2006-09-13 41 1 7 REPS 0 0 2006-09-13 The SPEAKER (Hon. David Hawker) took the chair at 9.00 am and read prayers. 1 MOTIONS 1 09:01:00 O’Connor, Gavan, MP WU5 Corio ALP 0 0 Mr GAVAN O’CONNOR —I move: That so much of the standing and sessional orders be suspended as would prevent the Minister for Industry, Tourism and Resources from coming into this place and providing a full and proper explanation as to why the Government: misled farmers in a letter to the National Farmers Federation before the 2004 federal election promising that a re-elected Coalition Government would introduce a mandatory code of conduct for the horticulture industry; falsely promised fruit and vegetable growers that the Government would introduce a mandatory code that would deliver a fairer deal on their terms of trade and on resolving disputes with produce buyers; falsely promised that supermarket chains would be included in a mandatory code; falsely promised that legislation for a mandatory code would be brought into Parliament within 100 days of the election; falsely promised that the code would be overseen by the Australian Competition and Consumer Commission; compromised the former Deputy Prime Minister, the Member for Gwydir, by dumping his promise to deliver a mandatory fruit and vegetable code; wasted tax payers’ money by employing public servants and consultants to develop a draft mandatory code that will never see the light of day; and falsely claimed that the code now being forced on the industry will be enforceable when in fact it will be voluntary. This is the greatest betrayal of fruit and vegetable growers that we have ever seen. Mr ABBOTT (Warringah —Leader of the House) 09:02:00 —I move: That the member be no longer heard. Question put. 2 09:11:00 Livermore, Kirsten, MP 83A Capricornia ALP 0 0 Ms LIVERMORE —I second the motion. Another day, another betrayal of farmers by the National Party— Mr ABBOTT (Warringah —Leader of the House) 09:12:00 —I move: That the member be no longer heard. Question put. 09:13:00 The House divided.     (The Speaker—Hon. David Hawker) 77 Abbott, A.J. Andrews, K.J. Bailey, F.E. Baker, M. Baldwin, R.C. Barresi, P.A. Bartlett, K.J. Bishop, B.K. Bishop, J.I. Broadbent, R. Brough, M.T. Cadman, A.G. Causley, I.R. Ciobo, S.M. Cobb, J.K. Downer, A.J.G. Dutton, P.C. Elson, K.S. Entsch, W.G. Farmer, P.F. Fawcett, D. Ferguson, M.D. Forrest, J.A. Gambaro, T. Gash, J. Georgiou, P. Haase, B.W. Hardgrave, G.D. Hartsuyker, L. Henry, S. Hockey, J.B. Hull, K.E. * Hunt, G.A. Jensen, D. Johnson, M.A. Jull, D.F. Keenan, M. Kelly, J.M. Laming, A. Ley, S.P. Lindsay, P.J. Lloyd, J.E. Macfarlane, I.E. Markus, L. May, M.A. McArthur, S. * McGauran, P.J. Mirabella, S. Moylan, J.E. Nairn, G.R. Nelson, B.J. Neville, P.C. Pearce, C.J. Prosser, G.D. Pyne, C. Randall, D.J. Richardson, K. Robb, A. Ruddock, P.M. Scott, B.C. Secker, P.D. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Thompson, C.P. Ticehurst, K.V. Tollner, D.W. Truss, W.E. Tuckey, C.W. Turnbull, M. Vaile, M.A.J. Vale, D.S. Vasta, R. Wakelin, B.H. Washer, M.J. Wood, J. 58 Adams, D.G.H. Andren, P.J. Beazley, K.C. Bevis, A.R. Bird, S. Bowen, C. Burke, A.E. Burke, A.S. Byrne, A.M. Corcoran, A.K. Crean, S.F. Edwards, G.J. Elliot, J. Ellis, A.L. Ellis, K. Emerson, C.A. Ferguson, L.D.T. Ferguson, M.J. Fitzgibbon, J.A. Garrett, P. Georganas, S. George, J. Gibbons, S.W. Gillard, J.E. Grierson, S.J. Griffin, A.P. Hall, J.G. * Hatton, M.J. Hayes, C.P. Hoare, K.J. Irwin, J. Jenkins, H.A. Katter, R.C. King, C.F. Lawrence, C.M. Livermore, K.F. Macklin, J.L. McClelland, R.B. McMullan, R.F. Melham, D. Murphy, J.P. O’Connor, B.P. O’Connor, G.M. Owens, J. Plibersek, T. Price, L.R.S. * Quick, H.V. Ripoll, B.F. Roxon, N.L. Sawford, R.W. Sercombe, R.C.G. Smith, S.F. Snowdon, W.E. Tanner, L. Thomson, K.J. Vamvakinou, M. Wilkie, K. Windsor, A.H.C. Question agreed to. 09:16:00 The House divided.     (The Speaker—Hon. David Hawker) 58 Adams, D.G.H. Andren, P.J. Beazley, K.C. Bevis, A.R. Bird, S. Bowen, C. Burke, A.E. Burke, A.S. Byrne, A.M. Corcoran, A.K. Crean, S.F. Edwards, G.J. Elliot, J. Ellis, A.L. Ellis, K. Emerson, C.A. Ferguson, L.D.T. Ferguson, M.J. Fitzgibbon, J.A. Garrett, P. Georganas, S. George, J. Gibbons, S.W. Gillard, J.E. Grierson, S.J. Griffin, A.P. Hall, J.G. * Hatton, M.J. Hayes, C.P. Hoare, K.J. Irwin, J. Jenkins, H.A. Katter, R.C. King, C.F. Lawrence, C.M. Livermore, K.F. Macklin, J.L. McClelland, R.B. McMullan, R.F. Melham, D. Murphy, J.P. O’Connor, B.P. O’Connor, G.M. Owens, J. Plibersek, T. Price, L.R.S. * Quick, H.V. Ripoll, B.F. Roxon, N.L. Sawford, R.W. Sercombe, R.C.G. Smith, S.F. Snowdon, W.E. Tanner, L. Thomson, K.J. Vamvakinou, M. Wilkie, K. Windsor, A.H.C. 76 Abbott, A.J. Andrews, K.J. Bailey, F.E. Baker, M. Baldwin, R.C. Barresi, P.A. Bartlett, K.J. Bishop, B.K. Bishop, J.I. Broadbent, R. Cadman, A.G. Causley, I.R. Ciobo, S.M. Cobb, J.K. Downer, A.J.G. Dutton, P.C. Elson, K.S. Entsch, W.G. Farmer, P.F. Fawcett, D. Ferguson, M.D. Forrest, J.A. Gambaro, T. Gash, J. Georgiou, P. Haase, B.W. Hardgrave, G.D. Hartsuyker, L. Henry, S. Hockey, J.B. Hull, K.E. * Hunt, G.A. Jensen, D. Johnson, M.A. Jull, D.F. Keenan, M. Kelly, J.M. Laming, A. Ley, S.P. Lindsay, P.J. Lloyd, J.E. Macfarlane, I.E. Markus, L. May, M.A. McArthur, S. * McGauran, P.J. Mirabella, S. Moylan, J.E. Nairn, G.R. Nelson, B.J. Neville, P.C. Pearce, C.J. Prosser, G.D. Pyne, C. Randall, D.J. Richardson, K. Robb, A. Ruddock, P.M. Schultz, A. Scott, B.C. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Thompson, C.P. Ticehurst, K.V. Tollner, D.W. Truss, W.E. Tuckey, C.W. Turnbull, M. Vaile, M.A.J. Vale, D.S. Vasta, R. Wakelin, B.H. Washer, M.J. Wood, J. Question negatived. 09:07:00 The House divided.     (The Speaker—Hon. David Hawker) 77 Abbott, A.J. Andrews, K.J. Bailey, F.E. Baker, M. Baldwin, R.C. Barresi, P.A. Bartlett, K.J. Bishop, B.K. Bishop, J.I. Broadbent, R. Brough, M.T. Cadman, A.G. Causley, I.R. Ciobo, S.M. Cobb, J.K. Downer, A.J.G. Dutton, P.C. Elson, K.S. Entsch, W.G. Farmer, P.F. Fawcett, D. Ferguson, M.D. Forrest, J.A. Gambaro, T. Gash, J. Georgiou, P. Haase, B.W. Hardgrave, G.D. Hartsuyker, L. Henry, S. Hockey, J.B. Hull, K.E. * Hunt, G.A. Jensen, D. Johnson, M.A. Jull, D.F. Keenan, M. Kelly, J.M. Laming, A. Ley, S.P. Lindsay, P.J. Lloyd, J.E. Macfarlane, I.E. Markus, L. May, M.A. McArthur, S. * McGauran, P.J. Mirabella, S. Moylan, J.E. Nairn, G.R. Nelson, B.J. Neville, P.C. Pearce, C.J. Prosser, G.D. Pyne, C. Randall, D.J. Richardson, K. Robb, A. Ruddock, P.M. Scott, B.C. Secker, P.D. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Thompson, C.P. Ticehurst, K.V. Tollner, D.W. Truss, W.E. Tuckey, C.W. Turnbull, M. Vaile, M.A.J. Vale, D.S. Vasta, R. Wakelin, B.H. Washer, M.J. Wood, J. 56 Andren, P.J. Beazley, K.C. Bevis, A.R. Bird, S. Bowen, C. Burke, A.E. Burke, A.S. Byrne, A.M. Corcoran, A.K. Crean, S.F. Edwards, G.J. Elliot, J. Ellis, A.L. Ellis, K. Emerson, C.A. Ferguson, L.D.T. Ferguson, M.J. Fitzgibbon, J.A. Garrett, P. Georganas, S. George, J. Gibbons, S.W. Gillard, J.E. Grierson, S.J. Griffin, A.P. Hall, J.G. * Hatton, M.J. Hayes, C.P. Hoare, K.J. Irwin, J. Jenkins, H.A. King, C.F. Lawrence, C.M. Livermore, K.F. Macklin, J.L. McClelland, R.B. McMullan, R.F. Melham, D. Murphy, J.P. O’Connor, B.P. O’Connor, G.M. Owens, J. Plibersek, T. Price, L.R.S. * Quick, H.V. Ripoll, B.F. Roxon, N.L. Sawford, R.W. Sercombe, R.C.G. Smith, S.F. Snowdon, W.E. Tanner, L. Thomson, K.J. Vamvakinou, M. Wilkie, K. Windsor, A.H.C. Question agreed to. 09:13:00 The House divided.     (The Speaker—Hon. David Hawker) 77 Abbott, A.J. Andrews, K.J. Bailey, F.E. Baker, M. Baldwin, R.C. Barresi, P.A. Bartlett, K.J. Bishop, B.K. Bishop, J.I. Broadbent, R. Brough, M.T. Cadman, A.G. Causley, I.R. Ciobo, S.M. Cobb, J.K. Downer, A.J.G. Dutton, P.C. Elson, K.S. Entsch, W.G. Farmer, P.F. Fawcett, D. Ferguson, M.D. Forrest, J.A. Gambaro, T. Gash, J. Georgiou, P. Haase, B.W. Hardgrave, G.D. Hartsuyker, L. Henry, S. Hockey, J.B. Hull, K.E. * Hunt, G.A. Jensen, D. Johnson, M.A. Jull, D.F. Keenan, M. Kelly, J.M. Laming, A. Ley, S.P. Lindsay, P.J. Lloyd, J.E. Macfarlane, I.E. Markus, L. May, M.A. McArthur, S. * McGauran, P.J. Mirabella, S. Moylan, J.E. Nairn, G.R. Nelson, B.J. Neville, P.C. Pearce, C.J. Prosser, G.D. Pyne, C. Randall, D.J. Richardson, K. Robb, A. Ruddock, P.M. Scott, B.C. Secker, P.D. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Thompson, C.P. Ticehurst, K.V. Tollner, D.W. Truss, W.E. Tuckey, C.W. Turnbull, M. Vaile, M.A.J. Vale, D.S. Vasta, R. Wakelin, B.H. Washer, M.J. Wood, J. 58 Adams, D.G.H. Andren, P.J. Beazley, K.C. Bevis, A.R. Bird, S. Bowen, C. Burke, A.E. Burke, A.S. Byrne, A.M. Corcoran, A.K. Crean, S.F. Edwards, G.J. Elliot, J. Ellis, A.L. Ellis, K. Emerson, C.A. Ferguson, L.D.T. Ferguson, M.J. Fitzgibbon, J.A. Garrett, P. Georganas, S. George, J. Gibbons, S.W. Gillard, J.E. Grierson, S.J. Griffin, A.P. Hall, J.G. * Hatton, M.J. Hayes, C.P. Hoare, K.J. Irwin, J. Jenkins, H.A. Katter, R.C. King, C.F. Lawrence, C.M. Livermore, K.F. Macklin, J.L. McClelland, R.B. McMullan, R.F. Melham, D. Murphy, J.P. O’Connor, B.P. O’Connor, G.M. Owens, J. Plibersek, T. Price, L.R.S. * Quick, H.V. Ripoll, B.F. Roxon, N.L. Sawford, R.W. Sercombe, R.C.G. Smith, S.F. Snowdon, W.E. Tanner, L. Thomson, K.J. Vamvakinou, M. Wilkie, K. Windsor, A.H.C. Question agreed to. 09:16:00 The House divided.     (The Speaker—Hon. David Hawker) 58 Adams, D.G.H. Andren, P.J. Beazley, K.C. Bevis, A.R. Bird, S. Bowen, C. Burke, A.E. Burke, A.S. Byrne, A.M. Corcoran, A.K. Crean, S.F. Edwards, G.J. Elliot, J. Ellis, A.L. Ellis, K. Emerson, C.A. Ferguson, L.D.T. Ferguson, M.J. Fitzgibbon, J.A. Garrett, P. Georganas, S. George, J. Gibbons, S.W. Gillard, J.E. Grierson, S.J. Griffin, A.P. Hall, J.G. * Hatton, M.J. Hayes, C.P. Hoare, K.J. Irwin, J. Jenkins, H.A. Katter, R.C. King, C.F. Lawrence, C.M. Livermore, K.F. Macklin, J.L. McClelland, R.B. McMullan, R.F. Melham, D. Murphy, J.P. O’Connor, B.P. O’Connor, G.M. Owens, J. Plibersek, T. Price, L.R.S. * Quick, H.V. Ripoll, B.F. Roxon, N.L. Sawford, R.W. Sercombe, R.C.G. Smith, S.F. Snowdon, W.E. Tanner, L. Thomson, K.J. Vamvakinou, M. Wilkie, K. Windsor, A.H.C. 76 Abbott, A.J. Andrews, K.J. Bailey, F.E. Baker, M. Baldwin, R.C. Barresi, P.A. Bartlett, K.J. Bishop, B.K. Bishop, J.I. Broadbent, R. Cadman, A.G. Causley, I.R. Ciobo, S.M. Cobb, J.K. Downer, A.J.G. Dutton, P.C. Elson, K.S. Entsch, W.G. Farmer, P.F. Fawcett, D. Ferguson, M.D. Forrest, J.A. Gambaro, T. Gash, J. Georgiou, P. Haase, B.W. Hardgrave, G.D. Hartsuyker, L. Henry, S. Hockey, J.B. Hull, K.E. * Hunt, G.A. Jensen, D. Johnson, M.A. Jull, D.F. Keenan, M. Kelly, J.M. Laming, A. Ley, S.P. Lindsay, P.J. Lloyd, J.E. Macfarlane, I.E. Markus, L. May, M.A. McArthur, S. * McGauran, P.J. Mirabella, S. Moylan, J.E. Nairn, G.R. Nelson, B.J. Neville, P.C. Pearce, C.J. Prosser, G.D. Pyne, C. Randall, D.J. Richardson, K. Robb, A. Ruddock, P.M. Schultz, A. Scott, B.C. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Thompson, C.P. Ticehurst, K.V. Tollner, D.W. Truss, W.E. Tuckey, C.W. Turnbull, M. Vaile, M.A.J. Vale, D.S. Vasta, R. Wakelin, B.H. Washer, M.J. Wood, J. Question negatived. 4 BUSINESS 4 Mr LLOYD (Robertson —Minister for Local Government, Territories and Roads) 09:27:00 —by leave—I move: That consideration of government business order of the day No. 1 be postponed until a later hour this day. Question agreed to. 4 BILLS R2628 4 Bill and explanatory memorandum presented by Mr Pearce. Bill read a first time. 4 4 09:28:00 Pearce, Christopher, MP A8W Aston LP Parliamentary Secretary to the Treasurer 1 0 Mr PEARCE —I move: That this bill be now read a second time. The introduction of this bill into the House today represents a significant step forward in ensuring that the Commonwealth can divest ownership of the remaining mortgage insurance contracts written by the Housing Loans Insurance Corporation prior to its abolition in 1997. Together with the Housing Loans Insurance Corporation (Transfer of Assets and Abolition) Repeal Bill 2006, this package of bills will enable the government to bring a long-running process to end its involvement in the mortgage insurance business to a conclusion. At the same time, it also simplifies the operation of the law. The Housing Loans Insurance Corporation was established as a statutory body over 40 years ago to meet a structural deficiency in the availability of mortgage insurance at the time. The corporation insured lenders against the costs of mortgage defaults, thereby assisting low-income earners with small deposits to obtain housing finance. Since 1979, successive governments have recognised that there is no justification for the Commonwealth’s continued involvement in the mortgage insurance business, as the private sector had a demonstrated capacity. In fact, its ongoing involvement was distorting prices and inhibiting the growth of the market, as well as imposing a burden on the budget. Successive governments have made a number of attempts to sell the corporation and exit the mortgage insurance business. An exit was first attempted by the then coalition government in 1979, but processes were overtaken by the election in 1983. Following the election, the then Labor government made two further attempts at a sale—neither of which was successful. In 1996, the Australian government restructured the corporation to place it on a more commercial footing, the intention being to make it a more attractive sale proposition in time. The Housing Loans Insurance Corporation (Transfer of Assets and Abolition) Act 1996 gave effect to this restructure. The restructure involved abolishing the corporation and establishing a new company to continue the mortgage insurance business. Contracts written by the corporation prior to its abolition, known as ‘pre-transfer contracts’, remained under the Commonwealth’s ownership. Claims against these contracts are managed on behalf of the Commonwealth under a management agreement. In 1997, the corporation was abolished. The new company and rights to the renewal business were sold to a private purchaser. To this day, however, the Commonwealth still remains involved in the business of mortgage insurance via its continued ownership of these residual pre-transfer contracts. Importantly, the bill does not commit the government to a transfer, but instead provides the necessary framework to enable any transfer of the contracts to occur, if desired. And continuing ownership of these pre-transfer contracts is not desired. The Commonwealth’s involvement is no longer financially viable and will only become increasingly burdensome to administer over time. The current management agreement expires on 31 December 2006. In addition, the Australian Government Actuary has advised that present market conditions and the current profile of the portfolio provide the Commonwealth with the best opportunity it has had to complete its exit from the lenders mortgage insurance business. Any delay in amending the current legislation may diminish the government’s negotiating position in the interests of the Australian public. For these reasons, the government considers that it is timely now to consider transferring ownership of these contracts to a private insurer to manage the run off of the remaining contracts. This bill enables such a transfer to occur. I commend the bill to the House. Debate (on motion by Mr Crean) adjourned. 5 BILLS R2627 5 Bill presented by Mr Pearce. Bill read a first time. 5 5 09:32:00 Pearce, Christopher, MP A8W Aston LP Parliamentary Secretary to the Treasurer 1 0 Mr PEARCE —I move: That this bill be now read a second time. This bill is a companion bill to the Housing Loans Insurance Corporation (Transfer of Pre-transfer Contracts) Bill 2006. On the transfer of the pre-transfer contracts, this bill repeals the existing redundant legislation which has achieved its purpose; that is, to restructure the Housing Loans Insurance Corporation and facilitate the sale of the Commonwealth’s interests in the company’s renewal business. These events occurred in 1997. I commend the bill to the House. Debate (on motion by Mr Crean) adjourned. 5 BILLS R2623 5 Bill and explanatory memorandum presented by Mr Abbott. Bill read a first time. 5 5 09:33:00 Abbott, Tony, MP EZ5 Warringah LP Minister for Health and Ageing 1 0 Mr ABBOTT —I move: That this bill be now read a second time. The Medical Indemnity Legislation Amendment Bill 2006 is a further refinement of legislation implementing the government’s medical indemnity package, in the light of consultations with insurers and doctors regarding their experience of its operation. The government’s original package of medical indemnity legislation in 2002 addressed the affordability of medical indemnity for doctors and the industry’s long-term viability, in a period of upheaval. Thanks to these changes, medical practitioners in private practice have been able to obtain affordable medical indemnity insurance cover and insurers have been protected against more extreme claims. However, those who had left the medical workforce—including retirees, and those on maternity leave—often faced significant ongoing costs for ‘run-off cover’ for incidents which had occurred during their careers but had not been reported. The Run-Off Cover Scheme, or ROCS, which began on 1 July 2004, is a logical extension of the medical indemnity package, designed to provide secure insurance for doctors who have left private practice. The intention was that medical indemnity insurers would provide cover under ROCS on the same basis as to doctors in the workforce, but in the former case the government would reimburse the cost of claims to insurers. Although the government pays ROCS claims, these are funded by a levy on insurers so that the scheme operates on a cost-neutral basis, to the benefit of taxpayers, patients and doctors alike. The present bill will align ROCS more closely to current industry practice, increase the level of certainty around the provision of ROCS cover, and simplify the administration of the scheme, following concerns raised by insurers and medical practitioners. In particular, ROCS cover will no longer be limited to incidents which were covered by medical indemnity insurance at the time of their occurrence, but will also include those which were uncovered at the time, but for which the doctor subsequently took out retroactive cover—specifically, in his or her last contract of insurance before entering ROCS. This change recognises that some of these gaps in cover may have been brief and inadvertent; if a doctor has addressed this by taking out retroactive cover, it seems unreasonable to exclude such periods from ROCS cover. The cover insurers offer individual doctors under ROCS will mirror that provided immediately before they become eligible for ROCS. Other provisions ensure that the payment of claims—and the reimbursement of the cost of those claims by Medicare Australia—will be closely linked to insurers’ ordinary business practices. From the doctors’ point of view, therefore, the transition to ROCS will be seamless: they will continue to receive the same cover and the same service. Some of the provisions of this bill extend beyond ROCS. Apart from those clarifying abbreviations, these include a relaxation of penalty provisions in relation to compulsory offers of retroactive cover: doctors who accept such an offer will no longer have to respond in writing, but those who refuse retroactive cover will. This will ensure that no doctor misses out on retroactive cover by accident. This change could be said to prejudice the system in favour of doctors’ taking out retroactive cover, but stops short of requiring it: medical indemnity insurance, including cover for past incidents, remains the responsibility of the individual doctor. The government is working with medical indemnity insurers to ensure that doctors understand the importance of this decision, and in particular recognise that the medical indemnity cover they will have in retirement, in relation to past incidents, now depends entirely on their last contract of insurance. This means they should take particular care in relation to medical indemnity cover as they begin to think about retirement. This bill builds upon the solid base of the government’s existing medical indemnity package, particularly in relation to ROCS. It provides for greater certainty, smoother operation and a seamless transition for doctors leaving the private medical workforce. It demonstrates the ongoing commitment of the government to the medical indemnity industry, doctors and patients, and to working with doctors and insurers to ensure that medical indemnity insurance continues to operate viably, fairly and efficiently for the benefit of the industry, doctors, patients and taxpayers. I commend the bill to the House. Debate (on motion by Mr Crean) adjourned. 7 BILLS R2584 Cognate bill: 7 BILLS R2583 7 Debate resumed from 12 September, on motion by Mr Andrews: That this bill be now read a second time. upon which Mr Stephen Smith moved by way of amendment: That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House notes that this bill: follows on from the Government’s extreme industrial relations changes which are a massive attack on living standards and living conditions, by removing rights, entitlements and conditions of Australian employees; also removes rights, entitlements, conditions and protections afforded to Australians in the workplace, whether employees or independent contractors; does this by allowing employees to be treated as “independent contractors”, thereby removing employee protections and entitlements and placing superannuation, tax, and workers’ compensation burdens on them; does this by removing protections from independent contractors who are in a dependent contract position and as a consequence in an unequal bargaining position; effects this by: Continuing to use the common law definition of independent contractor as the basis of law without the guidance of statutory criteria. Allowing employees to be treated as independent contractors in a sham way by ineffective anti-sham provisions. Overriding State laws with employee deeming provisions. Overriding State unfair contracts provisions which provide protection to employees, contractors and small business. Overriding any future State and Territory owner-driver transport laws and putting existing State owner-driver transport laws at risk. Failing to provide any genuine protections for outworkers through ineffective outworker provisions, significantly weakening outworker entitlements. introduces even more complexity and confusion into Australia’s workplace laws. treats the Senate Employment and Workplace Relations Committee reporting on these matters with contempt by dealing with the legislation prior to consideration of its report’. 7 09:39:00 Andrews, Kevin, MP HK5 Menzies LP Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service 1 0 Mr ANDREWS —In summing up the debate on the Independent Contractors Bill 2006 and the Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006, I thank members for the contributions they have made in this chamber. To briefly recap, the bills before the House reflect the government’s intention and commitment to ensuring that independent contracting is encouraged in Australia without excessive regulation. These bills are built on the tenet that genuine independent contracting relationships should be governed by commercial, not industrial, law. This is reflected in our approach of having a stand-alone Independent Contractors Bill rather than including the reforms in workplace relations legislation. The bills will, firstly, recognise and protect the unique position of independent contractors in the Australian workplace; secondly, override state laws which deem certain categories of independent contractor to be employees for the purposes of state industrial relations legislation; thirdly, maintain existing specific protections under state legislation for owner-drivers in the road transport industry; fourthly, maintain existing specific protections under state legislation for contracted outworkers in the textile, clothing and footwear industry; fifthly, replace existing state unfair contracts jurisdictions with a single federal unfair contracts jurisdiction; and, lastly, protect genuine employees from sham contracting arrangements and from threatening or deceptive behaviour aimed at making them change their status to independent contractors. The passage of the bills will be accompanied by funding of some $15 million over four years to support enforcement and education activities. I would like to address some of the matters raised during the debate. Firstly, I turn to common-law definition. A number of opposition speakers complained about the fact that the Independent Contractors Bill employs the common-law definition of who is or is not an independent contractor. In particular, the member for Hotham, who is in the chamber at the moment, would have the House believe that the common-law test has become increasingly blurred, leading to arbitrary and unpredictable outcomes. This, I posit, could not be further from reality. The government considers that the common-law test is the best arbiter of the distinction between an employee and an independent contractor. In applying the common-law test, courts look at the totality of the relationship between a worker and their hirer, not just the formal contractual arrangements. This ability to consider all the circumstances of a case makes the common-law test both flexible and fair. Any statutory definition would lack the flexibility of the common law. It is highly unlikely that the statutory definition would, as it is claimed by some, reduce the number of disputes over the status of the worker. There will always be some doubt around the fringes of a definition that will result in courts having to determine the true nature of a person’s status. In particular, the government opposes the use of the alienation of personal services income test to determine who is an independent contractor for the purposes of the Independent Contractors Bill. This test has been designed to address taxation policy considerations and should not simply be transposed into the legislation for other purposes. Further, the self-assessment nature of the test leaves it open to manipulation, thereby preventing it from providing the level of certainty alleged by some. Secondly, I turn to the overriding of state deeming laws. A number of opposition speakers opposed the overriding of state deeming laws proposed in the Independent Contractors Bill. In particular, the member for Perth, in his speech, in effect argued for the retention of the New South Wales laws that deem unregulated categories of workers such as milk vendors, carpenters, bricklayers, blind fitters and bread vendors as employees. The government opposes state and territory laws which deprive a worker of the right to choose the manner in which they work. Deeming laws prevent a person from being an independent contractor. They force all workers in particular industries to operate as employees. The Independent Contractors Bill will override state and territory deeming laws and give people the choice as to whether they want to work as an independent contractor or an employee. The Independent Contractors Bill includes transitional provisions for workers affected by deeming provisions at the time the proposed legislation commences. These people will continue to be deemed as employees for up to three years. However, they may elect to switch off the state deeming laws at any time within that transitional period. However, the Independent Contractors Bill will not override deeming laws with respect to outworkers. Similarly, the transitional provisions will have no application with respect to these workers. Outworkers are widely recognised as an especially vulnerable section of the Australian labour market who require additional protections. I turn to the outworker protections. A number of members opposite have asserted that the Independent Contractors Bill undermines the protections that apply to outworkers in the textile, clothing and footwear industry. Let me reiterate the government’s position on outworkers. The government does not intend the Independent Contractors Bill to in any way interfere with state and territory laws that afford protections to outworkers in the TCF industry. To this end, the government agreed to my department discussing with the Textile Clothing and Footwear Union and FairWear the detail of draft amendments to make the preservation of existing state outworker laws as clear and effective as possible. The government is considering these amendments and, in that context, we are considering also the report of the Senate committee inquiry into this bill, chaired by Senator Troeth. If there are amendments to be moved, we will look to move any amendments in the Senate. I also want to respond to the assertions of a number of members opposite about the effect of part 4 of the Independent Contractors Bill. These assertions betray their lack of understanding of the effect of part 4. Part 4 does not remove entitlements from outworkers. It simply provides for a default minimum remuneration entitlement for outworkers where their rate of pay is not already set by a state or territory law or an instrument made under such a law. Part 4 would apply in addition to any other state and territory protections, as these laws will be saved by clause 7(2)(a) of the bill. I now turn to sham arrangements. The member for Perth has alleged that the sham arrangement provisions are in themselves shams. He said in the House on 17 August this year that the bill: ... will enable employees who are genuinely in an employer-employee relationship and who are in a vulnerable position, with unequal bargaining power, to be pushed artificially into a so-called independent contractor’s provision ... This is not the case. While the government fully supports genuine independent contracting arrangements, it will not tolerate the use of sham arrangements and considers that people found to have knowingly disguised an employment relationship in this way should be subject to penalties. The government has demonstrated this by proposing four new penalty provisions. These would apply to employers who knowingly seek to disguise employment relationships as independent contracting arrangements. They would also apply to employers who deceive employees in order that they become independent contractors or who dismiss or threaten to dismiss a person for the purpose of engaging them as an independent contractor to perform substantially the same work. An employer who is found to be in breach of any of these provisions can be fined up to $33,000. These penalties would be able to be sought in either the Federal Court or the Federal Magistrates Court by the employee, a workplace inspector or, with the employee’s consent, their union. Extra funding of $6.2 million was allocated to the Office of Workplace Services in the last federal budget to enable the office to undertake this important compliance function. I turn now to the unfair contracts jurisdiction. Independent contracting is a commercial arrangement which should not be regulated by workplace relations legislation which focuses on the employee rather than on commercial considerations. The government considers that state unfair contracts jurisdictions have gone too far in attempting to rewrite commercial contracts which have been validly entered into by the parties. In New South Wales, for example, the Industrial Relations Commission can rewrite commercial contracts applying to independent contractors even where the terms of a contract are fair when entered into. This is totally unacceptable because it creates commercial uncertainty. To address these concerns, the Independent Contractors Bill will, as far as constitutionally possible, override existing state unfair contracts jurisdictions and replace them with a nationally consistent jurisdiction. This jurisdiction will more appropriately focus on the commercial considerations when determining if a contract is unfair. By introducing one national system which covers independent contractors, confusion and inconsistency which arise from the duplication of state and federal laws will be eliminated. This federal unfair contracts jurisdiction will become more accessible to parties by, firstly, allowing eligible incorporated independent contractors, such as small family-run businesses, access to the unfair contracts scheme for the first time. Secondly, it will establish concurrent jurisdiction in the Federal Magistrates Court and the Federal Court. This will enable parties to have a choice of jurisdiction, which will mean applications will be handled with less delay and expense. Thirdly, it will limit the requirement for parties to pay costs to another party except where they have instituted an unfair contracts claim vexatiously. The federal unfair contracts provisions therefore strike the right balance between the overly prescriptive and complex New South Wales and Queensland unfair contracts provisions on the one hand and providing an unfair contracts scheme for the remaining states and territories which currently do not have their own unfair contracts jurisdictions on the other. It has been alleged that most workers would be unable to afford the cost of commencing an unfair contracts proceeding or a sham penalty proceeding under the Independent Contractors Bill given the high fees that apply in the Federal Court and the Federal Magistrates Court. These allegations are unfounded. Under the Independent Contractors Bill, the cost of bringing an unfair contracts application will be reduced. Based on the current fee structure in the New South Wales Industrial Relations Commission, it would cost a worker $1,916 to file an unfair contracts application and have the matter set down for a one-day hearing in New South Wales. The same worker could file an application under the new unfair contracts provisions in the Independent Contractors Bill in the Federal Magistrates Court and have it set down for hearing at a cost of just $668—roughly one-third of the amount payable in the New South Wales jurisdiction. Moreover, the Federal Magistrates Court is prevented by clause 17 of the bill from making cost orders, except in cases where proceedings are instituted vexatiously. By conferring the federal unfair contracts jurisdiction on the Federal Magistrates Court, the government has made this jurisdiction more accessible to workers. I turn to the review of owner-driver laws. I note that a number of opposition speakers—in particular, the members for Perth, Throsby and Blaxland—have mentioned the government’s decision to review state owner-driver laws in 2007. As the government has previously announced, the Independent Contractors Bill will maintain the status quo for New South Wales and Victorian state owner-driver laws at this time. The government recognises the historical bipartisan support which has existed in New South Wales for some sectors of the owner-driver industry. As such, the bill will not override the existing protections for owner-drivers in New South Wales and Victoria, the only two states with such legislation. Some members opposite have tried to misrepresent the bill by claiming that it treats state owner-driver laws differently. This is not the case. All existing state owner-driver laws are preserved by the bill. The proposed legislation obviously cannot preserve legislation that does not exist, and this is the reason that only the New South Wales and Victorian laws are named in part 2 of the bill. Let me be clear about the extent of the savings for owner-driver laws: it is the government’s intention to review state owner-driver laws in 2007. The purpose of the review will be to seek to rationalise these laws with the aim of achieving national consistency in this regard. I commend the bill to the House. Question put: That the words proposed to be omitted (Mr Stephen Smith’s amendment) stand part of the question. 09:56:00 The House divided.     (The Deputy Speaker—Mr Jenkins) 77 Abbott, A.J. Andrews, K.J. Bailey, F.E. Baldwin, R.C. Barresi, P.A. Bartlett, K.J. Bishop, B.K. Bishop, J.I. Broadbent, R. Brough, M.T. Cadman, A.G. Causley, I.R. Ciobo, S.M. Cobb, J.K. Downer, A.J.G. Draper, P. Dutton, P.C. Elson, K.S. Entsch, W.G. Farmer, P.F. Fawcett, D. Ferguson, M.D. Forrest, J.A. Gambaro, T. Gash, J. Georgiou, P. Haase, B.W. Hardgrave, G.D. Hartsuyker, L. Henry, S. Hockey, J.B. Hull, K.E. * Hunt, G.A. Jensen, D. Johnson, M.A. Jull, D.F. Keenan, M. Kelly, J.M. Laming, A. Ley, S.P. Lindsay, P.J. Lloyd, J.E. Macfarlane, I.E. May, M.A. McArthur, S. * McGauran, P.J. Mirabella, S. Moylan, J.E. Nairn, G.R. Nelson, B.J. Neville, P.C. Pearce, C.J. Prosser, G.D. Pyne, C. Randall, D.J. Richardson, K. Robb, A. Ruddock, P.M. Schultz, A. Scott, B.C. Secker, P.D. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Thompson, C.P. Ticehurst, K.V. Tollner, D.W. Truss, W.E. Tuckey, C.W. Turnbull, M. Vaile, M.A.J. Vale, D.S. Vasta, R. Wakelin, B.H. Washer, M.J. Wood, J. 60 Adams, D.G.H. Albanese, A.N. Andren, P.J. Beazley, K.C. Bevis, A.R. Bird, S. Bowen, C. Burke, A.E. Burke, A.S. Byrne, A.M. * Corcoran, A.K. Crean, S.F. Edwards, G.J. Elliot, J. Ellis, A.L. Ellis, K. Emerson, C.A. Ferguson, L.D.T. Ferguson, M.J. Fitzgibbon, J.A. Garrett, P. Georganas, S. George, J. Gibbons, S.W. Gillard, J.E. Grierson, S.J. Griffin, A.P. Hall, J.G. * Hatton, M.J. Hayes, C.P. Hoare, K.J. Irwin, J. Katter, R.C. King, C.F. Lawrence, C.M. Livermore, K.F. Macklin, J.L. McClelland, R.B. McMullan, R.F. Melham, D. Murphy, J.P. O’Connor, B.P. O’Connor, G.M. Owens, J. Plibersek, T. Price, L.R.S. Quick, H.V. Ripoll, B.F. Roxon, N.L. Rudd, K.M. Sawford, R.W. Sercombe, R.C.G. Smith, S.F. Snowdon, W.E. Swan, W.M. Tanner, L. Thomson, K.J. Vamvakinou, M. Wilkie, K. Windsor, A.H.C. Question agreed to. 10:02:00 The House divided.     (The Deputy Speaker—Mr Jenkins) 77 Abbott, A.J. Andrews, K.J. Bailey, F.E. Baldwin, R.C. Barresi, P.A. Bartlett, K.J. Bishop, B.K. Bishop, J.I. Broadbent, R. Brough, M.T. Cadman, A.G. Causley, I.R. Ciobo, S.M. Cobb, J.K. Downer, A.J.G. Draper, P. Dutton, P.C. Elson, K.S. Entsch, W.G. Farmer, P.F. Fawcett, D. Ferguson, M.D. Forrest, J.A. Gambaro, T. Gash, J. Georgiou, P. Haase, B.W. Hardgrave, G.D. Hartsuyker, L. Henry, S. Hockey, J.B. Hull, K.E. * Hunt, G.A. Jensen, D. Johnson, M.A. Jull, D.F. Keenan, M. Kelly, J.M. Laming, A. Ley, S.P. Lindsay, P.J. Lloyd, J.E. Macfarlane, I.E. May, M.A. McArthur, S. * McGauran, P.J. Mirabella, S. Moylan, J.E. Nairn, G.R. Nelson, B.J. Neville, P.C. Pearce, C.J. Prosser, G.D. Pyne, C. Randall, D.J. Richardson, K. Robb, A. Ruddock, P.M. Schultz, A. Scott, B.C. Secker, P.D. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Thompson, C.P. Ticehurst, K.V. Tollner, D.W. Truss, W.E. Tuckey, C.W. Turnbull, M. Vaile, M.A.J. Vale, D.S. Vasta, R. Wakelin, B.H. Washer, M.J. Wood, J. 60 Adams, D.G.H. Albanese, A.N. Andren, P.J. Beazley, K.C. Bevis, A.R. Bird, S. Bowen, C. Burke, A.E. Burke, A.S. Byrne, A.M. * Corcoran, A.K. Crean, S.F. Edwards, G.J. Elliot, J. Ellis, A.L. Ellis, K. Emerson, C.A. Ferguson, L.D.T. Ferguson, M.J. Fitzgibbon, J.A. Garrett, P. Georganas, S. George, J. Gibbons, S.W. Gillard, J.E. Grierson, S.J. Griffin, A.P. Hall, J.G. * Hatton, M.J. Hayes, C.P. Hoare, K.J. Irwin, J. Katter, R.C. King, C.F. Lawrence, C.M. Livermore, K.F. Macklin, J.L. McClelland, R.B. McMullan, R.F. Melham, D. Murphy, J.P. O’Connor, B.P. O’Connor, G.M. Owens, J. Plibersek, T. Price, L.R.S. Quick, H.V. Ripoll, B.F. Roxon, N.L. Rudd, K.M. Sawford, R.W. Sercombe, R.C.G. Smith, S.F. Snowdon, W.E. Swan, W.M. Tanner, L. Thomson, K.J. Vamvakinou, M. Wilkie, K. Windsor, A.H.C. Question agreed to. 10:09:00 The House divided.     (The Deputy Speaker—Mr Jenkins) 76 Abbott, A.J. Andrews, K.J. Bailey, F.E. Baldwin, R.C. Barresi, P.A. Bartlett, K.J. Bishop, B.K. Bishop, J.I. Broadbent, R. Brough, M.T. Cadman, A.G. Causley, I.R. Ciobo, S.M. Cobb, J.K. Downer, A.J.G. Draper, P. Dutton, P.C. Elson, K.S. Entsch, W.G. Farmer, P.F. Fawcett, D. Ferguson, M.D. Forrest, J.A. Gambaro, T. Gash, J. Georgiou, P. Haase, B.W. Hardgrave, G.D. Hartsuyker, L. Henry, S. Hockey, J.B. Hull, K.E. * Hunt, G.A. Jensen, D. Johnson, M.A. Jull, D.F. Keenan, M. Kelly, J.M. Laming, A. Ley, S.P. Lindsay, P.J. Lloyd, J.E. Macfarlane, I.E. May, M.A. McArthur, S. * Mirabella, S. Moylan, J.E. Nairn, G.R. Nelson, B.J. Neville, P.C. Pearce, C.J. Prosser, G.D. Pyne, C. Randall, D.J. Richardson, K. Robb, A. Ruddock, P.M. Schultz, A. Scott, B.C. Secker, P.D. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Thompson, C.P. Ticehurst, K.V. Tollner, D.W. Truss, W.E. Tuckey, C.W. Turnbull, M. Vaile, M.A.J. Vale, D.S. Vasta, R. Wakelin, B.H. Washer, M.J. Wood, J. 60 Adams, D.G.H. Albanese, A.N. Andren, P.J. Beazley, K.C. Bevis, A.R. Bird, S. Bowen, C. Burke, A.E. Burke, A.S. Byrne, A.M. * Corcoran, A.K. Crean, S.F. Edwards, G.J. Elliot, J. Ellis, A.L. Ellis, K. Emerson, C.A. Ferguson, L.D.T. Ferguson, M.J. Fitzgibbon, J.A. Garrett, P. Georganas, S. George, J. Gibbons, S.W. Gillard, J.E. Grierson, S.J. Griffin, A.P. Hall, J.G. * Hatton, M.J. Hayes, C.P. Hoare, K.J. Irwin, J. Katter, R.C. King, C.F. Lawrence, C.M. Livermore, K.F. Macklin, J.L. McClelland, R.B. McMullan, R.F. Melham, D. Murphy, J.P. O’Connor, B.P. O’Connor, G.M. Owens, J. Plibersek, T. Price, L.R.S. Quick, H.V. Ripoll, B.F. Roxon, N.L. Rudd, K.M. Sawford, R.W. Sercombe, R.C.G. Smith, S.F. Snowdon, W.E. Swan, W.M. Tanner, L. Thomson, K.J. Vamvakinou, M. Wilkie, K. Windsor, A.H.C. Question agreed to. 13 Mr ANDREWS (Menzies —Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service) 10:04:00 —by leave—I move: That this bill be now read a third time. Question put. 10:09:00 The House divided.     (The Deputy Speaker—Mr Jenkins) 76 Abbott, A.J. Andrews, K.J. Bailey, F.E. Baldwin, R.C. Barresi, P.A. Bartlett, K.J. Bishop, B.K. Bishop, J.I. Broadbent, R. Brough, M.T. Cadman, A.G. Causley, I.R. Ciobo, S.M. Cobb, J.K. Downer, A.J.G. Draper, P. Dutton, P.C. Elson, K.S. Entsch, W.G. Farmer, P.F. Fawcett, D. Ferguson, M.D. Forrest, J.A. Gambaro, T. Gash, J. Georgiou, P. Haase, B.W. Hardgrave, G.D. Hartsuyker, L. Henry, S. Hockey, J.B. Hull, K.E. * Hunt, G.A. Jensen, D. Johnson, M.A. Jull, D.F. Keenan, M. Kelly, J.M. Laming, A. Ley, S.P. Lindsay, P.J. Lloyd, J.E. Macfarlane, I.E. May, M.A. McArthur, S. * Mirabella, S. Moylan, J.E. Nairn, G.R. Nelson, B.J. Neville, P.C. Pearce, C.J. Prosser, G.D. Pyne, C. Randall, D.J. Richardson, K. Robb, A. Ruddock, P.M. Schultz, A. Scott, B.C. Secker, P.D. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Thompson, C.P. Ticehurst, K.V. Tollner, D.W. Truss, W.E. Tuckey, C.W. Turnbull, M. Vaile, M.A.J. Vale, D.S. Vasta, R. Wakelin, B.H. Washer, M.J. Wood, J. 60 Adams, D.G.H. Albanese, A.N. Andren, P.J. Beazley, K.C. Bevis, A.R. Bird, S. Bowen, C. Burke, A.E. Burke, A.S. Byrne, A.M. * Corcoran, A.K. Crean, S.F. Edwards, G.J. Elliot, J. Ellis, A.L. Ellis, K. Emerson, C.A. Ferguson, L.D.T. Ferguson, M.J. Fitzgibbon, J.A. Garrett, P. Georganas, S. George, J. Gibbons, S.W. Gillard, J.E. Grierson, S.J. Griffin, A.P. Hall, J.G. * Hatton, M.J. Hayes, C.P. Hoare, K.J. Irwin, J. Katter, R.C. King, C.F. Lawrence, C.M. Livermore, K.F. Macklin, J.L. McClelland, R.B. McMullan, R.F. Melham, D. Murphy, J.P. O’Connor, B.P. O’Connor, G.M. Owens, J. Plibersek, T. Price, L.R.S. Quick, H.V. Ripoll, B.F. Roxon, N.L. Rudd, K.M. Sawford, R.W. Sercombe, R.C.G. Smith, S.F. Snowdon, W.E. Swan, W.M. Tanner, L. Thomson, K.J. Vamvakinou, M. Wilkie, K. Windsor, A.H.C. Question agreed to. 10:09:00 The House divided.     (The Deputy Speaker—Mr Jenkins) 76 Abbott, A.J. Andrews, K.J. Bailey, F.E. Baldwin, R.C. Barresi, P.A. Bartlett, K.J. Bishop, B.K. Bishop, J.I. Broadbent, R. Brough, M.T. Cadman, A.G. Causley, I.R. Ciobo, S.M. Cobb, J.K. Downer, A.J.G. Draper, P. Dutton, P.C. Elson, K.S. Entsch, W.G. Farmer, P.F. Fawcett, D. Ferguson, M.D. Forrest, J.A. Gambaro, T. Gash, J. Georgiou, P. Haase, B.W. Hardgrave, G.D. Hartsuyker, L. Henry, S. Hockey, J.B. Hull, K.E. * Hunt, G.A. Jensen, D. Johnson, M.A. Jull, D.F. Keenan, M. Kelly, J.M. Laming, A. Ley, S.P. Lindsay, P.J. Lloyd, J.E. Macfarlane, I.E. May, M.A. McArthur, S. * Mirabella, S. Moylan, J.E. Nairn, G.R. Nelson, B.J. Neville, P.C. Pearce, C.J. Prosser, G.D. Pyne, C. Randall, D.J. Richardson, K. Robb, A. Ruddock, P.M. Schultz, A. Scott, B.C. Secker, P.D. