continue to deliver a potent air capability from the Northern Territory. Under this $1.6 billion investment, over $700 million will go towards upgrading the airfield, including extending the runway and building a new air movements terminal, a parking apron and extra fuel storage facilities. The works will increase the capability of Tindal to support the KC-30 Multi-Role Tanker Transport operations. These are a key part of the core air power role of air mobility, in particular air-to-air refuelling and air logistic support missions. This will also improve accessibility for Tindal for the United States Air Force aircraft. Another $437 million will also be provided to critical base infrastructure upgrades. This $1.1 billion commitment comes on top of the $495 million already invested in the new air combat capability facility at Tindal, which will underpin the arrival of the Joint Strike Fighter in the Northern Territory.
Senator McMahon, a supplementary question?
Can the minister outline how these investments enhance the US alliance and regional security?
Yes, Senator McMahon. I can confirm that Northern Australia is and will remain our gateway to the Indo-Pacific. This is a region of growing economic prosperity, trade and opportunity for Australia, but it's also one that is more dynamic and more interconnected, and where traditional and new security threats increasingly transcend state boundaries. We cannot deal as a nation with any of these challenges in isolation. As the Defence minister, I recognise that strengthening the ADF's relationships with regional allies and partners is crucial to our nation and our regional security. This is why we, Australia, remain committed to the United States Force Posture Initiatives. They provide security benefits for both countries and for our regional partners, by deepening the joint operations between the ADF and the US forces. Also, they increase engagement with nations right across the Indo-Pacific. The US still plays an essential role in underwriting the security of the Indo-Pacific.
Senator McMahon, a final supplementary question?
Can the minister update the Senate on how this program of investment contributes to local employment and investment, particularly in the Northern Territory?
This is one of the many aspects of our defence industry policies that I'm so proud of. The Morrison government is making it easier for local businesses to get involved in delivering this $8 billion of investment pipeline over the coming decade in the Northern Territory. This government's local industry capability initiative announced in Darwin, in 2017, by the then minister, Minister Payne, continues to deliver valuable opportunities for local businesses. Since the implementation of this initiative, the average local engagement target for major infrastructure projects has been 79 per cent. We have now met this, and it is now over 80 per cent. The Morrison government remains committed to ensuring the delivery of the best capability for the ADF, investing in infrastructure and supporting a local defence industrial base in the Northern Territory.
My question is to the Minister representing the Prime Minister, Senator Cormann. I refer to the minister's earlier answers. Given that former Minister McKenzie consulted the Prime Minister and his office on the final round of grants under the Community Sports Infrastructure program on 10 April, how could former Minister McKenzie possibly have made the decision on 4 April?
I don't accept the characterisation of Senator McKenzie's interaction with the Prime Minister's office on 10 April. As I've indicated, after the decisions were made in relation to those projects, of course there was interaction as appropriate to make arrangements in relation to announcements of decisions that had already been made.
Senator Bilyk, a supplementary question?
What steps has the Prime Minister taken to satisfy himself that the document signed by Minister McKenzie was not backdated?
What I would just say again is that Sports Australia gave very, very clear, explicit and unequivocal evidence: this brief was dated 4 April.
Senator Bilyk, a final supplementary question?
Will the minister guarantee to the Senate that the document signed by Minister McKenzie was not backdated?
All I can do is, again, to point you to the evidence of Sports Australia, which was clear and unequivocal: the brief was dated 4 April.
Senator Wong, on a point of order?
The point of order is on direct relevance—
Senator Cormann has concluded his answer, Senator Wong. I'm afraid it's not appropriate for a point of order.
My question is to the Minister representing the Minister for Education, Senator Ruston. Can the minister update the Senate on how the Morrison government's plan is supporting Australian families with the cost of child care?
I thank Senator Bragg for his question and his obvious interest in this very important part of public policy. The Morrison government is absolutely committed to supporting all Australian families, particularly when they have young families themselves. The latest CPI data confirmed that Australian families continue to pay less out-of-pocket expenses under the Morrison government's new childcare package. The Australian Bureau of Statistics shows that, on average, out-of-pocket costs have actually reduced by 4.2 per cent and they're lower than they were before the introduction of the childcare subsidy in July 2018. This comes off the back of record funding to help Australian families manage the cost of child care. This year alone, we've committed $8.6 billion towards the cost of child care and that will increase to $10 billion over time. At the moment, there are more than 1.3 million Australian children who are benefiting from the subsidy that has been provided by this government through the childcare subsidy.
There are a number of mechanisms in our policy that ensure downward pressure continues to be put on childcare fees, including the hourly rate and parent co-payments. Eighty-seven per cent of centre based day care services are charged at or below the hourly cap. Last year the Morrison government delivered legislation updates that reduced red tape which made it easier for families to access childcare and made it easier for them to maintain their subsidy. In fact, just this week we've introduced legislation to further streamline access for vulnerable and disadvantaged children—and this includes those children who are living in foster care—to make sure that they get the support that they deserve as well.
Senator Bragg, a supplementary question?
How is the government supporting early education and childcare for Indigenous and regional, rural and remote children?
In addition to the childcare subsidy, families and services in regional and remote Australia can also benefit from the Community Child Care Fund. This fund is part of the childcare safety net, and it provides services with a different operating capacity so that we can meet the challenges faced in rural and regional areas, particularly around financial and business support. This is particularly in the case where there are limited services available in these areas, and sometimes there may be no childcare services. So funding totalling $328 million over the next five years has been made available for around 980 services. Seventy per cent of that money has been allocated to 480 services that are in rural and regional Australia. We're also investing $12 million a year in the Connected Beginnings Program, which supports Indigenous children aged zero to five and their families in 15 additional communities.
Senator Bragg, a final supplementary question?
How is the government supporting the early education and childcare sector services affected by the bushfires?
To make sure that we continue to support our bushfire affected areas as they go through recovery—we understand that drought, bushfires and floods have a significant impact on families—we've allocated an additional $5 million through the community childcare fund special circumstances program for services in those communities that have been directly affected by bushfires. Services may seek funds for a range of activities. It might be to establish a temporary centre or premises where children can go if their existing one has been damaged or destroyed, temporarily meeting operational costs and addressing the issues of health and safety requirements.
The Minister for Education also recently delivered a new set of rules that enables charities that wish to support volunteer firefighters with the cost of child care to do so. Families in bushfire affected areas will also be exempt from the activity test for the childcare debt going into the future so that we can continue to support— (Time expired)
My question is for the Minister representing the Minister for Infrastructure, Transport and Regional Development, Senator Cash. Damien Mills died tragically at age 35 when he fell overboard while travelling on a chartered vessel off the coast of Western Australia on 31 October 2014. A coronial inquest found Mr Mills's death underscored the need for simple safety processes on chartered vessels, such as performing accurate headcounts and supervising passengers properly while on board. What action, Minister, has the Australian Maritime Safety Authority taken to improve passenger safety following Mr Mills's death?
I thank Senator Sterle for the question. Senator Sterle, I have not been provided with a brief on that. I will take it on notice, and I will revert to you as quickly as possible.
Senator Sterle, a supplementary question?
Minister, a Senate inquiry into the Australian Maritime Safety Authority has raised serious concerns about the authority's management of Mr Mills's case and the authority's continued refusal to strengthen safety regulations for domestic commercial vessels. Why has the government minister ignored pleas from the committee for sensible action on passenger safety for the past two years?
Senator Sterle, I will have to reject the premise of your question. In terms of the government's record of maritime achievements, we actually have a very, very strong record of maritime achievements since 2013. Our economy relies, as you know, on safe and efficient maritime trade. Almost 80 per cent of the value of our international trade is moved by sea. As such, fishing, maritime, tourism and transport are important domestic industries. On 1 July 2018, the government took full responsibility for safety services and standards for domestic commercial vessels, which are now delivered consistently around Australia by AMSA. Industry also remains committed to phasing out two-tier vessels for live sheep exports, with AMSA implementing changes to Marine Order 43. But I would reiterate that, in terms of safety, we are committed to ensuring— (Time expired)
Senator Sterle, a final supplementary question?
Out of respect for the memory of Damien, I will go straight to my final supplementary question. Minister, no Australian family should have to endure the pain and anguish that the Mills family have experienced. Will the government finally act by supporting my private senators bill, which ensures that two headcounts are conducted—one at the commencement of the voyage and one at the end—to ensure that all passengers are present and accounted for?
Senator Sterle, the minister is responsible for administering maritime and shipping legislation in support of a safe, efficient and clean Australian shipping industry. This, as you know, includes compliance with international rules on maritime safety and environment, coastal trading, domestic commercial vessel safety and regulation of ships engaged in the live animal export trade.
Senator Wong, on a point of order?
Mr President, I am disinclined on this matter to take a point of order, but I take a point of order on direct relevance. This is about headcounts on charter vessels. It is a private senators bill. The issues that the minister is describing are not germane to the question. If she wishes to take the question on notice because the government hasn't made a decision on the private senators bill that would be a respectful thing to do. But could she please respond to the question?
Senator Cormann, on the point of order?
Mr President, as you've indicated on many occasions in relation to points of order of this nature, all that is required is for the minister to be directly relevant. The Leader of the Opposition in the Senate cannot insist on how she wants the minister to answer the question.
On the point of order, it was a very specific question with respect to a bill and a particular policy measure. You've reminded the minister of the nature of it, Senator Wong. I will listen carefully. She has 36 seconds remaining to answer or to take it on notice, as appropriate.
As I stated in relation to the primary question, I don't have a brief on this matter. I will take any questions on notice and return to the chamber.
I ask that further questions be placed on the Notice Paper.
Mr President, I have a procedural question to raise, and I apologise for not raising it earlier. I was not in my correct seat and was not in a position to raise this issue at the time that it occurred. During consideration of formal motions today a statement was made by the Assistant Minister for Forestry and Fisheries, Senator Duniam, reflecting on Senator Keneally's motives in moving general business notice of motion No. 519, which concerned the importance of timely and accurate answers to questions on notice at estimates. It would be good if you could please review the Hansard of Senator Duniam's comments and give consideration as to whether they constituted an imputation of improper motives or a personal reflection contrary to standing order 193(3).
On that point, I do appreciate that I got a brief notice during question time. I will go back and reflect on the Hansardon two matters, because I do want to address a question that was raised as well during question time. Firstly, 193(3) is strict about imputations of improper motives and personal reflections on members of this place, the other place and various other places. I will review the Hansard and come back on that. But there was also during a question time a question that alleged the buying of a vote by a member of another place. In my view, if someone had raised a point of order on this front, I would have asked for that to be rephrased. From the rough Hansard I have of this—and I haven't been able to check all of it, but I will come back—on the phrase that has been highlighted to me but not re-read so far I would have also asked Senator Duniam to have rephrased that. But I do draw attention to the fact that I would have done similar on a question that referred to the buying of a vote. So could all senators please be very mindful of 193(3) and reflections and assigning improper motives to other senators and members. Thank you.
I move:
That the Senate take note of the answers given by Senators Cormann and Colbeck to the questions asked by Senators Green, Chisholm, Kitching and Bilyk.
As was very clear from the evidence given by Sport Australia today in the hearing that we had before lunch, the noose is tightening around the Prime Minister's office. It's becoming very clear that the Prime Minister's office was up to its neck in both sports rorts 1 and sports rorts 2. What we now know, by a combination of persistence by the opposition and information being provided by a range of witnesses, is that 136 emails went into and out of the Prime Minister's office between the dates of 17 October 2018 and 11 April 2019.
You might recall, because I know you take quite a bit of interest in this, Madam Deputy President, that when this whole issue came up and it appeared that the Prime Minister's office was involved, and the Prime Minister himself was involved, the defence that he made—and he dismissed the claims—was he said he was just passing on representations.
Let's go back to those figures: 136 emails over that just over six-month period. During that time there were actually only 122 working days. We're in a situation where more than one email into and out of the Prime Minister's office occurred for the whole of that six months. I ask you, Madam Deputy President, is that simply passing on representations? No, Madam Deputy President, that's an active involvement—an active, consistent, persistent involvement—in the working out of where sports rorts 1 and sports rorts 2 would end.
I know Senator McKenzie has taken the fall and I know Senator Canavan followed in pretty quick succession. But the reality is, when you look at the factual circumstances here of those 136 emails over 122 days the Prime Minister's office was right up to its neck in all of this.
What else do we now know? We know about the 28 versions of sports rorts 1 that transpired between the—
Twenty-eight!
Twenty-eight. I perhaps should repeat that number: 28 versions transpiring over that period of time between the minister's office and the Prime Minister's office. Again, I ask you to consider this, Madam Deputy President, is that simply passing on representations?
What we found out this morning was some other interesting information about the Prime Minister's role in all of this. We discovered that on a particular date, 11 April last year, that the parliament was prorogued—and, of course, the provisions of the caretaker conventions came in. When did the minister send in this information? Well, the minister sent her approval of tens of millions of dollars of sports rorts grants at 8.46 am on 11 April. That's an important time because, at 8.29 that morning, the Governor-General prorogued the parliament and the parliament was dissolved. Just over 15 minutes after the proroguing of parliament the minister signed the documents, so the caretaker conventions were in place. (Time expired)
Thanks, Madam Deputy President, for again letting us talk about the Community Sport Infrastructure Grant Program. This program rolled out over 600 grants to small community sports clubs across Australia. Let's not forget that the assessment process undertaken by the minister meant that Labor got more grant projects in their electorates than they would have otherwise have got. Let's talk about what the Leader of the Opposition actually said on Facebook on 18 March 2019:
I am pleased to announce that the restoration of the historic Dawn Fraser Baths has received a further boost with a $500,000 grant from Sport Australia.
That was from Mr Anthony Albanese, the Leader of the Opposition. That was three weeks after the shadow Attorney-General first wrote to the ANAO raising concerns over the Community Sport Infrastructure Grant Program. So Labor loved this program just as much as we did, this program that got money to small community sports clubs and to our kids in areas across Australia. Labor electorates, Liberal electorates and National Party electorates across Australia benefited from this grant program.
Even on 20 July last year the Deputy Leader of the Opposition wrote on Facebook:
Pleased to support Geelong Soccer Club and celebrate a recent $500,000 announcement, that will fund an additional 2 new pitches. Soccer is alive and well in Geelong.
This just goes to show that there is no-one who can actually point to any of the successful recipients of this grant program and say, 'Actually they shouldn't get that money; they should give that money back'—not one of them. All of these project grants—it doesn't matter whether they went to Labor or Liberal electorates—have been welcomed by the communities which they went to. This program has definitely benefited, in my interest, regional Australia and it has benefited small community sporting clubs, which is exactly what our focus should be. It's about the grassroots. It's about getting money out there. It's about getting kids involved and playing.
Some of the other Labor seats that benefited included: Ballarat, with nine projects worth over $976,000; Bendigo, with five projects; Corio, with three projects; Franklin, with four projects; Fremantle, with four projects; Hindmarsh, with six projects; Hunter, with five projects; and Isaacs, with six projects. All of these projects possibly wouldn't have got funding had the minister relied purely on the Sport Australia ranking. In fact, if the minister relied on the Sport Australia ranking, 231 fewer projects would have received funding. That's 231 community sports organisations that would not have had funding to complete their projects, get kids active and provide facilities for their regional communities.
Let me just take the opportunity to remind those opposite, who are focused on the Prime Minister's engagement with the minister's office, that I would hope that my Prime Minister is talking to his ministers. The Auditor-General found that, while there were many representations coming into the minister's office about the grant funding program, our interest was in the decision-making process for the allocation of funding, and the reason we didn't go into the representations was that—and I quote—'I didn't feel that it was material for the decision-making process.' The Auditor-General himself did not find that the correspondence or representations from the Prime Minister's office— (Time expired)
I am very sad to see that the National Party senators have already left the chamber, no doubt to take themselves home on as early a flight as they can get.
On a point of order, Deputy President, I understand that it's disorderly to reflect on the absence of a senator in this context.
It is indeed. I gave Senator Kitching some leeway because she didn't name senators, but she did name the party. So I'll just remind her it is disorderly to mention those who've left the chamber.
I think there would be some of those sitting opposite in a corner who might be very sad about the recent turn of events, and they're still trying to come to grips with what's happened.
How many ministers did they lose?
They lost a lot of ministers, Senator Farrell. They're feeling like the neglected country cousins. They're reduced to squabbling over the Deputy Speakership. We now know that, in the days following the Nationals' leadership spill, the Deputy Prime Minister, Michael McCormack—who we all know is a decent person and does a pretty good race call—lacks the authority to hold the farm together. He lobbied the Prime Minister to dole out $120,000, on top of the $400,000 already given, to keep the doors open for an aged-care facility in the electorate of one of his dwindling crew of allies, the member for Nicholls, Damian Drum. I can tell you that Nicholls is a very important agricultural area in Victoria. It has the Goulburn Valley in it. It has SPC fruits. I have visited there. What I loved about the various groups I met with in Shepparton was that they all informed Mr Drum, the member for Nicholls, that I was arriving, and he said that I was most welcome to come because he had no worries about holding his seat. Now he can see, perhaps, that of course he didn't have many worries, because he had all of this pork-barrelling lined up to dole out to his constituents. The pork barrel is so blatant that even some in the Nationals, who have proven over the years to not be averse to a bit of doling out of swine, have complained due process was not followed. Does this all answer the question of how much a vote inside the Nationals' party room is worth these days? It seems $500,000, give or take, is about the mark.
I ask those who might be here in the chamber at some point, or those in their offices, whether they would let themselves stop being trampled upon by their coalition partner, who might seem to only care about taking their votes on the floor. They don't seem to give much care and heed to their junior coalition partner otherwise. We needn't look further than the recent ambassadorial appointments. It's clear that the Liberal Party have successfully pushed out National Party former MPs, because, excluding Peter McGauran, the last National Party identity to be appointed an ambassador was the late Hon. Tim Fischer AC, who was appointed not by the Liberals but by Kevin Rudd's Labor government in 2008. We're better friends, perhaps, to the National Party than are the Liberal Party.
The $100 million sports rorts frenzy, which we now know was carefully coordinated from the Prime Minister's office, has already crystallised in the minds of the Australian public the rot that has become the modus operandi of this tired three-term government.
I encourage those opposite to stop propping up this 'Nigel no friends' Prime Minister. I especially encourage those with a sense of morality and history to search their consciousness before covering up for this Prime Minister's rorting and deception. History tells us that he won't be here for much longer. The Liberal Party might have changed its party room rules but everyone knows that once the member for Dickson, or the member for Pearce or the member for Kooyong has the numbers, they will use them. After all, it takes only 50 per cent plus one to change the party room rules.
Now, gather around while we have a little bit of a history lesson. We had Mr Morrison and his 'circle of six' supporters. Remember, they gathered around. Remember, he gave then Prime Minister Malcolm Turnbull the hug of death? This is my Prime Minister, I'm ambitious for him. Remember that? Anyway, baboons have been on the Notice Paper today. Mr Morrison and his 'circle of six' will be stampeded into the dust by the rampaging baboons of the Liberal Left and Right, because Mr Morrison doesn't actually have a support base in his own party. In order to succeed with his hug of death of former Prime Minister Malcom Turnbull, the Prime Minister had to form a devil's pact with the moderates in his own party, as the conservative flank had coalesced behind— (Time expired)
Thank goodness the time has expired. In regard Damian Drum, the member who managed to advocate for an aged care home in his own electorate that had gone into voluntary administration and gone into liquidation, and managed to get some urgent funding to keep that facility open, with all of its associated ancillary services, that is exactly what I, as a senator, would expect from a member of the Lower House—advocating for his constituents. An aged care facility closing down—it's in administration and there are a lot of vulnerable people in a very difficult situation, and the local member advocates for those vulnerable people and delivers funding to that establishment and keeps it open so that it can continue providing aged care services and health services to his constituents. That is exactly why we're here—to deliver those sorts of services in that crisis situation to our constituents. That's the reason we're here. That's not pork barrelling. That's discharging your obligations to your communities and your constituents. Moving onto the sports grants program—and I note Senator O'Farrell is here—
Senator Farrell?
If the senator is going to go down that track, he could at least describe me by my correct name, which is Senator Farrell. He is obviously confusing me with the new ambassador to India, who is in fact an O'Farrell. Could you please direct him to call me by my correct name.
Senator Farrell, you're well aware that that is not a debating point, but I'm sure that Senator Scarr has heard your contribution. Please continue Senator Scarr.
I certainly have heard Senator Farrell's contribution and I apologise profusely to Senator Farrell. One hundred and thirty-six emails in 122 days. Is this the smoking gun those opposite think they have found? Let's see what the Auditor-General said, because you can't have it both ways. You can't on the one hand rely on what the Auditor-General said in some places but then in other places disregard what he said. This is what the Auditor-General's office said with respect to the representations:
… we would not agree that there was a clear causal relationship between local members of parliament saying 'These are the priority projects in my electorate', those inputs to the process and the ones being approved.
That is what the Auditor-General's office actually said. That is the actual evidence. You can't pick and choose. If the evidence doesn't suit you, it's still evidence; it's still there; it's still probative.
In another case, this is what the Auditor-General's office said:
Yes … It wasn't the case that we could see that those which came, if I could say, directly from the Prime Minister's office—
And this is the 136 emails. The supposed smoking gun Senator Farrell sees, which isn't there, which is a mirage—
were necessarily any more successful than those which came from a local member direct to the minister's office rather than through the Prime Minister's office.
Nothing to see here. What there is to see, when you look—and during question time I actually did look at the successful grants in my home state of Queensland—grants were awarded across the breadth and width of my great home state of Queensland. Mount Isa, held by the honourable Bob Katter, in the independent seat of Kennedy, got a grant. Palm Island, one of the most socioeconomically disadvantaged areas in my home state of Queensland, was successful in getting a grant—and Ipswich, in the federal seat of Blair, and Logan, in the federal seat of Rankin, and projects in the federal seats of Moreton and in Oxley. I was in fact invited to the opening of one of these successful grant infrastructure projects in the federal seat of Oxley. I declined, because I knew I didn't want to take away from the efforts of the Labor member for Oxley, Milton Dick, who'd worked so hard to secure that project in the federal Labor seat of Oxley.
The fact of the matter is that before the then minister intervened and did what ministers should do in terms of making final decisions in accordance with the guidelines, only 26 per cent of the grants were going to Labor-held seats. After the minister had exercised her discretion and considered what was right, what was wrong and where the money would be best directed, 34 per cent went to Labor seats—an improvement of eight per cent. And I'm sure the constituents in each and every one of those seats are thankful.
What we've seen, now that this sports rorts committee has been meeting, is that every day, in a new way, the protection racket they've been trying to build around the Prime Minister and his office gets dismantled. We've had only a couple of hearings now, and we're getting so much new information about how this goes to the direct involvement of the Prime Minister and his office in this program. That's why they're getting outraged, obviously—because they know that this is creeping up on them and that they are going to be held accountable for it.
It started with the report from the audit office. Then we had the resignation of Senator McKenzie, after the ANAO report had come down. Senator McKenzie didn't resign because of the content of the ANAO report. She resigned because of a failure to declare a conflict of interest in the granting of a grant to a gun club. The PM said that all projects funded were eligible. But the ANAO evidence was that 43 per cent of them were not. The PM said that what his office did was provide representation. Well, we know from the evidence that there were 136 emails, 28 versions of the colour coded spreadsheet and a breach of caretaker conventions, and twice the Australian Sports Commission raised concerns with the minister's office about the way they were conducting this.
Why were they in such a rush to get this program done? This actually goes to the heart of the determination and the way they were using this sports grant. At the end of the day, it all had to do with their re-election. That is what their motivation was in terms of how they used this sports grants program. It was all designed to boost their chances of re-election. The damning evidence is that, in round one, 41 per cent of the projects were not endorsed by Sports Australia. In round two, 70 per cent of the projects were not endorsed by Sports Australia. And then in round three, in the shadows of the election campaign, 73 per cent of projects were not endorsed by Sports Australia.
So, we know that the political nature of this decision-making by the minister was that the closer it got to the election the more they favoured those decisions that were going to boost their electoral chances. That was actually the whole genesis of this, and it goes to the heart of the Prime Minister's involvement as well. There's no doubt that this sports grant program was part of their re-election strategy. That's why the Prime Minister's office was so keen to know what was going on. That's why Minister McKenzie was so keen to ensure that the projects that were approved were in those marginal and target seats. Why else would she add the column to the spreadsheet, other than to identify those marginal and target seats?
When they sent the spreadsheet back to Sports Australia they said, 'We'll just delete that column'. How clever was that? They said, 'We'll just delete that column before we send it back to Sports Australia.' But we know that the decisions that the minister was making was based on that target and marginal seat list, because they were determined to boost their election chances.
We know that they were running a re-election strategy. They gave up on running a government; all they were doing was running a re-election strategy. They were using this sports grants program at the heart of that strategy. That is what they were up to. They were using this program to fund targeted marginal seats. We know that Sports Australia did not recommend up to 73 per cent in the last round that went for ministerial approval.
They're treating the Australian people so arrogantly because they can't admit the truth. Disregarding the thorough independent assessment from Sports Australia to fund their own projects is beneficial to them politically. The reason they can't admit that is, of course, it goes to the very legitimacy of this government. The fact that they were using this program as they were, as part of their re-election strategy, goes to the very legitimacy of this government. That's why they need to treat the Australian people with contempt. The government treat with contempt those mums, dads and other volunteers who put so much effort into putting forward submissions to get project funding and were rejected by this government even if they did score a high recommendation from Sports Australia. They're completely disregarding the will of the Senate over multiple orders for the production of documents and other things that would assist us in getting to the bottom of this. The government are treating that with contempt by providing redacted copies and not enabling us to identify who those community groups and who those people were who put in so much effort to be rejected by this government. We will continue to put the blowtorch on them, because the Australian people deserve better. (Time expired)
Question agreed to.
I move:
That the Senate take note of the answer given by the Minister for Finance (Senator Cormann) to my question.
While I was sitting here I was thinking to myself how good it would be to get this energy in the chamber that I've just witnessed in the last 25 minutes and to get senators to focus on the question that I asked today about the slow and tragic death of the Great Barrier Reef. This is the greatest living organism on the planet. It can be seen from space. It's home to incredible biodiversity, and it's much loved by Australians and, indeed, by the international community. It's UNESCO world heritage listed, and it's an absolutely stunning part of this country.
Yesterday the National Oceanic and Atmospheric Administration, NOAA, the US premier ocean science agency on this planet, warned in their latest set of data that they predict a 90 per cent chance—nine out of 10—that the Barrier Reef is going to bleach again in three weeks' time. Indeed, the bleaching has already started. It was already reported two weeks ago.
For senators who aren't focused on this, I urge you to think about the consequences of a third mass coral bleaching on the Great Barrier Reef in the space of five years. I chaired a Senate inquiry back in 2015, and we were told by the scientists that the best climate models they had didn't predict the possibility of mass back-to-back bleachings until at least 2050 based on current emissions trajectories, and yet we saw in 2016-17 that 50 per cent of the corals on the Barrier Reef were bleached. Most of those have subsequently died.
We've seen extreme weather events cause severe damage to the southern part of the Great Barrier Reef. Unfortunately, given how warm the water is right now, it's extremely likely we're going to see the same thing again. Who wants to guess what the consequences will be of a third mass coral bleaching on the Barrier Reef? Don't underestimate it when I say that another mass coral mortality on the Barrier Reef will certainly be the end of the Barrier Reef as we know it. It's in our lifetime and on our watch. And yet, do you think you could get an answer out of the government today on whether they're concerned about this or on whether they agree with our American scientific counterparts that this is the prognosis? What happens if this mass mortality occurs on the Barrier Reef in the next few weeks?