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Thompson, C.P. Ticehurst, K.V. Tollner, D.W. Truss, W.E. Tuckey, C.W. Turnbull, M. Vaile, M.A.J. Vale, D.S. Vasta, R. Wakelin, B.H. Washer, M.J. Wood, J. 60 Adams, D.G.H. Albanese, A.N. Andren, P.J. Beazley, K.C. Bevis, A.R. Bird, S. Bowen, C. Burke, A.E. Burke, A.S. Byrne, A.M. * Corcoran, A.K. Crean, S.F. Edwards, G.J. Elliot, J. Ellis, A.L. Ellis, K. Emerson, C.A. Ferguson, L.D.T. Ferguson, M.J. Fitzgibbon, J.A. Garrett, P. Georganas, S. George, J. Gibbons, S.W. Gillard, J.E. Grierson, S.J. Griffin, A.P. Hall, J.G. * Hatton, M.J. Hayes, C.P. Hoare, K.J. Irwin, J. Katter, R.C. King, C.F. Lawrence, C.M. Livermore, K.F. Macklin, J.L. McClelland, R.B. McMullan, R.F. Melham, D. Murphy, J.P. O’Connor, B.P. O’Connor, G.M. Owens, J. Plibersek, T. Price, L.R.S. Quick, H.V. Ripoll, B.F. Roxon, N.L. Rudd, K.M. Sawford, R.W. Sercombe, R.C.G. Smith, S.F. Snowdon, W.E. Swan, W.M. Tanner, L. Thomson, K.J. Vamvakinou, M. Wilkie, K. Windsor, A.H.C. Question agreed to. 14 BILLS R2583 14 Debate resumed from 22 June, on motion by Mr Andrews: That this bill be now read a second time. Question agreed to. 14 Mr ANDREWS (Menzies —Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service) 10:12:00 —by leave—I move: That this bill be now read a third time. Question agreed to. Bill read a third time. 14 BILLS R2605 14 Debate resumed from 17 August, on motion by Mr Pearce: That this bill be now read a second time. 14 10:12:00 Fitzgibbon, Joel, MP 8K6 Hunter ALP 0 0 Mr FITZGIBBON —Going into the 1996 election this government made, as a centrepiece of their campaign, promises to reduce the red-tape burden, in particular the red-tape burden and compliance costs on small business. Here we are 10 years later, still waiting. Indeed, their promise back in 1996 in the lead-up to that election was to reduce the red-tape burden on small business by some 50 per cent—a very ambitious target. Of course, it is a target that the government has not nearly met; indeed, it has failed badly in that goal. Not only has it not reduced the red-tape burden by 50 per cent, it has not reduced it by 10 or even one per cent. In fact, it has increased the regulatory burden on small business over the course of the last 10 years. You do not have to look very far for evidence of that. You need look no further than the GST, the business activity statement and all the compliance burdens which come from becoming a tax collector on behalf of the government. Notwithstanding all of that, the opposition welcomes the fact that the Tax Laws Amendment (2006 Measures No. 5) Bill 2006 is the government’s first attempt, I suppose, to finally get on with doing something about the regulatory burden on business generally. Of course, business peak groups have been very active in their campaign in attempting to force the government to finally move and to do something about red tape and compliance, including tax compliance and the various burdens that go with it. The peak groups have been as one. Amongst them have been organisations like ACCI and the BCA, which is generally accepted to represent the bigger end of town—the larger businesses in this country. Organisations like COSBOA, representing small business employers and operators in this country, have also been very active in that regard. This is an issue that has reached chronic proportions. There is no shortage of surveys which show that small business in this country is now spending on average some 40 hours a month just complying with the various regulatory burdens government imposes on it. This has a very real economic impact on those small firms. The enormous compliance burden saps business entrepreneurial spirit. It puts barriers in the way of small businesses attempting to grow, to turn a profit and to put food on the tables of their families. It also has enormous efficiency impacts on the Australian economy and, as a result, has an impact on GDP growth and therefore living standards in this country. I have always said that the best thing any government can do for business and, in particular, small business in this country is to grow the economy, keep interest rates low and after that basically get out of the way. Getting out of the way is a critical point in that trifecta. There are some exceptions, of course, where market failure will call upon the government to intervene. There is no better example of that than the debate we are having in the parliament at the moment with respect to the petroleum repeal bill, where the opposition is insisting that the government finally move to restore section 46 of the Trade Practices Act to its former glory—a once very effective provision in that now quite aging act, but a provision that has been undermined by various court decisions, including decisions like Boral and Safeway, which the ACCC chairman himself said did clearly not reflect the legislature’s intention when framing those provisions. With respect to the petroleum repeal bill, we have been saying that we agree that this 27-year-old regulatory regime is out of date, antiquated, anachronistic in some ways and in need of repeal. In its place we need a strong Oilcode, and I think we are pretty close to that now. I do not think we will ever get absolute agreement in the industry about the nature of the Oilcode but I think we are probably as close as we can be. The important third tranche is the strengthening of the Trade Practices Act. The original sites act was designed to deal with market power abuse. It has not been effective in recent years, but that does not mean we throw the baby out with the bathwater. We need something to replace it. We need a very strong Trade Practices Act or, to say the same, reform of the Trade Practices Act. As we speak in the Senate we are debating this bill, and the opposition is maintaining its view that, while we support the repeal of the sites act, we do not believe the package is complete in the absence of reform to the Trade Practices Act and, in particular, section 46. This, I suppose, is the government’s first attempt to get out of the way in the absence of examples where there is market failure and a reason to intervene. Its first attempt started with a reference of the issue of the various levels of government regulation and the way they are impacting on the business sector, including the small business sector, to an inquiry to be held by Mr Gary Banks. This led to the formation of the Banks committee and the report of the Taskforce on Reducing Regulatory Burdens on Business, Rethinking regulation. This bill, as I said, is a first attempt to deal with some of the low-hanging fruit. Labor welcomes the measures involved, but we say they are not enough. Business is struggling just to understand the regulatory overload, let alone ensure it is always in full compliance. This is a real concern for business—not knowing whether month in and month out it is complying with the various regulatory regimes which are imposed upon it, particularly all the complex taxation rules it is expected to comply with. In recent times the government has had a bit of an attempt at revising those tax provisions by removing a number of inoperative provisions in the tax act. We welcomed and supported that move. But I make the point again that we are not concerned so much with the inoperative provisions of the tax act as with the operative provisions of the tax act—the ones that are still in operation; that, on that basis, pose the greatest threat to business, particularly small business; and that cause small business major concern. In recent times we have also seen the regulatory burden added to by the introduction of Work Choices. This is a nightmare for small business. Recent surveys, not surprisingly, have shown that—notwithstanding the government’s rhetoric claiming Work Choices is the best thing since sliced bread for small business—small business is not supportive of Work Choices. It is not supportive of Work Choices mainly because it simply does not understand it. How could small businesses understand what is ahead of them under Work Choices when some of the country’s best legal minds are still arguing about its implications and ramifications? The bottom line is, in a relatively healthy economy, the overwhelming majority of small businesses are very happy with their arrangements, investing in the skills of their employees and working hard on a day-to-day basis, in the absence of an HR department, to make sure that their employees are happy and that they are getting maximum efficiency and productivity out of them. They are happy with their current lot; they do not need the threat of Work Choices. They do not need another layer of regulatory burden and compliance. They do not need another layer of complexity, and that is what Work Choices will present to them. So the measures in this bill, while welcome, are just planing off the rough edges. We will be supporting them, but the government needs to embrace much more of what Gary Banks has had to say. We will be looking forward in the not too distant future to the government having much more to say on that than is contained in this bill. It is not all that hard. In June of this year the opposition leader and I launched the first tranche of Labor’s small business policy, a five-point plan with a key focus on reducing the regulatory burden for small business. It included the provision of a grant to small firms. Skills are an enormous issue for small firms at the moment; they are having difficulty acquiring staff. They cannot compete against big firms on wages, so the best thing they can do is to try to skill up those who are already on staff. Labor’s training bonus will give some assistance to small business people hoping to skill their staff or, indeed, skill themselves. The second point of the plan was a new superannuation clearing house so that small businesses with obligations under the superannuation guarantee levy can rid themselves of super choice and obligations they have to their employees such as providing the infrastructure they require to take up the superannuation guarantee payment. It will also remove the fear some small business employees have about becoming financial advisers on employees’ superannuation. That new superannuation choice legislation threatens some significant fines and, indeed, jail for small business people who dare to offer advice about where their employees should turn for their superannuation savings. The third point in the plan, which is most relevant to this bill, is the introduction of a red-tape reduction plan. It is a simple idea that puts incentives in place for government departments when they are formulating policy, tax law and law generally that is going to impact on small business. It gives a financial incentive for government departments to perform in this regard. In consultation with state and territory governments, we hope this plan will also flow on to the decision-making processes of those governments. So there are things you can do. The fourth point in our plan is to try to improve cash flow for small firms by ensuring that larger businesses with which they do business pay their bills on time. It will allow small business to charge interest against those who are traditionally slow payers. That is an entirely appropriate thing to do, and it is an idea this government should be embracing. The fifth point in the plan is to deliver greater access for small business to appropriate broadband speeds, and to ensure regional small businesses can compete with their city cousins and are not disadvantaged by a lack of access to modern-day technology. So it is not all that difficult. We have given the government some guidance; we have given them some ideas. We will be happy for them to steal them from us; I am sure the member for Mitchell thinks they are great ideas, and he might care to respond when he takes the call when I have completed my contribution. Turning to the key schedules of the bill, the first measure involves an increase in the threshold for the minor benefits exemption as it applies to fringe benefits tax. The proposal is that the threshold exemption rise from less than $100 to less than $300. This measure is targeted at small businesses and means that an item that an employer provides for an employee under $300 is FBT exempt. This amendment is a simple and useful measure to reduce compliance costs for small business. The second measure associated with schedule 1 involves increasing the threshold for which fringe benefits are disregarded for the purpose of fringe benefits tax reporting. Currently, employers are expected to record and report the taxable value of the fringe benefits they provide to their employees when the value of those benefits exceeds $1,000. The amendment sees an increase in that threshold from $1,000 to $2,000. Again, it is to be noted that this is another recommendation of the Banks committee report. The measure is most relevant to the calculation of family tax benefits. Nevertheless, it does reduce compliance costs for business and makes the family tax benefit system marginally less complex. The third measure associated with schedule 1 involves an extra concession for eligible in-house fringe benefits and airline transport fringe benefits. The amendment seeks to raise the concession from $500 to $1,000 per annum. This means that if an employer offers in-house benefits like free meals or discount goods to employees then up to $1,000 could be ignored for fringe benefits tax reporting purposes. Further, if employers such as Qantas or Virgin Blue, for example, offer discounted air travel to their employees then an aggregate value of $1,000 per annum could also be ignored as it relates to the reporting of fringe benefits tax. The measure is also of particular benefit to shop assistants and retail employees who receive discounts as a result of their employment arrangements. The last measure associated with schedule 1 involves a change in the definition of the term ‘remote’ as it applies to fringe benefits tax concessions. The amendment introduces a new formula for calculating the distance between a tested location in an eligible urban area. Basically, travel by water will now be included in the calculation to determine whether a location is remote. The kilometres travelled by water will be assessed at double those travelled by land, and if the distance calculated is determined to be 100 kilometres or more then the location will be defined as remote. The amendment is clearly not one that will affect many Australian taxpayers. This is reflected in its estimated impact over future budget years, with a cost of approximately $1 million per financial year. We have asked the government for more detail in relation to this measure. Minister Dutton’s staff who briefed my office indicated they would provide further details but, disappointingly, we are still waiting. But I note here that we are receiving much more cooperation from Minister Dutton’s office than in the past we received from Minister Brough’s office. It may be the case that the individuals on islands are not receiving benefits from remote location treatment, like FBT exemption for housing costs. This is reasonable, but the opposition is seeking assurance from the government about who will benefit from this particular change. We are presuming that it is not about big business executives getting FBT-free temporary accommodation on, say, Hayman Island. That would not be acceptable to the opposition. I want to turn to schedule 2 of the bill. The amendment seeks to make a consequential amendment to GST law by making some personal vehicles and pharmaceuticals GST free under the Military Rehabilitation and Compensation Act 2004. The amendment seeks to make these items GST free for those receiving a special rate disability pension under part 6 of chapter 4 of section 199 of the Military Rehabilitation and Compensation Act 2004. As most of us are aware, the tragic Black Hawk disaster in June 1996 led to the review of the Military Compensation Scheme in March 1999, commonly known, of course, as the Tanzer report. Back then, the report recommended a new military and veterans compensation scheme, which led to the Military Rehabilitation and Compensation Act 2004. Yet, for some unknown reason, it has taken some two years for the government to get around to incorporating these significant entitlements into the appropriate legislation. The changes, however, are merely consequential amendments for the new compensation arrangements, so they should have been introduced much earlier. This is another example of the government not meeting its obligations to taxpayers in ensuring that tax changes are dealt with promptly and in a timely matter. Schedule 3 of the bill seeks to remove the part-year tax-free threshold for taxpayers who have ceased to be full-time students. This will allow taxpayers who have ceased to be full-time students to gain the full $6,000 tax-free threshold. Currently the tax-free threshold is only received for that part of the year that a student first enters the paid workforce. However, most students now end up in the labour force for some time even before going to university—at McDonald’s is the prime example, but also in many other areas of work. So times have certainly changed and, on that basis, the opposition is supporting the bill. It might be an appropriate time for me to move the second reading amendment circulated in my name, because I have something to say about a couple of other issues, including the James Hardie issue. I will ask the member for Lilley to sign that second reading amendment. The opposition has an ongoing concern about what is happening in the James Hardie case. We cannot understand why the Treasurer has been prepared to offer a tax break—a tax break we calculate to be worth about $1.4 billion over the course of the scheme—to the James Hardie company, which is very much the villain in this exercise, but he is not prepared to extend a similar tax break to the victims of James Hardie. It does not make sense. The Treasurer first of all claimed that he was not prepared to legislate in this place to ensure that the James Hardie compensation fund gets the tax break it requires to be sustainable to ensure that the victims and their families are adequately compensated. Then he backflipped without saying so and moved in this place some amendments to the black hole expenditure provisions under our tax law. He did not say that it was about James Hardie, but the whole world knew it was a backflip on the Treasurer’s part. We knew that it was an amendment to accommodate James Hardie, but we welcomed that. He is too proud to admit the backflip, but we welcomed the fact that he change those provisions and we supported them to ensure that this fund operates in the way in which it is intended. It took months and years of negotiations between the victims, the unions and the New South Wales government to get this fund into place. This is time sensitive because some of these victims are very sick, and we have to get on with it. We welcomed the changes to the black hole expenditure provisions, which extended to James Hardie the tax break they were looking for. But why will not the Treasurer extend the same courtesy to the victims? Worse than that, why is the Treasurer attempting to claw back from the victims $1.2 billion of the $1.4 billion it is costing him to fund the James Hardie company tax break? Let me make that clear: he is spending $1.4 billion to give the James Hardie company a tax break because they say that, without the tax break, the fund is not sustainable or, worse, they will not make a contribution to the fund. They are making it a condition of their contribution that they get a tax break—that is, $1.4 billion of taxpayers’ money. We do not have a problem with that, because there are times when the collective move to fix a situation which is basically unjust, unfair and cannot be fixed in the absence of an intervention by the collective. If the James Hardie case goes to court, it will go on for years. I would like to find a way of putting this more subtly but it is hard to: most of the victims will be dead before that case is ever resolved. So it is a good thing for the Australian taxpayer as a collective to move together to fix this problem. So we spent $1.4 billion of taxpayers’ money to give James Hardie a tax break. But the Treasurer, by denying the fund a tax break both on the money that it receives from the James Hardie company and on the money that it makes on its investments while it holds the money, is going to save $1.2 billion. So he is robbing the victims to pay for the James Hardie company’s tax break. It is morally obscene to be robbing money from the victims to pay for James Hardie’s tax break. He gets on radio—and I have heard him on a number of occasions—trying to make out that the Labor Party is weak in wanting to extend a tax break to the victims, a tax break that he has already extended to the company. He is trying to make out that the opposition is reckless, but it could be no further from the truth. It is the Treasurer who has been reckless in setting one rule for the villain company and another harsh rule for the victims. There is no logic in his approach. So I do not want to hear the Treasurer on radio anymore trying to make out that the Labor Party is too sympathetic towards the James Hardie company. There is nothing the Labor Party can do for the James Hardie company. They have got their $1.4 billion tax break—what more could we do? Their $1.4 billion tax cut is set in concrete. What we are calling for is similar treatment for the victims and their families, and we ask for no more and no less. We have attempted to use the forms of this parliament to provide that relief—of course, the government has used its numbers to vote us down—but we will continue to use forms of this House to do so. It is interesting we are debating taxation bill No 5 today; usually we do not get to No. 5 to all we have dealt with No. 4. Why aren’t we dealing with tax bill No. 4? There are two basic reasons. The government do not know what to do with our James Hardie amendments. We have to find a tax bill that has scope. We have to find a tax bill to which the James Hardie tax law changes are relevant. You cannot do it on tax bill No. 5 because sufficient scope is not there. The rules of the parliament, unfortunately, require us to find scope. Tax bill No. 4 has sufficient scope to include the required changes, but that bill has been magically pulled because the government do not want us in this place debating what they know is, in truth, an entirely appropriate thing to do. But, of course, Peter Costello will never do anything that might be an opposition idea. His pride comes before his responsibilities in this place, and he should just wake up and get on with it. My second reading amendment also deals with loss recoupment. The government botched the crucial bill with respect to loss recoupment the last time it came before the parliament. This is a very important bill for business, particularly those involved in infrastructure, venture capital and mining. We should note that those areas are very much the real drivers of the Australian economy at the moment—in fact, those most responsible for giving the government the windfall gains it is enjoying. They like to claim credit for those windfall gains, but, of course, we know the truth is entirely different. The reforms of the continuity of ownership rules were welcome, but changes to the same business test imposed a $100 million cap on these companies. The result is that non-listed companies might fail both tests and lose the benefit of those losses—not be able to carry those losses forward. The same day the government rejected Labor’s proposed amendments of the measures they called for a review which was to report in January but is now eight months late. Indeed, at the time I moved further amendments in this place which I have with me; I will not seek to table them because they are on the parliamentary record. That report is eight months late. Nothing could create more uncertainty for business than, first, a review and, now, a review that is eight months late. The review made the situation even worse. In many ways the government would have been best to not accept our amendment and just leave the bill as it stands rather than introduce greater uncertainty for those businesses which have been affected. In response to a question in writing from me, the minister has indicated that there are billions of dollars in losses outstanding here. We are talking about billions of dollars, not small fry, and you can appreciate that this is having an enormous impact on the investment decisions of businesses in this country, particularly businesses which are at the forefront of our economic growth at this point in our history. So we need to deal with this matter urgently. The previous Minister for Revenue and Assistant Treasurer, Mr Brough, in one of his mistakes we used to infamously call ‘Brough-ups’, made the error, but now we have a new minister in place. He has been there for many months now and it is about time he tidied up the situation and gave business the certainty they are looking for in terms of loss recoupment. They are not asking for much; they are only asking for some certainty, some clarity and an opportunity to get on with the job. The Reserve Bank governor tells us on a regular basis that one of the major things putting pressure on interest rates in this country is physical capacity constraints, particularly at our ports and in mining, and our inability to keep pace with the ever-growing demand of some of our customers, and yet at the same time we have mining and infrastructure companies in this country unable to make important investment decisions because this government cannot make a decision on an issue as simple as loss recoupment. I invite the member for Mitchell, who is due to speak next, to pass comment on that. I know he watches these statements on monetary policy closely. He knows what the Reserve Bank has been saying; every member in this place knows what the Reserve Bank has been saying. You would think this government would be spending lots of sleepless nights working out how they can best address those capacity constraints. But, instead, what do we have? We have an incompetent government and a lazy Treasurer who is not prepared to get off his backside and sort the problem out. Minister Dutton is not prepared to do it. The Treasurer should intervene and get this thing fixed, and while he is at it he needs to move very quickly to extend the tax concession to the James Hardie fund on both the income it receives from the James Hardie company and, of course, the interest it receives on that money while it is holding it on behalf of compensation victims. I move: That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House condemns the Government for failing to adequately deal with major unresolved taxation issues including; the failure to provide certainty to the former employees of James Hardie and their families by providing tax exempt status to the James Hardie Asbestos Victims Compensation Fund, and creation of great uncertainty in the Australian business community by its failure to bring forward its review of loss recoupment rules”. 10000 Lindsay, Peter (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Mr Lindsay)—Is the amendment seconded? 2V5 Swan, Wayne, MP Mr Swan —I second the amendment. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The question is that the words proposed to be omitted stand part of the question. 21 10:43:00 Cadman, Alan, MP SD4 Mitchell LP 1 0 Mr CADMAN —I believe they should. The amendment will fail because what we are dealing with here is a reduction of regulatory burdens on businesses, which is part of the government’s 2005 commitments. The Treasurer has ripped hundreds of pages of useless tax law out of the tax act. It is appropriate that that should happen. The one complaint that I consistently hear from businesses is that to compete they need to spend less time at their books burning the midnight oil and more time in their businesses competing on production and saving costs. One of the big costs that businesses have had to confront is the administrative arrangements required as part of compliance with a whole range of Commonwealth taxation law. The Treasurer is determined to reduce that taxation cost—that overhang which makes it extremely difficult for Australian businesses to compete with their colleagues, whether they are based in the United States, Europe or Japan. The thrust must be to have an efficient taxation system, just as it must be to have an efficient workplace. The compliance costs being tackled in this legislation are primarily those attached to fringe benefits tax. To give the House some idea of the complexity of fringe benefits tax and the way in which it can be calculated, I am told a simple meal between two people, depending on which organisations they come from and how the meal is paid for, can be calculated in 59 different ways. It depends on the concessions for individuals; it depends on the type of meal; it depends on where they have the meal; it depends on the premises where the meal is held. The complexity of the fringe benefits tax is enough to make anybody completely lose trust in any capacity to think logically. The arrangements being considered by the House today are simple and welcome. The first is to change the minor benefits threshold from $100 to $300. The minor benefits exemption applies to certain benefits with a notional taxable value of $100 provided to an employee. That means the value of any benefit of any description—whether it is a tank of fuel from the company bowser, clothing that employees are allowed to keep, or maybe it is Christmas presents—that an employee gains will increase from $100 to $300. Another change that will be welcomed broadly by both employers and employees is the in-house fringe benefits and airline fringe benefits increase. If we can find a complicated way of saying things, we seem to be able to do it. In-house fringe benefits—supplying financial advice to employees in a banking institution, the capacity to buy goods from a Harvey Norman store at a discounted price, or the capacity to use travel entitlements supplied by some airlines for people to travel more frequently at a lower cost—are benefits to employees and they are available in a tax year. The current benefit allowed without being accounted for is up to $500, and this maximum will be lifted to $1,000 as an in-house fringe benefit. As I have already indicated, it can be a good or a service. A lawyer may offer free professional advice to his staff, airlines may provide benefits, as may builders et cetera—all sections of industry seek to look after their employees by providing additional benefits of one type or another, which are counted under the current system as fringe benefits tax. It has been obstructive, really, to the sensible relationship between employers and employees. The whole of the fringe benefits tax complexity is something that, whilst understandable in some circumstances, seems to have gone far beyond sensible necessity. The extension to the remote definition is something else that has been changed. Those living in remote areas have additional costs they have to pay for their lifestyle—to uplift and transport themselves to their place of employment, higher prices to pay for groceries and goods—and so there are often concessions made for people living in remote areas by employers. State governments often provide concessions on housing and other amenities for people who are schoolteachers or policemen living in remote areas. A sensible concession for those living in remote areas is an encouragement for people to feel comfortable and satisfied, even though they may be a great distance from normal social contact. Having lived in remote areas of Australia myself, I see this as an important issue. However, in this instance the changes are made for those localities which are considered to be remote where the shortest practicable route involves travel by water. The changes are that the shortest calculated practical surface route by water and the total number of kilometres are doubled to bring it more in line with the equivalent to land travel. That is a reasonable proposition, and I am very strongly in support of the definition of remote concessions. I now want to turn to the reportable fringe benefits threshold. Employers are currently required to report fringe benefits up to a value of $1,000. That has been extended to $2,000. The increase in the threshold will reduce compliance in record-keeping costs for businesses by not having to report fringe benefits for employees who receive no more than $2,000 worth of fringe benefits. These changes, as I have already said, were announced in October last year. The Treasurer announced the establishment of a task force to identify action to address complaints about the burdensome and complex nature of record keeping. Many of the processes are redundant and duplicate each other, and it is good to see the government starting to move to reduce the cost of compliance. It is an absolute necessity if Australia is to remain competitive against all comers. The total cost for this process will be $14 million in the next financial year, and the impact will increase year by year. The next concession in this revision is for people who are covered by the Military Rehabilitation and Compensation Act—mainly diggers and veterans. This allows certain prescription medicines and pharmaceutical products to be provided GST free. It also allows people with disabilities to purchase vehicles GST free. I am afraid I do not really think that this is a very wise way of going about support for veterans and people with disabilities. I would rather not fiddle with the GST. I would rather do it in another way. I would rather increase their benefit. I would give them a concession or some sort of rebate rather than fiddle with the GST. The objective is understandable. The objective will provide certainty. My concern is that it will build a demand for further concessions in other areas, and it will be a difficult process to say to people, ‘We’ve given concessions to veterans, and rightly so.’ I would be the last person to want to deny that but, in denying concessions to others outside the veterans area, it may be difficult to argue that those other people should not also receive some GST-free provisions. However, the government has decided to do this, and I think that it is a worthy cause. I would not want anybody to consider that it is not a worthy cause. Certainly, the concessions are deserved. So that is a change to the GST provisions which will reduce the cost of medicines for veterans and reduce the cost of motor cars for people who are seriously impaired. I must stress that I am really supportive of the assistance to people in these conditions. The removal of the part-year tax-free threshold for taxpayers who have ceased to be full-time students also seems to be a simple and worthwhile administrative arrangement. Just reverting to some of the key features of the new law concerning the Military Rehabilitation and Compensation Act, it is interesting to look at the explanatory memorandum and compare the differences between the new law and the current law and see where there has been a simplification and a much clearer definition of who is eligible for motor cars or for prescription pharmaceutical drugs. I think that that is also a worthy addition. In the time remaining, I would like to broaden my remarks to those things covered by the previous speaker, to deal with some of the broader issues of taxation and expenditure and, in particular, to look at the need to apply our minds to infrastructure and infrastructure costs. I regret to report that I think the states of Australia have neglected infrastructure costs, and the cost of travelling and the affordability of homes have changed dramatically over the last few years. I have some figures available to me from the Housing Industry Association which indicate that home affordability is 6.1 per cent lower in this month than it was in December last year. In just six months affordability has dropped. The median price for a vacant block of land has risen by 143 per cent since 2000 and now accounts for between 52 per cent and roughly 80 per cent of the purchase price of a new home. The average price for vacant land across Australia has risen from $90,000 per block in 2000 to $219,000 in 2006, and the supply has actually fallen from 46,000 lots in 2003 to 27,000 lots in 2006. There we have a really dramatic and pretty awful picture if you are looking at the opportunity for homebuyers in Australia—a halving in the number of available blocks of land but an increase in the cost of that land by 140 per cent. It is a very difficult proposition. In 2001, a median block in Sydney cost $220,000. That has risen to $300,000 in the current year. But what is even worse is that the lot size has diminished by about 30 per cent. So the lot size has come down and the price has massively gone up. The demonstrable lack of application of thought to this problem is most concerning. The lack of local infrastructure is now being shifted from government sources and general taxation to levies that are applied on each new home as the development goes ahead. So rather than the community at large looking at covering the cost of roads and railway lines, what is happening is the first home buyer is paying that. Instead of the community at large paying, people are singled out because they are homebuyers. This dramatically shifts the cost and also means that, instead of state governments playing a role of any type through the taxation mechanism, they are shifting the total cost of the railway lines, the main roads, the streets, the water, the gas and all of the other amenities supplied to a block of land to the first home buyer, and that first home buyer is paying for the lot up-front. The lives of these facilities are between 50 and 100 years for roadways and railway lines, but the first person has to pay the total cost. Instead of amortising the cost, as would normally be the case, by borrowing or through a tax system or some other arrangement, state governments have thrown the lot on the first home buyer. The difficulty of this approach means that the first home buyers are not getting what they want but they are being forced, because there is no other option, to purchase blocks of land that are smaller and more expensive than they want. It would be very interesting to see what would happen if the total provision of all railroad infrastructure were given to private enterprise and no taxes were imposed. If one looks at the taxes and charges imposed in the provision of a house-land package in Australia, one has to look at not only the cost of the rural land but also legal fees; partial rates; land tax; stamp duty; development applications; construction certificates; DCP and council information requests, which can be an average of $8,000 per block; the design demands; the servicing provisions; the roads; the engineering; the survey; the geotechnical provisions which are often required; landscaping; section 94 grants; other district- and city-wide charges; a transport levy, which is about the railway line; and the LPI cost of $600, building to a total cost, including the rural land, which is about half the total cost of $301,000 to the home builder. It goes further than that because, if you then add construction to the final cost to the home buyer, the dwelling costs may be $200,000 but BCA compliance, other compliance, local regulations, sales and marketing costs, GST and other stamp duty taxes bring the final cost to the homebuyer to $605,000. Of that cost, land is $140,000 and the home is $205,000, giving a total of $340,000 for a home that ultimately costs $605,000. This is the wrong way for Australia to be heading. I draw the attention of the House to the need for us to urgently apply ourselves to these problems. It is really serious in Sydney, as the state government claims that there are 26,000 blocks of land available but, from the best surveys available to the private sector, it may only be as high as 9,000—less than half that said to be the case by the New South Wales government. These serious problems relate to the cost of living and the use of taxation. The Commonwealth is reducing the burden of taxation through tax cuts and reducing the regulatory requirements where the state governments of Australia are piling on more and more. 24 11:03:00 Hayes, Chris, MP ECV Werriwa ALP 0 0 Mr HAYES —I rise today to support the provisions of the Tax Laws Amendment (2006 Measures No. 5) Bill 2006, but I have to say that my support for that bill is not unqualified. This bill before us today deals with three aspects of tax law. The first is the fringe benefit tax changes to implement some of the recommendations of the report of the Taskforce on Reducing the Regulatory Burden on Business: Rethinking regulation. The second is the GST car and pharmaceutical concession from the establishment of the military specific compensation scheme. The third is the removal of the part-year tax-free threshold for taxpayers who have ceased to be full-time students. These changes introduced under this bill will reduce the complexity of the system, and it can be reasonably expected that such a reduction will result in a reduction in compliance costs. Fringe benefit tax changes included in this bill are broadly targeted at small business. I am a long-term supporter of improving the lot of people in small business and reducing their compliance costs. I know only too well what it is like to try to manage a small business, meet the regulatory requirements and try to find enough time to spend with your family, away from your business. It is difficult; it is a balancing act, and it is one that many small business owners find difficult to manage successfully—or at least manage to their satisfaction. This issue was raised with me recently, when I took part in Pollies for Small Business Week. Pollies for Small Business Week is an excellent opportunity not just to talk with the owners of small businesses about their specific needs but also to get involved, get behind a counter and, for a time, stand in the shoes of those on the front of running small businesses. I had the opportunity to spend some time with Sam Cavallaro at Cavallaros Sweet Indulgence—which, I hasten to add, was a gourmet eatery—in Liverpool and also sell newspapers and stationery items with Chris Redondo at Ingleburn Newsagency, which is directly across the road from my office in Ingleburn. These are quite different businesses—one is a gourmet eatery and the other is selling newspapers—but they had some very similar themes. Both small business owners expressed to me that the changing nature of their business environment had made their businesses tougher. By this they did not mean that their business was suffering a downturn as a result of a drop-off in the economic climate. Rather, competition was making things more difficult. Both men have been in business for quite some time, and both indicated to me that business was getting harder, not easier, in their line of work. Margins are thinner, competition is greater and cash flow management is more important than ever. It is interesting that both businesses thought that competition is getting tougher. It is particularly interesting that they did not make note of this in terms of competition from like businesses establishing themselves nearby or down the road—although they freely admit that that would have some impact. Rather, the message that I received is that the competition that they were concerned about was unfair competition from larger organisations that have the capacity to engage in loss-leading behaviour—unfair competition—that means that they can secure a greater market share over a short period of time. This brings me to the issue that I have raised on many occasions in this place: the failure of the government to implement the findings of the Dawson review of the Trade Practices Act and make businesses fairer for everyone in the market. I am sure both Chris and Sam—along with the more than 4,000 other small business people operating in my electorate of Werriwa—would enjoy the even break that the reforms of the Trade Practices Act would allow. These small business operators are not asking for the playing field to be slanted disproportionately in their favour. All they are asking for is to be able to at least ply their trade on a level playing field. They are not looking for preferential treatment; they are just looking for the opportunity for genuine competition to be played out on a level playing field. They want the chance for the hard work and dedication that they give their businesses not to be wasted simply because a large organisation can set up shop and carry short-term losses in order to secure a greater market share. I spent a number of hours with both these small businesses and their staff. I thank everyone involved for their time—and particularly for their patience, as I am rather a novice in both of these areas of business. The operators made comments about how tough business can be. But what really struck me was another matter that they did not raise, and it is the second most interesting thing that I would like to draw this House’s attention to. At no time in my period with either of those businesses did these operators express any view about industrial relations or industrial relations policies. They certainly did not express a view that Labor’s position on industrial relations would ruin them. They did not express that view that the Prime Minister is attempting to perpetuate—that Labor’s plans for industrial relations would make their businesses even more difficult. They did not even express a view that Labor’s plan to clean up unfair dismissals would create the sort of burden that would ruin their businesses. But the most telling thing about their size when it comes to industrial relations was that they did not sing the praises of this government. These businesses did not sing the praises of the government in any way as to the way in which they are being encouraged to treat their own employees. These two small business operators—and many other small business operators who I have spoken to since the Prime Minister made that famous ministerial statement on industrial relations in May last year—have not been telling me how good these changes are for them or how bright their outlook would be under Work Choices. The government claims to have made changes with the strong backing and support of small business sectors, but when push comes to shove it is not the small business owners or operators who are singing the praises of this government’s industrial relations agenda. They are wondering what happened to the stalled trade practices reform to make their business environment a bit friendlier, a bit more of a level playing field. They are not praising the government on industrial relations. Don’t get me wrong, Mr Deputy Speaker; I know that some business organisations and individual business operators are praising the government’s extreme industrial relations changes. However, these are not the mum and dad small business operations that the Prime Minister claims he was making these remarks about and making changes for. No, these business operations who are out there championing the cause of the government are from the big end of town. They are the people who Mr Hendy represents. I know the government says a lot about small business in their representations to the media about these things, but realistically we all have to concede that, whilst people are referring to small business, the people who are driving the agenda in the efforts that have been made to support this government’s industrial relations agenda are at the big end of town. I mentioned earlier that a growing problem for many small business operators in my electorate is the difficulties they face in managing cash flow. I understand that a recent survey of small business operators—which was mentioned by the member for Hunter—listed cash flow management as the top issue for the management of businesses today. While the changes implemented through this bill will reduce the compliance costs faced by small businesses when it comes to fringe benefits tax and a more fundamental review of taxation, as Mark Fenton-Jones noted in the Australian Financial Review on 29 August this year: The latest changes to the way GST and fringe benefits are calculated by small businesses are welcome measures to reduce the compliance burden. But it is only tinkering on the margin, as the whole tax system needs to be revamped with small business in mind. I would not want to misquote the words of the member for Mitchell, but I note that in his contribution to the debate a little earlier he drew attention to the fact that he did not see the way ahead involving a tinkering at the margins but that we should be looking at fixing the system—and I think he was referring to GST arrangements for vehicles and pharmaceuticals for those covered by the Military Rehabilitation and Compensation Scheme. The combination of small business cash flow problems and broader tax reform brings me to a problem experienced by a number of small businesses following the recent Australian Taxation Office ruling ‘Goods and services tax: deposits held as security for the performance of an obligation’. Mr Deputy Speaker, as you would appreciate, this tax ruling, which could force small businesses to pay the full GST on a sale price, even when they have received as little as 11 per cent of the price as a deposit, could have a serious impact on many small businesses and exacerbate the difficulties that they are already experiencing with cash flow. I note that the member for Adelaide has a particular concern in this regard, having recently placed a question on notice to the Treasurer about it. This ruling has the potential to greatly cripple small businesses as they take another hit to their cash flow. Once again, it may present the opportunity for larger competitors to make a grab for market share as they are better able to manage the cash flow implications of this tax ruling. It will certainly impact very directly on small businesses—and I refer in particular to the small businesses in my electorate of Werriwa. On 6 April this year, the Treasurer noted that the matter will go before the courts and that he will examine the findings of the case once the courts have dealt with the matter. I have to say that that is an abrogation of responsibility, if we are serious about protecting and furthering the interests of small business operators. I join people such as the New South Wales Minister for Small Business, David Campbell, in calling for the government to overturn this ruling in the specific interests of small business operators. It is about time that this government acted on behalf of small businesses across the country rather than using them to create a myth surrounding the demands of the small business sector for the industrial relations changes spearheaded by this government. As I said, small businesses do not want these industrial relations changes. Small businesses like the certainty of the award system because they know how much they are required to pay their employees. They also like the certainty of the award system because they know that other businesses that they compete with are governed by the same set of rules. They like the certainty of the award system because it prevents the cowboys in their industry from using the full extent of the law to drive down costs and to force them to cut the wages of their staff. This is something they do not want to do, as staff in many small businesses are considered to be family rather than employees. Small businesses make every effort to look after their employees. They do not want to be forced to join this government’s race to the bottom. Despite the government’s attempts to perpetuate the myth that small business wants this government’s extreme industrial relations agenda— 10000 Lindsay, Peter (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Mr Lindsay)—Order! The member will return to the substance of the bill. ECV Hayes, Chris, MP Mr HAYES —As I was saying a little earlier, this bill relates to fringe benefits tax changes in order to implement some of the recommendations of the report of the Taskforce on the Reduction of Regulatory Burdens on Business titled Rethinking regulation. Mr Deputy Speaker, the bill picks up some of the recommendations of that report and reduces the regulatory burden on businesses, and that is why I am drawing to your attention the position that small businesses are taking in relation to the government’s industrial relations agenda. They are being forced, through Work Choices, to embark on a pattern of behaviour which they do not want to follow. They are being forced to do this by the government— 83V Emerson, Craig, MP Dr Emerson —No choice. ECV Hayes, Chris, MP Mr HAYES —and with no choice. This is why they are reeling. I appreciate that I may have taken a slight liberty in this regard, Mr Deputy Speaker, but I do want to draw to your attention, and to the attention of the House, that small businesses are concerned that every time the government talk about their industrial relations agenda they say that the changes are attributable to the demands made of them by small businesses. This is clearly wrong. As you would appreciate from what is happening in your own electorate, Mr Deputy Speaker Lindsay, this is not the reality when it comes to what local members are seeing in their connections with relevant small business operators in their electorates. But I do heed your caution in this regard, Mr Deputy Speaker. I put on record that small businesses are sick and tired of being used in this debate and of being quoted by people like Mr Hendy who purport to represent small business, when everybody knows these industrial relations changes are about the big end of town and about industry driving the wage agenda. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The member for Werriwa will return to the bill or I will sit him down. ECV Hayes, Chris, MP Mr HAYES —Having said that, Mr Deputy Speaker, let me talk a little about some student related issues that flow from this bill. The bill contains provisions which remove the part-year tax-free threshold for taxpayers who have ceased to be full-time students. Under existing tax law, the tax-free threshold is only received for that part of the year in which a student first enters the paid workforce. I support this change; it makes sense. This amendment, along with others contained in this bill, makes sense and on any reasonable analysis will result in a reduction in compliance costs for business. Of course, I cannot help but wonder why this has happened. Sure, government members or, I should say, the lone government member, the member for Mitchell—the only one who had enough interest to stand up in this place and make a contribution to this debate—can make comments about how this government should not be tinkering at the edges of tax reform, particularly on certain aspects relating to car and pharmaceutical benefits provided by this bill. Quite frankly, I am sure we would be better off not tinkering at the edges but actually getting in and delivering a proper system. To return to how the legislation applies to students, if you look more deeply into the change that is before us you cannot help seeing it in the context of the changed requirements of students under this government. Students now face a much harsher reality than at any time in the past. It is no longer possible—for the vast majority of students anyway—to simply concentrate on studies as a full-time occupation. Given that this government has acted to take away virtually all support from students, it is now necessary for students to work on a continual basis to support their studies. The eligibility rules for Austudy have particularly draconian aspects under this government. (Time expired) 29 11:23:00 Emerson, Craig, MP 83V Rankin ALP 0 0 Dr EMERSON —The Tax Laws Amendment (2006 Measures No. 5) Bill 2006 contains a range of measures that Labor supports. First, it begins the process of implementing recommendations from the report of the Taskforce on Reducing the Regulatory Burdens of Business, Rethinking regulation. That report was prepared by the Productivity Commission headed by Gary Banks. It was a timely report; in fact, it was a well-overdue report. I am glad that the government ultimately did get around to commissioning a major report from sensible people who came up with a range of sensible recommendations. The reason I am saying that I am glad they got around to it is that before the government came to office in 1996 the now Prime Minister had indicated that he would commission Charlie Bell from McDonald’s to oversee a task force into cutting red tape with the aim of cutting red tape by 50 per cent. That task force report was produced within a couple of years of the coalition coming to office but nothing came of it. Subsequently the government, upon the introduction of the GST, said that the very act of introducing a $24 billion new tax would simplify the Income Tax Act. The Prime Minister said then that the number of pages in the Income Tax Act would go down substantially and this, too, would ease the regulatory burden on small business. Well, that did not happen until very recently, when the government, rather than simplifying the Income Tax Act, simply removed a large number of pages from it. It can certainly do with a reduction in the number of pages: it started out at about 3,500 when the government first came to office and had blown out to 9,600. The exercise in reducing the number of pages, however, was limited to reducing those provisions that were redundant rather than simplifying the income tax system itself. Nevertheless, ultimately—finally, thankfully—the government has begun implementing some of the recommendations of the Banks review. One of those, which is the subject of this legislation before us today, is an increase in the threshold for minor benefits exemption from fringe benefits tax from less than $100 to less than $300. That means that an item that an employer provides for an employee of a value of less than $300 will be exempt from fringe benefits tax. Of course, that will be welcomed by the small business community. It has significant, but not huge, revenue implications. It works out at about $43 million over four years for that plus other measures that are provided for in this legislation relating to fringe benefits tax. While the revenue losses are not great, the simplification that is achieved through them is worthwhile and certainly beneficial for the small business community. A related provision in this legislation for simplifying fringe benefits tax is that if an employer offers in-house benefits like free meals or discount goods to employees or, for example, cut-price travel for airline employees then an aggregate of $1,000 per annum could be ignored for fringe benefits tax purposes. That $1,000 aggregate is a doubling of the current limit, which is $500. Again, that will be of some benefit to employees but, at least as important, will simplify the administration of the fringe benefits tax. Labor supports it. There are some GST arrangements provided in this bill. The amendments make a car and pharmaceuticals GST free for those receiving a special rate disability pension under the Military Rehabilitation and Compensation Act 2004. That, too, is a worthy objective. There are further amendments relating to a part-year tax-free threshold for taxpayers who have ceased to be full-time students. So, overall, this legislation does simplify and, in some instances, ease the tax burden on people, and therefore Labor supports it. I do have to comment that I speak on taxation law amendment bills very regularly, along with the shadow minister for small business and the member for Werriwa and others. The reason we do this is that the government is submitting them into this parliament with such frequency, which is confirmation that the government has not got the income tax system right. It continues to tinker with it and change it. I know that no tax system should remain invariant to change over time. Circumstances change and clarifications need to be provided, but the truth is that the income tax system in Australia is unnecessarily complex. As a consequence, the compliance burden is far too high. There have been substantial proposals to reform the income tax system. I was fascinated to note that just last week the Treasurer commented on tax proposals which he asserted would have cost the revenue from $20 billion to $30 billion a year. He regarded those proposals, based on comments made by the Reserve Bank governor, as pretty wild and irresponsible. In fact, he said that any tax proposal which would cost the revenue $20 billion to $30 billion a year in the current economic environment would create a great deal of inflationary pressure by stimulating domestic demand, and that would force the hand of the Reserve Bank to yet again increase interest rates—to increase them a fourth time since the last election campaign, during which the Prime Minister promised to keep interest rates at record lows. In total there have been seven interest rate rises in succession, three since the last election, a fourth in prospect and who knows what the new year will bring? I thought I would have a look at this assertion by the Treasurer that people within the public domain are seeking tax changes that would cost from $20 billion to $30 billion. The closest I could come to it are the proposals by the parliamentary secretary for water, the member for Wentworth. Far be it for me to come into the parliament and spend a lot of time defending the member for Wentworth but, given that it would be unseemly if he had to do so himself in the parliament against these claims by the Treasurer, I thought I would check the Treasury costings on the proposals of the member for Wentworth. Indeed, the most expensive of those is quite expensive; it is quite costly. It works out at $14.55 billion in 2006-07. But the Treasurer said that people were making claims for proposals costing from $20 billion to $30 billion, so he is a fair way short. The member for Wentworth did have something like 287 proposals, one of the most expensive being $14.55 billion. In defence of the member for Wentworth, he did in fact argue the case for base-broadening measures to help fund his tax proposals. I also looked at the proposals I had advanced, including a submission to the Treasurer in advance of the last budget, and mine cost $7.8 billion—a long, long way from $20 billion to $30 billion. Over the four-year forward estimates period it would cost $33.5 billion. That is still cheaper than the $35.8 billion that the government ultimately delivered. So the criticism of the Treasurer cannot have been directed at me. It could only have been directed at the member for Wentworth, and rather unfairly. The Treasurer has been fast and loose with the truth not only on that occasion but on several other occasions, and some of them very recent. On 4 September, just last week, the Treasurer said in response to a question from the shadow Treasurer: The Australian Labor Party never had the wit to actually balance the budget. I have heard the Treasurer say this before. In fact the Treasurer said this in the parliament on 10 May 2000: ... we put the budget into surplus on a headline basis, which the Labor Party never did. It astonishes me that the Treasurer of the country can make these sorts of claims. He is never picked up by the media in making them. They are absolutely false yet he feels that he can stand up in parliament, where there is supposed to be some effort to grapple with the truth—and perhaps even to tell the truth—and he knows that his statement that Labor never delivered budget surpluses is false. But he knows that he can continue to make it because, sadly, the members of the press gallery are quite happy for him to continue to make false claims in the parliament and not bring him into account. I am bringing him into account. I used to be an adviser to Bob Hawke. If Bob Hawke ever came into the parliament and was put in a position of making a major statement that was factually incorrect, as advisers we would be horrified because we would be 100 per cent confident that Prime Minister Hawke would be brought to account by the media as having made a very bad mistake or for misleading the parliament. Of course those standards are now nonexistent. The truth is Labor produced surpluses in 1987-88, 1988-89, 1989-90 and 1990-91. How do I know? I looked at Budget Paper No. 1: Budget Strategy and Outlook 2006-07. We just need to go to page 13-5 and we find that as a percentage of GDP such surpluses were recorded and, indeed, that in the middle two years of 1988-89 and 1989-90 the surpluses were 1.7 per cent of GDP. What is significant about that? They are bigger than any surplus that the Treasurer of this government has ever brought down. Indeed, at 1.7 per cent of GDP they are substantially bigger than the surplus that is projected for this year, 2006-07, of 1.1 per cent of GDP and in the out years of 1.0 per cent of GDP. Here is the Treasurer, his own budget papers confirming that Labor produced four surpluses, including two that are bigger than any surplus that the Treasurer of this government has ever brought down, and the budget papers confirm it. Yet the Treasurer walks into this parliament with impunity and says that it never happened. His slipperiness and porkies are not limited to allegations about budget surpluses. The Treasurer has said on many occasions that Labor never delivered income tax cuts. I will just record a couple of them. The Treasurer said on Radio National on 10 May 2000: Now let me make this clear, this is I think that first budget, well certainly in my memory, where there’s been income tax cuts ... Australians deserved it, they haven’t had an income tax cut for a decade ... On radio 2AW on the same day he said: This is the first time we have had a genuine income tax cut for well over a decade. A lot of people can’t even remember what it is like to have an income tax cut ... Again, on radio 2SM on the same day he said: I think there are a lot of people in Australia would say, a lot of young income earners, suppose you’ve only been in the workforce for 10 years, you’ve never had an income, they wouldn’t know, they have no personal experience of an income tax cut. That is what he said. What is the truth? Labor cut personal income tax seven times in 13 years. It cut personal income tax in November 1984, December 1986, July 1987, July 1989, January 1990, January 1991 and November 1993. Three of those were in the decade to which the Treasurer was referring. Labor gave seven tax cuts in 13 years, handing back all of bracket creep and more, and yet the Treasurer says that no tax cuts were delivered in living memory and none in the 1990s—yet three of those were, in fact, delivered in the 1990s. I could go on, but the Treasurer never gets called to account for this. While we are on the subject of tax cuts, the Treasurer says, ‘We have delivered the greatest tax cuts that Australia has ever seen.’ Let me make some remarks about the Treasurer’s taxing record. The fact is that when the Treasurer introduced the GST he pulled a gigantic fiddle because he moved to classify the GST as a state tax. When the GST was introduced, it was a $24 billion tax but it replaced the wholesale sales tax, which was regarded as a Commonwealth tax. So, overnight, the Treasurer replaced a $14 billion wholesale sales tax with a $24 billion GST and, hey presto, the budget papers showed a big reduction in tax. Terrific if you can get away with it. He counted the wholesale sales tax as a Commonwealth tax, declared that the GST was a state tax and then, despite increasing indirect taxes by $10 billion, he claimed that the $24 billion tax never existed in the first place. In so doing, he defied rulings from the Australian Bureau of Statistics and the Auditor-General, who came to the obvious conclusion that the GST is a Commonwealth tax. The revenue from the GST has grown to $39 billion. But it gets worse. In the budget papers the Treasurer counts as a saving the scrapping of untied grants to the states, made possible by the allocation of all GST revenue to the states. So he chooses the best of all worlds—he makes the GST disappear from his budget, he makes the wholesale sales tax that the GST replaced appear in all budgets before the GST was born, and he chalks up as a budget saving the scrapping of untied grants to the states made possible by this orphan tax—the GST. If we want objectively to assess the Treasurer’s record in tax and in overall budgets, we would either add back the GST or take away the savings from abolishing untied grants to the states. If we add back the GST we get these results: Commonwealth taxation revenue as a share of GDP in 2006-07 is 25 per cent. What is significant about 25 per cent? It is much larger than Commonwealth taxation revenue as a share of GDP when the government came into office, when it was 22.3 per cent; it is much larger than when Prime Minister Bob Hawke left office in 1991, when it was 22.7 per cent; and it is much larger than when Gough Whitlam was in power, when it was 20.2 per cent of GDP. It proves conclusively that this government is the highest taxing government in Australia’s history. The truth is that under these fiddles in the so-called Charter of Budget Honesty the Treasurer could increase non-GST tax revenue by a massive $23 billion a year by the end of this decade and still claim never to have increased tax revenue as a share of GDP compared with what it was at the time of the change of government in 1996. He can keep increasing taxes and claim that he is reducing them as a share of GDP because he has been able to get away with this GST fiddle. On top of these sorts of fiddles the government has been willing and able to open up more and more holes in the income tax base. When the government came to office there were 170 so-called tax expenditures. These are special concessions or special tax breaks. In the last year that had increased to 270 special tax breaks—an increase of 100 in less than 10 years. It took all of federation to get up to 170 of these tax expenditures and only 10 years for this government to increase them by another 100. As a consequence, marginal tax rates are unnecessarily high under this government. This government holds the record as a political party for the highest top marginal tax rate, which peaked, I think, at 62.5 per cent. Who was the Treasurer? John Howard. It took a Labor government to move to cut marginal tax rates. Labor is the party of tax reform; the coalition is wrecking the income tax base and imposing unnecessarily harsh marginal income tax rates on ordinary Australians. 33 11:44:00 Ripoll, Bernie, MP 83E Oxley ALP 0 0 Mr RIPOLL —I rise today to speak on the Tax Laws Amendment (2006 Measures No. 5) Bill 2006 and offer my support to the amendments that were moved earlier by the member for Hunter and the comments that he made. The bill, according to the Bills Digest, does a number of things. I will speak on a variety of issues that have an impact on tax and a range of other matters contained in this bill. The changes to fringe benefits tax in particular, according to the Bills Digest, are about reducing the regulatory burdens on business. Schedule 1 amends the Fringe Benefits Tax Assessment Act 1986 to do a number of things, including: increase the minor benefits exemption threshold from $100 to $300, increase the reportable fringe benefits amount threshold from $1,000 to $2,000 and increase the reduction of taxable value that applies to eligible in-house fringe benefits and airline transport fringe benefits from $500 to $1,000. It extends the definition of ‘remote’ for the purposes of the fringe benefits tax concessions where the shortest practical route involves travel by water. These amendments will take effect in the fringe benefits tax year starting on 1 April 2007 and later fringe benefits tax years. The increase in the minor benefits exemption and the reportable fringe benefits amount thresholds were announced by the Treasurer and the Prime Minister in their joint press release No. 019 of 7 April 2006 as part of the government’s response to the report of the Taskforce on Reducing the Regulatory Burden on Business, which of course is something that this government needs to deal with seriously. After 10 long years of talking about being the best friend of government, little has been done on a practical level to deal directly with regulatory burdens on business. Although there have been a lot of reports, task forces and inquiries, the government has taken very little action. In fact, the amount of red tape and the regulatory burden on business today are somewhat weightier than they were 10 years ago when this government came to power. This bill, according to the government, is also a rethinking of regulation in the 2006-07 budget. The increase in the reduction of taxable value applying to eligible fringe benefits and the extension of the definition of ‘remote’ were announced in the 2006-07 budget and in attachment B of the Treasurer’s press release No. 039 of 9 May 2006. So the government is at least moving forward, albeit slowly, and making some attempts to recognise the burden that is placed on small business and to do something about it. This burden on small business has a number of effects on small business, particularly in the area of, for example, skills. While businesses are occupied and busy dealing with administrative issues, they cannot be dealing satisfactorily with skills issues, and we have plenty of evidence of that. The last 10 years has been marked by a growing skills crisis in Australia, to the point where today it really can be defined as a crisis. We are seeing the government react in a number of ways to that skills crisis, through short-term solutions such as 457 so-called skilled visas and a range of other activities. The reality is that the number of Australian apprentices and trainees quitting their courses and not following through has hit an all-time high in this country, and the government has done little to nothing to address this issue. These issues form just as much of a burden as any regulatory burden that small business faces. In fact, according to new figures from the National Centre for Vocational Education Research, in the March 2006 quarter, apprenticeship cancellations and withdrawals reached 36,000. That is up 13 per cent from the same time last year. Over that quarter 40,400 people completed an apprenticeship. That high number of those who did not finish, who either withdrew or cancelled, is startling and something that the government should be seriously trying to address. The government is so out of touch that the training minister recently proposed building TAFE colleges not here in Australia but in Africa. I think it confused everybody, not only in this place and on his own side but out in the community as to why that would be a good idea. The government ought to be acting to cut the dropout rate by adopting Labor’s proposal for a $2,000 trade completion bonus to encourage more traditional apprentices to complete their training. I think sometimes dealing with issues and burdens placed on small business, be they regulatory or otherwise, is not so much about trying to come up with new ways to attract people but about trying to stem the flow, stop the bleeding and stop the pain that is being felt by small business in trying to get skilled, qualified and trained people through their industries. Once again, the Howard government has forgotten what its top priority ought to be in this country—that is, training Australians first and training Australians today. The NCVER figures from the March quarter also showed an increase of 24 per cent last year in the number of cancellations and withdrawals from apprenticeships in the trades and related workers category. So it is not just restricted to one area. The number of apprentices and trainees also declined slightly in the March quarter compared to the same time last year. It will take another 10 years at the current level of training to make up for the lack of training over the past decade—a terrible record and a terrible legacy that has been left by this government. According to a recent report commissioned by the Australian Industry Group, Group Training Australia and the Dusseldorp Skills Forum, that level of training, that 10-year bridging gap, is a complete disgrace and something that Australia is going to struggle to fix. Building TAFE colleges in Africa obviously will not solve the problem, and the minister could not have backed away from it any faster than he did when we raised that issue and asked a question on it in this place. That is why Labor says our priorities are to train Australians and train them now. This is having a very serious effect on small business. The Australian Hotels Association, at a briefing that you and I, Mr Deputy Speaker Quick, got just recently, raised some of the issues that we are both concerned with, including the quality of training of young people and the level of service within that industry. It is an industry particularly marked by the number of young people and transient and casualised workers who come through and, potentially, do not stay in that industry, or who come through the industry to support themselves while they are doing some further educational studies or perhaps while in between jobs. Or perhaps they are people who really do want to have a long-term career in that industry. But what the industry is finding is that they are just not being supported by government, and I do not believe they are being supported by the government’s extreme industrial relations changes. The changes are not benefiting the industry as a whole. While on the surface there may be this impression that they give employers greater flexibility to determine how people ought to work, they do not actually do anything for the industry itself. What I am referring to is the dumbing down of skills in restaurants, coffee shops and service industries where we are finding that people no longer get trained. They no longer have those skills, and employers are no longer willing to spend the money that they otherwise would, and they cannot find enough skilled people to fill the jobs. So they are finding it very difficult, and that is causing major problems for the industry. One of the things we were told by the AHA is that there is a problem in the Australian market with domestic tourism, and I think this could be a part of that. If people are going to get a bad service experience or some other bad experience when they are travelling or holidaying domestically, then this skills crisis and all those other burdens that are on small business are not going to help. That is the real and practical impact: the dumbing down of skills and noncommitment to an industry. Young people are not silly. If they do not find opportunities and prospects for career advancement in an industry then they just move on. But I believe the AHA is actually becoming involved; it is doing everything it can. It understands the problems with skills and the skills crisis in this country, and hopefully it will do much more to address these issues, to reinvest in its own industry and in young people and training, and make sure that we do not end up with a very second-rate service industry. This leads straight on to the relationship between the extreme industrial relations changes of this government and the 457 so-called skilled visas class. I say ‘so-called’ because once upon a time a 457 skilled visa was just that; it was a visa that somebody attained. They then came to this country and worked to fill a particular skill gap which was identified and which had selection criteria. The employer looking to fill that position would have done everything they could have to find somebody domestically. So they would apply. It is a fairly big process, obviously, and a big leap for somebody to look overseas to fill a job. But that has all changed now, because this government has decided that it should go out there and relax the rules and regulations on how business can get so-called skilled labour—guest labour, as it were—into this country. Now those controversial temporary business long-stay visas are being used not to fill skills gaps but just to employ cheap labour. That is a real concern, because those people being displaced are the people in the service industries who I referred to earlier. We are now finding an opening up of this new class, particularly when it comes to chefs and people working in hotels. You will find that now they are all from overseas, supposedly filling a skills gap. But the reality is they are being used as cheap labour, and I find that completely appalling. I think that this government ought to seriously reconsider its position on the use of foreign, so-called skilled labour in this country. At the end of the day, what this really means in practical terms is taking jobs away from people who probably ought to be in those jobs and who may develop long-term careers if they can receive the training they need. Labor have made a number of comments and proposals on 457 visas. What we have said from the outset, though, is that we support a 457 skilled visa class. We have always supported one, because it is an important part of the mix in Australia to deal with skills and particular industries. But it should not be used as a replacement for skills just to import cheap labour. It should not be used to exploit people. There has been an inquiry on the abuse associated with the visas. There were problems with the launching and the administration of that inquiry on making it a more transparent visa class. The inquiry, rejected by the government, was to examine a number of things. I think these are very important. That inquiry would have examined the general efficiency and effectiveness of this visa class, the safeguards in place to ensure the integrity of the system, the government’s performance as an administrator of the visa system, the role of the domestic and international labour hire firms and agreements and the potential for displacement of Australian workers, and the difference between the pay and conditions of visa holders and the relevant rates in the Australian labour market. That particular point is another issue. Workers are brought in under this visa class not only to be used as cheap labour but also to undermine the wages and conditions of Australian workers working beside them. This is something that needs to be investigated fully. The inquiry would also have examined the government’s labour market testing required before a visa can be approved, and we have already seen a number of test cases that have shown that there are unscrupulous employers out there who will exploit and abuse people under this visa class. If it had been accepted by government, the inquiry would also have looked at the regional certifying bodies for visa certification and the interaction of this visa with the Work Choices legislation. These are some very serious issues, and if the government were serious about actually dealing with this properly they would have allowed this inquiry to take place. But they have cut and run. They are hiding; they do not want anybody to fully examine the impact this is having on our economy and on Australian workers. All I can assess from this is that they just do not care. They do not care enough about Australian workers and Australian industry to make sure that this visa class is not going to have some long-term detrimental effect. I will also add to that a very important part, which is that there are lots of very good, solid employers out there. Some are large employers. There are a number of them—quite a few, in fact, in my electorate, who are concerned about 457 visas. They use them themselves, but they use them properly. They do not use them to undercut wages and conditions; they use them to fill real skills shortages and gaps. The problem they are finding, though, is that some of their competitors are exploiting and abusing that visa class. And the problem they find is that it is getting harder and harder to compete with unscrupulous employers who are trying to undercut them and compete just on wages. If this government does not want a race to the bottom on wages and conditions, a dumbing down of industry and training and a running down of our own labour market then it should look very carefully at this visa class and its full impact on the Australian economy and labour market. I also want to talk briefly on the issue of interest rates. I do not think you can talk about any tax bill or any other bill in this place without raising interest rates because they seem to be the daily discussion point and certainly the barbecue stopper and all those things that the Prime Minister always talks about. But something very special happened in this place this week—that is, for the first time for a long time Labor asked a question citing 17 per cent interest rates. We threw it at the government with open arms, saying: ‘Here it is. Here’s a free kick. We’re going to raise 17 per cent interest rates with you and we’re going to compare our record to yours.’ What do you think the Prime Minister had to say on it? He ran and hid and tucked his tail under because his record is worse than it ever was with 17 per cent interest rates. Even though 17 per cent interest rates were very brief, they did hurt people, but people are hurting more today. That is the new interest rate reality—that is, it is 50 per cent more expensive today, in today’s dollars, than it was with 17 per cent interest rates when Labor was in government. This government has nothing to be proud of. It will leave no great legacy, apart from the fact that it is creating a whole generation of young people who now no longer consider it possible to even dream about owning their own home. They have other things to do. They have to worry about paying for their HECS and university degrees, which are now the price of a home. They have so many other bills, including personal debt and credit card debt, and are trying to survive the cost of living and all those other issues. As a young person, the dream of being able to save a few thousand dollars and to get into the housing market at the low end—something cheap and affordable but where you can start your family and start a bit of wealth creation, which this government seems pleased to crow about but does not do anything about in real terms—is gone. It is gone for a whole generation. Interest rates are nothing that this government ought to be proud of. We have seen the seven back-to-back rises and we have seen the broken promise the Prime Minister made at the last election. There have been three or four interest rate rises since then and there are potentially more interest rises to come. We do not want interest rate rises. We think people are paying too much already. Just because it is a low number it does not mean that you are not paying a lot of money. In fact, people are paying more money than they ever have in history. Consider these facts: the average new mortgage in Australia is over $220,000 and, of course, it is much higher in major capital cities. I do not have to talk about Sydney for too long for people to understand what that means for people in that market. Since the election, repayments on an average new mortgage have increased by $108 per month. It is a lot of cash, a lot of after-tax dollars, that people have to find. This means that, over the last 10 years, since this government has been in, household debt has doubled. Again, it is a very terrible record and one that this government should not be proud of. It is not going to be easy to fix. The only solution that the Prime Minister and this government ever put forward is: ‘Let’s blame the states.’ Okay, we will do that; that is fine. Do it for as long as you like, but at the same time start coming up with solutions and start looking at what you can do practically to deliver something, particularly for first home buyers, who cannot afford to buy a home anymore. The proportion of first home buyers in the market has hit a 12-month low. Of all loans, first home loans are now just 16.7 per cent. That is a startling figure and something that this government should be very concerned about. A range of issues have come to the table over the last few days in this place. Certainly the tax take and its relationship to interest rates and to what this government has been doing is not good. This is the highest taxing government in Australian history. We just heard the member for Rankin give a very eloquent contribution on tax, and he gave some comparisons and reminded us of some of the porkies that have been told by the Treasurer on taxation. Make no mistake: this is the highest taxing government on record. It is the Howard-Costello legacy. In the very few seconds I have left, I want to make a quick point about Medibank Private. It should not be sold. The sale should not go ahead. The government, whilst it has delayed the proposal for the sale, is still committed to this sale. It wants to flog off everything. I am waiting for the bill to sell off Parliament House! Maybe there will be some shares in it for Australians. Although they already own it, they will have to buy shares in their own parliament. Maybe democracy could be aligned with the number of shares you own. That is the mentality of the Howard-Costello government. It is unbelievable and incredible. This government ought to be condemned for even considering the sale of Medibank Private. (Time expired) 38 12:04:00 Hatton, Michael, MP LN6 Blaxland ALP 0 0 Mr HATTON —I am happy to support the amendment put forward by the member for Hunter on the Tax Laws Amendment (2006 Measures No. 5) Bill 2006. By putting his amendment forward, he has put Labor’s position with regard to the unfortunate people who have suffered at the hands of the James Hardie corporation over decades—people who have ended up with mesothelioma or asbestos poisoning, who have had their very health and lives destroyed. And it has impacted dramatically on their families. This government has mucked around with the resolution of this process. It is not been forceful or put its foot down in relation to it. It has not put as much pressure on the company as it should have—a company that has sought through just about every means imaginable to run away from its responsibilities. The government, in a hands-off approach, has said that it can only rely upon the good graces of this company to come forward and give adequate compensation to people. Labor has argued that we in fact need to do more. The amendment refers to: failure to provide certainty to the former employees of James Hardie and their families by providing tax exempt status to the James Hardie Asbestos Victims Compensation Fund ... The government has argued that it should not create a special case and that it puts more pressure and onus on the company by not providing a tax exempt status. Given what has happened so far in relation to this, the opposition is of the mind—as the shadow minister has put it in his amendment—that we in fact should consider this, and the government should have done so. On one of the other great major unresolved taxation issues, the amendment refers to: creation of great uncertainty in the Australian business community by its failure to bring forward its review of loss recoupment rules. The shadow minister dealt with both of these areas quite extensively. I indicate my support for the action that he has taken. This is a typical taxation bill and a combination of three very disparate measures under three schedules. The first relates to particularly minor changes in the fringe benefits tax area. The second relates to the treatment of veterans, extending the provision to them of pharmaceuticals and access to cars. The third relates to the availability to students of the tax-free threshold. I commend in particular the changes made in schedule 2. I will go to the specific provisions. The schedule proposes GST concessions in relation to the Military Rehabilitation and Compensation Scheme established under the relevant act. The amendments provide that the supplies of drugs, medicines and other pharmaceutical items are GST free if supplied as pharmaceutical benefits under that act and that the GST-free motor vehicle concession for veterans will be extended to include a new category of severely injured veterans under the Military Rehabilitation and Compensation Scheme. Previously, you had to be a totally and permanently incapacitated veteran to gain that concession; here they have somewhat lessened the extent of injuries necessary to qualify. I think this is an entirely appropriate response to people who have suffered in the past and continue to suffer for their country from injuries sustained from fighting on our behalf. Just in this last year, we have had a special operations group in Afghanistan. They have fought for a full 12 months and 12 of those soldiers have been injured—one very severely in the jaw and another in the abdomen. Those injuries would not qualify for assistance under the existing provisions. A range of other measures are available to them, but taking practical measures to relieve the distress of and the financial burden on those veterans by creating a class under which they can be assisted is important because it recognises the particular needs they have and that they have done things that others have not. I am not sure about schedule 3. I do not know why this was done and what drives it. I have looked at the Bills Digest; I have not been able to look at the explanatory memorandum to this, but there is a notation in relation to it. According to the Bills Digest it changes the application of the Income Tax Rates Act 1986: ... to extend the full tax-free threshold of $6,000 to taxpayers who cease to be engaged in full-time education for the first time from the year 2006-07; at present these taxpayers are only entitled to a proportion of the tax-free threshold of $6,000. When the minister is summing up debate on the second reading, I would like to know exactly what the reasons are for this. I can see that, at present, a series of calculations have to be done—if a person ceases to be a student at some time during the tax year, they may have to do a calculation of one, two, four, six or seven months out of the 12 and only get a pro rata treatment. That is what the situation has been historically. If you are in the workforce for five months out of 12, then you should receive five-twelfths of the full tax concession of $6,000. I do not think it is beyond the wit or the imagination of all those students or the people who give them tax advice to actually work that out. I do not see the compelling reason for changing this other than to make a simple change to the manner in which the act is operating for the benefit of students. Why is it being done? The argument is for less complexity and that it is less burdensome for those students, but is that it? Someone came up with the notion that what has been done historically should be turned upside down? The point here is not a question of appropriate generosity in schedule 2; the point goes to the question: why was this done? Is it just within the scope of this bill generally that there is a drive towards less complexity? This brings me to the first schedule, which I might devote some time to. Schedule 1 is about fringe benefits tax. What is achieved here? The purpose of the schedule is to, firstly, increase to the minor benefits exemption threshold from $100 to $300; secondly, increase the reduction of taxable value that applies to eligible in-house fringe benefits and airline fringe benefits from $500 to $1,000; and, thirdly, increase the reportable fringe benefits amount threshold from $1,000 to $2,000. The schedule also changes the definition of remote areas. There is a specific provision that applies here—and this one is a doozy. Maybe this is for Tasmania, if you actually go by ship from Tasmania to the mainland. This provision says: ‘We recognise that it is more inconvenient and more difficult to travel by water than it is to travel by land. Hence, if you undertake a journey that is completely by water, we will allow you to claim double the amount. If it is partly by land and partly by water, that amount by water will be doubled.’ I would like to know the genesis of this and how many people it actually applies to. I do not know whether this is an amendment centred on Tasmania or not. I cannot think of many other applications, unless people are coming in from Lord Howe Island in the electorate of Sydney. That is one small aspect of that. These measures are not very great or significant. One could guess that they were just developed in the normal course of the Taxation Office doing its job. They are very small eggs to have been laid. If you looked at the genesis of this, on 12 October 2005 you might have expected that the eggs laid by the government goose with regard to this would be not only golden but goose sized. Instead of that what we have here are extremely small eggs—quail eggs or smaller. This is the scope of what the Treasurer and the Prime Minister announced on 12 October 2005. They released the task force report Rethinking regulation, which looked at reducing regulatory burden on business. They said it will: identify specific areas of Commonwealth Government regulation which are unnecessarily burdensome, complex, redundant or duplicate regulations in other jurisdictions; indicate those areas in which regulation should be removed or significantly reduced as a matter of priority; examine non-regulatory options (including business self-regulation) for achieving desired outcomes and how best to reduce duplication and increase harmonisation within existing regulatory frameworks; and provide practical options for alleviating the Commonwealth’s ‘red tape’ burden on business, including family-run and other small businesses. As part of this, we have these changes on the fringe benefits tax: a hell of a lot promised; an enormously small amount delivered in these changes. There were a couple of goes at how much was done and what came out of this, given that the government, when it came into government in 1996, from memory, promised to slash red tape by half. This is a government that has specialised in creating more complex legislation, particularly in the tax area, over the last 10 years. Here it is responding to pressure from a very wide ranging and deep task force, and what has it come up with? There were several parts to what was recommended. The Treasurer chose only the first couple of parts, and they are minor in their effect. All up in these three schedules, we have got about $13 million—there is $2 million for the student part, about $1 million for schedule 2 and about $10 million for the rest. What is the reaction out in the community? If you have a look at the Australian Financial Review, on 29 August 2006 Mark Fenton-Jones, in an article entitled ‘Tinkering falls short of much-needed tax revamp’ says: The latest changes to the way GST and fringe benefits tax are calculated by small businesses are welcome measures to reduce the compliance burden. But it is only tinkering on the margin, as the whole tax system needs to be revamped with small business in mind. He went on to summarise the comments made by Pitcher Partners manager Gary Matthews on the FBT changes: He says the government needs to take a more fundamental approach and evaluate the whole FBT legislation, which is about 20 years old, to see if changes in business practices during the past two decades should be reflected in broader changes to the legislation. That basically gets to the core of it. Businesses would of course want to take their regulatory burden and place that on the employee. They like to mirror what the government is doing. What the government is trying to do through legislative workplace changes is take the on-cost of business and put that onto individual employees. If both achieve that then the employee would take the weight of just about everything that can be put on them. But by reducing compliance costs, reducing burdens and so on, by putting so much into this effort and coming out with so little, you would have to ask fundamental questions. Why did this government choose to bring in a GST whose fundamental structure and approach was generated in 1962? Why did it choose a paper-driven GST, appropriate to the fifties, sixties and seventies, in a computerised age? The one fundamental change that could change things for small, medium and large businesses in this country is to change the GST regime from the old paper based system—although they use computers to operate it, it is paper based at every iterative step of the process of everybody having GST imposed on them, so they have to claim it and they have to take it back, put it in and put it out, in a mass of records—to a simpler proposal and a simpler way of going about things. They could transfer this into a retail sales tax. If you want to take a burden off small, medium and large business in Australia, take an intensive GST and turn it into a retail sales tax. That was proposed by Treasury in 1985. When option (c) was put up, Treasury recommended that because it thought the full-blown GST would be too difficult to implement in a short time frame. I have had discussions since with certain Treasury officials who might have known something about what happened then and later, and they are reluctant to undertake this approach. There can be no impediment to this with regard to the question of what the effect might be on the black economy. In Australia and in Europe, it is absolutely evident that the GST regime we have got—the burdensome British and European 1960s regime—is still riddled with a black economy that has run rampant through various parts of Europe and has run rampant, despite the imposition of the controls that are there, in the GST. If you wanted to make some of the changes that this task force was suggesting, which none of Australia’s businesses are doing, you need to look at it deeply and fundamentally and ask: is the very design of this tax correct? Is its implementation right? Shouldn’t the government be looking at dramatic simplification by having one point at which this tax is put on? Simplify it for everyone else except at the endpoint. I want to make another couple of points. Originally this GST was to raise $24 billion. We know there is $32 billion-plus now, and rising. It replaced a wholesale sales tax that the government said was shambolic and all the rest of it. The wholesale sales tax had the benefit of being put on at one single point in the process. It was much simpler, much less complex, despite the fact that it had differential rates of application. And it was certainly far less costly to the community than this process is. Just in passing, because we have had a very wide debate, there is something that is entirely pertinent in this regard. I join with the member for Rankin here with regard to the fact that this is the highest taxing government in Australia’s history. It is also the one that has put a whole series of burdens on people while arguing that those burdens really are not great. They have been significant burdens. However, this is also a government with a Treasurer responsible for taxation matters in this country who is willing to completely distort the truth of the matter. He is currently swanning around the world, being in South Africa at the moment, but just last week, at the dispatch box, he told a complete and utter untruth. He said, ‘Why has the Labor Party never had the wit to be able to run a budget surplus?’ I interjected at the time, which was not parliamentary. However, my interjection at that time was quite simple. The first four surpluses in the history of the Commonwealth of Australia were under the Australian Labor Party. Guess who the Treasurer was. The member for Blaxland, Paul Keating. One, two, three and four. No-one had ever done it. Had John Howard, the member for Bennelong, in his years as Treasurer ever had a surplus budget? The answer is no. ET4 Bevis, Arch, MP Mr Bevis —Not one! LN6 Hatton, Michael, MP Mr HATTON —Not one, not a single one. But double-digit John did achieve this: double-digit inflation and double-digit unemployment. That is a story that is not told. It is not impossible—he actually did it. Labor made significant changes to the taxation regime. This bill, with its proposals reflecting the grand design, which should have been a goose laying very large golden eggs, has given us partridge eggs. It is an indictment of this government that they cannot think beyond tiny fractional approaches to things. Why don’t they go and have a look at the retail sales tax and really look at reducing the burdens on— (Time expired) 42 12:24:00 Plibersek, Tanya, MP 83M Sydney ALP 0 0 Ms PLIBERSEK —I am very happy to speak on the Tax Laws Amendment (2006 Measures No. 5) Bill 2006 because it gives me the opportunity to speak a little on fringe benefits tax and, in particular, the way that fringe benefits tax applies to child care. Certainly the fringe benefits tax system as it applies to child care is a mess, and I am not the only one who thinks so. In fact, there are so many problems with the fringe benefits tax regime as it relates to child care that even Bronwyn Bishop has lambasted the cabinet over its failure to act in this crucial area. On 21 June, at a hearing of the work and family inquiry by the Standing Committee on Family and Human Services, Mrs Bishop said that the business premises rule as it relates to the fringe benefits tax on child care was an absolute mess. She said it was ridiculous. This is something—and let us be clear about this—that is government policy. This is not something that is at the whim of the tax commissioner or that the tax office could fix up if they just got their act together. This is a definite decision of the Australian government to insist on the business premises rule when it comes to child care, and the effect of this is that it makes it virtually impossible for your average business to deliver work based child care without paying fringe benefits tax on it. Mrs Bishop said, ‘The bottom line is that we do need the government to seize the initiative and amend the Fringe Benefit Tax Assessment Act.’ She also said: ... the government has not had the wherewithal or the stomach to make it a policy and do it properly ... And so on. The chair of the committee made a number of other very sensible comments. The tax commissioner admitted that the Australian Taxation Office does not know how many employers have on-site child care. What this means in effect is the government does not know how many employees are salary sacrificing child care, because the fringe benefits that employers are exempt from paying fringe benefits tax on are not reportable. Just one of the problems with the government not knowing how many parents have salary sacrificed child care exempt from fringe benefits tax is that the government has no way of implementing what the Treasurer said is the rule—that parents who pay for child care from pre-tax income are not eligible for the childcare benefit and the 30 per cent childcare rebate. The Treasurer confirmed this on 22 May in response to a question from me about the phenomenally generous Centrelink proposal—the tender for child care for Centrelink and other associated workers. The Treasurer said: ... where people are able to access pre-tax dollars for child care, as exists at the moment, the flipside is you cannot access the child-care benefit or the child-care tax rebate. The same rules that apply to any other employees at the moment will apply to those who may be eligible to take up an offer out of the human services agency. That is all very good. People should not be double dipping. The problem is that the government has no way of knowing if they are because it has no records of who is salary sacrificing their childcare expenses in a way that does not attract fringe benefits tax for their employer. I do not know how the government could possibly cross-reference this information. There are in fact very good reasons to suggest that parents paying their child care from pre-tax income may also be claiming the childcare benefit and the 30 per cent rebate—and it is not because they intend to rort the system. It is because the system is fiendishly complex and incredibly confused and because there are loopholes all through it. Take, for instance, the forms to claim the childcare benefit as a lump sum. The forms changed between 2004-05 and 2005-06. On the form for 2004-05 parents were asked: Were all or some of your child care fees paid for you by someone else during the 2004–2005 financial year? On the form for 2005-06 the question was changed to: Were you liable for the cost of your child care during the 2005–2006 financial year? I have been told by childcare providers that there are parents who are salary sacrificing child care at particular childcare centres and who are accurately stating that yes, indeed, they are liable to pay their childcare fees; at the end of the day, if they are not paid, of course they come looking for the parents. Some of them have even checked with the human resources area in their workplace and human resources have confirmed to them that yes, they as employees are liable to pay their fees—but the employees are simply paying the fees from their pre-tax incomes. So they are accurately answering that they are liable; however, they are still paying the fees from their pre-tax incomes. What is happening is that a few lucky parents have employers who are able to comply with phenomenally narrow terms and conditions that allow a fringe benefits tax exemption on child care and thus allow their employees to salary sacrifice their childcare expenses. But, according to the paperwork that they are filling in, they are perfectly legitimately also claiming childcare benefits and the 30 per cent childcare tax rebate. It is obvious that this is not the Treasurer’s intention, but the system that he presides over is such a phenomenal mess, particularly when it comes to child care, that this is the result. It is just one more example of how the Howard government is failing parents when it comes to child care. If you look at the fringe benefits tax rule applicable to child care and its fiendish complexity and incredibly narrow scope and then have a look at the tender that Centrelink wrote for child care for its own employees, you get the notion that there is a phenomenal double standard applying here. Incidentally, it is interesting that we have not heard of any progress on this tender since Labor exposed its conditions in May this year. Work based child care is a really good thing; work based child care for public servants is great and work based child care for other Australian workers is terrific too. What we should not accept is a system that allows two types of workers—public sector workers and private sector workers—to be treated differently under the Australian tax system. This is effectively what the tender for child care for Centrelink workers required the winning tenderer to do. About 38,000 public servants would have had access to this, according to the tender documents. It was a tender drawn up under instruction from the Minister for Human Services, Joe Hockey. It covered 25,000 Centrelink staff and others who worked for Medicare, the Child Support Agency and other agencies. Basically the tender required the successful tenderer to provide child care wherever it was required by these public servants, whenever it was required—guaranteed. It required the successful tenderer to provide fixed price child care, to be paid from pre-tax income. This is something that the average Australian worker only dreams of. The double standard is evident in a system where the Treasurer says: ‘We don’t need to do anything about fringe benefits tax on child care and we don’t need to accede to the suggestions of the chair of the work and family inquiry or other backbenchers like the member for Lindsay and others for tax-free child care, for a change in the tax treatment of child care. We don’t need to do any of that because’—as the Treasurer said at the budget—‘uncapping family day care and out of school hours care was going to fix every childcare shortage in the country. There are no real childcare shortages. There is no issue with price. We have done all of that by uncapping out of school hours and family day care.’ Then, at the same time, they are actually looking for a guaranteed, fixed price pre-tax system of child care for its own employees. This strikes me as extraordinary. If there really are not problems with childcare affordability and availability in Australia, why is there a special deal for 38,000 public servants? If there are genuine problems of affordability and availability in child care, why not address them for public servants but also for ordinary Australian workers across the country? If you look closely at the provisions of the tender, it really is quite stunning. One of the things that the successful tenderer would have needed to commit to was priority placement over other children. Clause 3.3.1 states that priority placement for Centrelink families must be provided. This means: The Contractor must ensure that a standard term of community enrolment includes a month notice to vacate requirement; …     …         … The Contractor must invoke the one month notice to vacate requirement if the placement is required by a Centrelink family ... We subsequently had the government running for its life on this one because it meant that your child could have been in the same childcare centre for three years and, if your childcare centre was part of the successful tender, your child could be thrown out with one month’s notice for the child of a Centrelink employee. How inconvenient and stressful for the parents of the children and how terrible for those children who are used to attending one childcare centre. What of the disruption to the child’s learning process when they are unceremoniously uprooted and told to go and find another place to go to child care? There was also a clause that required ‘the ability for Centrelink employees to salary package their childcare fees without Centrelink incurring a fringe benefits tax liability’. I just do not understand—and I cannot find anyone who can explain to me—how Centrelink can tender out the provision of its child care at the same time as meeting the requirements for child care to be fringe benefits tax exempt. Unless they lease, they are moving into existing centres all around the country. Unless they become the organisation taking the financial risk for what would have to be hundreds, if not thousands, of childcare centres around the country, I do not see how, under current fringe benefits tax laws, this is even legal. The tender also said that childcare fees would be fixed by the government for five years. Don’t Australian parents just dream of that? At a time when the cost of child care is rising at four or even five times the rate of CPI increase, guaranteed-price child care for five years! It is like the film where they say, ‘Tell ’em they’re dreaming.’ 009LP Windsor, Antony, MP Mr Windsor —The Castle. Best film ever made. 83M Plibersek, Tanya, MP Ms PLIBERSEK —The Castle. The tender also says: Centrelink requires the delivery of an employer-provided child care program that will satisfy both present and future needs of employees, in all of our locations ... That would be terrific for parents living in suburbs where there are childcare centres with 600 people on the waiting list. The tender also says that the contractor must be able to provide long day care, outside school hours care and occasional care ‘in all locations, as required’ and that child care must be provided on public holidays and outside business hours. It is great if you can get it. It is certainly something that I would like to see. If work based child care like that is available, I would like to see it available much more broadly than just to the select few who work for the government. People say, ‘Isn’t it a good start to have this sort of child care available for people who work for government?’ Yes. The trouble is that the fringe benefits tax regime, as it exists at the moment, would actually stop employers who want to do this—who want to offer it to their staff—from doing so. If we could offer this sort of childcare arrangement to other employees, we would go a long way to solving the childcare shortages in this country—and the issue of cost as well. The trouble is that we have a tax system that will not let it happen. Recently I have been asking ministers questions about the sort of childcare assistance that they give to their employees, including how many of their employees are able to salary sacrifice. The answers are quite interesting. Some agencies have childcare centres on site. Of course, these are taxpayer funded. Examples are the Australian Bureau of Statistics and the Department of Finance and Administration. The Department of Agriculture, Fisheries and Forestry sponsor a vacation care program. The usual situation is that Commonwealth public servants have preferential access, followed by ACT public servants. It is great—it is terrific; it is fantastic—that these people have access to child care. It should be supported. But how can the government in conscience say that the only people who deserve this sort of support are its own employees? How can it in conscience say that people who work for other organisations—particularly small and medium-sized organisations—do not deserve support to meet their responsibility as parents that this sort of work based child care offers? Is it possible to change the tax system so that this sort of support is more broadly available? Yes, it is. The best way to do it is the way that Labor announced in our Care for Kids blueprint. We have said that you could get rid of the business premises rule for fringe benefits tax and that, if we had rules that said that if an employer genuinely invests in expanding the supply of child care or improving the quality of care in a centre—it could be an existing centre or a centre that they combine with other employers to build—we would allow the same fringe benefits tax exempt treatment of that child care as is allowed in these deals for public servants. We want to see more child care and better child care. We want to see work based child care for public servants. But we also want to see much more work based and work sponsored child care for other Australian workers. Our plan allows fringe benefits tax exemption on all eligible employer provided child care, and it allows employers to claim business tax deductions. We have said that we would also expand the limit from children aged up to six to children aged up to 15. It is quite mad that, for parents who have a problem with finding and paying for vacation care, that actually overshadows the whole year. There are plenty of parents who spend a good part of the year working out how they can cover 12 or 14 weeks of school holidays with four or possibly eight weeks of family leave. That is, if two parents never take leave at the same time, they might be lucky enough to get eight weeks of leave between them. How do you cover that time? We have said that employer investment in helping with vacation care is also something that should attract fringe benefits tax exemption where it is done appropriately. It is not beyond our capabilities to provide decent, work based or work sponsored child care for a much greater number of Australian employees. It is terrific where it happens in the public sector, but we really need to look beyond just the public sector, to make this available to a far greater number of employees. I know the employers want to do it if they get the help and support of the Australian government, as the chair of the work and family inquiry has asked for, as the member for Lindsay has asked for and as many government and Labor backbenchers have asked for in the past. 46 12:44:00 Windsor, Antony, MP 009LP New England IND 0 0 Mr WINDSOR —I was interested to hear the member for Sydney make some comments in relation to that great film The Castle. In terms of some of the comments I would like to make about fairness of tax treatment in the Tax Laws Amendment (2006 Measures No. 5) Bill 2006, I thought some of the issues raised in that film were pertinent, particularly in relation to the term ‘just terms’. Those who have seen the film would be aware that Bud Tingwell acted as a QC representing a family who were going to have their home, or their castle, removed because of the expansion of an airport facility. The airport company was using some sort of legislative process which allowed them to compulsorily acquire their land without just terms. The film came to the conclusion that one’s home is one’s castle and there would be a legitimate claim for ‘just terms’ compensation if one’s home were taken away under those circumstances. The reason I mentioned that—and I say at the outset that I am in support of the legislation—is that I would like to take the opportunity, as have some others, to talk about the broader taxation arrangements that have been put in place. In respect of the just terms provisions that I have just mentioned, which the film The Castle reminded me of, I take the parliament back to an answer that the Prime Minister gave last week in question time to a question that I asked him in relation to groundwater entitlement holders and the taxation treatment that they would be allowed in terms of the Achieving Sustainable Groundwater structural adjustment fund that was put in place. I know that the parliamentary secretary at the table is very familiar with this issue, and I would imagine that she would be quite sympathetic to some of her water entitlement holders. But for members of the House who are not aware, some years ago the Commonwealth, states and groundwater users put together a package amounting to $150 million to help compensate for the loss of groundwater entitlements, which the state government—the New South Wales government, in this case—had deemed to be applicable to reach sustainable use of a natural resource. Having done that, and the groundwater users having agreed to the package, it was assumed—quite wrongly by them, in hindsight—that the compensation package would be made available to them in total. Over ensuing months it was found that the Australian Taxation Office would be deeming the receipt of compensation arrangements from Commonwealth and state governments as assessable income in the year of receipt rather than assessing them as the loss of a capital asset and treating them under the capital gains tax umbrella. That came as a great shock to many of the irrigators because, in a three-way split of $150 million, it meant that of the one-third shareholding of the compensation package the Commonwealth could receive most of its money back via income taxation receipts. I am pleased to see the Minister for Revenue and Assistant Treasurer coming into the chamber, because he has had something to do with this particular issue. In his summing-up, he may like to address some of the correspondence that he has been privy to. In going back to the answer that the Prime Minister gave last week, I thank the Prime Minister because I think he made a very genuine attempt in a fairly complicated issue to come to grips with the concerns of the groundwater holders across the six valleys in New South Wales. I will quote the Prime Minister because I think that, in respect of the ‘just terms’ or property rights issue that I referred to earlier, the Prime Minister made a very important point and I share it with the House. In his reply to my question relating to the taxation treatment of compensation for the loss of groundwater entitlements for the greater good and the sustainability of the natural resource for the environment et cetera, the Prime Minister said: It is my view that these payments are in the nature of compensation for the withdrawal of the previously conferred water right. I myself do not believe that you can regard these payments as being in the character of income. That was a significant breakthrough and I thank the Prime Minister for his words in relation to that particular issue. It is the first time that the Prime Minister or any minister in this House has actually used the words ‘compensation for the withdrawal of a previously conferred water right’ in the same sentence. That is, in my view, the first time that the leader of the government has recognised a property right. If you look at the history of the property rights issue, particularly in relation to water—and I do not think anybody argues that we do not have to bring our natural resources into some degree of balance and sustainability—and if you travel back to 1995, when the competition policy arrangements were first put in place, there were two major tenets that underwrote the arrangements and the agreement between the Commonwealth and the states. As part of those arrangements the Commonwealth and the states agreed that money would not flow in terms of competition tranche payments to the states unless those various arrangements were put in place. In the case of the water reform process, there were two things that were basic to the process commencing. One was that a properly constituted market in water licences be established. There are some fuzzy bits on the edges but essentially that has happened. The other thing was that a recognised property right be established between the Commonwealth and the states before any flow of money in terms of tranche payments would flow to the states. We have gone through over 10 years and taxpayers’ money—money that has been earned through the income tax process and other taxation arrangements—has flowed from the Commonwealth to the states. That has applied for 10 years and yet property rights have not been recognised until last week, when the Prime Minister used the term ‘compensation’—not ‘structural adjustment’, not ‘financial assistance’—for the withdrawal of a previously conferred water right. I compliment the Prime Minister for doing so. I am pleased that Minister Dutton is here because, having said that, the Prime Minister did go on in his answer to my question to deflect blame, in my view quite wrongly, onto the New South Wales government. I am not defending the New South Wales government here; I think their behaviour has been absolutely atrocious in relation to their treatment of natural resource users in that state. However, the Prime Minister went on to deflect blame, saying: The New South Wales government thus far have represented to us—the federal government—that they want the payment treated as income because, apparently, they are fearful of a precedent being established whereby such payments are seen as truly they are, and that is as compensation for the withdrawal of a previously conferred water right. I believe that the Prime Minister was completely honest in his answer last week in the knowledge that he had of the issue. I am not criticising the Prime Minister. I do not think he was adequately briefed on the paper trail between Commonwealth and state government on this particular issue, bearing in mind that the Commonwealth and the states were equal partners in relation to the package that was put up to cover the six groundwater valleys that are going to be impacted. I made the point that I thought the Prime Minister should check the communication flow. In the meantime there has been some response from the state minister, the Hon. Ian Macdonald, to the Prime Minister’s words in question time last week. The Hon. Ian Macdonald has taken some degree of offence. I would like to read his response in the New South Wales parliament. The Hon. Ian Macdonald said: The Achieving Sustainable Groundwater Entitlements Program is a joint program co-funded by the New South Wales and Australian governments. It aims to assist in minimising the impact of reductions in groundwater entitlements on regional communities. That is correct: it is funded jointly by the New South Wales and Australian governments. It was always agreed that the New South Wales Government would cover a third of the impact, the Commonwealth would cover a third and irrigators would meet the remaining third. From the outset, the irrigators flagged with John Anderson, who was then Deputy Prime Minister, that there could be a problem if the payments were taxed. Indeed, my predecessor, Craig Knowles— I would say that Craig Knowles, who is not in the New South Wales government now—and I think John Anderson would agree with me on this—was a good minister and was actually trying to come to grips with this. Unfortunately, he is not there now. Maybe if he had remained, this problem would not have arisen. Indeed, my predecessor, Craig Knowles, wrote to the former Deputy Prime Minister in 2004, requesting reconsideration of the Commonwealth’s proposed tax treatment. Now to be clear, the Commonwealth and not New South Wales, is responsible for the Australian Tax Office and its rulings. This is not a new issue. Indeed, when the Federal Government and honourable members opposite— this is Ian Macdonald speaking in the upper house of the New South Wales parliament— chose to deregulate the dairy industry they decided to treat those payments as taxable income as well. The Prime Minister has known about this issue for at least two years and has done nothing. But yesterday, the Prime Minister had the hide to say the following in Federal Parliament: The problem here is the way in which the payments are currently structured by the New South Wales Government. Then he goes on to try to sheet home blame, and there are various communications between Malcolm Turnbull, the minister for water and others. He goes on to say that there was nothing confusing about letters that had been received: ... it was just another in the series of representations made by me, the Premier and others. Neither the Prime Minister nor the Treasurer responded. The Assistant Treasurer, Mr Dutton, responded by saying: Under the income tax law, a grant received in relation to carrying on a business is assessable income. Therefore, where the financial assistance is provided by governments to industry, as is the case for this package— this is the package I am talking about— the payments will generally— generally— be treated as assessable income for tax purposes. To sheet that home even further, Mr Dutton stated later: The treatment of the assistance payments is ultimately a matter for determination by the Australian Taxation Office. He did not say it was a matter for determination by the New South Wales Government. Peter Dutton is clear about this—unfortunately the Prime Minister is not. I am pleased to see the Parliamentary Secretary to the Prime Minister who has responsibility for water is here as well. Just in case the parliamentary secretary did not hear what I said earlier, I believe that the Prime Minister gave an honest assessment of what he believed to be the case last week in answering my question. The state minister has taken him to task and has said that the Prime Minister, by deflecting blame onto the state government, is not correct in doing so. This is a very important issue, not just for those water entitlement holders but for the way in which taxation treatment is going to be carried out into the future in relation to natural resource management adjustment policies. I call on the Prime Minister today, and the parliamentary secretary for water, to release the documents, the paper trail, relating to this issue—the discussions between the Commonwealth and the states on the establishment of what I still think is a good program, this joint Commonwealth-state irrigators adjustment package, compensation package, for a conferred water right, as the Prime Minister described it last week. I call on them to release all documents pertaining to those discussions, because the irrigators, members of this House and other chambers, and, most importantly, the general public, need to know how the tax office is going to treat the removal of a property right or—I spoke about the film The Castle earlier—the way in which just terms will be delivered to people who lose an entitlement that they have been issued in the past. As the Prime Minister said, it is a conferred water right, properly conferred by a state government, not the Commonwealth—I am not taking issue with the Commonwealth in relation to that. People need to know the way in which the tax office is going to treat those payments into the future. It is very important for natural water resource management. I congratulate the government. You have seen a problem with the overallocation of a resource and have tried to come to grips with that problem. We have seen this in the timber industry, we have seen it in the water industry and no doubt we will see it in a whole range of industries: for the greater good we have to remove some usage of a resource that is not sustainable at that level of extraction or usage. I am not arguing about that. But it is the message that we are sending to those people who are going to be impacted on by the change. People have been brought into a compensation arrangement fully assuming that the money would flow to them for the loss of a capital asset. They then find that the Australian Taxation Office may have a bite of it. Then there is a dispute between the Commonwealth and the states about the writing of the offer document for acceptance of the compensation. The Prime Minister is saying, and others have said, that the wording of that document will be the way in which the tax office will make a ruling on this matter. We have a similar issue with the removal of timber entitlements from the Brigalow bioregion. We have also had an issue in the fishing industry that is similar. The tax office is treating it differently. The point I am making is that we need to have a very clear determination so that, when we have a removal of an asset for the greater good of the community or for environmental purposes, those who are going to be impacted upon know exactly what the rules are. Because this issue has gone on for so long—it is over 10 years since property rights were written into the competition policy agreements between the Commonwealth and the states—we really do require all those documents pertaining to the discussions between the Commonwealth and the New South Wales government on this issue to be released for examination. The Prime Minister is saying that the New South Wales government is at fault because of the wording of the offer document, and the New South Wales government is saying that the Prime Minister does not understand the reality and the various messages and communications and meetings that have taken place. I am privy to some of those meetings, but I think it is time that the air was cleared and those documents were released. It is quite embarrassing for the government, with the Minister for Finance and Administration having written a letter to the New South Wales government, the parliamentary secretary for water having made other communications, the former Deputy Prime Minister having made further communications at other times, and many others, including the Treasurer, having made certain arrangements; and now the Prime Minister is put into a position—inadvertently, I believe, because he has not been given the full information on the issue—where he has made a statement that he may find difficult to back up. If he can back it up, let him do so by way of release of the documents. If that means the New South Wales government is embarrassed, so be it. (Time expired) 10000 Bishop, Bronwyn (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. BK Bishop)—Before I call the Minister for Revenue and Assistant Treasurer, I note that the debate on this bill has been very wide ranging and I think I have been quite tolerant of the speech of the honourable member who has just concluded. It would have been nice if he had mentioned some of the substance of the bill during the point that he wished to make. I call the minister. 50 13:05:00 Dutton, Peter, MP 00AKI Dickson LP Minister for Revenue and Assistant Treasurer 1 0 Mr DUTTON —in reply—A point well made, Madam Deputy Speaker. I would like to thank all those members who have taken part in the debate on the Tax Laws Amendment (2006 Measures No. 5) Bill 2006. I would like to start by addressing some of the concerns that were raised in the second reading amendment moved by the member for Hunter. He raised issues surrounding James Hardie. I say in response that the government strongly believes that James Hardie should honour its obligation to fully compensate asbestos victims in the same way that other companies with asbestos obligations have been willing to meet those responsibilities. None of the other companies that have paid their liabilities in full used a trust or did it through a charitable fund. To exempt the fund from income tax in these circumstances would be inequitable, as this would place the fund in a more favourable tax position relative to other companies with similar compensation liabilities who did the right thing, and it would reward a company that tried to move its assets offshore. Intervention of the kind proposed by the opposition is completely unnecessary. James Hardie has publicly announced that it and the ATO are currently in discussions about how James Hardie can fit within the current tax laws. The treatment of James Hardie is consistent with the treatment accorded to other corporations that meet their asbestos liabilities claims. James Hardie is not being singled out for special tax treatment. James Hardie, like CSR and BHP Billiton, is a commercial enterprise and its own actions have determined its tax liabilities. Unlike CSR and BHP Billiton, James Hardie has purposefully undertaken a restructure in order to protect its assets. The member for Hunter is dead wrong in his statements that the current tax treatment will penalise victims. In fact, the current tax treatment accorded to the fund does not penalise asbestos victims at all. It is important to recognise that the tax issues that have been raised will impact only on James Hardie and not on the entitlements of asbestos victims. The decision of the ATO that that fund as proposed is not eligible for charitable status means that the earnings of the fund will be subject to tax. This will not alter the amount of compensation paid to individual victims. It will, though, alter the amount that James Hardie will be required to contribute to the fund to meet the compensation claims. The government believes very strongly that Labor should be encouraging James Hardie to fulfil its obligations to asbestos victims rather than helping James Hardie get preferential tax treatment. The second issue raised by the member for Hunter was in relation to company loss recoupment rules. I would like to respond as follows. The opposition’s amendment refers to the creation of uncertainty in relation to company loss recoupment rules. In fact, the government has continued to improve certainty for business through changes to the loss recoupment rules which were passed by the parliament in December 2005. The changes made as part of the Tax Laws Amendment (Loss Recoupment Rules and Other Measures) Act 2005 followed a period of lengthy consultation with business groups about ways in which the loss recoupment rules could be improved. Amendments were made to the continuity of ownership test to make it easier for larger companies to trace ultimate ownership of their shares. This provides savings in compliance and administrative costs for large businesses and greater certainty in their ability to legitimately benefit from past losses. These changes were welcomed by businesses, and the government is continuing to consult on the loss recoupment rules and will refine them further if there is a genuine need to do so. Aside from these specific taxation measures, the government continues to support business through its sound economic management. Corporate profits continue to remain high and business investment has been strong. These measures provide evidence that the government’s policies are working and we will continue to ensure that this remains the case. The member for Hunter and the member for Blaxland asked a question in relation to who will benefit from the change in the definition of ‘remote’ for FBT purposes. The amendment will benefit those employers in locations isolated from populated areas by a body of water, such as those in tourism related businesses. These changes recognise that it is generally more difficult and inconvenient to travel by water than by land. This bill is in keeping with the government’s commitment to business to remove unnecessary regulation. The bill makes a number of changes that will reduce compliance costs for Australian taxpayers. Schedule 1 implements a number of fringe benefits tax changes. In particular, it gives effect to two fringe benefits tax recommendations from the report of the task force on reducing the regulatory burdens on business, Rethinking regulation. The first increases the minor benefits exemption threshold from less than $100 to less than $300. This change will reduce compliance and record-keeping costs for businesses that infrequently provide low-value benefits to employees. The bill also increases the reportable fringe benefits threshold from more than $1,000 to more than $2,000. This will reduce compliance costs and keep-record keeping costs low by removing the need for businesses to report fringe benefits for employees who receive no more than $2,000 worth of benefits. Schedule 1 also increases from $500 to $1,000 the reduction of taxable value that applies to in-house fringe benefits and airline transport fringe benefits. In addition, this schedule extends the definition of ‘remote’ for the purposes of fringe benefits tax concessions where the shortest practicable route involves travel by water. This is in recognition of the special circumstances of employees who work in locations isolated from populated areas by a body of water. The bill also provides GST concessions to people under the government’s new Military Compensation Scheme. Schedule 2 will ensure that supplies of drugs, medicines and other pharmaceutical items are GST free when supplied as pharmaceutical benefits under the Military Compensation Scheme. In addition, the GST-free car concession is extended to include people whose service in the Defence Force or in any other force of Her Majesty has resulted in them receiving or being eligible to receive the special rate of disability pension under the Military Compensation Scheme. Schedule 3 represents another instalment of the government’s continuing reform of the personal income tax system. It removes the part-year tax-free threshold for taxpayers who cease to be engaged in full-time education for the first time. Under the current law, taxpayers who cease full-time education for the first time are not eligible for the full tax-free threshold of $6,000. Rather, they are entitled to a reduced tax-free threshold that depends on the number of months that they are not studying, as well as on their income during the time that they are studying. This measure extends the full tax-free threshold of $6,000 to these taxpayers. The amendments simplify the law and indeed reduce compliance costs. I thank all of those members who have participated in this very worthwhile debate and I commend the bill to the House. 10000 Bishop, Bronwyn (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. BK Bishop)—The question now is that the words proposed to be omitted stand part of the question. Question agreed to. Original question agreed to. Bill read a second time. 52 Mr DUTTON (Dickson —Minister for Revenue and Assistant Treasurer) 13:13:00 —by leave—I move: That this bill be now read a third time. Question agreed to. Bill read a third time. 52 BILLS R2577 Cognate bill: 52 BILLS R2613 52 Debate resumed from 31 May, on motion by Ms Julie Bishop: That these bills be now read a second time. 52 13:15:00 Livermore, Kirsten, MP 83A Capricornia ALP 0 0 Ms LIVERMORE —I am pleased to have this opportunity to speak in the cognate debate of the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006 and the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 2) Bill 2006. International education is Australia’s fourth largest export industry and is estimated to contribute $7.5 billion to our economy each year. Now more than ever we need to take the education services industry seriously in this country. Figures released today show a decline in commencements of international undergraduate students at Australian universities. It is only a small drop but it is a signal that we can no longer take for granted the enormous growth in international students coming to Australia that we have seen over the past decade. Central to the industry’s success in that time has been the reputation of Australia’s education providers. The ESOS regime is designed to safeguard that good reputation by ensuring that providers meet certain standards of quality and overseas students are covered by adequate consumer protection measures. The focus of the original ESOS Act was on the regulation of providers of education services to overseas students. The act ensured that the providers of education services to overseas students had to: register with the Commonwealth Register of Institutions and Courses for Overseas Students, known as CRICOS; refrain from misleading or deceptive recruitment practices; in the case of closure, refund student fees; become a member of a tuition assurance scheme, which ensured access to alternative tuition in the event of provider closure; and be penalised through suspension or cancellation from CRICOS for any breaches. The current regulatory regime for international education consists of the ESOS Act and complementary acts, the ESOS regulations and the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students, known as the national code. There is much in the government’s policies on education generally to disagree with. However, in this case, the added protections for overseas students and other measures to provide clarity for providers, provided for within these bills, are a positive step for an important industry and we support them. These bills amend the ESOS Act to: extend the requirements on provider registration, clarify provider obligations in certain circumstances, extend the consumer protection elements of the act, insert a sunset clause for claims against the assurance fund, extend the fit and proper test provisions, and other elements as well. Most of the amendments have resulted from the evaluation of the ESOS Act conducted in 2003. The ESOS Act 2000 carried a requirement that an evaluation of the act be conducted within three years of commencement. The evaluation was conducted in 2004 and invited submissions from industry and other stakeholders. The key areas that the evaluation looked into included quality assurance, consumer protection, migration policy and administration. The evaluation comprehensively addressed the limitations of the current ESOS legislation and raised a number of valid points with regard to the administration of the act. It also acknowledged the massive growth in the international education industry and the manner in which the industry has evolved in such a short time frame. The evaluation report contained 41 recommendations aimed at improving the ESOS legislation, and it is some of these recommendations that have been picked up within these two bills. I will start with the changes to registration. In order to offer education and training services to international students, providers must be registered with the Commonwealth Register of Institutions and Courses for Overseas Students. In order to register, providers have to show that they can satisfy state and territory legislation as well as the ESOS Act and demonstrate that they are fit and proper. The ESOS Act requires all providers of education and training to overseas students that are registered on CRICOS to pay a registration fee each year. This fee is based on the total enrolments of overseas students for the previous year. Current provisions within the act enable enforcement action to be taken against any provider that fails to pay the registration fee. These bills amend the act to stipulate that failure to pay the annual charge will result in the automatic suspension of the provider’s registration. Previously DEST had complained that enforcement of the annual registration fee payment took up too much administrative effort. This particular amendment has troubled the Australian Vice-Chancellors Committee. These concerns were raised in a letter received from the AVCC which states that: Timely payment by universities or any other provider is contingent upon early receipt of notification from Department of Education, Science and Training ... regarding the rules and calculations of the ARC (Annual Registration Charge) for the period, which should include time to discuss any discrepancies between DEST and provider calculations. The AVCC’s concern is that, as the annual registration charge is reliant upon an agreement between the provider and DEST on total enrolments from the previous year, the resolution of discrepancies can affect the amount to be paid. The amount charged by DEST may therefore be inaccurate, and this amendment does not allow enough time for the charge to be questioned. The AVCC believes that automatic suspension for nonpayment by the end of February when DEST is under no obligation to detail the extent of liability could be seen as unfair. We on this side agree with the AVCC on this point and, subsequently, will be moving an amendment to the bill seeking to give providers 28 days notice of the specific amount they are required to pay as the annual registration charge under the act. Specifically the amendment that we will be moving is to repeal section 23 and substitute it with a new section 23 as follows: The Secretary must give to each provider who is liable to pay an annual registration charge for a year a written notice stating the amount of the charge. A notice under this section must be given to a provider by the last business day of January of the year. Subject to subsection (4), a registered provider must pay the annual registration charge for which the provider is liable by the last business day of February of the year. If the notice has not been given to a provider by the last business day of January, the annual registration charge for which the provider is liable must be paid within 28 days of the day on which the notice was given to the provider. I submit that this is an entirely appropriate amendment and I would ask that the government support it. The Australian Vice-Chancellors Committee is the peak representational body of Australia’s 38 universities and deserves to be heard on matters in which it has considerable expertise. This amendment is simply commonsense as it is impossible for a provider to pay the annual charge when they are unsure as to what the amount is or there is uncertainty about the figures used to calculate the charge. I turn now to the changes to the fit and proper test in this bill. The ESOS Act contains provisions relating to a fit and proper person test. This is designed to ensure that past behaviours which impact upon a provider or their associates’ suitability to be registered is identified. The independent evaluation identified disquiet amongst stakeholders at the fact that the test was only applied once, presently at the point of initial registration. These bills allow for that test to be applied at any stage in a provider’s registration and will allow for greater regulation over who the test applies to through an extension of the power. These bills extend the fit and proper test provision to include high managerial agents of the provider as a new category, along with providers and associates of providers. Concerns have been raised at the amendment’s definition of ‘high managerial agent’ to include teachers, consultants and principals. This has raised several issues with regard to the onerous responsibility that this places on larger institutions with numerous staff. It has also been pointed out that this particular amendment could unfairly expose an individual’s private information. Other concerns include the potential impediment to service delivery due to the extended application of the test. Some providers are worried that the extra workload burden that they may shoulder under this amendment will divert resources away from the core business of providers: to deliver quality education. As the Minister for Education, Science and Training noted in her second reading speech for the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006: In introducing these amendments, my department has been mindful of the need to avoid unnecessary regulation, given the cost both to the industry and the Australian government. These amendments will have a minimal regulatory impact on providers and will streamline processes for the Australian government. This would, however, appear to be at odds with the proposed requirements to do background checks on large numbers of employees, which clearly has the potential to become a regulatory burden on a number of providers. It should be pointed out though that similar tests do apply to people in the financial services sector whereby individuals are assessed prior to and continuously throughout their appointment by APRA. These tests have become commonplace in a number of sectors as consumer protection measures and will no doubt expand into a number of other areas. While we do share some concerns about this amendment we also believe that, on balance, the extension of the test is warranted. In recent years we have seen a handful of educational facilities undertaking questionable actions with regard to their international students. Unfortunately there are always going to be unscrupulous people and organisations out there seeking to take advantage of others for a financial gain; the international education sector is no exception to this. Of course, the vast majority of organisations are above board and offer quality education and training to their students. However, there is always the danger that there will be that rogue element and the government’s intention should be to minimise the potential for that as much as possible. These bills therefore correctly attempt to strengthen the consumer protection elements of the ESOS Act. Under the act, private providers are required to be members of a tuition assurance scheme which protects a student in the event that a provider is unable to meet its obligations. Amendments made within the bills before the House today clarify that providers must be a member of a tuition assurance scheme that covers each particular course on offer. Previously, providers could be members of any tuition assurance scheme even if it did not cover the specific courses offered. One event that has led to this change was the collapse of the Strathfield Regional Community College 12 months ago. When the college went under, students who were enrolled in its horticulture course were transferred into hospitality by the tuition assurance fund. As one media report noted at the time, the only similarity between horticulture and hospitality is that they both start with the letter H. Obviously this was an unfortunate and clearly unacceptable situation but one which illustrates the importance of the protection measures of the act and the need for these provisions to be sound. Another amendment to the act will insert a sunset clause limiting the time frame in which a potential claim can be made on the ESOS assurance fund. The purpose of the ESOS assurance fund is to protect the interests of students by ensuring that students are provided with suitable alternative courses or have their fees refunded if the provider cannot provide the course that the student paid for. The sunset clause on the fund will be 12 months. Stakeholders had stated that the lack of a sunset clause exposed the fund to potential claims for an indefinite period. The inclusion of a sunset clause gives fund managers greater surety and enables better management of the fund. I turn now to the important area of student visa conditions. These bills make changes so that provider obligations under the ESOS Act which support visa integrity are brought into line with current educational practice. Currently, students who breach visa conditions relating to attendance or satisfactory academic performance must be reported to DIMA. The reference in the act to the precise visa conditions for which this occurs will be removed from the act under these amendments and moved to the regulations made under the ESOS Act. These regulations will be mirrored by the migration regulations and will reflect the student visa conditions outlined in the national code. The reporting requirements of providers were the subject of many submissions to the ESOS evaluation. Providers were obliged by the act to report students to DIMA when the students did not meet certain standards of attendance or academic performance; generally, these were triggers for the automatic cancellation of a student visa. The ESOS evaluation stated that the all-or-nothing nature of present requirements for providers to report students for breach of their visa conditions bring the full weight of DIMA’s compliance process into play too early in the educational processes that should be the responsibility of the provider. It is for these reasons that the evaluation recommended that the national code be amended to ensure that reporting conditions are clarified to better reflect current educational practices across the sector and that providers devise appropriate policies and procedures to monitor student progress and attendance. The national code will set out the appropriate educational practices to be followed by providers in assessing a student’s performance and then DIMA will amend the migration regulations and student visa conditions accordingly. I understand that the question of how providers are expected to measure a student’s performance has become something of a sticking point in negotiations over the national code. The Australian Vice-Chancellors Committee has been successful, I understand, in negotiating for higher education providers to measure and report academic progress as opposed to attendance. Providers in the vocational education and training sector, however, are still concerned that they will be required to report on both attendance and academic progress. I trust that DEST will continue its consultation with this important sector to resolve those outstanding matters. DEST needs to consider the suggestions made by VET providers for sector-specific measures rather than insist on a one-size-fits-all approach. These bills also tighten up and clarify the requirements for student refunds within the act. Previously, there was a perception that refunds were only provided for when a student actively withdrew from a course, either before or after the starting date. Consequently, the legislation expands the concept of student default. The new amendments clarify that a student default can occur when a student withdraws from a course and where a provider terminates the student’s enrolment due to their failure to pay course fees, breaches of visa conditions or student misbehaviour. It is now clear that students can access the consumer protection measures of the ESOS Act in those circumstances. However, the bills also make concessions for providers by inserting that a student’s refund amount can be reduced if it can be demonstrated that, upon enrolment with a new provider, a student has received academic credit or recognition of prior learning for completed study with the original provider. A small number of providers have used the written agreement between the provider and the student regarding refunds to retain a significant proportion of the student’s prepaid course fees when a student is unable to commence a course due to a visa being refused. A new section inserted in the act will ensure that such written refund agreements cannot penalise a student for being unable to obtain a visa, although providers will be permitted to retain a small administrative fee in these circumstances. The tightening and clarifying of refund provisions within the act is clearly something which we support wholeheartedly. The provisions clarify the obligations