Yes, 64,000 jobs will be at stake if the Great Barrier Reef dies, but it's a lot more than that. And it is not just the Barrier Reef, sadly. The seagrass off Shark Bay, which is critical habitat for dugongs and other marine life, have been severely impacted by warming oceans. I have been talking about this for the last five years. Indeed, the previous Labor government, with Mr Tony Burke in the other place, listed the giant Tasmanian kelp forest as a critically endangered habitat in 2012. They're gone—all the way from the north-east of Tasmania to the south of Tasmania. On our watch one of the great oceanic ecosystems has gone, and gone are the marine life and our commercial fisheries that depend on it. You wonder why our fisheries are in so much trouble.
Yet we can't even get an answer from the government. They won't even acknowledge it. It's just not good enough. We need to be doing everything we possibly can to take action on climate change. We will never get that until we get acknowledgement. We need to move out of denial into understanding the problem we have before us and the magnitude of changes we need to make. It starts in this place.
I will just finish with this. People think climate change is an environmental problem first and foremost. Well, it's not. It's an economic problem because all of the damage that we're seeing to places like the Barrier Reef is happening because we are polluting the planet. It is coming from business activity. It is an economic problem. Even more than being an economic problem, it is a political problem. We could fix it if we had the political courage. We could make businesses pay for their pollution. We could regulate and pull companies into line. We could transition to a clean energy future, to a zero emissions future, and we could do it quickly if we had the political courage. The reason we don't, the reason it's a political problem and the reason the machine is broken is that big special interests run this place and they will not let that happen. We have to make it happen. We need to get truth first in this place. (Time expired)
Question agreed to.
I present the report of the Senate Legal and Constitutional Affairs References Committee on the impacts of changes to service delivery models on the administration and running of government programs, together with the Hansard record of proceedings and documents presented to the committee. I move:
That the Senate take note of the report.
I seek leave to continue my remarks later.
Leave granted; debate adjourned.
I present the report of the Senate Foreign Affairs, Defence and Trade References Committee on Australia's declarations made under certain international laws, together with the Hansard record of proceedings and documents presented to the committee. I move:
That the Senate take note of the report.
I seek leave to continue my remarks later.
Leave granted.
This Senate Foreign Affairs, Defence and Trade References Committee inquiry was important. It looked at whether Australia should revoke some declarations it made in 2002 limiting Australia's acceptance of the compulsory jurisdiction of the International Court of Justice and the International Tribunal for the Law of the Sea. These declarations were part of one of Australia's most shameful international swindles. I'll talk briefly about this. The committee did a good report in the context that it is technically correct and reflects the evidence that it received; however, it is necessary to understand the context in which Australia made these declarations.
The story started back in 1962, when Australia worked out that there was oil underneath the Timor Sea. People need to understand that Timor is flanked by Indonesia, so Indonesia is either side of Timor. In 1972 Australia negotiated a boundary line with Indonesia that didn't go to the median line, which is the international norm under the UNLCOS treaty. Instead, it was based on the natural prolongation of the continental shelf. We were basically saying that our continental shelf extended some distance and therefore we should have entitlement to a greater area or a boundary that was much closer to Indonesia. Part of the trade-off there was that Australia agreed, in the UNLCOS arrangement, to let Indonesia have access, or declare archipelagic zones, such that they had sovereignty over the waters that were within the boundaries of their islands. So a deal was done. We got more than we otherwise would have, in exchange for support in another area.
What that meant was that we now had maritime boundaries that were closer to Indonesia than they were to Australia. But, between the two flanks, the Timor line between Australia and Portuguese Timor was left unresolved. The Portuguese had a very strong view that it needed to be the median line. If it were the median line, Australia was going to miss out on a bunch of oil. Unfortunately, with our mind on oil, what happened was Gough Whitlam went up and talked to Suharto. In circumstances where Portugal, in 1974, had decided to make all of its colonies independent, Gough Whitlam spoke to Suharto and encouraged the annexation of Timor by Indonesia, basically stating that it was the best option. I might add, just to not be partisan here, that after the Whitlam dismissal occurred and Malcolm Fraser became Prime Minister, Fraser restated Australia's position to Indonesia. It was in early December 1975 that Indonesia invaded East Timor. And we should all remember the Balibo Five.
The next step in the process—and this wasn't expected by Australia—was that the Timorese struck up a resistance. In the first three years of the resistance more than 200,000 Timorese were killed. It was an act of genocide, basically, occurring on our shores, but we still had our eye on that oil. We were the only western country that ended up recognising Indonesian sovereignty over Timor, and our aim there was to make sure that we could simply join the lines between the negotiated Indonesian boundary lines to make sure we could get the oil. That's what our aim was.
Australia did then negotiate a treaty, and there's a well known photograph of Gareth Evans with the Indonesian foreign minister, flying above the Timor Sea back in 1989. But all of that came undone when Timor voted in a popular consultation to become independent. So they became independent, which meant Australia had again lost the oil that for some reason we thought belonged to us. The next thing that happened was that deliberations taking place between Libya and Malta back in 1985 gave strong cause to the Timorese to believe that if they took Australia to The Hague they would win. So what did Australia do? We withdrew from the jurisdiction of The Hague. That was a shameful act. At the time, the Labor government stood up and said, 'This is wrong.' In a joint media release by the then shadow minister for foreign affairs, Kevin Rudd MP, and then shadow Attorney-General Robert McClelland, the Labor Party's position was put very strongly. They said:
The announcement marks a historic departure from Australia's proud record of accepting the compulsory jurisdiction of the International Court of Justice without reservation. That position has enjoyed bipartisan support since 1975. It said to the world that Australia honours its international obligations and has nothing to hide. Excluding disputes relating to the delimitation of maritime boundaries from our acceptance of the ICJ's jurisdiction sends a very different message.
So the Labor Party stood up very proudly then and did the right thing.
But, of course, that wasn't the end of the whole sordid tale. After we withdrew from that jurisdiction, the Timorese had no choice but to negotiate directly with us. As they were negotiating with us, what did we do? We sent ASIS up there to spy on the negotiating team. People say 'alleged', but I think we need to get over the 'alleged' bit. This is what Timor lodged in The Hague in their memorial—these are their words:
The circumstances … are that during the negotiation of the 2006 Treaty between Timor-Leste and Australia in 2004, Australia covertly spied on the Timor-Leste negotiating team by means of listening devices surreptitiously and unlawfully placed by Australian personnel in the Timor-Leste government offices. This enabled the Australian negotiating team to become aware of the private discussions of the Timor-Leste negotiating team and of its position in relation to various issues arising in connection with the 2002 Treaty and the attempt to amend it by the drafting of the 2006 Treaty.
That's Timor's view.
Of course, we also know that, down the road here, we've got Witness K and Bernard Colleary currently being charged in the ACT courts for revealing an operation. In a conversation I had with the Secretary of the Attorney-General's Department—who, by the way, was a negotiator back in 2004—I said, 'Are you aware of the allegations in respect of Australia spying on the negotiating team of the East Timorese?' He said, 'I'm aware of that. There's a criminal case in the ACT. I'm well aware of that.' I said to him, 'Sure; and I presume most criminal cases are not launched on the basis of a fictitious operation,' and he said, 'I would hope not'. There is no question that we spied on East Timor, and we should simply acknowledge that. The committee should not allow its credibility be undermined by expressing doubt about what we know to be true, and that is that Australia spied on East Timor.
The committee recommended that we simply don't revoke the declarations that we made—but we should. And here are the two important reasons that we should: it would serve as an important reconciliation step with the people of Timor-Leste and it would enhance our standing in the international community as a returning participant in the international rules based order. Labor, who chaired this committee, have now retreated from the principled position that they held when the declarations were made—and that's hugely disappointing. I provided a dissenting recommendation that Australia should revoke the declarations made on 22 March 2002. Sadly, the Labor Party have now joined Australia's Timor-Leste boat of shame. I seek leave to continue any remarks.
Leave granted; debate adjourned.
On behalf of the Legal and Constitutional Affairs Legislation Committee, I present the report on the committee on the provisions of the Migration Amendment (Regulation of Migration Agents) Bill 2019 and a related bill, together with the Hansard record of proceedings and documents presented to the committee.
On behalf of the Standing Committee of Senators' Interests, I present the 2019 annual report.
I present additional information received by committees relating to estimates.
I present the interim report of the Parliamentary Joint Committee on Corporations and Financial Services on the regulation of auditing in Australia, together with the Hansard record of proceedings and documents presented to the committee. I move:
That the Senate take note of the report.
I rise to speak on the tabling of the regulation of auditing interim report as the Chair of the Parliamentary Joint Committee on Corporations and Financial Services. This is an interim report because, although the Senate has voted to extend the committee's reporting deadline until September, committee members agreed that the policy recommendations we wish to make were already clear from the evidence we had collected in our hearings so far. We did not want to delay the action required by regulators, government and the industry by withholding our recommendations for six months.
The committee's work has been comprehensive. We received more than 110 submissions, heard from 32 witnesses at four public hearings and obtained more than 100 answers to questions taken on notice. The committee received evidence from a wide variety of witnesses, including regulators, accounting standards bodies, the big four and mid-tier accounting firms, and academics. Hearing from a diversity of voices has assisted the committee in understanding how the auditing industry is performing from a holistic perspective.
Today we make 10 recommendations to restore trust and confidence in audit services. Auditing is systemically important to a healthy financial system. It gives investors confidence that they can rely on financial statements made by companies. An audit, therefore, needs not just to be high quality but to be seen to be high quality. At the outset of the inquiry, I asked witnesses to address the following questions. Firstly, what is the evidence that the practice of auditing in this country is flawed? Secondly, are those flaws isolated or are they systemic? Thirdly, if those problems are systemic, what is driving them? Fourthly, what policy solutions are available to government to address them, and what are the costs and benefits of the solutions? If they have been implemented elsewhere in the world, how did they work? If they are entirely new, what justifies this novel approach?
I also noted that it might be the case that the evidence base of a current problem of auditing in Australia is limited but there is very good reason to believe that it will be a bigger problem in the future and, if that were the case, I'd be interested to hear from witnesses why they believe it's so.
The committee did not identify any new empirical evidence of systemic audit failure in Australia. The most commonly relied upon evidence to claim that we have a systemic audit failure in Australia was the ASIC inspection reports. These have certainly attracted significant media attention and commentary in recent years, and they are reason for some concern. But, as ASIC was at pains to point out on multiple occasions in the inquiry, the data should not be relied upon to make judgements about the entire industry because they are not designed to be either a representative or a random sample. Instead, ASIC deliberately targets audit files based on risk. This is entirely appropriate for a regulator. As ASIC says, this means we must be very careful in extrapolating on this data.
As other witnesses raised and as ASIC acknowledged, the figures incorporate all issues with audit, from the least serious to the most significant. One of the recommendations of this inquiry is to ASIC on how they report this data, and they will be asked to implement a revised framework for grading the findings based on the severity of the issues identified. In the absence of new empirical evidence of systemic audit failure, the committee was presented with some anecdotal evidence of audit failure and fears were raised by a number of witnesses about the risks of audit failure of a systemic nature in the future. This indicates a lack of trust in the audit industry. Due to the systemic importance of auditing to a market economy, a lack of trust in and of itself is a problem which must be remedied.
The committee's interim recommendations seek to address this trust deficit by providing greater transparency, clarity and confidence in the auditing industry in Australia. They include mandating the disclosure of ASIC's individual firm inspection reports, clear definitions of audit and not-audit services, expanded auditor independence declarations, restrictions on audit partner remuneration and promotion, audit firm public tendering, compulsory digital reporting and other related matters. The committee has carefully weighed international experience to make recommendations which seek to balance the competing factors of auditor competence and independence to deliver an audit market that is efficient, effective and trusted. For example, based on experience overseas, technological innovation through digital reporting has the potential to lower costs, increase accuracy and improve transparency of financial reporting. I'm personally most excited by this recommendation because the benefits it promises will not just be limited to the audit industry, but will be for all users of financial statements.
During the hearings and across the submissions, no compelling evidence was found to support the more radical proposals, which have been either abandoned or discounted internationally, such as the mandatory structural separation of audit firms. On the contrary, the committee heard significant evidence that measures like these would have profoundly negative implications for competition and audit quality. The committee will hold two more hearings and hand down its final report in September.
I rise today to speak on the tabling of a very important report. I'm pleased that it has actually come to pass. It has great implications for our economy and for the operation of business in Australia. The report is the one to which Senator Paterson has just been speaking, on the regulation of auditing in Australia, regarding the quality and conduct of auditors, but particularly the big four—EY, KPMG, PwC and Deloitte.
I want to respond to a couple of comments made by the chair, Senator Paterson, and indicate that this interim report does contain several substantive policy recommendations. The committee expressed that we do expect the government and the various regulatory agencies to respond in a timely way to recommendations in this report. But I would hate anyone watching this or reading it to get the impression that this is the job done. There is still, in my view, considerable work to be done. In fact I think the report to date and the significant recommendations that it makes gives voice to how some of those opposite, who claim to be advocates for the economy and all things financial, are completely out of touch with what is going on. In fact, Mr Falinski said, 'I don't think there's anything wrong with the auditing industry in Australia at the moment. I think the real question is around whether the accounting industry is best structured to take into account all the issues that modern finance presents'. He also criticised the terms of reference of the inquiry as being too broad.
We found an awful lot, and it matters. As the Walkley Award winning journalist Adele Ferguson says: 'Auditing is fundamental to stock markets, investors and the economy. The auditing industry escaped the royal commission, which in hindsight is a glaring omission. The Hayne royal commission shocked the nation with tales of elaborate larceny and deception by the institutions that we entrusted with our savings. Yet the auditors, the very people that markets and investors look towards to provide a credible investment of the banks, were missing in action.
Former ASIC chairman Greg Medcraft has repeatedly warned of possible Enron-style collapses without reforms to the way audits are conducted as well as to the way companies appoint auditors and the way these are set. ASIC has been calling for action on audit quality for no less than seven years. The government did nothing. But this report changes that to a policy of action. ASIC has found increasingly adverse findings nearly every year since 2013, despite the key audit areas reviewed dropping by nearly two-thirds.