on providers and extend the protection for students and, as such, help to protect the integrity of our international education sector. I want to speak now about the national code, which is another very important element of the ESOS regime. While the bills do make some technical amendments in relation to the code, they do not address its content. While these bills are important in safeguarding the reputation of Australia’s international education sector, it is the finalisation of the national code that is the most pressing issue for stakeholders in the sector. In May this year, DEST issued a draft national code for industry consultation. Initially, the draft code was met with widespread criticism from stakeholders, especially relating to the proposed implementation date of 1 January 2007. This date was seen as being untenable to most providers as it did not provide adequate time to ensure that compliance measures under the new amendments were in place. Other issues that raised the ire of providers included the draft code’s impact on increasing compliance costs and administrative burdens, the cost of implementing the revised code and the fact that many of the proposed changes within the draft code had not been based upon quantifiable data. Thankfully, it seems that the department listened to the majority of suggestions and these issues are now mostly resolved. However, it does point to an attitude of consultation avoidance within the department. It would seem to me that, had the providers been listened to earlier on in the process, a lot of time and angst would have been saved. Another issue that the industry has with the revised code is the lack of inclusion of any evaluation or reporting time frames. Many within the industry fear that the code will be subject to continuous ad hoc amendments. For providers, every change means extra work, more cost and possible confusion. Providers want to meet their compliance obligations but they also have businesses to run and students to educate. To do that successfully, providers need certainty. We call on the minister to listen to the sector and work with providers to avoid non-stop changes that add to the compliance burden without necessarily adding to the quality of the education. That brings me to the question of whether DEST itself is doing everything it can to enforce compliance with the ESOS regime. There have been numerous bills brought before this House to amend the ESOS Act, each one imposing stricter compliance regimes on providers. However, none stops to consider whether DEST itself is being proactive in identifying and preventing possible breaches of the scheme. In June 2005, the Auditor-General presented a report to parliament on the International Education Group of the Department of Education, Science and Training. According to the ANAO report, the International Education Group undertakes a range of compliance and enforcement activities in relation to international education providers. But that audit report went on to note serious deficiencies in the way in which the International Education Group monitored performance and reporting. The report makes reference to the risk matrix model used by the IEG to assist in its compliance and enforcement role. The model assesses the risk of providers committing breaches of ESOS legislation and related policies and practices. The report notes: This matrix is useful in directing IEG compliance and enforcement resources towards providers that are relatively likely not to comply with ESOS legislation and related policies and practices. However, the matrix does not contain standard risk management approaches ... nor does it feed into a clearly defined framework for controlling risks, determining residual risks, and monitoring and evaluating risk treatments. Further, the ANAO found that few risk assessments have been undertaken, and IEG Branch plans contain little reference to compliance and enforcement. As I mentioned earlier, several submissions to the ESOS evaluation commented on this apparent unwillingness by government to use their monitoring and enforcement powers. This view was reiterated in submissions regarding the draft national code. A joint peak body response on the draft code made by a group consisting of the AVCC, the Australian Council for Private Education and Training, TAFE Directors Australia and English Australia states: ... DEST is not using the authority available to it in dealing with unscrupulous providers, but rather has imposed more regulation on all providers in an attempt to resolve an area of substandard performance. That is, to date, the government has not used the existing consumer protection measures available to it to protect the interests of international education. That is a pretty strong statement from a peak body grouping with enormous experience in the provision of international education. It should be noted that those comments were made just a few short months ago, in late May. These are companies and institutions that have invested heavily in the area of international education. There is a lot at stake here for providers, so they need to know that the government is doing everything it can to monitor and enforce compliance with the ESOS regime so that rogue operators do not put the rest of the sector at risk. The industry is calling for DEST to uphold its end of the bargain. The government keeps imposing more regulation on the sector, but there is little evidence, as highlighted by the Audit Office report, that DEST is using its enforcement powers proactively to protect students and the international education industry from unscrupulous operators. The government needs to take this industry seriously and DEST needs to show providers that the compliance burden that they have accepted for the good of the industry is matched by good administration of the regime within the department. It is sad to say that, in the past, some institutions have treated international students as cash cows and have not provided them with the education or facilities that they have paid for. The purpose of the ESOS Act is to ensure that this does not occur. The aim is to ensure the integrity of the international education sector, thus protecting Australia’s reputation as a provider of quality education to international students. It is Australia’s reputation that attracts the majority of international students to study here. All it takes to ruin or permanently damage that reputation is a few rogue elements. It is the objective of the ESOS Act to prevent this from happening. At the same time, though, there is one factor that is undermining Australia’s international education sector, and that is the voluntary student unionism bill that was rammed through parliament late last year. The AVCC have noted with respect to VSU: ... the economies of scale provided by universal service provision will be lost, reducing the breadth of services available to international students. This loss is becoming known internationally leading to questions from potential students and their families. One spin off from removing the requirements for Australian students to support services for themselves will be losses to the international income earned from international students. There is also considerable difficulty in justifying a charge that would apply only to one group of students. Clearly, one of the big selling points for Australian universities to overseas students was the promotion of the types of services that were supplied by student organisations. This loss, combined with the federal government’s funding cuts, constitutes a clear threat to our place as a competitive option for potential international students. As we saw late last year, the government introduced legislation that allowed providers to charge a service fee to international students while they were negotiating with their own party about bringing the VSU legislation before the House. This blatant show of double standards attracted widespread criticism from numerous sources, not the least of whom were international students and members on this side of the House. We now have a situation where it is compulsory for universities to charge a fee to provide services for international students but, at the same time, it is absolutely out of the question for the same universities to charge fees to provide the same services to domestic students. This does not sit well on campuses where the two student types are supposed to be sharing experiences, cultures and friendships. The last thing that international students want is to be singled out or seen as a distinct group on campus. This differentiation between students, created by the government’s ideological obsession with VSU, runs the risk of turning potential international students away from Australia as their education destination. With Australia recently posting its 52nd consecutive trade deficit, I would have thought it prudent for the government to be enhancing our successful export industries rather than trying to take away their shine. As I mentioned previously, education services are Australia’s fourth largest export industry, behind coal, tourism and iron ore. The paramount objective of any government in relation to this industry is its protection. We must ensure the continued viability of international education through the regulation of providers. However, we must also be fair and flexible in our approach. The government also needs to acknowledge that the greatest risk to the education services industry in this country is the government’s failure to properly invest in education at all levels: universities, the VET sector and schools. The stock in trade for international education providers trying to attract overseas students is the quality of an Australian education and the status of an Australian qualification. In an increasingly competitive global market for education services, Australia needs to be branded as a quality destination. That is getting harder and harder as our universities, who are the standard-bearers in the market, are starved of funding and forced by government policies to compromise quality just to survive. This is not a risk that we would take with any other valuable export industry. It is Labor’s intention, as I said at the outset, to support the passage of these bills along with the minor yet important amendment I referred to earlier, which I will table and move at the appropriate time. We support the bills as great believers in the aims and objectives of ESOS and through our desire to ensure that this important industry thrives. 60 13:43:00 Ferguson, Michael, MP DYH Bass LP 1 0 Mr MICHAEL FERGUSON —I rise to speak in favour of the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006 and the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 2) Bill 2006 that have been put forward by the minister. These bills are not earth shattering in that they do not contain any major reforms. However, the importance of these bills today is, I think, in their demonstration of the ongoing commitment on the part of the Howard federal government to protecting this very valuable industry: the education of overseas students in Australian universities and other education providers, including schools and TAFEs, at no cost to the Australian taxpayer but, rather, at full market rates charged to the overseas students. Australia does have a reputation, and a well-earned one, of being a safe, progressive and dynamic place to study. We should, and do, maintain this reputation by providing quality education and consumer protection specifically developed for overseas students. It is important, perhaps partly in response to the comments we have just heard from the member for Capricornia, that we do make a distinction between overseas students and Australian students. Clearly there are differences. First of all the Australian government has a special obligation to Australian students as taxpayers and as Australians. The same obligations do not necessarily always apply to overseas students who we need to protect, and we need to protect as much as anything because they do, as contributors, provide an enormous financial benefit to our education system here. In addition to that, it is a globally competitive environment and it is very important that Australia be able to hold its head high and give a guarantee to overseas nations that the educational standard that their students receive when they are in Australia is of top quality, and that consumer protections are there. After all, they will be separated from their homes by many thousands of kilometres. That is not the case, of course, with Australian students who do not have language barriers, who do have family support and who do perhaps have a better cultural understanding of the country that they live in. They also have better access to choice, as they understand, through local knowledge, which university will provide them with the educational training opportunities that they need. It is also worth pointing out that the Australian educational system in the main does not see Australian students as the cash cow that the member for Capricornia referred to. They see them not as an industry at all but rather as an investment in our own future as Australians for Australians. The international education export industry, as the member has said quite correctly, is our fourth largest export industry in this country. I feel that this will come as a surprise to many people. It is worth as much as $7½ billion per year to the Australian economy. If time permits me I will return to those remarks towards the end of my contribution. The Education Services for Overseas Students Act, more commonly known as the ESOS Act, and its complementary legislation regulate the international education and training services industry in this country. It is important to point out that this act is an innovation of the Howard government. It was, in fact, introduced in 2000 to address problems that were facing the industry at that time, which included the uncertain financial protections for students’ prepaid course fees, the emergence of a small minority of unscrupulous providers and an inconsistent quality assurance regime. Interestingly, after 13 years apparently Labor had not seen fit to introduce such legislation itself. The purpose of the legislation was then, and is now, to ensure that overseas students who come to Australia to study on student visas receive the education and training for which they have paid. It aims to protect the reputation of Australia’s education and training export industry—and that is what it is: an export industry exporting an educational or training product for a financial return from overseas. It also aims to strengthen public confidence in the student visa program. As the Parliamentary Library have very well informed me through their Bills Digest, the provision of education and training services to overseas students in Australia is a responsibility which we here in the Commonwealth share with our state and territory government colleagues. The states and territories have primary responsibility for the quality control of education providers and their courses, and exercise this through their own processes of approving, registering and monitoring providers and their courses. This, of course, is a subject all of its own but perhaps one in which we, as leaders in this place, should consider how we can better streamline those processes around Australia—perhaps not necessarily with a view to centralising them but certainly to make them as consistent as we can. The Commonwealth has an interest in protecting the reputation of this $7½ billion per year export industry in order to maintain the integrity of our own migration program and to protect the interests of overseas students as consumers. None of what we have been speaking about today can be seen in isolation from an orderly migration system which includes student visas. The arrangements under the ESOS Act include the registration of education providers. That is done through CRICOS, the Commonwealth Register of Institutions and Courses for Overseas Students, and the ongoing role that has in ensuring: courses and their providers are of an appropriate standard; the compulsory membership by providers of a tuition assurance scheme; the contribution by those same providers to an assurance fund to ensure that there are funds to pay for student tuition in the case of a provider or its entity collapsing; the reporting obligations on providers; a compulsory national code, along with compulsory compliance with that national code; and sanctions for being in breach of both the act and the national code. Finally, one of the ESOS Act’s roles is to ensure that the Commonwealth does retain powers to be able to investigate providers and to impose sanctions on them, and to remove from the industry operators who are shown to be shonky. These are the main roles of the act. In six years the act has proven its merit, because we have seen the overseas student education and training industry to be a growing industry. In coming months we will get an update of those figures and the common understanding is that those figures will, in fact, have grown. As the House has already been told, the ESOS Act required within it that it should be evaluated independently and that that should be commenced within three years of it having received royal assent. That evaluation commenced in May 2004 and its results were reported in June 2005, the report being released by the former Minister for Education, Science and Training, Dr Brendan Nelson. It is very important that I report to the House what the evaluation team found. It concluded: ... the architecture of the quality benchmarks represented by the ESOS framework is sound: standards for providers of education and training that are mandatory and operate nationally; a cooperative national regulatory model; the characterisation of the student-institution relationship in consumer terms; and the integration of export education and migration policy.  The evaluation report found broad industry support for existing arrangements, so no major reforms to this act were considered in any way desirable. But it did make 41 recommendations for improvement, many of which are the subject of our debate today. The amendments we are considering do address the evaluation recommendations and are largely responsive to further consultations which have been had with the education and training industry as recently as this year. The amendments put forward by the government will do three main things: they will maintain Australia’s reputation for providing a quality education experience, they will enhance consumer protection for overseas students and they will improve national consistency in implementation and application of the ESOS legislative framework. I turn now to the fit and proper test, which is the first major aspect we are debating today. All providers who deliver education and training to overseas students must be registered on CRICOS—the Commonwealth register. It is a requirement of registration that providers demonstrate they are ‘fit and proper’ to be registered. Unfortunately, currently the fit and proper test is applied on registration only and applies to providers and their associates. The amendments will allow for the fit and proper test to be applied not only on registration but at any time during a provider’s registration. Importantly, the government has seen fit to broaden to whom the fit and proper test can be applied. To prevent former providers with a bad history in the industry from taking up positions of influence with other providers, the application of the fit and proper test will now be extended from just providers and their associates to employees, agents and officers of the provider—that is, any person who works in a role with that provider and who is in a position to have an influence on the students or the quality of the course experience. Furthermore, the act will allow for the suspension of their registration from CRICOS, which will put to an end any concerns that overseas students or their families may have with a suspect person. These amendments provide further guarantee of the credentials of CRICOS registered providers. The second aspect I will address is the tuition assistance schemes and access to student information. The ESOS Act ensures protection for overseas students by placing the main responsibility with the registered provider. Tuition assurance schemes and the ESOS Assurance Fund provide further certainty where the provider is unable to meet their obligations. The amendments will clarify a provider’s obligations to the receipt of course money and the provision of refunds. Allowing tuition assurance schemes access to student information is going to be an important feature of the reforms so far as it concerns students who have attended a provider that has collapsed. It will allow a faster placement of students in alternative courses where a provider is unable to meet their own obligations. There is a fairly minor amendment of the annual registration charge. Providers contribute to the cost of regulation of the ESOS Act and that is appropriate, being an industry and not a government service. They do this by payment of the annual registration charge, or ARC. This is the legislated charge. I am advised that it is quite a small charge—only in the hundreds of dollars—and that it is payable on the last business day of February of any calendar year. The automatic suspension of a provider’s registration for failure to pay the ARC by the due date will streamline the enforcement action taken against providers who breach this legislative requirement. I also believe it will reduce the time spent by the Department of Education, Science and Training pursuing providers, who are, after all, collecting significant fees and paying fees back to the department which amount only to hundreds of dollars. There are other amendments which provide for: the fund manager to have discretion to adjust refunds according to a student’s recognition of prior learning status; a sunset clause to be introduced for eligibility to make claims on the fund; and streamlining provisions to provide obligations with respect to migration rules. These amendments will have a minimal effect on the red-tape burden on providers. The consultations have taken place with providers and I am advised that they are broadly supportive of the reforms and accept them as necessary. It will also streamline the processes for the Australian government. Protection and enhancement of Australia’s reputation for providing reliable and high-quality education is crucial to achieving sustainable growth of this important export industry, which, as I have already said, is Australia’s fourth largest export industry, bringing in over $7.5 billion every year. These amendments will strengthen the regulatory framework and consumer protection provisions of the legislation. In the last moments that I have I will refer to comments by the member for Jagajaga reported in the press. They begin with the ABC announcing that a federal education department report shows the total number of students at Australian universities in 2005 grew by about 12,000 on the previous year, which is the smallest increase in five years. The report also shows 90 per cent of the additional 12,000 places were for international students. I think that anybody with an ounce of knowledge of this area would see that university placements in this country have not diminished at all. The member for Jagajaga says that degrees are becoming unaffordable. She says: The real issue is the massive increase in HECS ... when you see the numbers going up as much as they have, they’ve more than doubled. She says: ... it’s, of course, just going to flow on to very high levels of debt. The member for Jagajaga went on to say that university graduates and students have debt growing by $2 billion a year. She fails to acknowledge that the HECS system was introduced not by the coalition but by her party, the Labor government, in 1989. It stands to reason that you would see debt increasing. What does that tell us? It tells us that there are more students in Australia studying at university than ever before; that there are more students studying at university than during any of the years of the Hawke or Keating governments; and certainly more students studying at university than was ever the case under the leadership of Mr Kim Beazley when he was the education minister. The government’s record on education in this country is stronger than ever. Every one of the reforms that has taken place under Brendan Nelson was opposed by the Labor Party—every reform and every major initiative that saw an increase in funding and an increase in the number of places. In my home state of Tasmania that amounted to more than 1,500 new places at the University of Tasmania. Every one of those places was opposed by the Labor Party. Every dollar of the $11 billion in extra investment was opposed by the Labor Party. As recently as yesterday they had the temerity to try to pour shame on the government when they themselves have the poorest record on education in this country. 10000 SPEAKER, The The SPEAKER —Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed. 64 14:00:00 Questions Without Notice 64 14:00:00 64 Beazley, Kim, MP PE4 Brand ALP Leader of the Opposition 0 Mr BEAZLEY —My question is to the Prime Minister. Is the Prime Minister aware that, according to OECD figures released last night, Australia is the only developed country to have reduced public investment in TAFEs and universities between 1995 and 2003? Why has the government cut investment in Australian higher education by seven per cent when all other developed countries have increased investment by an average of 48 per cent? How does the Prime Minister expect Australia to compete when the US has increased public investment in tertiary education by 67 per cent; Canada, by 37 per cent; Japan, by 32 per cent; Spain, by 63 per cent; and Switzerland, by 74 per cent? 64 Howard, John, MP ZD4 Bennelong LP Prime Minister 1 Mr HOWARD —The facts are that Australian government funding for training has increased by 85 per cent in real terms since 1995-96 and that, if expenditure on TAFE colleges and institutions around Australia has fallen, that is the fault of state Labor governments. Opposition members interjecting— 10000 SPEAKER, The The SPEAKER —Order! Members are holding up their question time. 64 64 14:02:00 McArthur, Stewart, MP VH4 Corangamite LP 1 Mr McARTHUR —My question is addressed to the Prime Minister. Would the Prime Minister update the House on the state of Australia’s labour market? How have recent reforms affected the labour market and are there any alternative policies? 64 Howard, John, MP ZD4 Bennelong LP Prime Minister 1 Mr HOWARD —I thank the member for Corangamite for that very important question. Can I start my answer by updating him on the state of the labour market in Corangamite. In March of 1996 the unemployment rate in Corangamite was 8.6 per cent. It is now 4.7 per cent. I know the work of the member over that 10-year period has played a major role in that fall. I can say generally in reply to the member that yesterday the quarterly Manpower survey of employment intentions was released and it showed the biggest increase in intention to employ since the survey began. Last week the Westpac-ACCI survey of industrial trends reported the strongest increase since December 2004 on employment growth. These two reports are consistent with the ABS statistics, which show unemployment at the lowest levels since the 1970s, the participation rate rising to a record high and over 175,000 new jobs created since Work Choices began, with 85 per cent of those new jobs being full-time jobs. We all remember the predictions made by the Labor Party and the unions. We all remember they said there would be mass sackings. There have not; there have been mass hirings. They said that there would be an increase in industrial disputes; they are now at a record low. They said wages would be cut; wages continue to rise in real terms. On every score, the predictions made by the Labor Party and the union movement about Work Choices have been demonstrated to be wrong. Work Choices has not brought about the Armageddon that was predicted by the Australian Labor Party. But it is worse than that. I am asked about alternative policies. They have some alternative policies. The alternative policies would bring back the job-destroying unfair dismissal laws. The alternative policies would wrench the secondary boycott protections out of the Trade Practices Act and return them to the Industrial Relations Commission, where they would be a completely useless sanction. On top of that, the Labor Party would embrace a form of so-called collective bargaining which would give an open permit to the unions of this country to enter any workplace they wanted to, and, if more than 50 per cent of the workers in that workplace voted for a collective agreement, they would deny the freedom of choice of the remaining 49 per cent and the employer to have individual contracts. That is the sort of policy that would take us back to the bad old days when we had one million Australians out of work. We do not want to go back; we want to go forward. The prosperity of today is the product of the reforms of yesterday, and tomorrow’s prosperity can only be purchased with today’s reform. The Labor Party stand against reform. They stand in favour of taking the Australian economy back to the years when more than one million Australians were out of work. 65 DISTINGUISHED VISITORS 65 14:05:00 SPEAKER, The 10000 PO N/A 1 0 The SPEAKER —I inform the House that we have present in the gallery this afternoon the Ambassador of the United States of America, His Excellency Robert McCallum, and Mrs Mimi McCallum. On behalf of the House I extend a very warm welcome to our visitors. Honourable members—Hear, hear! 65 Questions Without Notice 65 65 14:06:00 Beazley, Kim, MP PE4 Brand ALP 0 Mr BEAZLEY —My question is to the Prime Minister and it follows the answer he has just given on the subject of collective agreements. I refer him specifically to his 21 April endorsement of the Australian Federal Police: I want to compliment the Federal Police ... for the tremendous work they have done in the past and I’m sure they’ll go on doing in to the future. I also refer to the following statement by the Australian Federal Police Association: To date, the AFP has taken a responsible approach to the utilisation of AWAs, preferring to steer clear of these tenuous arrangements in favour of transparent, collective agreement making. If collective bargaining is good enough for those who protect all of us, why isn’t it good enough for everyone else? 65 Howard, John, MP ZD4 Bennelong LP Prime Minister 1 Mr HOWARD —I thank the Leader of the Opposition for asking me that question. I actually had a meeting with the leadership of the Australian Federal Police Association only a few weeks ago, and I can assure you of this, Mr Speaker: they were not complaining about our industrial relations policy. They were raising other matters— PE4 Beazley, Kim, MP Mr Beazley interjecting— 10000 SPEAKER, The The SPEAKER —Order! The Leader of the Opposition has asked his question. ZD4 Howard, John, MP Mr HOWARD —I am very proud of the Australian Federal Police, and I am very proud of the additional financial support. It is very interesting; what the Leader of the Opposition has done is draw attention to the difference between our policy and his. Under our policy you can choose; under his policy you cannot. What he would do is deny— Opposition members interjecting— 10000 SPEAKER, The The SPEAKER —Order! The level of interjections is far too high. The Prime Minister has the call. ZD4 Howard, John, MP Mr HOWARD —Under our policy you have many choices. Under the Labor policy, what comes out at the end of the process is what will be dictated by the ACTU, and the Leader of the Opposition knows it. It was laid down in black and white at the National Press Club today. 66 66 14:08:00 Secker, Patrick, MP 848 Barker LP 1 Mr SECKER —My question is to the Minister for Employment and Workplace Relations. Would the minister update the House on how the government’s workplace relations reform is benefiting Australian workers, including those in my electorate of Barker? Is the minister aware of proposals to re-regulate the Australian labour market, and how might these reduce wages and employment growth? 66 Andrews, Kevin, MP HK5 Menzies LP Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service 1 Mr ANDREWS —I thank the member for Barker for his question. I am delighted to inform him that these changes are benefiting the people of Barker, because in the June quarter the unemployment rate in Barker fell to 4.1 per cent. Indeed, I can advise the member for Barker and other honourable members that in March 1996 over 45 federal electorates in Australia had unemployment rates above 10 per cent. Almost one-third of the federal electorates in Australia in March 1996 had an unemployment rate above 10 per cent. The data for the electorates today show that there is no electorate in Australia today that has an unemployment rate above 10 per cent, and that is an example of the good reforms that have been put in place. The electorate of Barker and all the other electorates around Australia are therefore benefiting from the strong economic management of this government. I am asked by the member for Barker about proposals to re-regulate, and every policy position that the ACTU imposes on this compliant Leader of the Opposition here is designed to do two things. They are designed, firstly, to restrict the ability of employers and employees to agree about the working arrangements that best suit their particular needs and conditions. And, secondly, they are designed to increase the unfettered powers of unions in Australian workplaces, even as union density in Australia continues to fall. So we had the Secretary of the ACTU, Mr Combet, down at the Press Club this afternoon in what was generally a left-wing rant. He actually— Opposition members interjecting— PE4 Beazley, Kim, MP Mr Beazley —A socialist rant? HK5 Andrews, Kevin, MP Mr ANDREWS —A socialist rant. I am being kind. But amongst this left-wing rant—amongst phrases disguised to hide true intentions, like ‘good faith bargaining’ and ‘workplace democracy’—what we know is that the Leader of the Opposition has been ordered by his union bosses to adopt union monopoly bargaining; a good faith bargaining which is really compulsory union bargaining. People of Australia should understand what this actually means. When the rhetoric is stripped away, what this actually means is that unions will have an unqualified right to involve themselves in any workplace in Australia which they choose, regardless of whether or not that particular workplace has a union member. That is the purport of what was discussed by Mr Combet. In fact, employers will be forced by Labor to negotiate with the union regardless of whether or not the employees actually consent to this. Mr Combet made this absolutely clear today. He was asked a question by a journalist from the Financial Review about this particular article. What he did first of all was correct what Mr Beazley said on Friday and said, ‘No, that wasn’t actually what the Labor Party policy was.’ Then he stressed—and this is important—that you do not need a majority of employees to demand collective bargaining; that the union will simply be able to march in and demand union bargaining. Secondly, he rejected the US model, which actually means you must have a majority. Further, in black-and-white terms, on page 18 in the document which the ACTU released today, it says: A lack of majority employee support would not of itself be grounds for the Commission to refrain from making any good faith bargaining orders. So what this means, and let us make no bones about this, is that whether or not you have got a union member in a workplace, and whether or not that union is otherwise represented in that workplace—as Mr Combet has pointed out in correcting the Leader of the Opposition, who last week did not even know the detail of the policy that has been forced upon him—the unions can walk into that place and demand compulsory collective bargaining. That is what their policy is about, and Mr Combet let the beans out today in relation to that. We have seen over the last 10 years, as the Prime Minister indicated earlier, the lowest unemployment rates in 30 years. We have representatives of the tourism industry in Australia here today. They know from their experience that the reforms of the last 10 years have led to greater employment and greater business prosperity in this country. They are because of those reforms. And yet this weak Leader of the Opposition would rip up not only the most recent reforms; he would rip up the previous reforms and take us back where Mr Combet and the union movement want us, to the 1970s and the 1980s—to the days when the Leader of the Opposition presided over an unemployment rate of over 10 per cent and industrial disputation was 30 times what it is today. That would be economic vandalism. 67 DISTINGUISHED VISITORS 67 14:14:00 SPEAKER, The 10000 PO N/A 1 0 The SPEAKER —I inform the House that we have present in the gallery this afternoon the Syrian Arab Republic Minister for Expatriates, Dr Bouthaina Shaaban. On behalf of the House I extend to her a very warm welcome. Honourable members—Hear, hear! 67 Questions Without Notice 67 67 14:15:00 Hayes, Chris, MP ECV Werriwa ALP 0 Mr HAYES —My question is to the Prime Minister. I refer the Prime Minister to an AWA offered to one of my constituents by Lipa Pharmaceuticals which scraps Saturday hourly penalty rates, scraps Sunday hourly penalty rates, cuts public holiday hourly pay rates, excludes all protected award conditions and pays the same base rate of pay as the existing collective agreement but does not guarantee a pay rise over the five-year life of the agreement. I also refer the Prime Minister to the fact that my constituent was told that if he refused to sign the AWA there were plenty of people who would. What does the Prime Minister say to my constituent, a father of five who would lose at least $200 a week as a result of this government’s extreme industrial relations laws? 67 Howard, John, MP ZD4 Bennelong LP Prime Minister 1 Mr HOWARD —I thank the member for Werriwa for his question. I have had the experience of being asked a lot of these questions, and about 90 per cent of them have been based on incorrect information. If the honourable member wants to send me a copy of the AWA and all the details, I will have a look at it and respond accordingly. ECV Hayes, Chris, MP Mr Hayes —To assist the Prime Minister, I seek leave to table both the certified agreement that the employee was under and the Australian Workplace Agreement. Leave granted. 68 68 14:16:00 Mirabella, Sophie, MP 00AMU Indi LP 1 Mrs MIRABELLA —My question is addressed to the Deputy Prime Minister and Minister for Trade. Would the Deputy Prime Minister and Minister for Trade update the House on Australia’s record export performance? How might proposals to reregulate the Australian labour market damage Australia’s export performance? DT4 Crean, Simon, MP Mr Crean interjecting— 10000 SPEAKER, The The SPEAKER —Order! I notice the member for Hotham is back. PE4 Beazley, Kim, MP Mr Beazley —Well, he’s trying to prove that there’s life in the National Party— 10000 SPEAKER, The The SPEAKER —Order! The Leader of the Opposition holds a responsible position in this parliament. He should exercise it in a responsible way. I call the honourable Deputy Prime Minister. 68 Vaile, Mark, MP SU5 Lyne NATS Minister for Trade 1 Mr VAILE —I thank the member for Indi for her question. Australia’s exports continue to grow, with figures released on Friday last week showing that exports for July were a record for that month and the second highest monthly level ever at $17.5 billion. Exports for the last financial year rose by 17 per cent to reach a new high level of $192 billion worth of goods and services exported out of Australia. That has risen from $99 billion in 1995-96 when the Labor Party was last in office. Last year $192 billion worth of goods and services were exported out of Australia. All of those industries and businesses that are exporting around the world have made a contribution to the generation of new jobs in the Australian economy that has helped drive unemployment down to 4.9 per cent. It has lifted the participation rate to the record level it is at today. In recent months, since the introduction of Work Choices, we have seen 175,000 new jobs created in the Australian economy. So those industries are making their contribution and playing their part as well. The government, over the years, has made a number of significant reforms to strengthen and underpin the competitive nature of Australia’s export industries. One of the most important reforms that we did undertake to ensure the competitiveness of Australian exports was on the waterfront. We all remember the debate and the battle that we had to try and improve the efficiency of the waterfront. Today, in 2006, crane lift rates have hit 27 movements per hour. In 1996, there were 14 crane movements per hour and we were being told by the Labor Party and the union movement that that could not be improved upon. They said: ‘There is no way that it could be any better. You will never improve on it. That is world’s best practice.’ And today there are 27 movements per hour. The Leader of the Opposition is now committed to tearing up AWAs if he is re-elected. He is committed to going back and reintroducing collective bargaining in the workplace, so you have to ask yourself the question: is he going to roll back the reforms on the waterfront? The Leader of the Opposition wants to force collective bargaining back into the workplace. Today, at the National Press Club, ACTU Secretary Greg Combet has let the cat out of the bag. He said that Labor policy is now being driven again by the ACTU. That is a plain, simple fact. It is being driven by the ACTU and all Australians should recognise that. Yesterday Heather Ridout of the Australian Industry Group said about the policies of the Leader of the Opposition that Labor’s collective bargaining plan is a retrograde step for the Australian economy in terms of what has taken place in recent years. So, while the coalition government is continuing to improve the circumstances in the Australian economy for business, for jobs and for employment prospects for the future, the Labor Party wants to take it back into the past. We want to support job creators in this economy. The Labor Party wants to destroy them. 69 69 14:21:00 Smith, Stephen, MP 5V5 Perth ALP 0 Mr STEPHEN SMITH —My question is to the Prime Minister. I refer to the fact that Serco Sodexho Defence Services has been awarded a Defence services contract to provide garrison support at the Royal Military College, Duntroon. Is the Prime Minister aware that having won this contract Serco is refusing to collectively bargain with its employees and has offered an AWA which cuts the hourly rate of pay by $1.33 below the existing collective agreement, cuts the Saturday penalty rate by $2.00 an hour below the existing collective agreement, and cuts the public holiday penalty rate by $3.33 per hour below the existing collective agreement? Isn’t the Prime Minister’s wages race to the bottom the real reason the government supports individual contracts over collective bargaining? 69 Howard, John, MP ZD4 Bennelong LP Prime Minister 1 Mr HOWARD —The answer to that question is no. The other observation I would make is that the capacity of an employer to have a view and to implement that view in relation to the nature of an employment contract with an individual or group of his employees prior to the introduction of Work Choices involved a capacity to decide not to have a collective agreement. Work Choices has not changed that fact. So whatever may be happening there in relation to whether there is an AWA or a collective agreement is not the result of Work Choices. 69 DISTINGUISHED VISITORS 69 14:23:00 SPEAKER, The 10000 PO N/A 1 0 The SPEAKER —I inform the House that we have present in the gallery this afternoon the Hon. Tony Messner, a former minister and senator. On behalf of the House, I extend to him a very warm welcome. Honourable members—Hear, hear! 69 Questions Without Notice 69 69 14:23:00 Ciobo, Steven, MP 00AN0 Moncrieff LP 1 Mr CIOBO —My question is addressed to the Minister for Employment and Workplace Relations. Would the minister advise the House of the benefits to the economy of greater workplace flexibility? Do international experiences align with those in Australia, and is the minister aware of any alternative approaches to workplace reform both here and overseas? 69 Andrews, Kevin, MP HK5 Menzies LP Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service 1 Mr ANDREWS —I thank the member for Moncrieff for his question and his interest in this. His question about international experiences reminds me that in 1997—in fact, on 9 September 1997—the then new Labour Prime Minister of Great Britain, Tony Blair, made a famous address to the Trade Union Congress in that country in which he said, amongst other things: You should remember in everything you do that fairness at work starts with the chance of a job ... Very prophetic words from the Labour Prime Minister of Great Britain. Of course, this must be put in the context that at that stage it was predicted that, when Mr Blair first went to address the Trade Union Congress as the Prime Minister of the UK, he would go along and promise to rip up the industrial relations changes that had been put in place by the Thatcher government previously. Mr Blair had the ticker to stand up to the union leaders, who wanted to rip up the changes which had been put in place—something that ought to be a lesson for the Leader of the Opposition here in Australia. Indeed, if one looks at the experience in the UK since then, those changes, which Mr Blair was prepared to support in the face of opposition from the union movement, have led to more jobs and a lower unemployment rate in that country—indeed, a lower unemployment rate than exists in this country today. If one goes the 22 miles or so across the English Channel there is a totally different picture when one looks at what has happened in France and Germany, where there has been a failure of political will to make reforms in this area. Last night Tony Blair gave what is expected to be his last address to the Trade Union Congress in the UK. During that address Mr Blair spoke about the strong labour market, which has continued in the UK as a result of those workplace reforms which, when he became Prime Minister, he refused to rip up in the face of calls from the union movement to do so. Indeed, I note in the press reports of Mr Blair’s speech to the Trade Union Congress overnight that he was heckled by some from the union movement. Several unionists walked out once again. The notable thing is that once again Tony Blair stood firm. There is a lesson to be learnt in this about the sort of courage and fortitude that one should have in this regard, because strong leaders who are interested in delivering economic prosperity for their country do not cower and take their orders from the union movement like this man over here. What we have seen in the last few months is a capitulation by the Leader of the Opposition to Greg Combet and the union movement. The Deputy Prime Minister noted today that Greg Combet in effect said, ‘We are running the Labor Party again.’ Too right they are, because what they want to do is rip up the very mechanisms— 00AMR King, Catherine, MP Ms King interjecting— 10000 SPEAKER, The The SPEAKER —The member for Ballarat is warned! HK5 Andrews, Kevin, MP Mr ANDREWS —the very industrial relations reforms which have brought the prosperity which this country has today and which will best meet the challenges that this country faces in the future. We do not need weakness from this man here—this weak, capitulating man; what we need is people who will stand up and meet the challenges that Australia has got and continue the prosperity of this country. 70 70 14:27:00 Smith, Stephen, MP 5V5 Perth ALP 0 Mr STEPHEN SMITH —My question is also to the Minister for Employment and Workplace Relations. Isn’t it a fact that a specialist consultant undertook an analysis of the financial records provided by Cowra abattoir and PD Mulligan and provided a report on the financial position of Cowra abattoir over the period 2003 to 2006 to the Office of Workplace Services? If the Cowra administrator found there were highly questionable transfers on the books of the company over the period of the investigation, why didn’t the Office of Workplace Services? Now that the minister has had 24 hours to check, when did the minister, his office, his department or the Office of Workplace Services first become aware that, by 30 June 2006, $1.18 million had been transferred from the Cowra abattoir to a related company of the owner? 70 Andrews, Kevin, MP HK5 Menzies LP Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service 1 Mr ANDREWS —It would be good if the member for Perth came in here and told the whole truth for once— 5V5 Smith, Stephen, MP Mr Stephen Smith interjecting— HK5 Andrews, Kevin, MP Mr ANDREWS —No, you haven’t, Stephen, and you know it. 10000 SPEAKER, The The SPEAKER —Order! The member for Perth has asked his question. HK5 Andrews, Kevin, MP Mr ANDREWS —The member for Perth came in here and made allegations about questionable transactions. Let me read from the report of the insolvency practitioner what the member for Perth failed to disclose to this House—and it is becoming a pattern. 5V5 Smith, Stephen, MP Mr Stephen Smith interjecting— 10000 SPEAKER, The The SPEAKER —The member for Perth is warned! HK5 Andrews, Kevin, MP Mr ANDREWS —In relation to these matters, this is what the insolvency practitioner in his report said, amongst other things which you have failed to disclose: Our inquiries as to the nature of the loan accounts continue and we will report to creditors further if warranted. He then goes on and says further in the report, which has not been disclosed by the member for Perth: … notwithstanding that a liquidator would need to carry out further investigations based on the oral evidence from the director and management, prima facie it appears that the company and PD Mulligan entered into these transactions in good faith. 5V5 Smith, Stephen, MP Mr Stephen Smith interjecting— 10000 SPEAKER, The The SPEAKER —The member for Perth is on very thin ice. 71 71 14:30:00 Vale, Danna, MP VK6 Hughes LP 1 Mrs VALE —My question is addressed to the Minister for Human Services. Would the minister advise the House what initiatives have been implemented to help Australians find work? How important are these initiatives in helping to address the growing demand for workers? 