I instigated this inquiry due to my concerns that the standards of audit in Australia were dropping. I was very concerned about audits were becoming loss leaders for lucrative consulting contracts that provide most of the wealth of the big four. I was also concerned that the behaviour of management structures of the auditors was leading to high staff turnover and poor workplace cultures. It is an area that we have still to traverse. Since this inquiry started, whistleblowers have been coming to me with evidence of cultural practices in the big four that are completely inappropriate—cultures that compromise the quality of audit in Australia's sophisticated financial system. I've informed the Senate of reliable reports that EY may have been auditing its own work at ANZ due to a lack of branding of separate EY teams' cybersecurity work. I remain concerned that this instance is all too common across the entire sector.
The committee learned that KPMG failed to flag problems in two companies that collapsed in the last six years—WDF and Forge Group—and has settled six legal actions relating to its audit quality of collapsed companies in 10 years. None of the auditors involved in these cases were dismissed, and only a few suffered any kind of penalty. Deloitte too failed to discover problems in three out of eight collapsed companies it audited in the last decade, including the electronics company Dick Smith, while at the same time it was doing lucrative, non-audit work for six of the eight collapsed companies over the same period. Significantly, the committee heard evidence that the chair of the Financial Reporting Council, Mr Bill Edge, failed to disclose an ongoing profit share arrangement with PwC to the FRC. Still to this day, Mr Edge refuses to acknowledge that it is a conflict of interest in his role as the government's chief adviser on financial services, of which auditing is a critical element. This is another undeclared and ongoing conflict of interest: a government appointee overseeing the regulation of his former company but still receiving a stipend from them. I have today written to the Treasurer, Josh Frydenberg, and asked that he direct Chairman Edge to disclose to the Senate the full amount of his annual retirement package, so that a clear picture of potential influences upon his regulatory decisions can be better discerned.
The probity of the FRC, the Financial Reporting Council, must be beyond reproach. It's critical to the success of one of our most significant recommendations—a far-reaching recommendation. I am, I have to say, very pleased with the work of the committee in delivering this recommendation that the Financial Reporting Council—but in partnership with ASIC—finally develop standards to clarify categories and fee-disclosure requirements in relation to both audit and non-audit service and also to undertake a model of the Sarbanes-Oxley prohibitions which clarifies for the sector what work they can and can't do. There were many calls for that. I go to the evidence of the national managing partner of audit and assurance from Grant Thornton, who articulated that regulatory requirements regarding what an auditor or firm can or cannot do with respect to non-audit services need to be clearly defined, such that there is no ambiguity in marketplace understanding. I had this exchange with Mr Rigele:
Mr Rigele: … I think the audit profession needs to act to that and perhaps look at something where it's clearly defined what we can and cannot do—
Senator O'NEILL: Which is the US system, as revealed to this committee clearly in the evidence from ASIC.
Mr Rigele: Yes, that's right. I think we need no ambiguity around it. We need to get to a stage where everyone understands the platform. One person's perception is reality and I think we just need to react to that.
Senator O'NEILL: Clean it up and make it clear?
Mr Rigele: Make it clear.
This third recommendation of the committee enables that to happen, particularly if it is implemented promptly under the guidance of the Financial Reporting Council in concert with ASIC.
Recommendation 5 recommends:
… the Australian Professional and Ethical Standards Board consider revising the APES 110 Code of Ethics to include a safeguard that no audit partner can be incentivised, through remuneration advancement or any other means or practice, for selling non-audit services to an audited entity.
This, again, will not only stop the perception of conflicts of interest that this inquiry has uncovered between consultancies and other services and audits of companies—I believe it will stop the practices. I'm pleased that KPMG came and gave us evidence to that end saying:
We support revising the Code of Ethics standard, APES 110, to include the concept that no audit partner can be remunerated for selling non-audit services to any audit clients of a firm, as a mandatory safeguard that all firms need to apply to mitigate risks of potential conflicts of interest.
So the sector has become, in recent times, a little more alive to the reality of conflicts of interest embedded in their current prevailing business models and practices.
I want to thank the committee—all the members for their hard work in getting this interim report together—and I thank all the staff who support us for their diligence and patience in this important inquiry. I also want to thank the chair, Senator James Paterson, for his steady leadership of the committee during the inquiry and for always having an open door to give consideration to the important matters that have been raised in the course of the inquiry so far, and I want to acknowledge the leadership of the deputy chair, Mr Georganas, in the other place as well.
I also want to thank the crossbench senators, who, while they haven't participated in the inquiry themselves, have backed this inquiry since the very beginning. They gave their support at its inception. The government didn't put it to a vote, but their support was very important to me at the time. Just in the last week I had to call on them to vote, to push the government to ensure that this inquiry continues. I notice Senator Pratt here as well, and I thank her by name, as one of the committee members, for her work. I strongly believe that this inquiry is in the best interests of the Australian people, and they are only serving their constituents by doing so. We need to get on with looking in further detail at the way in which this industry operates.
Labor absolutely supports markets and the investment of capital in Australian businesses. Now more than ever—following the findings of the Hayne royal commission into banking—large businesses and small investors need confidence in the truth, fairness and quality of audits to inform sound business decision-making and investing. For any Australian who has superannuation: this stuff matters to you. The reforms proposed in the interim report will do something to restore confidence, but there is much more to do. It is a wake-up call to the industry. I seek leave to continue my remarks later.
Leave granted; debate adjourned.
I take note of item 9 of page 13 of the Notice Paper, relating to climate change reports. Over the past decade there has been much said and written about man's contribution to the warming of our planet, much of it characterised by emotive and alarmist language by those pushing their respective agendas. When asked whether you believe in climate change the answer is yes, because there has always been climate change on planet earth. Over billions of years, our planet has warmed and cooled, and sea levels have risen and fallen at different times. From the Roman warming to the cooling of the Dark Ages, from the medieval warming to the little ice age and the warming of the late 20th century until now, our climate has changed. But when asked, 'What causes this change?' I would urge Australians not to follow the herd mentality by blaming CO2 and more especially man-made CO2 as the culprit.
CO2 is not a pollutant. It is a clean, odourless and colourless gas. It is vital for the health of our planet and indeed our very existence. CO2 is food for plants and plankton, and without it they cannot survive. It is very troubling that this is no longer being taught in our schools. Young Australians are not receiving the facts about the crucial role that CO2 plays in the life cycle. Indeed, they are strongly labelling CO2 as a pollutant, instead of informing young Australians of its vital role in the process of photosynthesis. Plants and trees absorb CO2 and release oxygen. Also, phytoplankton in our oceans absorb CO2 and produce up to half of earth's oxygen supply. We need oxygen to breathe and exist on earth.
Also important to informed judgement in this area is to have academic freedom, with peer review remaining integral to this freedom. The politicisation of climate science has not only stifled debate; credible scientists have been ridiculed and marginalised for daring to pursue scientific methods and conduct. One only has to look at what happened to Dr Peter Ridd, who was dismissed from James Cook University after he criticised his colleagues regarding their Great Barrier Reef research. This is only one case of how universities are trying to stymie or stop academic debate on climate change that doesn't accord with the herd mentality against CO2.
Of course, how could we forget the leaked emails from the University of East Anglia Climatic Research Unit, which became known as 'climategate'. This showed the lengths that some in the industry were prepared to go to link CO2 to climate change global warming. We saw an orchestrated campaign of vilification against alleged 'sceptic' scientists and deliberate attempts to exclude the publishing of their work, including targeting editors who did publish their work; and the manipulation of data to 'prove' a warming effect coincided with industrialisation, while dismissing or preventing raw data from being peer reviewed.
On 29 September last year a global network of more than 500 experienced scientists and professionals in climate and related fields wrote to the Secretary-General of the United Nations. This group, led by CLINTEL cofounder Professor Berkhout, warned the Secretary-General:
The general-circulation models of climate on which international policy is at present founded are unfit for their purpose.
Therefore, it is cruel as well as imprudent to advocate the squandering of trillions of dollars on the basis of results from such immature models. Current climate policies pointlessly and grievously undermine the economic system, putting lives at risk in countries denied access to affordable, reliable electrical energy.
The letter urges the UN to:
… follow a climate policy based on sound science, realistic economics and genuine concern for those harmed by costly but unnecessary attempts at mitigation.
CLINTEL, the Climate Intelligence foundation, was founded by Professor Berkhout and science journalist Marcel Crok. Its world climate declaration 'There is no climate emergency' document now has over 800 signatories, including 109 scientists and professionals from Australia. It asks the important question:
To believe the outcome of a climate model is to believe what the model makers have put in. This is precisely the problem of today’s climate discussion to which climate models are central. Climate science has degenerated into a discussion based on beliefs, not on sound self-critical science. Should not we free ourselves from the naïve belief in immature climate models?
CLINTEL, rightly, not only calls for a wider range of voices to be heard in the climate debate but also plays the role of watchdog. I seek leave to continue my remarks.
Leave granted.
I rise to speak on the consideration of the first quarterly report of the Australian Building and Construction Commission for 2019-20. The ABCC is supposed—and I stress 'supposed'—to have a dualistic mandate to regulate unions and employers in the construction industry. But this is an organisation that practises this mandate with a wired-in double standard—one standard for the unions, fighting for the recovery of tens of millions of dollars of wages and superannuation that's stolen every year in the construction industry, and another standard for the shonky employers ripping the workers off. How do we know that? Well, let's recap. We know the following from answers provided in Senate estimates in October last year. We know that the ABCC has spent three times as much taxpayers' money prosecuting unions and working people as they actually recovered in stolen wages or superannuation. Since the end of 2016 the ABCC has made no referrals—I repeat: no referrals—for sham contracting to the Fair Work Ombudsman. That is none—zero. They have never investigated what role employer associations and their members play in instances of wage and superannuation theft. They have threatened federal contractors with a loss of contracts if their worksites fly the historic Eureka flag, or if workers display union stickers on their hard hats. Well may you ask, where are the free-speech warriors of the coalition on this abuse of the right to freedom of expression in Australia?
In addition, less than 15 per cent of the ABCC's internal legal costs are spent on investigating or prosecuting theft of wages and entitlements or instances of sham contracting. Since 2016 they've launched six times as many prosecutions against the CFMMEU as they have against employers. They've successfully prosecuted only 14 employers but have found the time to prosecute over 200 individual workers. You would think that with these figures in the public domain, that in the interests of appearing less bias, the ABCC would be refocusing on targeting wage theft. That they would want to honour their legislative mandate to police the employers in the industry doing the wrong thing. Instead, last month the ABCC Commissioner, Stephen McBurney, announced it would be increasing the number of workplace inspectors, specifically targeted at unions. More boots on the ground to inspect hard hats for stickers. More boots on the ground to check flag poles for the Eureka flag. But no more boots on the ground to investigate instances of sham contracting, illegal phoenixing, safety issues or the millions upon millions in wages and entitlements stolen every year by shonky employers.
We now have the Attorney-General and Minister for Industrial Relations, Christian Porter, promising action on wage theft. Any such action will be meaningless in the construction industry whilst a regulator is more preoccupied with flags, stickers and prosecuting unions than going after the companies undercutting the industry through wage theft and bad conditions. Good companies are competing with dodgy companies.
National construction secretary Dave Noonan has described the state of the construction industry:
(Employers) repeatedly flout the law, exploit their workers and attack union officials when they try to stand up for our members… Dedicated laws and harsher penalties for wage theft will be worthless without a regulator that is up to the job of policing employers in the building industry.
The ABCC wants to crow about recovering $1 million in wages entitlements in an industry which has $320 million stolen in unpaid wages and superannuation every year. It's a disgrace.
In contrast, the CFMMEU have recovered close to $60 million in wages for its members over the past six years. It should be no surprise to senators that when it comes to fighting wage theft the CFMMEU is at least 60 times more effective than the ABCC. I seek leave to continue my remarks.
Leave granted.
I move:
That the Senate take note of the document.
In his report Dr Rennick outlines the key aspects of our national security and counter-terrorism landscape. In identifying the various threats, he also refers to radical violent right-wing activity. In light of recent comments by the Director-General of ASIO regarding extremism, it is timely to again remind those opposite, who once again seek to take the opportunity to attack right-wing views, that the Left has a guilty history.
In an opinion piece which I published in The Australian on 27 March last year, I explored this history and it is timely to once again remind the Left in this country of it:
Those who use the label "right wing” or "hard Right" to describe and criticise conservatives fail to acknowledge history and therefore fail to take some ownership of the dark side of communism and socialism.
I ask the question: how did we get to this point in a society steeped in activism and characterised by violence operating in a toxic social media space? History provides some of the answers but not all. Those who continue to criticise conservatives under the guise of right wing need to be reminded that fascism had its antecedents in socialism. Hitler joined the German Workers Party in 1919 and then he rebadged the organisation to be the National Socialist German Workers Party. Its constitution read like a communist manifesto but included anti-Semitism and broader forms of racism.
When Hitler took control of Germany, he joined forces with another emerging giant, Joseph Stalin's Soviet Union. Hitler signed a non-aggression pact with Stalin but history records that he reneged on the deal by attacking Russia in 1941.
Mussolini had a similar path. His antecedents were also in socialism, and he fervently supported the teachings and writings of Karl Marx and the communist cause. And some might recall the disgraceful attacks and use of Nazi labels by the Electrical Trades Union against then Prime Minister Abbott and my friend and colleague Senator Abetz, reported under the headline 'Union flyer furore' in an article in the Herald Sun on 9 May 2014. This attack was like that conducted on Prime Minister John Howard when he sought to clean up the waterfront in Australia, reminiscent of Curtin's actions against Australian communists on our waterfronts who preferred to support Stalin over our troops fighting in World War II.