71 Hockey, Joe, MP DK6 North Sydney LP Minister for Human Services and Minister Assisting the Minister for Workplace Relations 1 Mr HOCKEY —I would like to thank the member for Hughes for her question. As the member for Hughes knows, the best way to help create jobs is by having a strong economy. That is the first step. A second way to do it is to have structural reform, such as tax reform, but none more important than industrial relations workplace changes. The workplace changes that have been in place for 171 days have delivered more than 1,000 jobs a day since they were introduced by this government. The question is: how do we find the workers in Australia to go into those jobs? You might say, with 10.3 million Australians now in work—the highest number of Australians in work on record—and a participation rate of 65.1 per cent, the highest on record, that Australia is running out of workers. Well, we are about not only helping to create jobs but encouraging Australians to take up those jobs. We are doing it in a number of ways. I am reminded that we had a seminar down in Wollongong in the seat of Cunningham, and that seminar was attended by Angry Anderson, whom some people in this place would be familiar with. Angry said: ‘The reason I hooked up with Centrelink is that they are making a concerted effort to show that they do more than just give people benefits.’ He went on to say that employment provided workers with self-respect and a sense of achievement. Hear, hear to that. He referred to that famous VB ad that many people might be familiar with, even if they do not drink VB. He said: ‘What the bloke in that ad was talking about was the rewards that come with a day’s work. It is an ethic that is so Australian. Work is about earning your place. It is so much more than just a pay packet.’ We agree. The most fundamental thing we can do to help Australian families is to provide them with the opportunity to have work. That is the first thing that we can do to provide a better welfare system to Australians and that is the best thing we can do to improve harmony in the community. We have done that in two ways in particular. The first was that in November 2004 we started ringing up people who had no obligation to work and who were on welfare. We rang them and asked them if they wanted to work. We left out the Labor frontbench! Just by our asking them if they wanted to work, 200,000 Australians have been referred to the Job Network. The second program is a fundamental program. From 1 July this year, we started Welfare to Work, a program that the Labor Party opposed all the way. Since that time we have referred 100,000 Australians to the Job Network. Everything we do about creating jobs in Australia is opposed by the Labor Party, whether it be industrial relations reform, tax reform, trying to reform the Australian economy to create jobs or encouraging Australians into work through programs such as Welfare to Work. The weak Leader of the Opposition opposes everything, because he is totally beholden to his mates in the trade union movement. 72 72 14:35:00 Macklin, Jenny, MP PG6 Jagajaga ALP 0 Ms MACKLIN —My question is to the Prime Minister. Is the Prime Minister aware that the latest OECD figures show that Australian university students pay the second highest fees in the world, second only to those paid by students in the United States? Can the Prime Minister confirm that the OECD has sheeted home the blame for this to the Howard government, stating: In Australia the main reason for the increase in the private share of spending on tertiary institutions between 1995 and 2003 was changes to the Higher Education Contribution Scheme that took place in 1997. In light of the Prime Minister’s deliberate Americanisation of our university system— Government members interjecting— 10000 SPEAKER, The The SPEAKER —Order! The Deputy Leader of the Opposition will come to her question. Members on my right! PG6 Macklin, Jenny, MP Ms MACKLIN —In light of that, is it any wonder that student debt under the Howard government is ballooning by $2 billion a year and is projected by the department of education to blow out to $18.8 billion by 2008-09? 72 Howard, John, MP ZD4 Bennelong LP Prime Minister 1 Mr HOWARD —I thank the Deputy Leader of the Opposition for that question. I will check part of it out with former Vice President Al Gore, who seems to have become a sort of resident authority for the opposition on just about everything. I am quite sure he, like all of our American friends, will take that with very great good humour— DZY Georganas, Steve, MP Mr Georganas interjecting— 10000 SPEAKER, The The SPEAKER —The member for Hindmarsh is warned! ZD4 Howard, John, MP Mr HOWARD —because that is the nature of the nation and that is the nature of the American people. This nation has every reason to be very proud of our friendship with the people of the United States, although on a lot of issues we approach things rather differently. That applies in relation to the social welfare system of this country, where this nation has struck the right balance between the overpaternalistic social welfare structure of Europe and some of the less desirable laissez-faire features of the social welfare structure of the United States. When it comes to the social security safety net, the Australian way is the best way. In relation to the particular question asked by the Deputy Leader of the Opposition, let me remind the House that HECS was introduced by the Labor Party when it was in government. We supported it, once again illustrating that when Labor brought in something that was good when it was in government we supported it, unlike the approach taken by the Labor Party in opposition. In relation to the OECD examination, I do not accept the conclusion drawn by the Deputy Leader of the Opposition. I point out to the Deputy Leader of the Opposition that in real terms Australia’s public expenditure on educational institutions increased by 32 per cent between 1995 and 2003— PE4 Beazley, Kim, MP Mr Beazley —Look at this. 10000 SPEAKER, The The SPEAKER —The Leader of the Opposition will put his placard down. ZD4 Howard, John, MP Mr HOWARD —which is an increase greater than that in at least 12 other OECD countries. According to the OECD, Australia’s expenditure on tertiary educational institutions has increased by 25 per cent in real terms between 1995 and 2003. PE4 Beazley, Kim, MP Mr Beazley —Look at this. 10000 SPEAKER, The The SPEAKER —The Leader of the Opposition is warned! ZD4 Howard, John, MP Mr HOWARD —This magnitude of increase is higher than that in at least six other OECD countries, including Germany, Austria, the Netherlands and the United Kingdom. Australia’s total expenditure per student on tertiary education in 2003 is 10 per cent higher than the OECD average of $US11,254. The actual contribution of the Australian government to higher education is much higher than that indicated by the OECD. For example, the OECD fails to take into account the value of the 25 per cent discount paid for the student by the Australian government when that student pays their HECS fees up front. The OECD also fails to take into account the provision of HECS doubtful debts, such as the value of HECS paid by the Australian government for any student who never reaches the repayment threshold. I remind the Deputy Leader of the Opposition and those interested in this issue that about 97 per cent of all domestic undergraduate students are in Commonwealth supported places. On average, about three-quarters of the cost of these students’ education is met by the Australian government. The average HELP debt is around $10,500 for Australian students and most debts are quickly repaid. It stands to reason that the debt would have risen, because since 1996 the number of university students has nearly doubled. In 2005, university student numbers reached a record high of nearly one million. We are further expanding the number of new places by 39,000 and extending loans to private higher education providers. I reject the conclusion of the Deputy Leader of the Opposition. 73 73 14:41:00 May, Margaret, MP 83B McPherson LP 1 Mrs MAY —My question is addressed to the Minister for Foreign Affairs. What is the government’s response to reports that the Australian High Commissioner to the Solomon Islands has been declared persona non grata by Prime Minister Sogavare? 73 Downer, Alexander, MP 4G4 Mayo LP Minister for Foreign Affairs 1 Mr DOWNER —I thank the honourable member for her question and the interest that she shows in this issue. I can confirm that the Prime Minister of the Solomon Islands has written to the Prime Minister to advise that he wants Patrick Cole, who is our High Commissioner in Honiara, to be declared persona non grata—that is, to expel him from the Solomon Islands. Quite frankly, this decision by the Solomon Islands government is both eccentric and outrageous. The Australian government fully supports Patrick Cole and the work that he has done. He has been an excellent High Commissioner. He is an Australian public servant of long standing who has worked for both sides of politics as a public servant in a number of government departments—in particular, my department and the Prime Minister’s department. In his discussion with our Prime Minister, the Solomon Islands Prime Minister said that Mr Cole had apparently been talking too much to the opposition in the Solomon Islands. It is the practice of our ambassadors and high commissioners around the world to keep in contact with opposition politicians and parties. In fact, it would be a long time since an Australian ambassador or a high commissioner was barred from talking to the opposition. That sort of thing happened in the days of the old Soviet Union, but it is pretty unusual these days. In this country, the ambassadors and high commissioners frequently talk with our opposition. This is just normal practice, even if they do not think that they are going to get much out of the conversation—which they do not, I believe. YU5 Tanner, Lindsay, MP Mr Tanner —You could not resist being a four-year old. 4G4 Downer, Alexander, MP Mr DOWNER —No, I cannot resist having a crack at you socialists. YU5 Tanner, Lindsay, MP Mr Tanner —You could not resist. 10000 SPEAKER, The The SPEAKER —The member for Melbourne is warned! 4G4 Downer, Alexander, MP Mr DOWNER —You are all the same, you lefties. The second allegation made against Patrick Cole is that the Prime Minister of the Solomon Islands objected to Patrick Cole’s opposition to the establishment of a commission of inquiry and in particular to some aspects of that commission of inquiry——and he quite rightly opposed that on behalf of the Australian government. I would have thought most members of this parliament would be sensible enough to know that this commission of inquiry is not the right thing. It is an endeavour to try to clear the names of Messrs Ne’e and Dausabea in particular, who are facing charges in relation to the riots in April. These two men were both made ministers when Mr Sogavare became the Prime Minister of Solomon Islands. Frankly, this has been a matter of very great concern to the Australian government, and it should be. We should be objecting to this. Frankly, to declare Mr Cole persona non grata is completely and utterly inappropriate. Let me make two final points. The first is this: we will continue our work with the Regional Assistance Mission to Solomon Islands because that regional assistance mission, a Pacific-wide mission led by Australia, is providing enormous benefits to the ordinary people of the Solomon Islands. There may be some people in Solomon Islands politics who object to RAMSI standing between them and the honey pot, but there is no doubt that as far as the ordinary people of the Solomon Islands are concerned RAMSI is a great thing. Finally let me say: we really do appreciate in this incident the strong support we are getting from our partners from other countries in the region and beyond. I think this is a time when all of us should show our solidarity with Patrick Cole, who has been treated abominably. He is a good and decent Australian, a hard-working public servant and he should not have been treated in this shabby way. 74 74 14:46:00 Katter, Bob, MP HX4 Kennedy IND 0 Mr KATTER —My question is to the Minister for Industry, Tourism and Resources. Could the minister advise the House how his ministerial statement on the farm produce code of conduct—and I quote: ... under the code ... agreements will be defined in a contract— which clearly envisages a contractual code—is consistent with a government promise of a ‘mandatory’ code? Could he advise how a farmer with a gross income of $200,000 could afford a court case to enforce a contract against, say, Woolworths or Coles with grosses of $38 million and $36,000 million respectively? Government members interjecting— HX4 Katter, Bob, MP Mr KATTER —No, it is not; it is a question. 10000 SPEAKER, The The SPEAKER —Order! The member will come to his question. HX4 Katter, Bob, MP Mr KATTER —Is the minister aware that Woolworths and Coles, according to their own growth claims, should now have a market share of 82 per cent? And, in light of this, could he further advise whether a grower taking legal action against giant chains would still be considered a person with whom a Woolworths or a Coles would be likely to do business? Finally, could the minister advise why the farm product mandatory code of conduct legislation has been taken off Agriculture Minister McGauran and given to the minister? Could the minister confirm media reports that Minister McGauran felt obliged to honour the election promise given by the government in the 2004 election and was therefore replaced by someone not inhibited by such a detail? 75 Macfarlane, Ian, MP WN6 Groom LP Minister for Industry, Tourism and Resources 1 Mr IAN MACFARLANE —I thank the member for Kennedy for his question. I can confirm that tomorrow the Minister for Agriculture, Fisheries and Forestry and I will be at a meeting where the code of practice for horticulture will be discussed. Under the proposals that have been circulated to the participants, we envisage a discussion will take place about a legally enforceable contract, a contract which can therefore be, if broken, taken to a court of law. Also, the code of practice will entail a dispute resolution process and an ombudsman. As soon as I am able to give further final detail of where those discussions travel to, I will pass them to the member for Kennedy and the House. 75 75 14:48:00 Forrest, John, MP NV5 Mallee NATS 1 Mr FORREST —My question is addressed to the Minister for Health and Ageing. Is the minister aware of moves by the states to make better use of the private sector in their public hospital systems? Does the government support this approach? What benefits are there for the health care of Australians and particularly for those who reside in the federal division of Mallee? 75 Abbott, Tony, MP EZ5 Warringah LP Minister for Health and Ageing 1 Mr ABBOTT —I thank the member for Mallee for his question. I certainly acknowledge his strong support for the many private doctors, private hospitals and also public hospitals in his electorate. I can inform the House that nearly all of the state Labor governments make good use of the private sector to, amongst other things, reduce their public hospital waiting lists. Many of the state Labor governments also use the private sector, including the for-profit private sector, to actually run some of their public hospitals—for instance, Noosa public hospital in Queensland, which is run by Ramsay Health Care corporation, as are the Joondalup public hospital in Perth and the excellent Mildura public hospital in the electorate of Mallee. There is Healthscope, another for-profit private company, which runs the Modbury Public Hospital in South Australia. There are the great religious charities which have long run some of the largest public hospitals in Australia, such as St Vincent’s public hospitals in Sydney and Melbourne and Calvary Public Hospital here in Canberra. The Keating government in a responsible moment privatised the management of those great repatriation hospitals, such as Greenslopes in Brisbane and Hollywood in Perth, to the great benefit of patients and taxpayers. The state Labor governments are not embarrassed by using the private sector. For instance, we had the New South Wales health minister earlier this year saying: The Government is unapologetic about using services in the private sector ... where it’s otherwise better value for money to be able to provide ... those services and more efficient to do so in the private sector. Premier Bracks wants to ‘use the innovative skills and abilities of the private sector in a way that is most likely to deliver improved services to the community’—including using a for-profit private company to deliver support and cleaning services in the new women’s hospital in Melbourne. Unlike responsible Labor politicians, the member for Lalor will always grab the chance to smear the private sector. 83L Gillard, Julia, MP Ms Gillard interjecting— 10000 SPEAKER, The The SPEAKER —Order! The member for Lalor does not need to respond. EZ5 Abbott, Tony, MP Mr ABBOTT —She said yesterday: ... what’s public about a hospital that’s managed for profit and who’s generating this profit? Is it coming out of the pockets of patients? The member for Lalor does not like being told it, but she is still a socialist at heart. She hates the private sector. Then there was the dog whistle on health. She said yesterday: Do they— Australians— want an American-style health system in this country with Medibank Private gone and then Medicare on the chopping block? Quite apart from the knee-jerk anti-Americanism involved there, the member for Lalor thinks that, if you say ‘privatise Medibank’ fast enough, people might think the government wants to sell Medicare itself. That is the dog whistle that she is practising. Let me make it absolutely clear that the Howard government is the best friend that Medicare has ever had. We understand that public health services in this country have long been delivered by the private sector. It is high time the member for Lalor gave the private sector the credit it deserves. 76 76 14:53:00 Rudd, Kevin, MP 83T Griffith ALP 0 Mr RUDD —My question is to the trade minister and refers to a record of conversation between his department and AWB executives. The government tells the AWB ‘to stay in touch with Minister Vaile’s office for advice on the government’s public lines’—that is, on the impending release of the Volcker inquiry report. Why was the minister still colluding with AWB on the eve of the release of the UN Volcker report when, by then, the government had received a June 2003 cable from Baghdad stating that every oil for food contract had a 10 per cent kickback, a September 2003 US defence report stating that AWB contracts had been upped by 11 per cent, an October 2003 report by Australian Treasury officials virtually to the same effect and a May 2004 briefing from an ADF officer in Iraq who said that the jig was up on the AWB and that the AWB was up to its eyeballs in corruption? 10000 SPEAKER, The The SPEAKER —Order! The member for Griffith will come to his question. 83T Rudd, Kevin, MP Mr RUDD —Minister, what political spin doctoring advice did you provide to the AWB on the eve of the release of this report to try to get you and your National Party mates out of the mess? SE4 Bishop, Bronwyn, MP Mrs Bronwyn Bishop —Mr Speaker, I raise a point of order. Aside from the question of length—which the practice of the House says is not in order—the member opposite said that the minister had been colluding. This is a serious allegation and can be dealt with only by substantive motion, and not at question time. I ask the member to withdraw those words. QI4 Price, Roger, MP Mr Price —On the same point of order, Mr Speaker, I cannot see where length is referred to in the standing orders. Certainly it is in House of Representatives Practice. 10000 SPEAKER, The The SPEAKER —We are not debating points of order. I asked the member to come to his question. I believe he came to his question. I was listening carefully. I do not believe he made a personal reflection. I call the Deputy Prime Minister. 76 Vaile, Mark, MP SU5 Lyne NATS Minister for Trade 1 Mr VAILE —I thank the honourable member for Griffith for his lengthy question. There was no spin doctoring involved. The only advice that was given was to cooperate fully with the Volcker inquiry. 76 76 14:55:00 Hartsuyker, Luke, MP 00AMM Cowper NATS 1 Mr HARTSUYKER —My question is addressed to the Minister for Education, Science and Training. Is the minister aware of failures by state governments to adequately fund state government schools? How has the federal government tried to ensure that state schools are better resourced, particularly in my electorate of Cowper? 77 Bishop, Julie, MP 83P Curtin LP Minister for Education, Science and Training and Minister Assisting the Prime Minister for Women’s Issues 1 Ms JULIE BISHOP —I thank the member for Cowper for his question. I did listen very intently to the speech he made in the House on Monday evening when he highlighted the battles that state government schools in his electorate are having with the New South Wales Labor government— 83M Plibersek, Tanya, MP Ms Plibersek interjecting— 10000 SPEAKER, The The SPEAKER —The member for Sydney is warned! 83P Bishop, Julie, MP Ms JULIE BISHOP —to get funding for basic infrastructure needs. He cited the example of the largest state government primary school in his electorate, Narranga Primary School, which had been looking for funding for a library reading room. The New South Wales Labor government would not provide the funding, so the parents raised every single cent of funding for that library reading room. Now they find that every time they seek funding for some basic works the parents are called upon to provide the funding, whether it is for pathways, drainage or seating. In recent years, the parents of the children at this school have raised three times the amount of funding for basic capital works as the New South Wales government has provided. Now the school is seeking funding for a school hall. This is a school with some 600 pupils. It does not have a school hall; it has no facility for assemblies, indoor sport or drama. The New South Wales government have told the school no and said that they have already been too generous to this school because a couple of years back they upgraded the toilets. So they are not going to give them any more funding for a school hall. This is just not good enough. It is cases like this that led the Australian government to introduce the $1 billion Investing in our Schools program. State government schools across Australia are having to turn to the Commonwealth to get funding for basic infrastructure needs. In the electorate of Cowper, already, after rounds 1 and 2, $3 million has been invested by the Commonwealth in funding for state government schools. Across New South Wales, 1,500 applications have been successful and over $100 million has now been invested by the Commonwealth. In round 3 we already have 3,000 applications. There are only 2,000 state government schools in New South Wales. For a side of politics that pretends to care about public education— 83Z Irwin, Julia, MP Mrs Irwin —You said— 10000 SPEAKER, The The SPEAKER —Order! The member for Fowler is warned. 83P Bishop, Julie, MP Ms JULIE BISHOP —it is astounding— 83Z Irwin, Julia, MP Mrs Irwin interjecting— 10000 SPEAKER, The The SPEAKER —The member for Fowler will remove herself under standing order 94A. The member for Fowler then left the chamber. 83P Bishop, Julie, MP Ms JULIE BISHOP —It is a disgrace that state Labor governments are not investing in their schools. I call upon the federal Labor Party to require state Labor governments to properly and adequately fund state government schools. 77 77 14:59:00 Rudd, Kevin, MP 83T Griffith ALP 0 Mr RUDD —My question is to the Prime Minister. I refer to the notes of a meeting between his foreign policy adviser and senior AWB representatives last May when his office advised AWB about dealing with the UN Volcker inquiry in the following terms: ... keep your response narrow, technical ... complain about the process ... keep narrow, be a small target ... I also refer to the Prime Minister’s reply to a parliamentary question six months ago when he said that his foreign policy adviser did not entirely agree with the accuracy of these notes. Can the Prime Minister, six months later, now tell the parliament definitively which elements of this record are inaccurate about the advice his staff gave to the AWB—the ‘keep your response narrow’ bit, the ‘keep the response technical’ bit, the ‘be a small target’ bit or the ‘complain about the process’ bit? 10000 SPEAKER, The The SPEAKER —Order! The member for Griffith will resume his seat. The last part of that question was not necessary. 78 Howard, John, MP ZD4 Bennelong LP Prime Minister 1 Mr HOWARD —I have every confidence in my former foreign affairs adviser. Paul O’Sullivan is now the Director-General of ASIO. He is doing an excellent job. As to other matters raised by the member for Griffith, he will be aware that we have established the Cole inquiry. We have been totally transparent about this issue. We alone of Western governments have established a body to inquire into these matters. I wait with interest for the outcome of the inquiry. 10000 SPEAKER, The The SPEAKER —Has the Prime Minister concluded his answer? ZD4 Howard, John, MP Mr HOWARD —Yes. 83T Rudd, Kevin, MP Mr Rudd —Mr Speaker, I rise on a point of order. Not an element of that answer was relevant to the question. 10000 SPEAKER, The The SPEAKER —The member for Griffith will resume his seat! 83T Rudd, Kevin, MP Mr Rudd —The Cole inquiry— 10000 SPEAKER, The The SPEAKER —The member for Griffith will resume his seat! That is not a point of order. 83T Rudd, Kevin, MP Mr Rudd interjecting— 10000 SPEAKER, The The SPEAKER —The member for Griffith is warned! 78 78 15:01:00 Haase, Barry, MP 84T Kalgoorlie LP 1 Mr HAASE —My question is addressed to the Minister for Industry, Tourism and Resources. Would the minister update the House on the export potential of Australia’s resources sector? Are there opportunities for further export growth? In particular, is there potential for uranium exports to expand from new mines in my electorate? 78 Macfarlane, Ian, MP WN6 Groom LP Minister for Industry, Tourism and Resources 1 Mr IAN MACFARLANE —I thank the member for Kalgoorlie for his question and also for the hard work he does for the resources sector in Australia in creating jobs and exports out of his electorate of Kalgoorlie. Australia’s resources sector has reached another milestone today, with ABARE releasing figures that show Australia’s mineral and energy sector has exported a massive $90.5 billion worth of exports in 2005-06. This is a record amount representing an increase of 32 per cent on 2004-05. Commodities leading that charge include coking coal, up 59 per cent; iron ore and pellets, up 54 per cent; and copper, up 79 per cent. It is an outstanding result by any measure, with some 90 advanced resources projects underway with further opportunities for growth. I am asked by the member for Kalgoorlie about uranium export potential from his electorate. Unfortunately, the outlook is not as positive. In Western Australia alone, five mining leases over uranium deposits were granted before 2002. The uranium deposits are estimated to be worth some $2 billion and under Labor’s no new mines policy have no prospect of ever being developed. This is a ridiculous situation and made even more farcical by the fact that last month Australia announced its fourth uranium mine in South Australia, and that uranium mine has been given its commercial go-ahead. It just goes to show that in pro uranium mining states like South Australia the no new mines policy is an outdated inconvenience which is simply sidestepped by those Labor members who understand the importance of exports and jobs. Yet, in anti-uranium states like WA, where the WA Labor government opposes uranium mining, it is used to deny the opportunity of exports and dollars to that state. Either way, the no new mines policy is a complete shambles. It has completely divided Labor as to where it should go and, while the Labor Party ties itself in knots, the Howard government continues to grow the resources sector and do everything it can to build exports and build jobs. 79 79 15:04:00 Rudd, Kevin, MP 83T Griffith ALP 0 Mr RUDD —My question is again to the Prime Minister. I refer to his statement to parliament on 1 November 2005, where he said: The Volcker inquiry had access at all times to any documents within the possession of the Australian government that it wanted. I also refer to Mr Volcker’s comments on 7 February 2005, since released by the inquiry, that the Australian government had been ‘beyond reticent, even forbidding’ in response the committee’s requests. Prime Minister, isn’t it a fact that for the first 12 months of the Volcker inquiry you knew that Australian officials had been gagged from cooperating with the inquiry and appearing before them and that, when you later said, ‘At no time did we ever reject requests from the Volcker inquiry,’ you were engaged in a cover-up and had deliberately lied to the parliament? 79 Howard, John, MP ZD4 Bennelong LP Prime Minister 1 Mr HOWARD —The answer to the honourable member’s question is no. 79 79 15:05:00 Jull, David, MP MH4 Fadden LP 1 Mr JULL —My question is addressed to the Minister for Workforce Participation. With Australia’s unemployment rates at 30-year lows, what are the latest performance figures for Australian government employment services, particularly in assisting the long-term unemployed? 79 Stone, Dr Sharman, MP EM6 Murray LP Minister for Workforce Participation 1 Dr STONE —I thank the honourable member for Fadden for his question. It is a most important question for the economy and for all Australians who expect a fair go. The member for Grayndler a little while ago said in a press release: Persistent high levels of long-term unemployment are indisputable proof that the Howard Government’s Job Network is failing to place the unemployed into jobs. This was amazing. This was followed up with an ABC Adelaide radio interview, where the journalist asked the member for Grayndler: “So you will take back, you will do away with the privatised network and you will bring all of these functions back into government if elected?” The member for Grayndler snapped back: No, certainly not. Of course, the member for Grayndler understood that the Job Network is an extraordinarily successful program. The latest figures show that the Job Network has delivered record-breaking numbers of job outcomes, especially for the long-term unemployed. In the last 12 months, Job Network has helped nearly 640,000 Australians, previously welfare dependent, into a real job. Nearly 47,000 of those jobs were for single parents, and that is a 57 per cent increase on the previous 12 months. We have also placed 11,000 people with a disability into employment—that is a new annual record. Almost 45,000 Indigenous Australians were found work. Mr Speaker, you know our Indigenous Australians have had some of the greatest difficulty finding jobs in previous generations. Most importantly, long-term unemployment has fallen by over 70 per cent since 1993. That is 230,000 fewer people—fewer families—who have been locked into long-term unemployment. You need to compare these statistics to when long-term unemployment actually peaked at 330,000 in May 1993. Yes, it is a significant date: it was when the Leader of the Opposition was employment minister. That is when long-term unemployment peaked, very tragically, for the Australian people. What did the Leader of the Opposition, then the employment minister, say about this problem? He said that long-term unemployment was ‘an almost intractable problem’ and ‘the guts of the problem is going to be there with us and it is growing’. Can you imagine what the long-term unemployed thought when they heard that dismissal? ZD4 Howard, John, MP Mr Howard —They would have been depressed. EM6 Stone, Dr Sharman, MP Dr STONE —They would have been depressed. They would have felt, in fact, written off and completely left to their own devices. ZD4 Howard, John, MP Mr Howard —Ignored. EM6 Stone, Dr Sharman, MP Dr STONE —Ignored. Put simply, Labor ran up the white flag and left them stranded. Remember, it was the minister for employment—the current Leader of the Opposition—who also dismissed unemployed 55-year-olds and said, ‘Put them on the old age pension.’ What a disgrace! So Labor had no plan to help the unemployed then; they have no policy now. The John Howard government has revolutionised the way we help the unemployed into work. Honourable members interjecting— 10000 SPEAKER, The The SPEAKER —Order! The level of interjection is far too high! EM6 Stone, Dr Sharman, MP Dr STONE —We are meeting the challenges of an ageing population and a booming economy, and we are delivering a better life to those Labor simply consigned to the scrap heap. ZD4 Howard, John, MP Mr Howard —Mr Speaker, I ask that further questions be placed on the Notice Paper. EZ5 Abbott, Tony, MP Mr Abbott —Mr Speaker, I rise on a point of order. I understand that, in the member for Griffith’s final question today, he put it to the House that the Prime Minister had deliberately lied. This is clearly unparliamentary and I believe that he should be asked to withdraw and to apologise. 10000 SPEAKER, The The SPEAKER —I did not catch that comment, but, if the member for Griffith did say that, he should withdraw it. R36 Albanese, Anthony, MP Mr Albanese —I wish to speak to the point of order, Mr Speaker. You have ruled on a number of occasions, when we have raised points of order about comments being out of order on that side of the chamber, that those points of order have to be raised at the time the comments were made. If the Leader of the House— 10000 SPEAKER, The The SPEAKER —The member for Grayndler will resume his seat! That was not the point raised by the Leader of the House. I ask the member for Griffith: if he made that statement, he should withdraw it. 83T Rudd, Kevin, MP Mr Rudd —Mr Speaker, the reason I used the language is that it was true. If it gives offence— Government members interjecting— 83T Rudd, Kevin, MP Mr Rudd —You know it’s true! 10000 SPEAKER, The The SPEAKER —The member for Griffith will withdraw! 83T Rudd, Kevin, MP Mr Rudd —If it assists the House, I withdraw. 10000 SPEAKER, The The SPEAKER —The member for Griffith will withdraw without reservation. 83T Rudd, Kevin, MP Mr Rudd —I withdraw. 80 Questions to the Speaker 80 80 15:11:00 Bowen, Chris, MP DZS Prospect ALP 0 Mr BOWEN —Mr Speaker, I refer you to page 188 of House of Representatives Practice, which states: It is not acceptable to raise points of order concerning proceedings earlier in the day or concerning proceedings of a previous day. This is a ruling that you have enforced previously, Mr Speaker. Can I ask: when is it acceptable for a member to raise a point of order regarding something which has happened earlier in the day, as the Leader of the House just did, and when is it not? 81 SPEAKER, The 10000 PO N/A 1 The SPEAKER —The member for Prospect would be aware I am not going to provide commentary on rulings. The point is that the Leader of the House asked for a withdrawal and a withdrawal was given. 81 QUESTIONS WITHOUT NOTICE: ADDITIONAL answers 81 81 15:11:00 Mr HOWARD,MP ZD4 Bennelong LP Prime Minister 1 0 Mr HOWARD —Mr Speaker, I seek the indulgence of the chair to add to an answer. 10000 SPEAKER, The The SPEAKER —The Prime Minister may proceed. ZD4 Howard, John, MP Mr HOWARD —Last Thursday the member for Perth asked a question about the employment status of a Mr Shane Denning and the impact of the Independent Contractors Bill. The member for Perth did provide some information on Mr Denning and the Office of Workplace Services was asked to investigate. I am informed that the information provided to the Office of Workplace Services was not sufficient to make an assessment of the status of Mr Denning. I am advised further that the Office of Workplace Services has been unable to contact Mr Denning to gather additional information. Further, I am advised that the Office of Workplace Services contacted the member for Perth’s office and they have refused to cooperate or provide any additional information on Mr Denning. So it appears that the member for Perth is happy to use constituents as a stunt in parliament but he is not interested in helping them to get answers to their questions. Government members interjecting— 10000 SPEAKER, The The SPEAKER —Order! Members on my right! 9V5 Pyne, Chris, MP Mr Pyne interjecting— 10000 SPEAKER, The The SPEAKER —The member for Sturt is warned! 81 PERSONAL EXPLANATIONS 81 15:12:00 Smith, Stephen, MP 5V5 Perth ALP 0 0 Mr STEPHEN SMITH —Mr Speaker, I wish to make a personal explanation. 10000 SPEAKER, The The SPEAKER —Does the honourable member claim to have been misrepresented? 5V5 Smith, Stephen, MP Mr STEPHEN SMITH —Yes, by the Prime Minister just then. 10000 SPEAKER, The The SPEAKER —Please proceed. 5V5 Smith, Stephen, MP Mr STEPHEN SMITH —Two points: firstly, I provided the Prime Minister with the information that I had; secondly, the Office of Workplace Services contacted my office asking me to provide them with contact details of Mr Denning. I said to the Office of Workplace Services through my office that I would inform Mr Denning of the contact officer for the Office of Workplace Services and that it would be a matter for Mr Denning to contact them if he so chose. Government members interjecting— 10000 SPEAKER, The The SPEAKER —Order! Members on my right! The member for Perth has the call! 84C Thompson, Cameron, MP Mr Cameron Thompson interjecting— 10000 SPEAKER, The The SPEAKER —The member for Blair is warned too! I call the member for Perth. 5V5 Smith, Stephen, MP Mr STEPHEN SMITH —I do not hand out personal details of people without their permission. And I do not mislead the House, unlike you! 10000 SPEAKER, The The SPEAKER —The member for Perth will resume his seat. EZ5 Abbott, Tony, MP Mr Abbott —Mr Speaker, I rise on a point of order. Under the standing orders, the member for Perth has made an imputation of bad faith against the Prime Minister and it should be withdrawn. 10000 SPEAKER, The The SPEAKER —I did not catch that, but if the member for Perth has made such a comment it would help the House if he withdrew that last statement. 5V5 Smith, Stephen, MP Mr STEPHEN SMITH —Mr Speaker, I used exactly the same expression in respect of the Prime Minister that he used in respect of me. 10000 SPEAKER, The The SPEAKER —Did the member for Perth say that the Prime Minister had misled the House? 5V5 Smith, Stephen, MP Mr STEPHEN SMITH —I said exactly what the Prime Minister said in respect of me. I did not use the word deliberately and I think the Prime Minister is happy to leave it there. EZ5 Abbott, Tony, MP Mr Abbott —He clearly accused the Prime Minister of misleading the House in a way which was offensive as well as contrary to the forms of the parliament, and he should withdraw it. 5I4 McMullan, Bob, MP Mr McMullan —Mr Speaker, I rise on two points of order with regard to the matter which the Leader of the House has raised. Firstly, all House of Representatives practice and the standing orders make it clear that you are not entitled to say someone deliberately misled, but people regularly say in this House that people have misled the House and no-one has ever been required to withdraw it. It would be a dangerous precedent if you were to say so. Secondly, given the exchange between the Prime Minister and the member for Perth, can I draw your attention to page 164 of House of Representatives Practice, which says the Speaker: … should give the same reprimand for the same offence whether the Member is of the Government or the Opposition. 10000 SPEAKER, The The SPEAKER —The member for Fraser will resume his seat; he is reflecting on the chair. The chair has not ruled. If the member for Perth did not use the word deliberately— 5V5 Smith, Stephen, MP Mr STEPHEN SMITH —I did not use the word deliberately. 10000 SPEAKER, The The SPEAKER —then I will take it no further. 82 15:17:00 Gillard, Julia, MP 83L Lalor ALP 0 0 Ms GILLARD —Mr Speaker, I wish to make a personal explanation. 10000 SPEAKER, The The SPEAKER —Does the honourable member claim to have been misrepresented? 83L Gillard, Julia, MP Ms GILLARD —On two occasions in question time today. 10000 SPEAKER, The The SPEAKER —Please proceed. 83L Gillard, Julia, MP Ms GILLARD —In question time today, the Minister for Health and Ageing claimed that I am anti the private sector. Government members interjecting— 10000 SPEAKER, The The SPEAKER —Order! Members on my right! The member for Mackellar will resume her seat. The Manager of Opposition Business has just begun to give a personal explanation. I have yet to hear what it is. SE4 Bishop, Bronwyn, MP Mrs Bronwyn Bishop interjecting— 10000 SPEAKER, The The SPEAKER —The member for Mackellar will resume her seat and I will hear the Manager of Opposition Business and rule if she is not giving a personal explanation. SE4 Bishop, Bronwyn, MP Mrs Bronwyn Bishop interjecting— 10000 SPEAKER, The The SPEAKER —The member for Mackellar will resume her seat! 83L Gillard, Julia, MP Ms GILLARD —Thank you, Mr Speaker. In question time today the minister for health claimed that I am anti the private health sector. This claim is absurd, and I seek leave to table my Earle Page memorial lecture which details my plans to use private health— 10000 SPEAKER, The The SPEAKER —The Manager of Opposition Business will resume her seat. SE4 Bishop, Bronwyn, MP Mrs Bronwyn Bishop —Mr Speaker, I rise on a point of order. The Manager of Opposition Business has indicated her intention to debate something that took place in question time. That is totally against the standing orders and is not a proper use of a personal explanation. The standing orders are very clear on the point. 10000 SPEAKER, The The SPEAKER —The member for Mackellar will resume her seat. The Manager of Opposition Business is well aware that, if she seeks to make a personal explanation, she must show where she personally has been misrepresented. 83L Gillard, Julia, MP Ms GILLARD —Mr Speaker, I am dealing with matters which were over the dispatch box and directly about the member for Lalor. How could they not be matters that are about me? I have dealt with the first of them, and I have asked for leave to table this speech, which details my plans to use private sector capacity for public needs. Leave granted. 83L Gillard, Julia, MP Ms GILLARD —Thank you. On the second occasion, the minister for health in question time today accused me of misleading people about the government’s plans to privatise Medicare. To answer this claim, I seek leave to table a press release from the federal member for O’Connor, Mr Wilson Tuckey, headed ‘Privatise Medicare and public hospitals’, in which he outlines the government’s plans to privatise Medicare. Leave granted. 83 15:20:00 Smith, Stephen, MP 5V5 Perth ALP 0 0 Mr STEPHEN SMITH —Mr Speaker, I wish to make a personal explanation. 10000 SPEAKER, The The SPEAKER —Does the honourable member claim to have been misrepresented? 5V5 Smith, Stephen, MP Mr STEPHEN SMITH —I do. 10000 SPEAKER, The The SPEAKER —Please proceed. 5V5 Smith, Stephen, MP Mr STEPHEN SMITH —It was by the Minister for Employment and Workplace Relations during question time today. In response to a question about the Cowra abattoir, the minister suggested that I had quoted selectively from the administrator’s report by referring to what I described as ‘questionable transfers of money’. I refer to page 12 of the administrator’s report in respect of those matters. The administrator says that ‘our inquiry as to the nature of the loan accounts continue’, and on page 16 the report says: We will lodge a report with the Australian Securities and Investments Commission, together with our further comments, detailing the results of our investigations together with possible offences, which may have been committed by company officers. I think that justifies the use of the word ‘questionable’. 83 Questions to the Speaker 83 83 15:21:00 McMullan, Bob, MP 5I4 Fraser ALP 0 Mr McMULLAN —I wish to raise again with you a matter I raised earlier. For the third time you ruled on a question today and said ‘a part of this question is unnecessary’. I wish to ask you to reflect on which part of the standing orders gives you the authority to rule on part of a question being ‘unnecessary’. 83 SPEAKER, The 10000 PO N/A 1 The SPEAKER —If I refer the member for Fraser to standing order 100, he would find a list of reasons I could easily refer to. 83 DOCUMENTS Mr ABBOTT (Warringah —Leader of the House) 15:21:00 —Documents are tabled as listed in the schedule circulated to honourable members. Details of the documents will be recorded in the Votes and Proceedings and I move: That the House take note of the following document: Australian Law Reform Commission—Report No. 104—Fighting words: A review of sedition laws in Australia, July 2006 Debate (on motion by Mr Abbott) adjourned. 84 MISCELLANEOUS 84 84 Mr ABBOTT (Warringah —Leader of the House) 15:21:00 —by leave—I move: That the following order of the day be referred to the Main Committee: Australian Law Reform Commission—Report No. 104—Fighting words: A review of sedition laws in Australia, July 2006—Motion to take note of the document: Resumption of debate. Question agreed to. 84 MATTERS OF PUBLIC IMPORTANCE 84 10000 SPEAKER, The The SPEAKER —I have received a letter from the honourable member for Grayndler proposing that a definite matter of public importance be submitted to the House for discussion, namely: The need for strong Government action to address the threat posed to Australia’s environment and economy by dangerous climate change. I call upon those members who approve of the proposed discussion to rise in their places. More than the number of members required by the standing orders having risen in their places— 84 15:22:00 Albanese, Anthony, MP R36 Grayndler ALP 0 0 Mr ALBANESE —It is an inconvenient truth that the Howard government is increasingly isolated on climate change. It is an inconvenient truth that between 1990 and 2004 emissions rose in Australia by 25.1 per cent, once you exclude the decisions of the New South Wales and Queensland governments on land clearing. And it is an inconvenient truth for this government that, over coming weeks, hundreds of thousands of Australians will be become more aware about climate change due to Al Gore’s documentary, An Inconvenient Truth. I have had the privilege of watching that documentary on a number of occasions, and it is extremely powerful. The former Vice President of the United States puts a great case for why this is the moral cause of our generation, in the interests of future generations—and that is because climate change threatens the very conditions that allow human civilisation to live on this planet. However, this important documentary has been dismissed by the Prime Minister’s Minister for Industry, Tourism and Resources, Ian Macfarlane, who stated, ‘It’s just entertainment, and really that’s all it is.’ That reminded me of one of my favourite songs, That’s Entertainment, written by Paul Weller of The Jam. But Weller used ‘That’s entertainment’ in the ironic sense. It was a devastating critique of social dislocation in Thatcher’s Britain, but from this mob over here there is no irony at all in saying that Al Gore’s movie, which documents the threat to our water supply, the increase in extreme weather events, the potential for over 100 million environmental refugees and the catastrophic future that we face unless we act is just about entertainment as far as this government is concerned. But we should not be surprised, because on the date that the Kyoto protocol came into effect the minister said: Whether or not those emissions are causing climate change, I don’t know ... If you go back across history, millions of years, carbon-dioxide levels go up and down and global warming comes and goes. That is an extraordinary statement from a senior minister in the Howard government. Last week, the Prime Minister said he was sceptical about gloomy climate change predictions. Al Gore was asked on The 7.30 Report about the Prime Minister’s scepticism, and he said: He’s increasingly alone in that view among people who’ve really looked at the science. ... The so-called “gloomy predictions” are predictions of what would happen if we did not act. It’s not a question of mood. It’s a question of reality. And, you know, there’s no longer debate over whether the earth is round or flat, though there are some few people who still think it’s flat, we generally ignore that view because the evidence has mounted to the point where we understand that it shouldn’t be taken seriously. And that is why we should not take the Howard government’s flat-earth view of climate change seriously. Today, I want to take the opportunity to go through the five arguments that the government advanced against ratifying the Kyoto protocol and against taking action to avoid dangerous climate change. The first is pretty simple. They say that it will ruin the economy—but in the next breath they say that Australia will meet the target. The contradiction between the two statements is so obvious. You cannot on the one hand say that it will cause enormous economic damage but on the other hand say, ‘We actually don’t have to make any changes to meet the 108 per cent target, thanks to the decisions of the New South Wales and Queensland Labor governments.’ 00AMV Hunt, Gregory, MP Mr Hunt interjecting— 10000 Causley, Ian (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. IR Causley)—The member for Flinders will have an opportunity to reply if he remains quiet. R36 Albanese, Anthony, MP Mr ALBANESE —Argument No. 2 against ratifying Kyoto is perhaps the most offensive. It is that we should not be involved in Kyoto because the developing world is not involved—China, India and all those countries. That is simply not true. Kyoto has been ratified by 158 countries, including China, India and most of the developing world. The fact is that the developed world created the problem. We created the emissions that have caused climate change. We have a moral responsibility to take the lead on these issues. On Enough Rope on Monday, Al Gore put it particularly well when he stated: Since the end of World War II there has been the same basic architecture for every international treaty. The wealthier countries that have the wherewithal to go first have agreed to take the first steps and then after we find the pathway and chart the course, then the poorer nations, where per capita income is just a fraction of what it is in Australia and the United States, they then join in the work. And the Kyoto treaty, the first of the treaties to come on the climate crisis, is based on that same model. As it is. We have a moral responsibility, along with the United States—being the two highest per capita emitters in the world—to take the lead. I can assure you, having attended the Montreal climate change conference last year, that countries in our region, like Kiribati and Tuvalu, which are sinking under rising sea levels, and countries in Africa, South America and Asia find it incredibly offensive that Australia and the United States, having signed the Kyoto protocol, have not ratified it. And the Prime Minister is so unaware of the detail. Yesterday, when I asked a question, he spoke about 2010 targets. There are not any 2010 targets. The Kyoto protocol’s first commitment period is 2008 to 2012. 