And as we look back at the abhorrence of the Christchurch massacre, we should remind ourselves of how the narrative emerged. It was reported that the main and only suspect had a familiar rise to infamy outlined in his manifesto. He was immediately branded 'right wing', notwithstanding the fact his manifesto clearly stated that he was a communist, then an anarchist, then a libertarian and then an ecofascist, before his European travels convinced him that violent revolutionary solutions were the only answer to achieving his objectives. And I ask: doesn't this all sound familiar? Margaret Thatcher succinctly summed up socialism and fascism when she noted that 'socialism and fascism are two sides of the same coin'.
Today, half of us were either born overseas or have at least one parent born overseas. In a culturally and religiously diverse Australia, many conservatives come from these different backgrounds. They share values and beliefs that include supporting the family as fundamental to the wellbeing of society; freedom of speech, religion and association; and a strong sense of pride and national spirit in our Australian way of life. So my advice to those opposite, the Labor Party, the Greens, GetUp!, misinformed activists and those who join the chorus is: 'Do not be divisive. Choose your words carefully before you unfairly label decent, hardworking, law-abiding conservative Australians.' Further, take some ownership of the problems facing the world today, because it has been your left-wing ideology that has been the embryo and source which has fostered most of the problems playing out in today's societies around the world.
And as Minister for Home Affairs, Peter Dutton, has rightly said in recent days:
I don't really care where people are on the spectrum. I don't care what country it is we're talking about, whether it's China or Russia or Iran—if people pose a threat to our country, they will be dealt with according to the level of that threat.
I seek leave to continue my remarks.
Leave granted; debate adjourned.
To say that I am disappointed with the government response is an understatement. But do you know what? I care about this, but what really matters is what our first responders think—those who are there for us in our time of need. I will tell you what they think, because I've actually spoken to them. They are appalled, they are angry, they are disappointed and they feel rejected that this government took over 12 months to respond to this report that meant so much to them—a response that they say has been cobbled together without any thought or any care about all the issues that were raised during this long inquiry.
I'm going to quote a first responder's take on the government's response. They said to me:
There is a lot of bunching 1st responders with the general public services … the Beyond Blue research states—
and we know this—
that first responders have a much higher rate of mental illness than the general public and their needs are very different … As a paramedic I feel that this government does not care that we attend sentinel events, such as the murder of Hannah and her children in Queensland … those first responders who attended that will have that haunt them forever and with only the right support will they be able to move on … I wouldn't be surprised if there is significant mental distress and injury from that case whether it is now or in the future when triggered by another event … The response reeks of last minute panic. Effectively the Government were lucky they were shamed into doing something about the bushfires, otherwise nothing would have happened.
That's just some of the quotes. I have many, many more.
This government has given no thought, no care and no concern for the anguish in the lives of these men and women who are there in our hours of need. We cannot imagine for one moment the things that our first responders see and do in their jobs every single day—the recent bushfires, the road crashes, the domestic violence calls that they arrive at every day—and yet this government has not listened at all to their cries for help, which were laid out in the committee report. The responses provided are pathetic. The comments of 'support in principle and noted' and their deferring the responsibility to the states are a complete cop-out. These measures were there before the inquiry and they were not working, hence the need for the inquiry.
In this short time this afternoon, I cannot respond to each of the recommendations and the responses that the government gave us; however, I will do that at a later time. In the meantime, can I say to all those first responders out there: I am sorry that you have been ignored by the Morrison government, and I'm sorry that your cries for help have not been taken seriously by this government but Labor will not abandon you, and this is not the last of this. We on this side of the chamber know that you need help and that you have reached out, and we will continue to fight for you. I seek leave to continue my remarks later.
Leave granted.
I just want to roundly support the comments of Senator Urquhart. I think she needs to be given great recognition for her personal push to have this inquiry. I was privileged and devastated at the same time to be part of the inquiry and to hear the evidence that we received. There is a gaping hole in the support that is required by these remarkable Australians who are there to help our families.
I see members opposite perhaps not believing this, throwing their hands up in disbelief that there is some role for the federal government in this. This is Australia. Get on board. This is a country where all Australians matter. There shouldn't be a differentiation in service because you live in the north or the south. When people bleed out across this country and first responders get there, they don't care which government gives them support but they absolutely need it. That is a matter of public record. The efforts which Senator Urquhart has so eloquently given voice to, on behalf of Labor, are a really vital record of what this amazing group of people are doing around this country.
Once again, I wholeheartedly endorse everything said this afternoon by Senator Urquhart, and I think it is a great shame on this government. It's yet another example of this government absenting itself from a response to the real and pressing practical needs of Australians in a time of need. I seek leave to continue my remarks later.
Leave granted; debate adjourned.
I table correspondence on the schedule of special purpose flights and related correspondence.
I move:
That the Senate take note of the documents.
It's disappointing that the tabling of this schedule required the opposition, in order to get this information, to follow up with the minister first by letter, then by order of the Senate and then by asking the minister questions in Senate question time. It should be very clear what the minister's obligations are in this regard. Senator Reynolds is responsible for tabling the schedule of special purpose flights in June for the six months ending the previous 31 December, and in December for the six months ending the previous 30 June. So this represents a failure to meet the guidelines, which is becoming manifestly routine under this government in terms of the government's obligations to this chamber. It has routinely been tabled late—in one case over eight months late. The previously tabled schedule, for the six months ending 31 December 2018, was not tabled until 28 August 2019.
It is this track record that saw the Senate, on 11 February, order that the schedule of special purpose flights for the period from 1 January to 30 June 2019—so the Senate took action some six months later—be tabled by the Minister for Defence by no later than 9.30 am on 13 February. There was no response to that order, and again the minister had to be followed up in question time. The order had, in fact, fallen off the Notice Paper and had to be reprompted by Senator Wong asking the minister a question in this place. The minister completely disregarded that order, responding with a letter that she has not yet received the final verified report from Defence. I understand that the minister wants that information from Defence, but you need to require Defence to give you that information. It's your job to do so. It's simply not good enough that the guidelines that are required by this place are ignored. Evidence given by the Department of Defence was that the minister sat on the last schedule for some 71 days. It's all very well for the minister to sheet home blame to the department when actually we know that last time the information sat within the minister's purview for some 71 days.
So we call on the minister to meet her obligations under the guidelines and to the Senate. The matters raised in this issue will be explored further in estimates next week, and we would like to be able to determine the cause of the delay in tabling the schedule. If the minister is able to take note of that now, that would help proceedings next week. It escapes no-one that the tabling of this document today minimises time for it to be examined in advance of next week's hearings, but I assure the minister and this chamber that we'll be taking a very close look and following it up.
Debate adjourned.
I table a document relating to the order for the production of documents concerning the South Coast Track Huts Walk
I move:
That the Senate take note of the document.
As I and many people in Tasmania feared, the government is making a public interest immunity claim here to prevent the Senate from having documents that the Senate has actually ordered the government to provide. I want to provide some context here of what's going on in Tasmania. The state government in Tasmania is secretly selling and leasing public areas, many of which are in our national parks and the Tasmanian Wilderness World Heritage Area. They are public places that the Tasmanian government is the temporary steward of on behalf of the Tasmanian people, in regard to national parks, and on behalf of the people of the world, in regard to those places inside the Tasmanian Wilderness World Heritage Area. They are publicly owned and they are being secretly leased to tourism developers for private profit. All the Senate sought from the government was the funding agreement between the infrastructure department and one of the proponents of these secret proposals—in this case to put huts on the South Coast Track in Tasmania.
I've been a wilderness guide. I was a wilderness guide for many years in Tasmania. The south coast is one of the most special places on our island, which makes it one of the most special places in the world. It is beautiful wilderness. It is pristine wilderness. It should not be leased to private developers in a secret and shonky process that completely lacks transparency, in a process that is dodgy and opaque. That is what the Tasmanian government is doing, and the Commonwealth government are now complicit in this lack of transparency and are complicit in this opacity because they are now refusing to reveal details of the funding agreement. They have already thrown some money at a tourism developer to develop these wilderness areas. It's not good enough. This secrecy is not good enough. This lack of transparency is not good enough.
These places are home to precious, beautiful, unique creatures, many of which exist nowhere else in the world. These places have been protected so we look after nature. They've been protected so we look after the Aboriginal cultural heritage values of those areas—and, believe me, the South Coast Track is rich in Aboriginal cultural heritage. Yet this federal government is now joining the Tasmanian government in secretly doing deals with developers. And we now can't even get a look at those deals, because of some spurious claim around commercial-in-confidence.
We know that money has changed hands here between the Commonwealth government and the proponent of huts on the South Coast Track. We know that money has changed hands, but we don't know how much money has changed hands. We don't know the terms of that funding agreement. That's what we asked for. That's what the Senate asked for this week. That is the request that the government has rejected.
These are precious places. They are unique places in the world. We should all be committed to looking after these places, not just for ourselves, the beautiful animals that make them their home, the beautiful plants these places are home to and the rich Aboriginal cultural heritage of these areas but for future generations, because that's what we have signed up to do. This is inside the Tasmanian Wilderness World Heritage Area. It's inside Tasmania's national park system. The state and Commonwealth governments have signed up to a dodgy, secretive process—there are corrupt deals and corrupt management plans. They have secretly handed over unknown amounts of cash to tourism developers and have then refused to reveal the terms of that exchange of funding.
If we had a Commonwealth ICAC, I would be referring it to that ICAC today, because this is an absolute disgrace. But, of course, we don't have a Commonwealth ICAC, because the Liberals will not deliver an ICAC. Nearly two years after they first promised it, what have we got from the government in regard to the establishment of a Commonwealth ICAC, an anti-corruption authority? Absolute crickets—that's what we've got from the government.
Tasmania deserves better. Australia deserves better. Our World Heritage listed wilderness in Tasmania deserves better. It is not a plaything of the state or Commonwealth governments. We have agreed with the United Nations that we will look after it for future generations. We have agreed to look after nature, to look after those beautiful creatures and to look after the Aboriginal cultural heritage of that area. As someone who has walked the South Coast Track on numerous occasions, I am devastated that we are looking at tourism developments—commercial huts—on that track. I can hear the mutterings from the government benches here. Get down there and have a look for yourself before you comment on this matter. I've been down there many times. I know how beautiful it is. I know how precious it is. I know how valuable it is of itself. It nurtures all of our spirits to look after these places. To have them traded off to commercial tourism operators in deals that are secret, to have funds handed over to commercial operators with absolutely no transparency and ultimately, as we've found out today, in a secret arrangement between the Commonwealth infrastructure department and the proponent of huts and tourism developments in a pristine wilderness area is a disgrace, and the government has not heard the last of this.
At the request of senator Gallagher, I move general business notice of motion No. 512:
That the Senate notes that—
(a) after six years in office, the economy is floundering on the Government’s watch;
(b) Australians are struggling with stagnant wages, with wage growth stalling further;
(c) net debt has more than doubled under this Government;
(d) the Government does not have a plan to boost wages or growth in the economy; and
(e) it is because of the Government’s failures that Australia meets the challenges and uncertainties of the bushfires and coronavirus from a position of weakness, not strength.
There are so many people on the Labor side who would absolutely love to discuss this matter. So, even though there is considerable time, please take my short contribution only as a generosity to my colleagues, who have great things to say. There is so much wrong with this government. The gap between what the government say themselves about how good they are at managing the economy and what they're actually doing is like in a relationship where somebody promises that they're going to be a particular way and, bit by bit, you find out that they are not what they said they would be. That's exactly the case with this government.
The content of the notice of motion that we're discussing today is to note these critical things: that after six years—and it is now seven years—in office, the economy is actually floundering on this government's watch. In absolute contrast to what it is that they put out there and claim day after day, week after week, year after year, like drips on a stone. People have had this oil poured into their ears and they've been inclined to believe it for a little while, but the truth is coming out. It's coming out that this economy is in great trouble because they are not the economic managers that they claim to be.
We know that Australians are struggling with stagnant wages, with wage growth stalling further. That is the reality that's happening under this government. We know that net debt has more than doubled under this government and that the government doesn't have a plan to boost wages or grow the economy. It is because of this government's succession of failures that Australia meets the challenges and uncertainties of the bushfire summer that has just passed and the coronavirus from a position of economic weakness, not strength. That is what we are here to talk about this afternoon.
In the language around debt that this government has inflicted on the nation over the years, they claim they are great economic managers. I decided that I would do what Australians do for their sources of information, because I can tell you that you cannot trust the Prime Minister. He is very loose with the truth. You cannot trust Mr Frydenberg, for example, who declared outright last year in his budget speech that we were 'back in black'. Not that we were going to be, but that Australia 'back in black' and 'back on track'. He was so confident in that, and so were the Liberal Party, in their masquerade, in their deception to the Australian people, that they decided they'd cash in by actually creating a product to improve their chances of fundraising for the election. They actually came up with this little official 'back in black' mug. It was a limited edition. They said:
The 2019 Budget delivers the first surplus in more than a decade. Mark this event with the official Back in Black mug.
The problem is that it's just not true. What they really should have put out was 'still in the red', because that was the reality at the time that this government was declaring to Australians, in April last year, that the accounts were back in black.
This government has seen debt spiral. If we go back to 2011, this government was sitting with $191 billion of gross debt. You don't need to take my word for it. Just go to Wikipedia. It's not hard to find; it's the first search result that comes up. It has a table—
Senator, you do know it is out of order to use props in the chamber?
Well, you will have to use the screen on your own laptop or iPad to see the truth of what I'm telling you. Any Australian who cares to hear the truth, that this government wants to deny, that they are a failure as economic managers, just Google 'Australian government debt' and you will get the facts on Wikipedia. These are the facts. In 2010 there was $147 billion of gross debt. They worked pretty hard on that with their great mantra of 'jobs and growth' and by 2011 they grew the debt to $191 billion. By 2012, they grew Australia's national debt to $233 billion. Not happy with that, in 2013 they bumped it up a little further, to $257 billion. Well, by this time there was a pattern emerging. Under the Liberal-National parties, who claim to be great economic managers, who came in to fix the debt crisis, debt went up and up and up—and it continues. In 2013, even though they don't want to accept it, they must have seen there was a bit of a pattern here. I remember that they came in here and did a bit of a deal with the Greens to get rid of the debt ceiling, which was then sitting at $300 billion, because they knew they were going to fly past that. Indeed, that is exactly what they did. By 2014, this government, these so-called good economic managers, had Australia's gross debt at $319 billion. In 2015, it was $368 billion. In 2016, it was $420 billion. In 2017, it was $500 billion. In 2018—it keeps going up—it was $531 billion, and in 2019, according to this source, as of last week it was $541 billion. That is the truth about this government and their capacity to manage the economy. They have celebrated a surplus that doesn't exist. They sold congratulatory mugs on their website. They've lifted debt year after year for seven years in a row. This is economic mismanagement that has resulted in the stagnation of our economy and placed an incredible burden on families. And to do that with a sort of little double-deal, a little shuffle of the pea and thimble trick that they tried in April last year in the budget, when they declared that they were back in black—to even do that in that deceptive way, what they did was bank $4.6 billion from the NDIS. That was money that was there and should have gone out to people with disability. This government pulled that money out, yanked it out, and shoved it over onto what they declared as a surplus—a non-existent surplus—all the while racking up debt year after year. This government can find money and raise money for themselves in the bushfire crisis with a donation button, but they still cannot manage to raise the funds to get the budget back in black. This mob are no AC/DC. They're a show, and they've got the greatest showman on Earth at the front with all the sales lines and all the magic marketing phrases of Mr Morrison. The reality is that this is a government that is incapable of managing the economy of Australia. Australians are paying the price of a government that has no plan for jobs, no plan for wage growth and no plan to address climate change that Australians know, as of last summer, is reality. It's Mr Morrison and his government full of slogans, but they have no plan for our economy.
As the last election result showed in absolutely no uncertain terms, Australians are no fools when it comes to knowing the economic management of this country could not be in better hands than those of the coalition government. The intelligence and intuition of Australians could only be insulted by any suggestion that somehow they got it wrong by making sure Prime Minister Morrison and Treasurer Frydenberg continued to command the nation's economic shift.
It's about time those opposite showed some respect to those Australians and the fact they got it right. With one-third of the budget spent on welfare and the usual cries and intellectually bereft suggestions that the Newstart allowance should be raised simply ignores the fair way in which the Morrison government is managing welfare payments with the highest standards of fiscal responsibility while retaining the sensitivity needed to support those in hardship. The Morrison government is extremely sensitive to the pressing needs of Australians doing it tough, and, as I've said previously, any suggestion to the contrary is pure mischief. But, once again, it's time to correct the public record of our welfare commitments and focus on the facts.
Once again, it's necessary to highlight that the Newstart rate increases every six months. It's boosted in accordance with the CPI. Please take note of this, and perhaps you might want to all write it down using indelible ink: 99 per cent of recipients receive additional payments. Newstart will always be increased by indexation, and that's not going to change. Labor knows full well the recipients are not just receiving Newstart. They know that rental assistance and other measures are also supporting people in challenging circumstances as they seek employment. They know Newstart and youth allowance are often supplemented by a fortnightly energy payment and rental assistance payments. Nineteen per cent of unemployed people receive family payments, and that's just for starters. The Morrison government remains committed to focusing on the key issues—
How would you like to be on the bones of your arse like that?
It's something you might want to have a really good listen to, Senator Pratt. We're actually focused on the key issue of securing employment. Just look at the Morrison government's recent record on jobs. It makes for fantastic reading: employment grew by 1.9 per cent through the year to January 2020, which is almost double the OECD average and compares to the 0.7 per cent when we came to office. The last three months of jobs data have beaten median market expectations with around 800,000 jobs created. On average, over the past 12 months, a record 74.5 per cent of the population aged 15 to 64 had a job, which the RBA governor said was, 'Fantastic.' There are more people in jobs and fewer people on welfare, pushing welfare dependency to its lowest level in 30 years, with 100,000 fewer working-age people on welfare over the past year.
The December quartile retail trade volumes increased by half a per cent, beating median market expectations. It's the fastest increase since the June quarter 2018. This followed the largest increase in household disposable income in a decade in the September quarter 2019, following the government's low- and middle-income tax offsets, putting money back into the pockets of Australians, which boosted income by $4.5 billion in the quarter. December also saw a trade surplus for a record 24 consecutive months, bringing the trade balance to $67.6 billion in 2019—a record high.
The housing market continues to strengthen, with house prices up 5.2 per cent over the year. The value of new housing loans is up by 14 per cent over the year to December 2019—the biggest increase in almost three years and above market expectations. Building approvals are also up by 2.7 per cent over the year, with the RBA expecting residential construction to support activity by the end of this year. The number of owner-occupied loan commitments to first home buyers increased by 6.2 per cent in December to be 21.3 per cent higher through the year. First home buyers now make up 34.9 per cent of total owner-occupier loans—well above the 10-year average.
On 7 February the RBA Governor noted: 'Loan arrear rates are coming down. The number of people who have problems with their personal debt is coming down.' So it looks like balance sheets are in a better position across a range of dimensions. This improvement is supported by the introduction of the government's low and middle income tax offset, with more than $6 billion already paid out to more than 8 million taxpayers. Then there is the impressive wage growth. It's expected to gradually pick up across the forward estimates, supported by ongoing employment growth. Wages, as measured by the wage price index, rose by 2.2 per cent through the year to the December quarter. Real wages grew by 0.4 per cent through the year to the December quarter, slightly lower than the 20-year average; however, over the past ten years growth in the WPI has usually outpaced CPI.
Compensation of employees was up five per cent in through-the-year terms in the September quarter, compared to 3.5 per cent in the September quarter 2013. In Australia, as in other advanced economies, the response of wages to improving labour market conditions has been slower and more muted than in past cycles, but this is partly explained by lower inflation expectations and spare capacity in the labour market, as indicated by broader measures of labour underutilisation. Strong employment growth has also drawn people into the labour market who were not previously looking for work.
Going forward, wage growth will be supported by the key drivers of wages: spare capacity in the labour market, inflation and labour productivity. Spare capacity in the labour market is being reduced, with employment increasing by 247,400 people during the 12 months to January 2020. Inflation is likely to pick up and be within the RBA's target band by the June quarter of 2021. Wage growth is expected to pick up in through-the-year terms to 2.5 per cent to the June quarter of 2020 and the June quarter of 2021. In the projection years, wage growth is projected to pick up to be a further 2¾ per cent in 2022 and three per cent in 2023 as spare capacity is reduced. The WPI grew by 2.2 per cent through the year to the December quarter 2019, up from 1.9 per cent through the year to the June quarter 2017. Average earnings on a national accounts basis, another measure of wage growth which is calculated as the total compensation of employees divided by total employees, increased by 0.7 per cent in the September quarter 2019 to be 2.9 per cent higher through the year. Total compensation of employees increased by 1.1 per cent in the September quarter to be five per cent higher through the year. Total company profits increased by 1.7 per cent to 11.1 per cent higher through the year.
Spare capacity in the labour market is an important factor influencing wage growth, as are consumer price investments. The unemployment rate was 5.3 per cent in January 2020, down from a recent peak of 6.4 per cent in October 2014. In the December quarter, the trend means that CPI, a measure of underlying inflation, increased by 0.4 per cent to be 1.6 per cent higher through the year. I realise that there are a lot of numbers here, but I hope particularly for Senator O'Neill's sake that she is taking a great deal of note of them.
The Mid-Year Economic and Fiscal Outlook forecasts for wage growth are consistent with the broad consensus among economists for a pick-up in wage growth. Treasury's projections of economic parameters, including wage growth, from 2021-22 onwards are determined by medium-term methodology introduced in the 2014-15 budget.
But wait. The economic measures of living standards provide even more encouraging news. Household disposable income, as measured by the ABS in the national accounts, increased by 5.1 per cent through the year to September. Strong growth in household disposable income in the September quarter was driven by a decline in income tax payable due to the introduction of the low and middle income tax offset. The WPI grew at a faster rate than all of the selected living cost indexes over the year to the December quarter, with the pensioner and beneficiary living cost index rising by 1.8 per cent. CPI rose by 1.8 per cent through the year, and real household disposable income rose by 3.2 per cent through to September 2019. Real household disposable income is calculated by deflating nominal household disposable income by the household final consumption expenditure deflator. In contrast, the real wage, seasonally adjusted, increased by 0.4 per cent through the year to the December quarter.
Australia's labour market remains sound, with employment growth above its long-run average and the participation rate close to a recent record high. Since September 2013, more than 1.5 million jobs have been created, and labour force participation is around record high levels. Through the year, jobs growth to January 2020 was 1.9 per cent—stronger than the OECD average. This compares with growth of 0.7 per cent recorded in September 2013. Employment increased by 13,500 people in January 2020 to be 247,400 persons higher over the past year. Around 239,800 jobs have been created every year on average since September 2013.
Employment growth has remained consistently above the 10-year average for the past three years. Almost 60 per cent of employment growth over the past year has been in full-time jobs; 2018-19 was the strongest financial year for full-time jobs growth in 11 years. Over 80 per cent of these jobs created in 2018-19 were full-time. The participation rate has increased to 66.1 per cent in January 2020, remaining close to its record high of 66.2 per cent in August 2019, compared with the 64.9 per cent recorded in September 2013. Additionally, a record high of almost three-quarters of Australians aged between 15 and 64 have a job. More than 890,000 females have found employment since September 2013, representing 59 per cent of the more than 1.5 million jobs created. In fact, female employment has increased by over 183,000 in the last 12 months, with more than two-thirds of these jobs being full-time. Rising female participation has driven the participation rate higher. The female participation rate set a record high of 61.5 per cent in January 2020.
But the good news just keeps on coming. The gender pay gap is at a record low. Older Australians are also benefitting from stronger labour market conditions. Workforce participation for those aged 65 and over is also around a record high. The underemployment rate is the number of employed persons who want to work more hours as a share of the labour force and is a complementary measure of spare capacity in the labour market in addition to the unemployment rate. Employment is forecast to expand over the forecast horizon, underpinned by a pick-up in economic activity. Employment is forecast to grow at 1¾ per cent through the year to the June quarter 2020 and the June quarter 2021.
There have been 1.5 million jobs created since the election of the coalition government in 2013. The minimum wage has increased every year since 2013 at the rate of at least 2.4 per cent. The real minimum wage under Labor was cut twice between 2007 and 2013—a sad fact that provided even more evidence of the need for the repairs and reforms of the coalition that have produced such stunning results for the Australian people.
I rise to contribute to this debate on the motion moved by Senator Gallagher, which relates to our economy. I'm particularly focused on elements of the motion around Australians who are struggling with stagnant wages, with wage growth stalling even further, and point (d) in particular:
the Government does not have a plan to boost wages or growth in the economy.
It is clear that the government doesn't have a plan to boost wages or growth in the economy. In fact, many people feel very excluded from our economy, and that's why I want to focus today on the issues around Newstart.
The previous speaker from the government was just speaking about Newstart and was having a go at a number of us on this side of the chamber, saying that we don't really know what we're talking about, in terms of the need to increase Newstart, because—didn't you know?—most of the people on Newstart are also getting other payments. Well, let's just have a little look at that. Let's look at what most of the people on Newstart are getting in additional payments. There's the energy supplement. Guess how much that is, folks? It's $8.80 per fortnight. You can buy yourself two cups of coffee a fortnight on your energy supplement. You can live it up when you're on Newstart! Let's look at rent assistance. For a single person, it's $138 a fortnight. If you add on Newstart, do you know what you get per week? If you get those two most common additional payments, you get $318.25. Do you know what the poverty line is? There are arguments about what the poverty line is, but if you take it to be half the median household income, it's $426.30. That's the poverty line. What are you getting if you're lucky enough to get Newstart, the energy supplement and the maximum rent assistance? You're getting $318.25. You are still more than $100 a week below the poverty line. So, please, government members, do not try to lecture us about the inadequacies of Newstart. If you really care, go out and talk to the people that are trying to live on Newstart and then you'll know what their life is like. You'll know what it's like to live below the poverty line. So, please, get over yourselves and don't keep up this absolute nonsense that all these people on Newstart are so lucky because they get all these other payments. Yes, they might get a few additional payments—the whole $8.80 per fortnight from the energy supplement. When they say most people get additional payments, that's the payment they're talking about: the extra cup of coffee a week. And you've got to be careful where you spend that, because if you're buying in Perth you can pay over five bucks for a cup of coffee. In Perth you can't even get a cup of coffee for your $4.40 a week extra from your energy supplement.
One of the ways that we can stimulate the economy is by increasing Newstart. We know that the report by Deloitte Access Economics, which was released in 2018, was based on a $75 increase to Newstart. That increase has been proposed for some time, but, because the government has failed so consistently to increase Newstart, ACOSS is now calling for an increase of $95 a week to meet cost of living increases. But if you look at the Deloitte Access Economics analysis of the positive impact of raising Newstart and the impact it would have on the economy—even based on a $75 increase; and, as I said, as the cost of living has increased, so too has the need to increase Newstart even further, to at least $95—it's very interesting.
I must say that people were constantly talking to me or phoning our office and saying that the $75 wasn't enough. We're now getting people ringing and saying that $95 isn't enough. I acknowledge that $95 will not take us to the point I was just talking about, which is making sure that Newstart actually takes people above the poverty line. It's quite clear that $95 won't do that. I was actually using a fairly low level for the poverty line there, so, even using that level, you can see that $95 would not take a single person above the poverty line, even if they had all those other supplements.
But what Deloitte Access Economics found was that by investing, by $75 a week, in those people who are trying to survive on Newstart you would lift the Australian economy by $4 billion. This has a lot to do with the fact that when you're living below the poverty line and you actually get an increase then you spend that money straightaway to meet your costs of living, to make sure you're paying your bills, to make sure you can actually feed your kids, to make sure you can send your kids to school with lunches. And that's what surveys have consistently found—that parents sometimes are not able to send their kids to school with lunches, and parents on Newstart in particular are frequently going without food themselves. So, if you're a single person or you're trying to raise kids on Newstart, you will be investing that money in your wellbeing and your family's wellbeing. In other words, you're spending it straightaway. That's automatically injecting money into the economy. We know that people living below the poverty line will spend those extra dollars to make sure they're looking after the essentials, such as food, heating and housing—spreading it throughout the economy.