00AMV Hunt, Gregory, MP Mr Hunt —Gee, what’s in the middle of that? 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The member for Flinders will be removed if he does not remain quiet. R36 Albanese, Anthony, MP Mr ALBANESE —And last year the world made a unanimous decision at the Montreal conference to begin the discussion about the post-2012 architecture. The whole world is moving forward, and Australia is being left behind. Argument No. 3 against ratifying Kyoto is about jobs and international competitiveness. Well, have a look at what is happening. John Howard’s failure to plan for the future— 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The member will refer to people by their titles. R36 Albanese, Anthony, MP Mr ALBANESE —meant that 100 jobs were lost in Tasmania. The Vestas Nacelle wind turbine assembly plant in Northern Tasmania will close as a result of the failure of the government to increase the mandatory renewable energy target. We all know about the Bald Hills wind farm, where one theoretical parrot being killed every 1,000 years stopped a $220 million wind farm project. And, in July, the Roaring Forties company, based in Tasmania, announced $300 million to provide three wind farms to China, which has a 15 per cent mandatory renewable target, but at the same time they are not proceeding with projects in South Australia and Tasmania worth $500 million because of the failure of the government. There is a trillion-dollar emerging industry in renewable energy technologies, and we are not a part of it. Our innovation and our ideas are being taken offshore. Companies like Pacific Solar are moving offshore—an absolute tragedy. Argument No. 4 against ratifying Kyoto is that somehow technology will solve the problem: ‘We are about supporting this new technology.’ Who is opposed to new technology? Nobody. That is a given. The question is—this is Economics 1A—how do you get that technology to actually be applied and commercialised? How do you bring it on? What do you do? There is something called ‘a market’. You use market based mechanisms. What is extraordinary about this mob is not that there are climate sceptics in the cabinet; it is that there are market sceptics in the so-called right-wing, free-market government who oppose emissions trading and who insist on trying to turn it into a tax when the fact is that there are two price signals that you can have for carbon, and one is trading a market based signal. They say a price signal is necessary; that means they must support a carbon tax, because that is the other way that you have a price signal. Argument No. 5 against ratifying Kyoto is related to the first: ‘AP6 is the alternative to Kyoto. We’ve got something else.’ Except they failed to mention that most of the partners in AP6—of course, everyone except us and the United States—is also a part of Kyoto. Korea, China, India and Japan—funnily enough—are part of Kyoto. They missed that one! It is extraordinary. You actually hear them argue: ‘Japan and China aren’t a part of it.’ Where do you think Kyoto is, Parliamentary Secretary? I say that to you. 00AMV Hunt, Gregory, MP Mr Hunt interjecting— 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —Order! The member for Flinders! R36 Albanese, Anthony, MP Mr ALBANESE —Then we have the response to AP6. Senator John McCain—perhaps the next Republican President of the United States—said this when it was released: The [Asia-Pacific] pact amounts to nothing more than a nice little public-relations ploy. It has almost no meaning. They aren’t even committing money to the effort, much less enacting rules to reduce greenhouse-gas emissions. The Chinese Ministry of Foreign Affairs said this: This pact has no power for legal restrictions. It is a complement to the Kyoto treaty, not a replacement. The Canadian Minister of Foreign Affairs, Pierre Pettigrew, said: When you want to complement something, you recognise that the real substance is somewhere else. That is right. No-one opposes new technology; of course we support that. The question is how you drive that new technology. It is a triumph of hope over experience to suggest that you get new technologies applied without market based mechanisms or without regulation. We support market based mechanisms to drive that change through. In evidence of that is that in the United States, when the funding debate for the Asia-Pacific pact came on, at first they got zip. They got nothing; they got knocked back. Then, in the end, when this was a bit embarrassing for Australia and the push started, they got $52 million to support the pact in 2007. This is the alternative to the Kyoto protocol! Billions of dollars are involved in the protocol, and they got $52 million. The truth is you need push and pull: the push of new technology and the pull of the market to drive it through. That is why you need strong action. The work undertaken by ABARE and released by the government at the climate pact showed that emissions would increase by 80 per cent by 2050—that is under their scenario—when we know that there is a scientific consensus that we need a 60 per cent reduction by 2050. Climate change is real and the threat of dangerous climate change is also real. What Labor would do is cut Australia’s greenhouse pollution by 60 per cent by 2050. We know that, if you have a target, it is like a one-day cricket target: you do not bat out the first 30 overs; you send out Adam Gilchrist to get some runs on the board early because it makes it easy to get to the target later on. That is what the business council’s Global Roundtable on Climate Change has said. That is why they have called for early action. We would ratify the Kyoto protocol. We would significantly increase MRET. We would introduce a national emissions trading scheme. We would have a climate change trigger in the EPBC Act. We would have specific policies to drive change, such as the green-car challenge to introduce a hybrid car being made here in Australia. We would make every school a solar school. We should be the silicon valley of the solar energy industry. What is happening with this government? Where does it stand? It is increasingly isolated. Yesterday in the Sun newspaper in London the front page was ‘Go green with the Sun’. It said: Man the lifeboats. Will your town be underwater if global warming takes hold? You could log on and find out exactly what the situation was. 00AMV Hunt, Gregory, MP Mr Hunt interjecting— 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The member for Flinders is warned! R36 Albanese, Anthony, MP Mr ALBANESE —This is the Sun newspaper, not Green Left Weekly. This is Rupert Murdoch’s major UK publication, just as the Daily Telegraph this week has on page 1 an ad for the fact that it is promoting green energy in Australia. Increasingly, this mob just cannot make that leap to the future. This is what the Sun’s editorial stated: Too many of us have spent too long in denial over the threat from global warming. The evidence is now irresistible. Searing summers and dry winters in the UK, increasingly frequent tornadoes and hurricanes worldwide, the shrinking Arctic ice cap ... I say to the government: get on board before you are the last people on earth who are sceptical about the need to take serious action on climate change. Every day, more people are more conscious about the threat that this represents and the responsibility that we have—not just to ourselves but to our kids and our grandkids—for the survival of this planet. (Time expired) 88 15:37:00 Hunt, Gregory, MP 00AMV Flinders LP Parliamentary Secretary to the Minister for the Environment and Heritage 1 0 Mr HUNT —I take on this matter of public importance debate with relish and I do so because it defines the difference between this government and this opposition. What in essence is that difference? It comes down to two principles. The first is that the opposition would sign but we are already delivering. Its entire principle on this is that you must ratify the Kyoto agreement so that you can achieve the target of 108 per cent of 1990 emissions for the period between 2008 and 2012. Guess what! We are one of the only developed world countries that is actually meeting its targets. We are one of a handful of countries that is achieving the very outcome it wants to pursue. What does that mean in a broader sense? It is the difference between doing the easy and the hard. What is it that defines the Leader of the Opposition? It is the desire to do the easy. What is it that defines the Prime Minister and the government that supports him? It is the desire to do the hard. The concern of the Leader of the Opposition and the member for Grayndler comes down to a simple principle, and that is, ‘Look, let’s just sign and everything will be fine.’ We have already delivered in a way that almost no other developed world country has. I want to deal with this fraud in four steps. Firstly, I want to deal with the notion of how Australia is one of the few countries to actually be meeting its targets under the international agreements. Second is the fact that we do accept the IPCC findings and recommendations in relation to climate and we have taken profound action. Thirdly, I am happy to say that, of all the countries in the world, we have taken the best and most practical international leadership role. We have taken a step to produce savings of 90 billion tonnes of CO over the years between now and 2050 through the Asia-Pacific Partnership on Clean Development and Climate—which is approximately three times the amount that would come through the Kyoto mechanism. These are real figures with real estimates which utterly put the lie to the position that the member for Grayndler outlined that by signing and ratifying everything will be fine, whereas we take the real steps. The fourth thing I want to do is outline some of the practical steps we are taking to control our greenhouse emissions. Let me put a very simple proposition. In 1990 our greenhouse emissions as a country were 550 million tonnes; in 2004 and 2005 we are looking at a figure of approximately 560 million tonnes. That is a fascinating reality check for the great claims made by our friends in the opposition. Let me go first to this notion of meeting our targets. The very concept here is that, when you look around the world amongst the developed countries, Australia is almost unique or alone in doing the practical things to meet the outcomes. The great shibboleth on the other side is that we have to ratify Kyoto. What defines Denmark, Austria, Belgium, Italy, the Netherlands, France, Ireland, Spain, Portugal, Norway, New Zealand, Canada, Japan? All of them have ratified Kyoto; none of them is meeting its targets. Not one of these countries, which the opposition hold up as moral leaders, is meeting its targets. Denmark is 25 per cent over its target; Austria, 22 per cent; Belgium, 8½ per cent; Italy, 9½ per cent; the Netherlands, 10 per cent; France, nine per cent; Ireland, 20 per cent; Spain, 36 per cent; Portugal, 25 per cent; Norway, 22 per cent; New Zealand, 10 per cent; Canada, 22 per cent; and Japan, 12 per cent. They are all over their targets. In Australia, by comparison, we are achieving what we set out to do. But we did not accept that the mechanism for doing it was in the Australian interest or in the international interest. Why? Because of a simple proposition. It is the proposition of perverse outcomes—that if you pursue that particular mechanism what is likely to happen is precisely what has happened in Europe where we have seen aluminium and cement plants not close down, not cease to exist but move from Europe to North Africa. That has actually led to an increase in total global emissions. That is the only test that matters: what is the effect on total global emissions? So we have a mechanism that relies on an accounting fraud in that it relies on the collapse of Russian industry post-1990 and achieves a perverse outcome. It achieves precisely the opposite of what our friends in the opposition would seek to portray as happening. They wish to sign and they wish to ratify but we have already achieved the outcomes. They demand that we adopt a mechanism, though, to achieve those outcomes which globally is having a perverse effect. That is why we reject it—because it does not do what it was intended to do. It does not do what they said it would do. Worse than that, it is destructive and is backed up by the hypocrisy of all those countries whose names I have just read into the record and the amount by which they are exceeding their targets. I make no apology for the fact that we have not fallen for this particular trap but instead have delivered where none of those other countries has delivered. And that is fundamental. What it means in practice is, firstly, that we have been able to achieve a sensible outcome in the balance between the contribution of this generation and future generations and, secondly, that we have been able to do it in a way that makes Australia a global leader. I particularly pay respect to the work of Senator Ian Campbell in doing this and point out that Australia has been enlisted through the role of Mr Howard Bamsey, who is the head of the Australian Greenhouse Office, as one of the world’s two co-chairs of the post-2012 negotiations. That is what is fascinating in this regard. Of all the countries in the world, Australia, through the work of Senator Ian Campbell and, through his agency, the work of Mr Howard Bamsey, has been selected as one of the world’s two co-chairs of the post-2012 talks. I think that is a recognition of where Australia stands in the international community on this matter—amongst those people who actually focus on balancing our economic responsibilities for individuals’ lives, for people with families and jobs, with our responsibilities for future generations. Having mentioned future generations, this brings me to the next point that I would like to make. We do, as a country and as a government, accept the general principles of the IPCC and we accept the general principles of climate change. Our key advisory bodies, the Bureau of Meteorology, the CSIRO, the Australian Antarctic Division—which does a lot of core sampling—and the Australian Greenhouse Office, have all presented material which the government has accepted as setting out a principle. There may be some debate about the extent and range of activities, but all of these key advisory bodies, as the Prime Minister himself has acknowledged, have set that out. That is why we have invested almost $2 billion in addressing climate change. That is why Senator Ian Campbell was able to work with the Prime Minister on establishing the Solar Cities program. We have real programs, backed by $2 billion of funding and by the delivery of real abatement changes. We can compare that to the notion of hollow rhetoric—and I think that is a fundamentally important point. I do take it as a responsibility that we recognise that we have to make abatement cuts, that we have to achieve outcomes. But we have to compare that to the magical notion that if we simply ratify a document suddenly everything will change. We say that that mechanism will not work. Also, there is the problem of perverse outcomes: by exporting jobs, plants and factories from Europe to North Africa, precisely the opposite of what is intended will be achieved. In Australia, we have achieved what we wanted to achieve, and that is why we are not going to export our jobs and our emissions to other countries. That is why the mechanism is fundamentally flawed. It is what I call the Union Carbide argument: export your problem overseas and pretend that you are absolutely fine. So I respect that people have good intentions in this regard, but it is a mechanism that fundamentally fails to deal with the very thing that it purports to deal with. This brings me to our role in leading international change. The Asia-Pacific Partnership on Clean Development and Climate—I call it the Sydney partnership, put together by the Prime Minister, the foreign minister and the environment minister, Senator Ian Campbell—brought together six nations. But it did not just bring together any six nations; it brought together Australia, the United States, China, India, Japan and South Korea. Between them, those nations represent 50 per cent of global emissions, approximately 50 per cent of the world’s population, and the greatest growth in emissions through India, China and South Korea. By bringing those countries on board, we helped to establish a framework and a mechanism to try to introduce clean technology into the countries where the greatest growth in emissions is likely to be found. As an aside, I point out that the member for Grayndler was absolutely silent when the Victorian government reapproved the Hazelwood power station and he said nothing about the Sydney desalination plant. He was totally silent when his state colleagues took such steps, even though they were responsible for the activities. To return to the point, these countries are fundamental. If we do not deal with them, nothing that we do will have an impact. Australia’s emissions represent 1.4 per cent of global emissions. We could close Australia down, as some on the other side may implicitly want us to do, and within nine months all the emissions saved would be recovered by China’s growth. We emit 560 million tonnes a year of CO, and that is less than the amount by which China’s emissions profile is growing annually. Through the Asia-Pacific partnership mechanism, we have put together a system of clean technology on issues such as clean coal—which is fundamentally important—and all sorts of other projects which can, over the period between now and 2050, lead to the abatement of 90 billion tonnes of CO. That is the estimate from ABARE—that the Asia-Pacific partnership is likely to lead to the abatement of 90 billion tonnes of CO. Let me put that in context. Under Kyoto, the estimate is that, between now and 2050, if the figure is extrapolated out, about 25 billion tonnes is likely to be saved. Let us increase that figure to 30 billion tonnes. With the partnership mechanism we are talking about a proposal which is complementary but which is likely to lead to the saving of up to three times as many emissions that may occur under this great saviour that our friends on the other side argue is the key to everything. It is a flawed mechanism which exports jobs, which exports emissions, which exports the problem but which makes people feel good about themselves. Let us compare what we are doing at the international level with what we are doing domestically. I am very proud of what we are doing domestically. We have a series of initiatives in Australia that contribute to greenhouse gas initiatives worth $2 billion. The practical steps that we take mean that Australia is one of the very few countries in the world to actually be delivering in this regard. So where others promise, where others would sign, we are delivering on real targets and on real outcomes. We are delivering on the 108 per cent target. What are these practical initiatives? We are not talking about two per cent of renewable energy, as some would say. Australia is currently at about eight per cent, and on track to reach 10 per cent, of our total energy generated, or 11 per cent of our energy consumed, being from renewable sources by 2010. So 11 per cent of energy consumed in this country will come from renewable sources. People misrepresent what happens in that regard. I would hope that folk on the other side would not fall into that trap but would be honest about it. We have a $500 million Low Emissions Technology Development Fund. That may help with solar, geothermal energy or clean coal—which I think is fundamentally important for the future. I would say that all of those are critical. They are critical to our economic health; they are critical to our innovation; and they are critical to our contribution at an international level. Ultimately, whether it is the Solar Cities program, whether it is the renewable energy development initiative or whether it is the $500 million Low Emissions Technology Development Fund, our proposal is simple: we are meeting our targets, we are making investments and we are making absolutely no apologies for failing to adopt a proposal which would endorse a flawed mechanism. (Time expired) 91 15:53:00 Garrett, Peter, MP HV4 Kingsford Smith ALP 0 0 Mr GARRETT —Regrettably, the member for Flinders has brought nothing new to this debate on climate change, despite the fact that the tempo of information and dialogue about global warming and the challenges posed by global warming continue to increase. As the member for Grayndler pointed out to the House, that is now recognised unanimously by scientific communities that are recognised for prudence and, more importantly, by those parts of the media community who can see that this is not something that has been dreamt up, that the sceptics have got it wrong, that the science is clearly in. It is a double-jeopardy situation for the government here, really. They are trying to pretend that it is not really a big problem, and then they get up and spend a lot of time in the House telling us what they are doing about it. It either is a big problem and you ought to be doing more about it, or, as some of your members have said in the past, it is not really that much your problem—in which case, why the speech? Fact 1: Australia’s greenhouse gas emissions are of a very high order—we are amongst the highest per capita emitters of greenhouse gas emissions in the world. Fact 2: we are going to continue to increase greenhouse gas emissions in the foreseeable future, but particularly up to 2050. Fact 3: there is a majority of scientific consensus that there will be temperature increases, called global warming, which will occur in that period of time, up to 2050. Fact 4: Australia will be contributing to that global warming. They are the facts that the member for Flinders has chosen to ignore in his address to the House on this matter of public importance. There are many lawyers in this parliament, including the Prime Minister, who might know that the definition of ‘duty of care’ is: a legal obligation to avoid causing harm. This duty arises, according to the Australian Legal Dictionary, where the harm is foreseeable if due care is not taken; and the type of harm, not its extent, must be foreseeable. The Australian public, the international scientific community and citizens worldwide know that there is a type of harm that will be caused by global warming and that it is foreseeable. So we have reached a point in our history where a failure to meaningfully act on a national and international crisis—which global warming is—where the projected damage that flows from climate change is foreseeable, represents nothing less than a failure of a duty of care that the government owes to its citizens. With the prospect of an average rise in global temperatures of up to 5.8 per cent by 2100, with corresponding sea-level rises, and no sign of real action by the Howard government, Mr Howard as Prime Minister is simply failing to discharge his duty of care and his government’s duty of care to all of us. In this parliament we become properly consumed by the stem cell debates, and we will speak about those in the coming weeks. We will weigh the prospects of new scientific discoveries and the prospects they hold for improving health against some people’s firmly held philosophies. The opposition will continue to focus on the need for the government to invest in targeted ways in infrastructure and education and we will criticise the Howard government because it has not done enough of that. But, frankly, these debates are overshadowed by the profound challenge of global warming. Global warming is casting a giant shadow across this parliament and the next, and it is casting a shadow across our way of life, literally. The rhetoric and the half-formed arguments we have just heard from the member for Flinders, and the policies that the government puts up to justify its position on the climate change debate, are an insult to us in this House. And they are an insult to the people that we have been elected to serve. I suspect that next year’s International Panel on Climate Change will provide more factual research material which will expand both our knowledge and understanding and also our alarm about the prospects of global warming. In fact, there are very few sceptics left in the known universe. It is true that the government benches are a sceptics refuge—and it is a bit scarier to be over there than in a wildlife refuge! But dangerous climate change poses a real threat to Australians who live on farms that face drought and to those who live in big cities and face drought—and it seems that the government does not get it. It will not take off its ideological blinkers. It will not say out loud that it has got it wrong. What it really spends its time doing is abusing others who disagree with it, countries and senior politicians from our most important ally, such as the former Vice-President of the United States. This failure to say out loud in this place, ‘We recognise that the climate crisis is on us and we will now do something seriously about it,’ is jeopardising our national interest—and it renders this government unfit for the stewardship that it has to exercise in shepherding our country through this very difficult time. If you cannot see the stark evidence of icecaps and snow cover shrinking, of lakes evaporating, of warming trends and temperature graphs heading upwards; if you continue to view these pictures through the prism of mad, singular scientists or neoconservative op-eds; and if you continue to ignore the photos and images placed in front of you courtesy of the former Vice-President of the United States in his film An Inconvenient Truth, then you are simply blind. You are blinded by your ideology. When you ignore, as this government regularly ignores, the pleas of our Pacific neighbours already struggling, as the member for Grayndler pointed out, to contend with rising sea levels—they are building small walls around their vegetable plots to stop the seawater coming in—then you are deaf to the pleas of our neighbours who face climate change and global warming now. And when you dress up your arguments you are exposed because it is all about self-interest; it is all about sectional interest. The government cannot escape its ideological straitjacket. When you do that, you are not taking the national interest into account at all. The Prime Minister maintains Australia will suffer economically if we sign the Kyoto protocol. But his government is willing it seems, and the Prime Minster is willing, to continue to accept that our future economic growth will be partnered by future increases in carbon dioxide emissions. For Mr Howard the natural order of things is more economic growth, more pollution and more CO. But there is another way to do it and that is what smart countries do—they invest in renewable energy. They take serious measures to reduce greenhouse emissions. They develop strategies, policies and products to harness the growing energy-efficient economy that is building rapidly worldwide. Last week another report on the Great Barrier Reef—our natural and economic treasure that generates billions of dollars per year and employs thousands of Australians, which represents one of the great natural wonders of the world and is a magnet for our tourists—pointed out, as reported in the Courier Mail on Friday, 8 September under the headline, ‘Warming a reef threat’: SCIENTISTS believe an increase in average temperatures of just 1C could cause coral bleaching on up to half the Great Barrier Reef. A 2C increase ... 80 per cent of the reef ... And as scientists simply say: Mainstream scientific opinion is that the rapidity of change is the problem. That is what we are facing now: an acceleration of global warming identified by Vice-President Gore, confirmed by scientists worldwide and particularly in Australia. The government refuses to embrace a national trading scheme. It refuses to increase mandatory renewable energy targets. In the midst of the worldwide boom in renewable industries—these are the industries of the future which are already experiencing rapid growth and to which our economic fortunes are tied—the government has no clean energy investment strategy in place. This government will not permit Australian innovators and industry to get the opportunity to build into this market. In fact they are preventing them from doing it, and those that want to do it actually have to head overseas. Most scandalous of all for a national government is that we have a national trading scheme which is being run by the states. To their great credit the states have taken it up but it will be extremely difficult for them to maintain and run a national trading scheme without the assistance of the Commonwealth. Seeing as this has been identified as the most important environmental issue we face, and that one way of dealing with it is through the market which this mob on the other side of the House supposedly believe in, what is the problem? What is the problem with this government? The Country Womens Association said it very simply to this government: we need the development of renewable energy sources and that development is required now. But as the world goes for wind and solar, Mr Howard embraces nuclear. As California, Sweden, the UK and others set ambitious targets and time lines for reducing greenhouse pollution, the government vacates the playing field altogether. In fact, as things stand in Australia in 2006 with the most important environmental challenge coming upon us, the Howard government has no national climate change action plan, no time lines, no targets and no policies to significantly reduce our greenhouse pollution or slow our energy demand. So if the Australian people want more droughts, vote for John Howard. (Time expired) 94 16:03:00 Broadbent, Russell, MP MT4 McMillan LP 1 0 Mr BROADBENT —The member for Grayndler attacked the Prime Minister and Ian Macfarlane at the start of his address in relation to the matter of public importance: The need for strong Government action to address the threat posed to Australia’s environment and economy by dangerous climate change. To support the Prime Minister and Minister Macfarlane, Professor RM Carter, head of the Marine Geophysical Laboratory at James Cook University in Townsville, says in the IPA Review of September 2004: Droughts, floods, hailstorms and cyclones are natural weather events which human populations have always managed reactively. No empirical relationship has yet been observed between modest temperature changes of a degree or so and the frequency or intensity of such events. Secondly, Ian Plimer, professor of geology at the School of Earth Sciences at the University of Melbourne, wrote in March 2003 in the same review: Maybe the global warming of the twentieth century is just a measure of the variability on a dynamic evolving planet? His conclusions in the article were: Underpinning the global warming and climate change mantra is the imputation that humans live on a non-dynamic planet. On all scales of observation and measurement, sea level and climate are not constant. Change is normal and is driven by a large number of natural forces. Change can be slow or very fast. However, we see political slogans such as Stop Climate Change or government publications such as Living with Climate Change, demonstrating that both the community and government believe that climate variability and change are not normal. By using the past as the key to the present, we are facing the next inevitable glaciation, yet the climate, economic, political and social models of today assess the impact of a very slight warming and do not evaluate the higher risk of yet another glaciation. Geology, archaeology and history show that during glaciation, famine, war, depopulation and extinction are the norm. What a future we look forward to in this debate. I have been disappointed by the member for Grayndler and also the member for Kingsford Smith. Why am I disappointed? Because they refer to articles in newspapers across the globe but fail to address one in one of Australia’s major newspapers, the Herald-Sun, today from our good friend Andrew Bolt. I am not close to Andrew Bolt and sometimes I have an opposite opinion to him but today he outlines 10 of his own inconvenient truths and asks for judgement, yet neither the member for Grayndler nor the member for Kingsford Smith came in here and were prepared to address these reasoned criticisms of the movie by Al Gore. Why do you just come into this House with the arguments you came in with last time? I have to say to the member for Kingsford Smith that it was probably his best address I have seen him make in the House. He is obviously getting more comfortable in this place. He is obviously passionate about what he is talking about. I can understand the position he comes from. His consistency is like the religious fervour of a Bible-bashing priest in the far south of America. But I get disappointed that you cannot see any argument whatsoever for a reasoned debate—nothing. It is like everybody that might have some consideration, like the Prime Minister who in his statement this week said: ‘Look, the science is out there. We’re addressing those. We’ve done all these things, as outlined by the parliamentary secretary.’ All of those things are outlined but there is no real debate on the issues. The member for Grayndler and the member for Kingsford Smith have just dismissed anybody who has a view on climate change that is contrary to theirs. I would like to be part of the debate. The member for Kingsford Smith did not offer anything today, nothing new—nothing, nought, nada. All he did was present again the same policies that would devastate— HV4 Garrett, Peter, MP Mr Garrett —We have the policy. 10000 Causley, Ian (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. IR Causley)—The member for Kingsford Smith has had his 10 minutes. MT4 Broadbent, Russell, MP Mr BROADBENT —No, you made the same presentations that would devastate Latrobe Valley, which you know is dear to my heart—and yours, I am sure—and place huge cost burdens on Australian business without regard to the consequence of that at all. It is just a pipe dream—it is just: ‘This is what we should be doing regardless of the consequences.’ I do not think your speech is a fair, reasonable and honourable representation of our responsibility to our constituents. HV4 Garrett, Peter, MP Mr Garrett —There is $85 million there. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —Order! The member for Kingsford Smith is warned! MT4 Broadbent, Russell, MP Mr BROADBENT —That is a bit unfair, Mr Deputy Speaker Causley; he should be given an opportunity. On a day like today we get an opportunity to debate the issues. We have a senior journalist in Melbourne—you can say whatever you like about Andrew Bolt but he does his homework. And he has done his homework on Al Gore’s movie and he has come up with 10 points that really should be discussed. I do not have time in my 10 minutes to go through them all, but people should have a reasoned look at them. Recently, Minister Ian Campbell outlined what Australia has done on global warming. Broadly, the government has accepted that there is an issue that needs to be addressed. The government has pumped $32 million into further global climate change research in an effort to inform good policy decisions and reasoned measures. We know that our scientists are among the world’s best and are making a major contribution to this work. Regarding international policy, however, Australia is punching well above its weight. We are co-chairing the United Nations talks on future climate change action as well as being a leading member of the Asia-Pacific Partnership on Clean Development and Climate. I inform the House that the Minister for the Environment and Heritage is flying to Zurich this evening as a member of a select number of countries that have been invited to participate in the G8 dialogue on climate change, clean energy and sustainable development. Australia is delivering real results on climate change. We are one of only four industrialised countries on track to meet its targets by 2010. We will stop 85 million tonnes of greenhouse gases going into the air. That is the equivalent of taking 14 million cars, trucks and buses off our roads. I disagree with the member for Kingsford Smith because the facts are that Australia is not a major contributor to global greenhouse emissions. Individually, with a small population and coal based energy source, you say we are high output. We contribute 1.4 per cent of global emissions. Our expertise and constructive approach to addressing the challenges of climate change is internationally recognised. We know that combating greenhouse effects is one of the big challenges we have in the future, so we are investing more than $1 billion to develop climate friendly energy technologies across a spectrum. These include solar, with the announcement last week of the very first solar city trial going ahead in Adelaide. In my part of the world the Howard government has announced a clean coal pilot plant in the Latrobe Valley. That is all positive. On Monday this week I was involved in a community roundtable—I wish you had been there—on wind farms. That included local government, wind energy industry people, planning industry people, community groups and non-government organisations. Representatives began working towards a national code for wind energy installations. Wind farms have been a controversial issue in my electorate of McMillan and I take this opportunity to inform the House that despite what some Victorian state government ministers are saying I am not anti wind farm, I am not anti renewables. I fully support the Howard government’s investment in alternative energy technologies but I back the need for local government planning jurisdictions so that people in my local communities, particularly Bald Hills and Foster North, get a fair go. Local governments should have a say and it should not be withdrawn and taken back to state government to do whatever they like with that beautiful pristine area of Gippsland. People like to have a say about what goes on in their backyard. All politics is local. I also support the right technology-wrong place argument and emphasise my passion to protect critically endangered wildlife and the sensitive coastal regions of Gippsland. HV4 Garrett, Peter, MP Mr Garrett —Is this an election speech? 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The member for Kingsford Smith will be removed if he does not obey the chair. MT4 Broadbent, Russell, MP Mr BROADBENT —I refer to the comments made by the Prime Minister in the House yesterday around the recent Al Gore movie, An Inconvenient Truth: The argument over climate change is not whether there is a threat posed by climate change; there seems to be broad agreement on that, although there is a lot of legitimate debate about the speed of that change and the nature of the threat, and I do not think it is right to say that there is total unanimity about that in the scientific community. The action initiatives I outlined are not just a knee-jerk reaction to the current world climate change debate; they are about making sure Australia works towards being energy and water efficient. In relation to water, I acknowledge the hard work and dedication of the Parliamentary Secretary to the Prime Minister, Malcolm Turnbull, who has the vitality and the important job—(Time expired) 96 16:13:00 Katter, Bob, MP HX4 Kennedy IND 0 0 Mr KATTER —On a hectare of cane land each year about 150 tonnes of biomass are produced, most of which are from carbon dioxide taken out of the atmosphere. Every hectare takes out 73 tonnes of carbon dioxide from the atmosphere. The bagasse can be burnt to produce energy and the sugar can be used to produce ethanol. Every hectare produces about 13 or 14 tonnes of sugar, each tonne of which will produce 600 litres of ethanol. Of our 400 million tonnes about 300 million tonnes come from power stations and about 75 million tonnes from transport. Simply switching our fuel stream over to a renewable fuel stream will effectively take away 74 million tonnes. I find it incredible that we should be talking about this when the answer is right there with ethanol. Of course, South America is already there, and the United States have declared unequivocally that that is where they are going. I was the Minister for Mines and Energy in Queensland. I was surprised to find out that almost half of the electricity usage in a house comes from heating water. Throughout Australia we have a huge amount of sunshine to heat our water. So if we change as many of the hot water systems in our houses in Queensland and throughout Australia as we can to solar hot water systems then as much as 10 per cent, maybe even 15 per cent, of our requirements from our power stations will be removed. We need to look at solar hot water systems and moving to the ethanol alternative with our motor vehicles. There are two other issues that need to be addressed. One is the planting of trees. Right across North Queensland there are almost no trees whatsoever except an introduced species, a weed tree. It does not grow very much, I can assure you, but it is enough to wreck our flora and fauna. An area of six million—arguably seven million—hectares of native flora and fauna has been destroyed by this particular tree. It does not take in much carbon dioxide. It does not grow much—just enough to wreck our native flora and fauna. If some of those areas are put under trees then you will have (a) your timber taking CO away, (b) your solar hot water taking CO away and (c) your transport sector being replaced with ethanol taking CO away. We would be producing well below the amount of CO that was being produced before Europeans came to this country. It amazes me that people in this place are not aware of the ecological history of their own country. When Captain Cook came along the coastline, he said almost the whole coastline was on fire. When Logan Jack, the famous explorer, moved out from Cooktown, he counted 11 Aboriginal fires—they farmed with fire—before breakfast camp. So before about 10 o’clock in the morning he had already seen 11. In three weeks, moving into the interior of North Queensland, the only time he remarked about the Aboriginal fires was when he said they had gone a whole six hours, nearly half a day, without seeing an Aboriginal fire, indicating that there were no Aborigines living in that area. Our First Australians farmed with fire. On a station property that I just bought in the Gulf Country, where they did not used to farm with fire, a natural fire started, went for 850 kilometres and took out every single tree. A massive amount of CO was being produced naturally every year in Australia through fires. Those fires do not occur now. In that area of 850 kilometres, in the last 30 years there have probably been 1,000 fire breaks. On our station alone there would have been four or five fire breaks that fire would have had to break through, and it simply would not have broken through. Also, the body of grass has been reduced because the watering points have enabled a massive increase in our kangaroo population and, to some degree, our cattle population. CO was being produced naturally in massive quantities long before Europeans arrived here. We might say we want to go back to the natural condition, but human beings, the First Australians, were producing massive amounts of CO through fires. Let us turn to the answers, which I think any sensible person would look at. One is simply solar hot water systems. I think one house in five in Queensland was a housing commission or government house. The Queensland government could have moved with massive sales, which would have enabled our manufacturers of solar hot water systems to move on massive economies of scale, which would have meant very cheap hot water systems. Simply putting a very simple device on every government or housing commission home, or whatever they call them now, would have enabled us to cut out, I would estimate—and I have not done the figures in detail over recent years—possibly as much as 10 per cent, certainly around seven per cent, of our entire electricity requirements in Queensland, and I am sure that would also apply in the other states. If we planted a large amount of area under trees in Australia and we moved to the ethanol alternative then Australia would probably be producing less CO than it was producing before Europeans arrived and settled in this country. I put those things before the House and reiterate that each year every hectare of land under cane—which produces, I think, half, maybe two-thirds, of Australia’s ethanol—produces 150 tonnes of biomass. So if there are a million hectares out there then you have 150 million tonnes of biomass that is being taken, and most of that biomass is created by taking CO out of the atmosphere. We move into highly technical areas with how much of that recycles and how much does not, but we absolutely know that, at 600 litres per tonne of sugar, from that we would produce about 13 tonnes of sugar. The House can work out for itself how much petrol equivalent is produced from a hectare of cane. If you burn petrol, CO goes up in the atmosphere. If you burn ethanol, CO goes up in the atmosphere. But one hell of a difference is that with sugarcane it comes back down again. An officer did a very silly thing with CO, and I think he regrets what he did there. He did the figures for ethanol on the basis of grain and he did not do it on the basis of sugarcane. He said that we ploughed six times a year and cultivated—put the steel through the ground—six times a year. Mr Deputy Speaker Causley, you are well aware that now that we do not burn we only put the steel through the ground once every six years; not six times every year. 10000 Causley, Ian (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. IR Causley)—Order! The discussion is concluded. 98 COMMITTEES 98 98 98 16:23:00 Moylan, Judi, MP 4V5 Pearce LP 1 0 Mrs MOYLAN —On behalf of the Parliamentary Standing Committee on Public Works I present the 14th and 15th reports for 2006 of the committee relating to—Facilities upgrade to the Shoalwater Bay Training Area, Rockhampton, Queensland, and Facilities for troop lift helicopter, RAAF Base Townsville, Queensland. Ordered that the reports be made Parliamentary Papers. 4V5 Moylan, Judi, MP Mrs MOYLAN —by leave—The 14th report of 2006 addresses the proposed facilities upgrade to the Shoalwater Bay Training Area, Rockhampton, Queensland, at an estimated cost of $11.16 million. The Shoalwater Bay Training Area is an area of approximately 454,000 hectares located 80 kilometres north of Rockhampton, Queensland. The Shoalwater Bay Training Area provides a highly effective training location for the Australian Defence Force’s three services and a focal point for major national and multilateral combined arms exercises. These exercises commonly involve defence forces of the United States, New Zealand and the Republic of Singapore. The facility enhancements to the Shoalwater Bay Training Area involve the construction of an exercise control building and an urban operations training facility to support the upcoming exercise Talisman Sabre 2007. The committee visited the Shoalwater Bay Training Area in July this year, conducted a site inspection of the area and held a public hearing which was well attended by the local community. The committee investigated all aspects of the works, paying particular attention to the nature of activities within the area, environment and heritage concerns, and consultation. The committee noted that submissions to the inquiry and evidence provided at the hearing raised concerns with the consultation process. Defence assured the committee that it, through HLA Envirosciences, had undertaken all consultation as listed in its statement of evidence, including community meetings, escorted tours of the training area and specific Indigenous community consultation. In this regard the committee recommends that Defence continue its close ongoing consultation with all relevant groups and organisations with regard to the facilities upgrade of the Shoalwater Bay Training Area. Environment and heritage concerns for the inquiry included the use of depleted uranium and sites of heritage significance within the training area. Defence assured the committee that there is no depleted uranium used within the Shoalwater Bay Training Area by Australian or international forces. An environmental advisory committee has been established by Defence to ensure it is open and transparent about the environmental effects of its activities. Defence stated that the proposed facilities upgrade would not impact on any historical or heritage sites within the Shoalwater Bay Training Area. A number of heritage studies had been undertaken, including a specific study to identify and address Indigenous cultural heritage considerations. Subsequent to the hearing, the committee was provided with a copy of this report. Having given detailed consideration to the proposal, the committee recommends that the proposed facilities upgrade to the Shoalwater Bay Training Area, Rockhampton, Queensland, proceed at the estimated cost of $11.16 million. The committee’s 15th report of 2006 presents findings in relation to the proposed facilities for troop lift helicopters, RAAF Base Townsville, Queensland, at an estimated cost of $20 million. The purpose of the proposed works is to provide facilities to support the introduction of the multirole helicopter 90 aircraft or the MRH90, as it is commonly known. This will include the refurbishment, re-use and construction of facilities at the 5th Aviation Regiment facilities. The 5th Aviation Regiment is located in the south-western precinct of the RAAF Base Townsville, which is approximately seven kilometres from the Townsville CBD. The base is maintained for the defence and surveillance of the north-eastern areas of Australia. A concern raised at the hearing was the sharing of the runway between RAAF Base Townsville and the Townsville Airport. Defence were able to clarify for the committee that the runway belongs to the Commonwealth, and there is a joint user deed between Defence and Townsville Airport. At the committee’s request, a copy of the joint user deed was supplied to the committee subsequent to the hearing. The MRH90 aircraft is being introduced under the Defence Capability Plan Project Air 9000. Defence stated at the hearing that in June this year the Prime Minister announced the purchase of an additional 34 multirole helicopters as part of Project Air 9000. In this regard, the committee inquired as to the impact of this operational change and how it may affect Defence forward planning. Defence responded that it was confident the proposed works can accommodate the multirole helicopters and that RAAF Base Townsville is consistent with Defence future long-term planning. At the public hearing the committee sought assurances from Defence that ecologically sustainable development initiatives had been incorporated into the facility design. Defence confirmed that the cost-effective ESD was a key objective in the design, development and delivery of new and refurbished facilities. The list of features included insulation and weatherproofing seals, energy efficient lighting and lighting control systems, energy efficient plant and equipment, and specifications of waterless urinals and AAA water efficient fixtures. At the hearing the committee expressed its appreciation to Defence for the very comprehensive site inspection and the quality of the evidence provided to the inquiry, which greatly aided the committee in its consideration of the proposed works. Having examined all the evidence presented to it, the committee recommends that the proposed provision of facilities for troop lift helicopters, RAAF Base Townsville, Queensland, proceed at an estimated cost of $20 million. Once again, I thank my committee colleagues, Hansard, the secretariat and all those who assisted with the inspections and the public hearings. I commend the reports to the House. 