But the Deloitte Access Economics report also found that it would create 12,000 extra jobs in Australia. By spending that money, we can generate 12,000 extra jobs and then of course address the issues around employment. I just heard Senator Hughes talking about all those extra jobs the government's generated. I'll come back to that in a minute, but today it was reported that 1.2 million Australians were underemployed last year, and this problem is likely to get worse. With the stupid way that we measure employment in this country—and quite frankly it is stupid—you're counted as employed if you've got a job for an hour a week. How ridiculous is that? So, quote all the figures you want, but we know, from this data, that at least 1.2 million Australians are underemployed.
I just heard claims made about the people who have come off income support. It was a claim that over 100,000 people had come off income support. At the last estimates we identified 104,000 people who had been breached through the government's flawed targeted compliance framework—up to three demerit points, and then they get reviewed. The government keeps saying that people aren't penalised when they get a demerit point. In fact, they are, because their payments are suspended. When I asked how many of those are reconnecting, the government finally admitted that 104,000 people had not reconnected. And when I asked what had happened to them they said, 'Oh, we just assume they've got a job'—which is not fair to assume at all, because we know there are a lot of people who are dropping out of the system. Fortunately some of this data does show up when we look at the Community Development Program, which is targeted mainly at First Nations people in remote communities. But from that the data for the jobs generated and the data for the people who have come off income support don't match. In other words, there are people who are not accessing income support and are making do with support from their family. So, you cannot assume that those 104,000 people have gone into work. And I'm very concerned that they have in fact come off income support when they were suspended and haven't reconnected and now are finding other ways of trying to exist, including support from their families.
You would think that in the midst of figures like this, with so many people who are underemployed or unemployed, the government would jump at the chance to create these extra jobs as well as inject money into the economy that would get spent straightaway, therefore boosting the economy. We argue that investment in Newstart is not only investment in people and community but also an investment in boosting our economy. A stronger economy means that the government can raise extra taxes, and it's postulated that they could earn up to a billion dollars extra in taxes by making sure that we are boosting the economy.
Boosting income support payments would also have a positive effect on our health and social services budget, because we know that unemployment and poverty are linked to poorer health outcomes, including poorer mental health outcomes and chronic disease. Inadequate payments contribute to housing insecurity and homelessness. Increasing Newstart would also have an impact on the not-for-profit sector by reducing the need for people to rely on food relief, emergency services and frontline services. We know that income support payments are one of the main drivers of poverty in this country. As I have just demonstrated, by keeping Newstart at a level that is way below the poverty line the government continues to trap people in poverty. And as we know from the Australian Council of Social Service report released just at the end of last week, 3.24 million people are living in poverty and 774,000 children are living in poverty. We know that we can help those people by increasing Newstart. We can help their wellbeing and also help them actually find work. We know from the research that poverty is a barrier to employment. By increasing Newstart, you address people's economic wellbeing, you address their social wellbeing and you assist people to find work. So it has this extra impact as well.
Imagine what a $95-a-week increase to Newstart would provide for our economy and to people who are living on income support in terms of helping them to not be trapped in poverty. There is no doubt that keeping Newstart low acts as a barrier to employment. The current rate of Newstart and related payments does not cover basic living costs, let alone the additional costs of looking for work, such as internet, transport and clothing. And we all know that it's now absolutely essential that you have a phone and the internet when you're trying to find work, in particular because the government is driving people to the digital platforms through compliance requirements and through Centrelink. The ongoing stress and struggle to make ends meet can detract from job search activities and undermine health and wellbeing, further undermining people's employment prospects. If we give people an increase in Newstart, we help people live with dignity and we help them to increase their chances of finding work.
I really want to touch on the issues around people living in rural and regional areas, because we know that poverty is at a higher rate in those rural and regional areas. David Tennant, CEO of Shepparton FamilyCare, noted that the low rate of Newstart is:
… devastating rural and regional communities, where unemployment was widespread, and had become a structural level of poverty almost impossible to escape.
He said:
It's just a bizarre, slightly cruel conundrum that we're requiring people to go to government funded agencies to get emergency relief, when what really should be happening is they're paid a respectful amount of money that they can constantly survive on.
Last year, the National Rural Health Commissioner also explained how people in rural and regional areas have worse health outcomes, again demonstrating the fact that we need to make sure that we are enabling people to live on an adequate payment. We need to raise Newstart by $95 a week, which will help our economy and, most importantly, help people live with some dignity.
I too rise to speak in today's general business debate on economic conditions. The Liberals like to paint themselves as the superior economic managers, but as we've heard from people on this side—from Senator Siewert and from Senator O'Neill earlier—they're not. It's a con that they've perpetrated on the people of Australia by pretending to be in surplus when they weren't, and I think the people of Australia are waking up to it. I think they understand that the claim that the government is managing everything so well is falling apart. I think the Australian people know that it's rubbish. We've got the economy floundering. The government's economic narrative just unravels day by day. Whenever you open a newspaper, you see something else about it.
The Prime Minister likes to say, 'That's just the Canberra-bubble talk,' and tries to dismiss it, but we all know that the disastrous state of the economy is hurting Australian households. It's hurting Australian people. It's hurting Australia's small and family businesses. It's hurting people who are looking for work—Australian jobseekers. We know also that the prices of essential services are going up. Wages are falling or stagnant. As a result, household living standards are going backwards.
Those on the other side are so good at trying to blame Labor for absolutely everything that they muck up. They are a third-term government. If they were one of my children trying to blame one of my other children for something that happened years ago, I would be having more than severe words with them. I would be telling them to grow up. That's what those on the other side need to do. They need to grow up and they need to take responsibility. They can't keep blaming Labor for their economic failures. They can't blame the bushfires and they can't blame the coronavirus, because, before the bushfires and before the coronavirus, the government were already presiding over a weak economy. Those on the other side have no plans except on how to rort the system. They have no plans to boost the economy, which, as we all know, is more than floundering; it's in decline. It's a disaster. It is just a disaster for anyone who, as Senator Siewert said, is on Newstart and even for families on average incomes. How are you expected to cope if the prices of all your essential services are going up and your wages aren't going up as well? I don't know. They think they're Einstein on that side, but, truly, a three- or four-year-old could do the maths and work out that they're just wrong.
They've got no plans at all. They have no plans for jobs and employment. We know that, when they talk about employment numbers going up, they're referring to people who are often doing just one hour of work a week. People have to work multiple jobs, when they can find multiple jobs, just to be able to afford the basics of life. There's not enough work out there. Unemployment's too high. There's no job creation on that side. Maybe there's a bit for their mates that they've managed to give money to through sports rorts, but other than that there's no plan at all. There's no plan for wage growth, and we know that they have no plan for climate change.
The government had a plan before the last election, but do you know what that plan was? That plan was to buy its way into government, to buy its way back into power by putting up a showman, by putting Mr Morrison out front, and by doling out money to the marginal electorates through the sports rorts. What really irks me about all of this is that they used taxpayers' money to do that. The taxpayers are not silly. Senator Hughes made a comment about how smart the Australian voters and taxpayers are. Yes, they are. I doubt that they are going to put up with this sort of thing for very much longer. What the government didn't have before the last election, and still doesn't have, was a plan to make the economy work for all Australians. It is probably working for some Australians but not for all Australians.
I mentioned the surplus, or the alleged surplus—I have to be a bit careful about my wording here, because we know there isn't a surplus. It was just alleged there was a surplus and, as we saw, there was a marketing strategy for their own fundraising around that alleged surplus, but there was never a surplus, and it was a bit of a magic show of moving money around a bit to try and get the surplus. But they did claim, on budget night last year, that a surplus had been achieved. To me, that's a bit like building a Lego model before you've got the pieces out of the box and saying that you've built the Lego model. It's just not on.
Mr Morrison and, of course, Mr Frydenberg are hoping that Australians will forget all of that—that they will forget that the economy has been deteriorating under their watch for the past six years, long before the bushfires and long before the coronavirus hit. I don't think that Australians will forget that. I think Australians know that the government didn't have a plan for the economy then, at the election time, and they still don't have a plan now.
Let me just talk about what Labor did, even though it was six or seven years ago—sorry, longer than that, I suppose. You have been there for—what is it?—seven years, seven long years. Under Labor, Australia became one of the two fastest-growing economies in the OECD, and we were the eighth-fastest-growing when the government changed hands in 2013. Under the Liberals, we've dropped to 20th—from eight to 20. The economy is even weaker now than it was when Labor was in government, even though we had to deal with the biggest economic downturn since the Great Depression. It was Labor's economic stimulus that saved Australia from recession during the global financial crisis, and we kept a quarter of a million Australians in work—a quarter of a million people who would have lost their jobs. So I find it really hypocritical of those opposite that they can't take responsibility for anything, let alone their economic failure, despite the criticism that they hurled at us. They can dish it out, of course—they're very good at dishing it out—but they can't take it. Whatever those opposite claim, let's be clear: our economic record stands on its own. But they've had six years to improve it—they're a third term government—and instead they've just made everything worse. We know that they cannot be trusted with the economy.
I just want to quickly, in the last couple of minutes I've got, have a little chat about some economic statistics and facts, just to reiterate my point. Economic growth, as we know, is at its lowest level since the global financial crisis. Productivity fell last financial year. The net debt has more than doubled, and gross debt has risen to over half a trillion dollars. Just have a think about that. When Mr Abbott was Prime Minister, he declared a debt and deficit disaster. Unemployment is high. There are almost two million Australians looking for work or for more work. As I said, there are people in Australia who are working maybe three jobs just to try and make ends meet—just to be able to feed their kids or get their kids their school uniforms or schoolbooks. They do not want to have holidays to Hawaii or anything; they're just trying to make ends meet. Labour productivity actually went backwards for the first time on record. Since Labor started talking about slow wage growth, it's actually slowed even further. So we've got the Morrison government presiding over the worst wages growth on record. That cannot be good for the economy. People need money to spend money. When you let wages stagnate, people cannot spend the money—let alone people on Newstart, who, as we've heard, don't have the money to spend anyway. They're struggling more than other people. They don't bank the money. People on low incomes or Newstart do not bank money. They spend just about every cent they get just trying to survive.
Order, Senator Bilyk! The time for the debate has expired.
I table correspondence relating to an order concerning the appearance of witnesses from the Naval Shipbuilding Advisory Board at Estimates. I also table a response to a continuing order relating to entity contracts.
To Holden or not to Holden? That is no longer the question, nor is Holden the answer and that is sad. General Motors is pulling out of Australia after treating us to an 88-year one-night stand. First as a saddlery manufacturer in South Australia in 1856, Holden has been part of Australia's history on the racetrack, on our roads and in our garages. We've all heard of the Kingswood, the Torana and the Monaro. My first car was a red Camira.
It is difficult to think of a regional centre that does not have, or has not had, a Holden dealership. Holden dealerships have played a huge role in the economies of regional towns and the suburbs of our cities. Here is the rub: the decision of General Motors to retire the Holden brand has left these dealerships completely blindsided. Small and medium, mum and dad sized, businesses across Australia were left blindsided, just like the rest of us. General Motors has the ethics of a granny-smacking purse snatcher. The decision was sneaky, stinking, dirty and how they've gone about it offends so many. Their decision has affected the lives of many Australians—dealership owners, mechanics out the back, sales representatives out the front, car owners and their families.
General Motors may not care about their reputation in Australia but Holden dealers do. They have been supplying their local communities with vehicles for decades—in some cases generations. This needs to be respected. General Motors, stop selling the Holden dealers a clunker and compensate them fairly. General Motors, this is not how you should treat honest, hard-working Australians. You should be ashamed of your shameful, rank, rancid, ethically deficient conduct. General Motors, be better.
I rise this evening to highlight the issue of the continued exploitation of workers in this country and the wage theft accompanying this practice. George Calombaris may well be the poster boy for wage theft in this country, but this unlawful practice within our community is insidious and widespread.
In my home state of Tasmania it was recently revealed that more than 70 seasonal workers hired by Costa Group have been exploited for their work, taken advantage of financially and forced to stay in a single home. That's right 70 people forced to live under the one roof in Shearwater in Tasmania. We know that exploitation and wage theft is alive and well in this country, and in this case displays the willingness of large corporations to adopt slave labour in their everyday work practices because of corporate greed.
These workers, who are primarily from Tonga, were employed through the federal government's Seasonal Workers Program working on berry farms owned by Costa Group. The Costa Group made a statement detailing that the welfare of the workers was 'a priority for them'. Well, their actions, the actions of the employees, tell a very different story. I hope that the Costa Group faces the full force of the law and are not able to, or permitted to, hire seasonal workers again.
I call on the Morrison government to start taking wage theft and unscrupulous and unlawful exploitation of seasonal workers seriously in this country. No company should be permitted to get away with this type of treatment of our fellow human beings.
This, unfortunately, is not an isolated incident. The practice of wage theft and worker exploitation is widespread across our country. It has become a widespread business model from retail and hospitality to agriculture and service industries across the country. This is real. Big businesses like 7-Eleven, Caltex, Pizza Hut, Domino's, Red Rooster, and the list goes on, must take responsibility for their flawed business models which allow wage theft and other exploitation practices. A recent audit of job advertisements with particular language criteria found that 78 per cent of businesses advertised rates of pay below the minimum award wage. People are not being paid for a fair day's work. They're not being paid their superannuation. They're not being paid for their breaks. They are not being paid for their overtime.
I commend the work of the Australian Workers Union Tasmanian branch and the national branch for alerting the community to this sickening practice. I note that the Retail Supply Chain Alliance is calling on the federal government to review Costa's right to hire seasonal workers. The Retail Supply Chain Alliance is made up of the Australian Workers Union, the Shop, Distributive and Allied Employees Association and the transport union. They are doing everything in their power to ensure that these exploitative practices are not allowed to continue in this country.
Not only were these 70 individuals forced to stay in the one house, after working a full day picking berries; they were also forced to pay $100 a week in rent each—when a property of this size would have been rented out on the market for just $600 a week. I also note that the workers were forced to pay for transport to and from the work site every day—at a price that could only be described as criminal. What has happened here is truly sickening. These people were exploited and now they have been rescued. But my concern is that this is an industry-wide practice and there are so many more people being exploited, when they deserve better conditions to work in, better pay, better treatment, better accommodation and free transport. There are no ifs and buts about this. These workers have been rescued, and I commend these unions for the work that they have done.
We must ensure that all workers are treated fairly. We cannot allow this sort of practice to continue. I'm calling on the Morrison government and the Department of Employment, Skills, Small and Family Business to take this issue of wage theft and the exploitation of people with the seriousness with which it deserves. We would not tolerate this for our fellow Australians, and we should never allow foreign workers coming to this country to do jobs to try to support their families to be exploited in such a terrible, degrading manner. It's unacceptable.
I rise to speak on a study on income management published by the University of Queensland this week. Here we have a report from academics with research expertise and experience telling us what is actually going on for the people on the cashless debit card. Let's have a look at what they have to say, rather than the usual spin we hear from the people that are proponents of the card.
The overwhelming finding is that compulsory income management is having a disabling, rather than enabling, effect on the lives of people on income support. Their findings show that compulsory income management has in fact undermined many participants' financial capabilities and autonomy. This study shows that many people in the trial areas found their expenses had actually increased, as they were blocked from participating in the cash economy and burdened with new fees and charges. To manage their finances, many participants have become reliant on family members, service providers or automatic payment systems. Dr Michelle Peterie, one of the researchers, said that the study was unique for its focus on individuals' and communities' experiences with the cashless debit card and BasisCard. She said:
These voices have frequently been lost or ignored in the policy debate.
The voices of people on the ground who are actually living with this punitive program are ignored by MPs in this place time and time again; instead, they listen to billionaires and people with vested interests—many of whom are self-appointed, so-called community leaders.
A strong theme in the survey data was that many people had experienced a significant decline in their mental health and wellbeing as a result of the challenges they faced navigating their lives on the card. People on the card said to the researchers:
"I'm embarrassed to leave the house. My mental health has taken a steep decline."
"It is not helping my mental health I can't take my kids out much anymore."
"I feel exhausted all of the time just trying to manage my life on this card."
"So much stress caused by this card that relationships with friends and family become strained just because I am always anxious. It is really bad and friends have told me I am way more stressed now."
Another key finding in this report relates to Newstart. One of the authors, Professor Greg Marston, said:
The majority of people didn't have a problem with spending or budgeting, what they had a problem with was inadequate income support payments. In fact, most of the people we spoke with were very good at budgeting, they just didn't have enough money to cover all their expenses.
The point this study clearly makes is that people simply don't have enough to live on. That is their key problem. They don't need the government to tell them how to manage their money. They need more money to manage. The researchers also noted that other evaluations:
… had raised significant concerns regarding the capacity of income management policies … to meet their stated objectives. Despite this, income management continues to be expanded …
This government is trying to entrench this card by stealth, with legislation continually coming back here, extending the trials year by year, without proper evaluation.
If this government wanted to assist people in facing barriers like poverty, addiction, unemployment and underemployment, they would immediately increase Newstart and invest in community wraparound services, rather than punishing people with expensive and punitive programs. This is yet further evidence that compulsory income management does not work. The study does mention voluntary income management, and suggests there could be a role for it, which I've got to say is consistent with other evidence. The findings in terms of compulsory income management are consistent with other research—independent research, not research funded and initiated by the government, which has been flawed. Again, independent academics have clearly pointed out the flaws in those evaluations, but the independent research, including the independent research on the final evaluation of the Northern Territory intervention income management component, showed it met none of its objectives—none! It failed—the same place that the government now wants to roll the BasicsCard over into the cashless debit card. It is flawed! We need to abandon income management. (Time expired)
It is with sadness that I rise tonight to pay tribute to Launceston businessman Anthony Henrikus Montauban, better known as Tony, who died at his riverside home earlier this month. Tony will be sadly missed by his wife, children, stepchildren, grandchildren and his many friends. At his service at Franklin Grove Centre in Youngtown, on 12 February, Tony was remembered as a generous gentleman, mentor and an optimist with a positive outlook that was infectious to anyone around him.
Tony was born in Amersfoort in Holland, on 20 September 1945, the youngest of five children. Tony had minimal English when he came to Tasmania from Holland with his parents, Corrie and Bert, in 1956, and settled in Campbell Town in the Tasmanian Midlands. His difficulty early on in learning English made school challenging, but Tony was determined to get ahead in life. He gained a diploma of building at the technical college that we now know as Queechy High School, and helped build the family home at Riverside.
Tony worked in the family business with his father and brother and married Jenny, in the late 1960s. The couple became parents to Marc, Clare and Andrew. In the late 1980s, Tony married Jean, extending his family with stepchildren Narelle and Dayle.
A street-smart businessman, Tony's passion for the tile industry led him to establish the highly successful Montile business in Launceston, in the early 1970s. Tony was considered a pioneer in the ceramic and tile industry in Tasmania and he grew the business across the state. He was instrumental in the formation of Tile Boutique, a network of 36 tile showrooms spanning the country that together provide customers with access to worldwide tile trends and technology. Tony was also well known for saying, 'Don't chew miss out', the tagline he adopted for his television and radio advertising.
Montile gave Tony the opportunity to travel the world, researching new trends and products and meeting new people. His first solo trip to Japan at 28 years of age was the first of many international trips, allow him to develop strong friendships with business acquaintances throughout the world.
Not just a businessman, Tony also loved waterskiing, fishing and farming. He raised goats, sheep, horses, cows, pigs, chickens, cats and dogs on his Tamar Valley farm and grew his own fine Tasmanian produce via his vineyard, vegetable gardens, fruit trees and greenhouses. Tony also enjoyed making smallgoods, wine and spirits, with many a visitor to the household enjoying wine, Limoncello, sausages, smoked salmon or gourmet pizza made by Tony's own hand. Nothing made Tony happier then eating a meal that he, or his family, had raised, grown, caught or produced themselves.
Tony was a member of the Rotary Club of Central Launceston, and previously a member of the Launceston Rotary Club. Tony enjoyed taking part in all Rotary activities, and generously hosted regular fishing weekends at Swanwick, as well as hosting international exchange students who became life-long friends, and often learned skills such as making sausages during their time with him. Tony was actively involved with the Rotary Club of Central Launceston's duck race throughout the 20-plus years it was held, often as organising director and regularly as a major sponsor; raising thousands of dollars for local Tasmanian causes each year. I am pretty sure that there is still a container of plastic coloured ducks at Tony's house waiting to be repurposed. Having also been the duck race director in recent years, I was fortunate to have the benefit of Tony's experience. He offered me advice, counsel and support throughout that process; as well as during my time as president and on the board of the club.
In recognition of Tony's contribution, the Rotary Club of Central Launceston acknowledged him as a Paul Harris Fellow; and more recently presented him with a sapphire pin for his outstanding commitment and contribution to the club, our local community, and to Rotary more broadly.
Tony was always looking at what he could do to give back, or to help others. His community spirit extended beyond Rotary, with Tony regularly sponsoring Launceston's Clifford Craig ball, and cooking pizzas for the Ravenswood Heights Primary School students, amongst many other things—all without the need for recognition. The giving was what gave Tony pleasure.
Tony was a true and valued friend, and he will be missed by many throughout the state. I extend my condolences to Jean, his extended family and his friends.
Tonight I want to talk about the Urban Congestion Fund. This is a topic of particular concern to me, because a large number of my Tasmanian constituents live or work in Hobart, a city which has a growing problem with traffic congestion. A study in 2017 found that the traffic congestion in Hobart is the third worst in Australia, with drivers spending an extra 123 hours a year behind the wheel. The same study found that the annual cost to business of Hobart's congestion was around $80 million a year. This would be of no surprise to anyone in Hobart who has to drive into the city, because the frustration of crawling along clogged arterial roads, no matter which direction you're coming from, is becoming a far too common occurrence. It is not unusual at times to have traffic backed up along the Southern Outlet for a 10 kilometre stretch to Kingston, where my electorate office is based, and quite often it goes down even further.
Tackling this congestion is going to require substantially more than the $25 million received under the Hobart City Deal. The Morrison government's commitment to busting Hobart congestion is barely going to scratch the surface. The Urban Congestion Fund was announced as a means of tackling congestion throughout Australian cities, but it appears that, in the world of the Liberals and Nationals, some cities are more equal than others. Of the $3 billion distributed, $2.5 billion went to Liberal-held electorates as well as marginal electorates targeted by the coalition. Over 28 per cent of the funding, that is just shy of a third, went to just four Liberal-held electorates: Higgins, Deakin, La Trobe and Boothby. In contrast, 36 seats held by Labor received—guess how much of the fund?—zero. Zilch. Nothing. Zip.
So shameless was the government in its pork barrelling that the Prime Minister actually boasted in question time about the amount of money that went to just four Liberal seats. The $3 billion spend on the Urban Congestion Fund was then followed by $17 million in taxpayer funded advertising to tell Australians how good the program was! These road rorts are a supercharged version of the sports rorts saga. They've taken blatant politicisation of taxpayer funded programs to an absolutely epic scale, not just in terms of the amount of money that was involved, but also in terms of the brazenness with which those opposite doled out the money once again for their own political benefit. The program that was announced in the budget had no guidelines, no applications, and no process for funding decisions. There wasn't even an opportunity for local councils, state governments or other stakeholders to have input into the process. In the case of sports rorts the government at least began with an application process, and, initially, there was a clear set of criteria. With road rorts they haven't even pretended to be open. Once again there is no transparency. They haven't even pretended to have a rigorous, merit based process. There appears to be absolutely no rationale for how road rorts decisions were made, other than as a shameless exercise in vote-buying using taxpayers' money.
Even if the government had made a sufficient contribution to tackling Hobart's traffic congestion, we would still be waiting for concrete action. Just like the traffic in Hobart, work on implementing the Hobart City Deal, including transport measures, has slowed to a crawl. Hobart commuters who have been spending hours of their lives stuck in traffic are still waiting for the northern suburbs transit corridor study and the business case for the Derwent River ferry service. Frustrated Hobartians are sick of having their concerns ignored by the Morrison government just because they happen to live in safe electorates. Despite the ongoing traffic woes, Franklin and Clark keep being overlooked because they are not electorates held or targeted by the Liberals—I said to the federal member for Franklin the other day that maybe she should get her margin reduced a bit because I felt that Franklin was completely disadvantaged! But while congestion problems in Tasmania's capital are going from bad to worse, Hobart received a little over one per cent of the funding allocated to the Urban Congestion Fund. This government's blatant pork-barrelling has left my fellow Hobartians stuck in the slow lane, going nowhere very fast, and this government needs to— (Time expired)
The federal coalition government have introduced regulations into the parliament that will require security screening at regional airports. They've offered to pay for the equipment but not for the much more significant cost of the ongoing employment of security guards and, indeed, maintenance. I'm quite happy for there to be security screening at regional airports. If that's what Home Affairs says is required then that is what is required, but it must be the government that pay the cost. National security is a national responsibility, not a local council responsibility. It is the local councils that own the airports and will be charged this cost, and they, of course, will have to pass it on to passengers.
The former Department of Infrastructure, Transport, Cities and Regional Development did a case study on Whyalla—I'll just point out that Whyalla is serviced by both Rex Regional Express and Qantas—and found that the new requirement will increase a per person flight by $53 or $69. If the screening is only carried out on the Qantas passengers, the cost will be an extra $69. Now, clearly, if it costs an extra $69 to fly Qantas, fewer people are going to accept that option and, in fact, Qantas will end up pulling out of that route. If it's carried out on both Rex and Qantas passengers, the cost will be $53. This will just reduce people's willingness to fly. They'll go back on the roads.
In this instance, it'll reduce loadings on the aircraft and it will reduce the viability of the routes and again will result in flights being cut. So the two best options are that flights are cut or routes are cut completely. The government have botched this up. They've failed to do proper due diligence from the beginning and they're only now discovering what devastating impacts this proposal will have on regional communities. Whyalla and Port Lincoln will be seriously affected by this bungle. However, it is the thin end of the wedge—Kangaroo Island and Mount Gambier will likely be next.
When bureaucrats in the Canberra bubble first dreamed up this policy, they thought the annual operating costs of the equipment would be somewhere between $530,000 and $760,000. They were wrong. We now know that the numbers are something around $1.2 to $2 million. How do we know that? Because the RRAT committee conducted an inquiry and caught on to the idea that this was going to happen and asked a lot of questions. Amazingly, again, the government had done no analysis on the effect. I can tell you that regional air travel is the lifeblood of these regional cities. It's how people get to education services. It's how they get to medical services. It's how medical locums get into a local community. It's how we support agriculture, business and tourism. And it just allows families to travel to see one another. It is their lifeblood. If you start taking away flights, it will have an impact on communities. In the analysis, the department actually claim that the increased costs might not be passed directly on to ticket pricing. That just shows how hopelessly out of touch the government is. I can assure you that the costs will get passed on.
I have moved to disallow this regulation. The Senate will get to vote on this on 12 May this year. It's not just Whyalla that will be affected, and it is not just Port Lincoln. The department conducted case studies into other airports—Rockhampton, Geraldton, Wagga, Longreach and, indeed, Kangaroo Island, which is not even on the list. They're looking at that, and I'm now trying to get some more information on that. When this disallowance motion is voted on, it will be a real test for coalition senators who often claim to represent regional Australia. So I'm going to give them the opportunity to buck the system and vote with me on the disallowance.
I rise in this adjournment debate and, in doing so, table a letter from the Minister for Defence, the Hon. Linda Reynolds, to the Chair of the Senate Standing Committee on Foreign Affairs, Defence and Trade in relation to the attendance at Senate estimates of the Naval Shipbuilding Advisory Board.
Senate adjourned at 17:58