100 16:30:00 O’Connor, Brendan, MP 00AN3 Gorton ALP 0 0 Mr BRENDAN O’CONNOR —by leave—I lend my support to the comments made by the member for Pearce with respect to the two projects to be undertaken in Townsville and Rockhampton. I agree with the comments that were outlined. I would like to say, as a member who was in attendance on both occasions, that we properly examined the matters that were before us. The Department of Defence provided sufficient information and followed up when we asked for further information. The hearing at Townsville also had the local federal member, the member for Herbert, in attendance and we provided an opportunity for him to make comment. That hearing went off without any particular problem. I was not able to be involved in the inspection of the Shoalwater Bay site. However, I have been to Shoalwater Bay before and I was able to see the site prior to the inspection provided to the Joint Standing Committee on Public Works on the day. We had quite a busy time at the public hearing. There were a number of community organisations in attendance. The federal member for Capricornia, Kirsten Livermore, was also in attendance. She raised some questions, ensuring that she was protecting the community’s interests. The local mayor was also in attendance. I would like to point out one thing which was raised informally on the day and which is something we might have to consider in relation to those types of hearings. Whilst the hearing on the day went well, and those who might have had some objections to the particular proposal were given the right to express those objections and they had access to the location, it might have been more fitting if the Rockhampton hearing had been held off-base. There were no particular concerns raised with me directly, but it might be more suitable, if there is a Defence project and there are citizens or organisations wanting to involve themselves in the public works process, to have that hearing located on neutral ground, as it were. Perhaps something like a municipal office or another location would be more appropriate. I also, along with the chair of the committee, thank Hansard, the secretariat of the committee and members who managed to find their way—you know how it is, Mr Deputy Speaker—to these regional places to do the work that is required of them. 100 BILLS R2608 100 Bill returned from Main Committee without amendment; certified copy of the bill presented. Ordered that this bill be considered immediately. Bill agreed to. 100 Mr DUTTON (Dickson —Minister for Revenue and Assistant Treasurer) 16:35:00 —by leave—I move: That this bill be now read a third time. Question agreed to. Bill read a third time. 101 BILLS R2393 101 Bill returned from Main Committee without amendment; certified copy of the bill presented. Ordered that this bill be considered immediately. Bill agreed to. 101 Mr DUTTON (Dickson —Minister for Revenue and Assistant Treasurer) 16:36:00 —by leave—I move: That this bill be now read a third time. Question agreed to. Bill read a third time. 101 BILLS R2532 101 Bill returned from the Senate with an amendment. Ordered that the amendment be considered at the next sitting. 101 BILLS R2577 Cognate bill: 101 BILLS R2613 101 Debate resumed. 101 16:38:00 Hatton, Michael, MP LN6 Blaxland ALP 0 0 Mr HATTON —Prior to going to the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006 and cognate bill, as a former member of the Public Works Committee many moons ago and as the current Deputy Chair of the Defence Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I would like to endorse the work that has been done at the Shoalwater Bay facility in preparation for Talisman Sabre in 2007. Together with the member for Gorton and others, I was present at the 2005 Talisman Sabre exercises. This is an area of immense importance in terms of Australia’s defence preparedness. We conduct operations there jointly with a number of other countries. It is of great importance and significance to the local towns. It is good to see that our normal public works processes have been undertaken and this has now been given approval to go ahead. Going to the matter in hand, which is this cognate bill, I will deal with it in this manner. The Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006 is relatively simple. It concerns one particular area that has been introduced. That is the beefing up or extension of the definition of a ‘fit and proper person’ to cover what are called high managerial agents of an education provider so that it includes the principal, teaching staff and some other members of staff. The principal point behind this is to remedy situations that have occurred previously where the question of whether an educational provider should continue to provide has been hindered by the fact that the minister could not take action if agents of that provider had been found wanting. The critical issue here goes to the extension of that ‘fit and proper’ test, which is covered by sections 9, 11, 17 and 83 of the relevant act. With the extension of that definition, provision is made in item 24 for automatic suspension of the provider’s registration where that provider no longer meets the fit and proper person test—and they need that in order to maintain their registration. However, in doing so, item 25 specifies who falls under that definition: people with management responsibility, teachers, consultants and principals of the provider. The fundamental reason for that is explained, and it is an important one: this will prevent former providers with an adverse history in the industry from taking up positions of influence with other providers. We know that was not the case previously throughout the commercial area and that it still happens. That is where companies engaged in other businesses are set up and run for a period of time, accumulating debts and entitlement questions for people on their staff. They then close down or fold and, within a relatively short period, they open up under the guise of another entity. So the problems they cause in the first place come back to haunt that particular part of industry. In this particular case, we have had several examples in the past of educational providers doing a similar thing—opening up, running courses and bringing in people from overseas but not running properly and not giving full value to those overseas students. In fact, there have been cases of providers robbing the students blind and treating them very poorly—and, in that process, damaging the reputation of the industry here. We are now dealing with not a small industry but our fourth biggest industry in Australia—a $7 billion a year industry. If you look generally at English-speaking educational providers providing international access, we are dealing with the third biggest provider. We are in single digits, but we follow the United States with 32 per cent and Britain with 15 per cent. I think we are up to around the area of nine per cent. The very reputation of those service providers and the guarantee that fit and proper people are providing those services guarantees two things. One is the continuing high reputation of the industry within Australia and, therefore, the ability for universities, technical and further education colleges, other higher education colleges and, indeed, schools to be able to market themselves, particularly within the Asian region, to bring students into Australia—and that here the agents of this organisation bear that responsibility as well. There is also a related provision where steps have been taken to ensure that things are put back on an even keel so that the minister can then move very quickly to reintroduce that legislation. The Bills Digest points out that, apart from this fundamental area, which is this fit and proper person test to apply to agents, the rest of the provisions of the bill are highly technical. They are part of the 41 amendments that were recommended by the group tasked with looking at the operation of the act, which came into being in the year 2000. The Education Services for Overseas Students Act, apart from guaranteeing our international reputation of quality education services, also concerns what guarantees can be given to the people who are the consumers of those services. Therefore, we have in part 2 of the bill a series of provisions to ensure that students who are using these services get some protection as well. So in this section of the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 2) Bill 2006 it is a two-way street: how do you ensure that students have a guaranteed position and how do you better regulate the industry and do so in such a way that the industry itself has to measure up? You can put in particular provisions that will cover students as well, but it is part of an attempt to balance things out. Related to this, the opposition will be moving—and the member for Capricornia is the relevant person—a significant technical amendment in relation to the annual registration charge. This goes to the fundamental position of who should be penalised if there is a fundamental failure, how readily and quickly that penalty should be imposed if that failure occurs, and what the implications of that would be. There are significant changes in this legislation to the automaticity of the treatment of a failure. The Australian Vice-Chancellors Committee have approached us and urged that this particular amendment be made. I encourage the Minister for Education, Science and Training to take full note of the fact that this is coming not just from the Australian Labor Party; it is on the advice of the Australian Vice-Chancellors Committee. The reason they have put this is that they are one end of the spectrum of service providers and, at the moment, with the changes that are currently there, they could, together with all of the other institutions, be knocked out of the ring peremptorily, because that is what is said here. The key point of our amendment is that there should be adequate notice of where a failing is and how it should be remedied. The specifics of our amendment are: The Secretary must give to each provider who is liable to pay an annual registration charge for a year a written notice stating the amount of the charge. Why is that important? Because that can come into question and into dispute. If it is in dispute and if it is indeterminate as to what amount should be paid, the current provisions of this legislation say that the provider can be simply knocked out, even though there is a dispute. So this is a question of certainty with regard to what they have to perform to. Secondly, our amendment would require a notice to be given by the last business day of January of the year. The amendment goes on: Subject to subsection (4), a registered provider must pay the annual registration charge for which the provider is liable by the last business day of February of the year. If the notice has not been given to a provider by the last business day of January, the annual registration charge for which the provider is liable must be paid within 28 days of the day on which the notice was given to the provider. So this is very specific and it goes to the question of certainty and guaranteed notification. The provisions as they stand do not demand that notification and they do not demand a guarantee of certainty. It would be wise for the government to take this up. I think it is a very good and a very sound recommendation. It also goes to the question of the intent of a great deal of this legislation, and that intent is to underscore the importance of this particular set of educational arrangements. Education is our fourth biggest industry. I was incorrect when I said nine per cent; it is seven per cent of international provision, versus 32 per cent for the Americans and 15 per cent for the United Kingdom. In a lot of ways it could be argued—and I think it is pretty right—that with this particular set of provisions about how you should deal with this new regime, the government are using a hammer to crack a walnut. The reason you could argue that that is happening is that they are catching up with a number of people who might otherwise not be brought in. There is an argument that you could actually identify them. The concluding comments in the Bills Digest are: Stakeholder response has expressed concern at ‘an ever increasing compliance and reporting load on providers, with impacts on customer service and administration costs. These costs will have to be passed onto students, which in turn will impact on Australia’s international competitiveness.’ That is something none of us should want to see. The comments go on: Furthermore, providers are concerned that the legislation imposes more regulation on all providers in an attempt to deal with the small minority of unscrupulous providers that could be dealt with under the existing legislation. That is a fundamental problem. We have experienced this previously. We have had two significant outbreaks. You have to put this into context and remember that this $7 billion a year industry of educating overseas students started in 1984. It started as a Labor government initiative. It started with John Dawkins as education minister. What Labor found from our experience in setting that up in the early years, when there was no experience whatsoever with this, was that you had to provide the correct framework but you had to have an enforceable framework for an industry that grew rapidly but demanded standards which would encompass not only Australia’s universities, technical and further education facilities and established schools but a plethora of independent providers—some good, some excellent, some poor and some downright dastardly. We had a series of episodes where people who should not have been in the industry were and they significantly damaged our reputation overseas. Another fundamental aspect of this is the key interaction between the education system and the Department of Immigration and Multicultural Affairs and their concern—which was covered in the background in relation to this legislation—about the enforcement of student visas. This is a balancing act. People gaining access to Australia for English language tuition in particular are allowed to work 20 hours a week. It is possible—and this has happened before; indeed, it is still happening—that people can break the provisions of that visa and simply use that as an entry to Australia and seek to work a 40-, 60-, or 80-hour week. They might work those hours in order to gain the income to cover their cost of entry, but working might be their prime purpose. That is why we toughened up our approach and the rules that govern this. I can see fundamental reasons for further clarification of that in this legislation and why it attempts to get at those service providers who pop up and continue to be problems. In section 1 of the bill there is the broad classification of ‘high managerial agents’. That is so that we can ping them and stop that inappropriate activity. There is, though, the fundamental problem that in going after those guys you create a much more significant problem for the institutions that do not cause you problems. There is a key thing about this legislation that needs to be looked at. When you talk to the peak bodies—and I will quote the end of the Bills Digest, because it is important—they claim that the $6 million collected in the annual registration charge provides the government with: ...the resources to be more proactive in identifying and dealing with those providers operating on the fringes of the industry who continue to take advantage of international students, and facilitate visa fraud and illegal immigration without imposing additional administrative, regulatory and compliance burdens on all providers. The problem is that that is what they have done in this legislation. There is a significant competitive difficulty when we are up against others. Trying to ensure the proper balance between allowing educational access and preventing that being used as a way to exploit our economic situation and to make a lot of money is the fundamental problem at the centre of this. That is underlined by an ESOS evaluation report by DEST. The report said: A gulf exists between the education system which views student participation and progress as primarily matters of educational judgement, and DIMIA which views them as facets of visa control. Given their different goals and cultures, a tension is inevitable, but it has been unnecessarily exacerbated by the lack of specificity in the Code. …            …            … ... the relevant National Code standards should be rewritten in terms that fit the realities of teaching, learning and assessment in each sector. Part of the solution to this conundrum lies in the fact that the provisions in the legislation that we have before us put in place a number of technical recommendations out of the 41 recommendations that were put up. There is an attempt to make the industry secure and to provide a balance between providers and those who are using those services. A fundamental and necessary part of this is a rewriting of the national code. Where is it? We do not know; we have not got it yet. It is not here; it is not extant; it has not been done. This is a case of the government saying, ‘We’ll put these measures into place and then down the track we’ll continue to process this and eventually get to it.’ This is indicative of the government’s approach to a range of bills and matters before this parliament. In the past two weeks or so, I have spoken on a number of bills where the problem has been exactly that. They should get their act together in this regard. The strength of this industry and the manner in which it is regulated mean that if you do not do the proper thing here we will lose our particular advantage. Singapore has recently entered the field of international education. The Singaporean government does not do things by half measures. We have seen that in the airline industry and in terms of the development that they are working towards in the pharmaceutical area, to have a large pharmaceutical techno-park in Singapore, and they are becoming a leading supplier throughout the area. They are in partnership with the Chinese government in, I think, Suzhou province, building one of the biggest active industrial parks in the world—one that is absolutely cutting edge and one that is at the core of the growth within China. Once they make a determination to enter a market, those who are in that market need to take note—us particularly. The source of the students being addressed in this bill is the very region that Singapore is at the epicentre of. We are at the periphery. It is much quicker to get from Singapore to virtually every part of the Asian region than it is from Australia. It is necessary that we make these changes and allow good educational service providers who will work within the bounds to operate more effectively than they have in the past and to build on and reinforce their strengths. While doing that, we need to kick out the people who have caused the fundamental problems—those providers who have gone beyond the mark or who are not fit and proper people to run those institutions. They damage brand Australia and they should be knocked down. (Time expired) 105 16:58:00 Ferguson, Martin, MP LS4 Batman ALP 0 0 Mr MARTIN FERGUSON —I appreciate the opportunity to address the House on what I consider to be very important legislation. The Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006 and the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 2) Bill 2006 go to our desire as a nation to further cement opportunities in education and to maintain our strong international reputation as a world-class provider of education to international students. It is important that we maintain this. Over the last 20 years, it is fair to say that, as we have sought to develop these export opportunities, we have had some failings on a number of occasions. I note that some of those occurred under the previous Labor government, with some English learning centres having difficulties in Australia. It is therefore very important that we adopt a commonsense approach to this legislation. For that reason it is largely supported by the opposition with an amendment, to be moved by the member for Capricornia, which is aimed at strengthening the intent of the bill. This amendment on behalf of the opposition is to guarantee that, in consideration of this bill, the House properly focuses on the need to strengthen consumer protection. The consumer protection measures for individual overseas students are exceptionally important because they go to the very nature of their study in Australia. It is about providing consistency within the education services sector for the overseas students framework. I think we all appreciate that Australia’s education services industry is our fourth largest export industry. Not only do we earn a lot of export dollars from it but it is also a key employer of Australians—more than ever in key regional and provincial centres of Australia. Think about the importance of the education industry in the context of export earnings. It is just behind coal, tourism and iron ore. Take that on board in the context of Australia’s export performance at the moment—the key economic achievements that are being made, for example, because of access to such important markets as China. In 2000 there were more than 153,400 overseas students studying in Australia. Almost half of these were completing courses in higher education. We should also appreciate that in Australia in the 21st century, overseas students are important for the purposes of strengthening our university sector and they are also a key component of our migration program. The system has changed for those undertaking approved courses in Australia. They now earn points which enable them to gain easier access to Australia. That is a proper program, which is also about strengthening our skills base in Australia. The reputation of our overseas program is therefore important for the education sector and export earnings and, more than ever, it is central to the migration program which Australia is so proud of. Over the past two decades we have seen a strong increase in the number of overseas students coming to Australia, to the point where the sector generated $3.7 billion for the Australian economy in 2000. The sector’s global reputation and integrity must be protected from issues arising from within the industry. These bills are about protecting the industry from itself because, on some occasions, the industry likes to take shortcuts for the purposes of getting the upper hand on some of the other competitors in the industry. Potential difficulties include the uncertain financial security of students who have prepaid course fees and the emergence of a small minority of unscrupulous providers—and I emphasise that it is a small number—who, if not tamed, can damage Australia’s reputation generally with respect to the education sector. It is also appropriately about inconsistent quality assurance. We always have to be careful to maintain the highest possible education standards to ensure that we are not only attractive in terms of cost but also in terms of the international standing of the degrees that we offer overseas students. The last thing we want is to lower our educational standards for the purposes of attracting export dollars and then give those who should not be able to migrate here a backdoor entry to Australia. We have to be about the highest possible education standards whilst also ensuring that, in terms of protecting the consumers, the overseas students are guaranteed a proper consumer protection system in Australia. That is what this debate is about. The issues I have raised are appropriately addressed in the bills. We are hopeful, especially if the government takes on board our amendment, that the bill will ensure that the overseas students who come to Australia to study on student visas receive a quality education and training opportunities appropriate to the financial payments they make to the Australian tertiary education sector. Since the early 1980s Australia’s reputation as a quality education provider has grown substantially alongside the economic growth experienced in many countries across Asia. Just think about the importance of maintaining this sector when you consider the huge increase in the number of students from places such as China and India. With further economic growth and development opportunities in those countries, there are going to be further opportunities for Australia on the overseas education front. To make sure that we have the best consumer protection system in place, we need to make sure that we protect a terrific employment opportunity for the purposes of providing overseas education services in Australia. That is about making an investment now, in a proper legislative framework, to guarantee our access to this market in the years to come. One needs to appreciate that is important, and I say that because Australia’s relatively isolated location globally sometimes presents additional challenges for the prosperity of this nation. As the shadow minister for tourism, I know that Australia is regarded as a long-haul destination for international visitors from Europe and the USA, in particular. But our close proximity to Asia, especially South-East Asia, has enhanced our capacity as a nation to absorb many students from Malaysia, Hong Kong, Indonesia, Singapore and China, who might have otherwise studied in England or America if not for our international reputation, which is just so important. We should never allow that reputation to be tarnished. We must always err on the side of being especially cautious with respect to not only the quality of education offered by our tertiary institutions but also the guarantee that the consumers, the students, have protection in law with respect to their own entitlements and consumer opportunities. Obviously, if one examines the facts, the majority of overseas students still originate from Asia, yet our reputation has appropriately spread far. We are now seeing an increasing number of international students from, interestingly, South America, including Colombia and Brazil, and Eastern Europe, including the Czech and Slovak republics. It is this reputation for delivering quality education to international students that owes its genesis to the Hawke Labor government. It was this government’s initiative in the mid-1980s that ensured Australia was an early player in the educational export industry which directly linked trade and policy. This policy included a decision in 1986 to allow full-time fee paying international students into Australia’s education system. Overseas students then—and we should not forget this—made up only a small component of the student body; today they are part of almost every tertiary institution and make up 40 per cent of all long-term visitor arrivals and over four per cent of all short-term visitor arrivals. I can think of the importance of this education opportunity by way of my own involvement in recent times with the Melbourne campus of the Central Queensland University where there were some difficulties with Indian students. Because of some complaints as to the operation of that Melbourne campus there was the need to make sure that not only were their education opportunities protected but also the quality of their education was protected. I am pleased to say that it seems that those difficulties are now resolved; the reputation of the institution has been maintained and the students themselves understand not only their responsibilities but also their rights as students paying a significant amount of money in Australia for a quality educational opportunity. That is the key to the debate. We are a large provider per head of population. Interestingly, we are the third-largest English-speaking provider of international education services—behind only the US and the United Kingdom—with seven per cent of the market. And that is why we have to have debates about proposals such as this because you maintain your market share by making sure it is a quality product at a reasonable price and giving the students proper consumer protections. This represents the outcome of a decision by the Hawke-Keating Labor governments to not only get in early to actually pursue these international market opportunities but also focus on quality in delivering education export services as part of our early entry into the market. Australia, as we all appreciate, has become more broadly recognised in the arena of international education and is appropriately regarded as a safe study destination that offers high-quality courses in a friendly environment. This influx of international students has been highly beneficial to Australia and has resulted in flow-on effects to Australian communities and industries. We are a highly successful multicultural nation and the education services sector of our Australian economy has added to the strength to the benefit of Australia at large. I say that because not only do overseas students continue to be a major source of revenue for Australian education institutions but also they contribute to the overall Australian economy and the social and cultural make-up of Australia. In 1994, overseas student fees amassed $883 million; in 2000, this figure more than doubled to reach $1.8 billion. In that same year, overseas students outlaid a total of $1.9 billion on goods and services whilst in Australia. This is of assistance to the tourism industry, for example, because it encourages family members and friends to also make a visit to Australia. Obviously there are many post-study benefits to a healthy education export industry, such as the contribution the international student program now makes to our migration program. I take the House to a report released in 2000 by the Australian Bureau of Statistics which indicates that international students continue to have an important influence on Australia’s skilled migration and tourism industries well after they have finished their studies in Australia. We all understand that having a positive experience studying here is likely to encourage overseas students to not only think about migrating to Australia but also maintain those social networks to visit Australia. Experience shows that these connections have also been important in facilitating trade opportunity access for Australia in a range of countries around the world. There is also an increased likelihood that family, relatives and friends, as I have touched on, will visit these students in Australia, bringing further opportunities for Australia on the export earnings front. These are all wins for Australia and they further stress the need to safeguard the integrity of our education export industry. I say that because tourism is one of the world’s fastest growing industries with world tourism forecast to grow from 714 million international passenger arrivals in 2002 up to 1.6 billion in 2020. Australia’s tourism industry must step up to the mark if it wants to maintain itself as a key player in this highly competitive global market because it is also about making sure that we can compete in a tough global market not only on the education services front but also with respect to tourism. Every opportunity therefore to enhance our reputation as the destination of choice must be seized and the education export industry is part of that desire by Australia to seize those opportunities. As well as adding to our cultural diversity, overseas students add to our skill supply by often becoming permanent residents after completing their study. In a survey conducted in 1992 on overseas students in higher education, 47 per cent said that they planned to migrate to Australia at a later time. One of the main reasons they gave was their high-quality experience of studying in Australia. There is also the added bonus for former overseas students wishing to migrate to Australia that they have Australian qualifications. In 1999-2000, 14 per cent of permanent residence grants made in Australia were to holders of student visas, and in 2000-01, around 50 per cent of applicants for skilled migration were former overseas students. These students are generally in their early 20s and from all corners of the world and while studying here have increased their desire to remain in Australia. When you think about it, for a nation facing a major skills shortage because of a lack of government commitment to the education of Australians, this represents a huge potential skilled workforce that should not be overlooked. Importing skilled labour is always a difficult issue; it must never be at the cost of Australian workers. We should be doing everything possible to not only train Australians but also create a welcoming education opportunity for overseas students. I also remind the House today that in addition to encouraging and strengthening the education services sector for international students we also have to pay more regard to investing in the skilling of Australia, and especially our apprentices and mature age workers who can add to our skill requirements at this difficult point in the economic cycle. Therefore, this is obviously an important debate. It is for those reasons that so many Labor representatives have sought to contribute to this debate. The failure of the government to participate in the debate is a damning indictment of its arrogance and its lack of commitment to parliamentary processes. All too often, if you go through the Notice Paper and consider the bills which are debated on a regular basis not only in the House but in the Main Committee, you find a raft of opposition speakers trying to contribute to improving the legislative process, yet very few representatives of the government, despite it having a significant majority, are willing to come in here and participate in debates in the House and Main Committee and also, more than ever, in the proceedings of those important institutions of the House—our policy committees, the various standing committees of the House and joint standing committees of the House and the Senate. I raise these issues because I think it is about time that the government moved away from the hubris which now exists on the other side of the House and got serious about debating legislation and contributing to a better legislative framework in Australia in order to secure not only our education opportunities in the future but also our export opportunities as a nation in the 21st century. We must have such debates, and this debate is one of them. I say that because there is an urgent need to consider some of these pressing issues not only in the education sector but also in the resources, tourism and health sectors. These are all complex debates that require people to come in here and properly represent their constituents. There are a range of opportunities for young people to come to Australia. I remind overseas students, as well as those who visit Australia but who are not necessarily studying here, of the importance of our backpacker working visa program, which has been extended from three to six months in a range of industries, such as the hospitality industry, and up to 12 months in the agricultural sector. These represent further opportunities for young people to come to Australia and experience Australia’s great tourism opportunities as well as being gainfully employed under agreed terms—namely, appropriate Australian wages and conditions, which the Australian government now wants to break down. This program will contribute to the needs of a range of Australian industries while also making it easier for some people to have extended stays in Australia. This is important, because we have a major skills shortage in Australia at the moment, in sectors such as agriculture, horticulture, resources and tourism, to name just a few. I say in conclusion that the member for Capricornia has, quite properly, come into this House and foreshadowed an amendment to what is a very important bill. It is a bill that cements our international reputation as a major provider of education services to overseas students. It is about guaranteeing that those students have proper consumer protection. I urge the government to give the amendment appropriate consideration. Labor supports the passage of the bill. We think the amendment will add to the government’s desire to maintain the integrity and reputation of our overseas student education sector. I commend the bill to the House, along with the amendment foreshadowed by the member for Capricornia. 110 17:18:00 Emerson, Craig, MP 83V Rankin ALP 0 0 Dr EMERSON —The Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006 and cognate bill help to assure the quality of Australian education and training institutions for overseas students. The legislation is designed to protect the reputation of Australia’s $7 billion education export industry. Certainly, as has been acknowledged by the member for Batman, we should reflect on the fact that this education industry was created initially by the Hawke and Keating governments. They saw wonderful opportunities for education exports from Australia, involving overseas students coming to Australia in large numbers and benefiting from our education system; and Australia benefiting not only from the revenue that was generated by their participation in education but also from the improvement in the diversity and quality of our culture and our links back to the countries from where those students came. That was all part of the integration of Australia into our region—a reorientation of the Australian economy and, to some extent, of Australian society, such that it was more interested and more engaged in our local region and neighbourhood. That program has been a wonderful success. However, from time to time it will need some repair work, some tending, to ensure that quality is maintained. Unfortunately, there have been occasions when the quality of our offering has not been up to scratch. That is due in part to unscrupulous operators—a small minority of the total sector. That is why this legislation is before us—to ensure that unscrupulous operators are not abusing the system and so that quality is maintained. The legislation is in part a consequence of an evaluation of the regulatory framework—an evaluation which made 41 recommendations. This legislation implements some of those recommendations while others do not need legislative change in order to be implemented. Labor is supporting the legislation but will move an amendment that provides for 28 days notice of the amount of annual registration charges to the education providers. This amendment will be moved by the member for Capricornia. The education system in Australia for overseas students has become an integral part of our immigration program, as the member for Batman explained. Overseas students coming to Australia can earn points for immigration purposes through their study. I think that is a good thing because we will continue to need a strong immigration program in the coming decades as our own population ages and as the proportion of working age Australians in the total population consequently falls. An immigration program will play a significant role, along with other measures that can be taken, in ensuring that we are successful in combating the adverse economic consequences of the ageing of the population. In a book of mine that was published earlier in the year I suggested the idea not only of the students themselves being given some extra consideration in remaining in Australia but that, while they were studying, their parents and other family members might be encouraged to come to Australia. It stands to reason if parents are so motivated to send their children to Australia to study that those parents might themselves make a good contribution to our society. This is all part of the challenge of the 21st century, a challenge that has been well explained by Richard Florida in two books, the first called The Rise of the Creative Class and the second The Flight of the Creative Class. By a ‘creative class’ Florida means those people who have had the opportunity to go to university, whether that be in the humanities, architecture, medicine or scientific research. He identifies, in a broad order of magnitude, about 150 million such people around the world. And he suggests that, more than any other factor, the availability of people who constitute the creative class will determine the wealth and prosperity of parts of the world in the 21st century. I think there is a lot of merit in that argument. Richard Florida does not specifically deal with countries but with parts of countries. As is the case now, and it may be increasingly so in coming decades, there are parts of countries that are wealthy and other parts that are struggling. Florida observes that the prosperous and most tolerant parts of countries tend to be those that have high concentrations of the creative class. So the great contest of the 21st century will be to generate, attract and retain members of the creative class. Florida’s argument is that, rather than building businesses and trying to attract people to those businesses, communities should seek to attract the creative class, and businesses will follow. Again in the book that I released, I argue not only that we should do much more to create, attract and retain our own creative class but that perhaps regional areas in Australia could be encouraged to do the same and that a visionary government could contribute to that great task, thereby creating a band of gold of our dynamic regional centres which obviously would include regional universities. That is the sort of challenge Australia confronts in the 21st century—the intense competition for people who have been educated in universities and vocational training institutions. To give absolute currency to this debate, I am able to refer to the OECD report Education at a glance that was released overnight. My colleague the shadow minister for education and Deputy Leader of the Opposition, who is in the chamber now, pointed to the revelations in this report and asked a question of the Prime Minister earlier today which he fobbed off. A report from the OECD comparing Australia’s performance with that of other members of the OECD should ideally be a goldmine, but this one is a minefield—and I will explain that conclusion as I continue my remarks. On the question of overseas students, it is clear from the report that Australia is more heavily reliant on overseas students than any other OECD country. Indeed, the report says: Australia, Austria, Switzerland and the United Kingdom display the highest ... proportion of international students in their total tertiary enrolment. It goes on to say: In Australia, 16.6% of tertiary students enrolled in the country have come to the country expressly to pursue their studies. That is not a bad thing; it is a good thing. But it also begins to tell another story, and that is of the neglect of our higher education institutions by the Howard government for domestic students, Australian students. We welcome overseas students coming to our country, for all of the reasons that I have mentioned, but it should not be a substitute for investment in the education of Australian students; it should be a complement to it. As this OECD report points out, that really has not been the case because the number of Australian undergraduate students has in fact declined, in the last two years for which statistics are available, for the first time in half a century. The report goes on to say, in relation to the contribution of international students to graduate output: In Australia, Canada, Switzerland and the United Kingdom, more than a quarter of tertiary-type A second degrees or advanced research degrees are awarded to international students. This pattern implies that the true domestic graduate output is significantly over-estimated in overall graduation rates. This over-estimation is most important for tertiary-type A second degree programmes in Australia and advanced research programmes in Switzerland and the United Kingdom, where international graduates represent over 35% of the graduate output. When the Deputy Leader of the Opposition asked the Prime Minister a question today on our performance in producing Australian undergraduate students at our universities, he bundled together, I believe, all students—overseas and domestic students—to inflate the number. And this is what this OECD report is saying; it is making a very legitimate point that we deserve to know how many of those students are from overseas and how many are Australian. He sought to disguise the fact that this government has tragically and massively underfunded university education for Australian students, such that many universities have had to rely very heavily on overseas full fee paying students in order to sustain their viability. Indeed, since the change of government in 1996 virtually all the enrolment growth in Australian public universities has been in the area of overseas full fee paying students. There has also been a small lift in the proportion of Australian full fee paying students, but it is from those who are subsidised through the HECS arrangements that we get the result that enrolment growth has been virtually non-existent. In relation to immigration and overseas students, the OECD report says: ... the education systems where international students contribute most to the graduate output are those of countries with a long tradition of immigration favouring skilled individuals ... It mentions specifically Australia, Canada and New Zealand. It goes on to say: In this perspective, the contribution of international graduates to the total graduate output can also be seen as a measure of the size of the potential pool of highly skilled immigrants upon which host countries can capitalise to enhance human availability in the economy. Hear, hear! And that is why Labor does welcome overseas students into this country. But as I said, the way it has been managed by this government has resulted in our universities relying very, very heavily on overseas students for their revenue. That is because the government has not properly indexed, and therefore increased in line with costs, the payments to our public universities. From this OECD report the Deputy Leader of the Opposition has revealed, in a statement today, an absolutely stunning indictment of this government. That is that public investment in our TAFEs and universities has declined by seven per cent while in other OECD countries it has increased by an average of 48 per cent—a 48 per cent increase on average for other OECD countries, but in our tertiary education institutions a decline of seven per cent. The OECD reveals what has been going on in this country since the change of government, because it says: ... many OECD countries with the highest growth in private spending have also shown the highest increase in public funding of education. This is referring specifically to tertiary education. It says: This indicates that increasing private spending on tertiary education tends to complement, rather than replace, public investment. The main exception to this is Australia, where the shift towards private expenditure at tertiary level has been accompanied both by a fall in the level of public expenditure in real terms ... What an indictment that Australia stands out amongst OECD countries as a country where increases in private spending on tertiary education have substituted for, rather than complemented, increases in public expenditure on tertiary education. What this government has done is to shift the burden of investment in higher education and in TAFEs onto private individuals and onto the private sector, and it has shirked its responsibility to invest in the talent of our young people. As a consequence of the failure to invest properly, the OECD report finds that in Australia the main reason for the increase in the private share of spending on tertiary institutions between 1995 and 2003 was changes to the Higher Education Contribution Scheme that took place in 1997. Who was in government in 1997? The Howard government was, and as soon as it got its hands on the reins of government it moved to very sharply increase HECS fees in this country. Depending on the course, those increases were anywhere from around 30 per cent to more than 100 per cent. This government has no philosophic commitment to public investment in our public education institutions, in our higher education institutions. It believes that a university education is 100 per cent a private good and that there is no public benefit from investing in education. And yet even the driest, most economically rational economist will tell you that there are very, very substantial spillover benefits for the rest of society from investing in higher education and in education more generally. But this government, driven by blind ideology, does not agree with that, and believes that individuals who are going into our education institutions generate only benefits for themselves and not for the rest of the society. We know that because for most of the last few years this government, instead of investing in our higher education institutions, has been absolutely obsessed with voluntary student unionism and enforcing, coercing and bullying higher education institutions to adopt its own blind ideological position on Australian workplace agreements. When the now Minister for Defence was education minister we spent hours and hours in this parliament debating changes to enforce voluntary student unionism, instead of having a proper debate about investing in the nation’s future and about what we need to do to ensure that we are creative and productive, and have a decent, prosperous and harmonious society in the 21st century. We desperately need university reform in this country. It will not come from the coalition because it just does not believe in it. But it will come from Labor. The Deputy Leader of the Opposition has produced a very well considered and creative package of higher education reforms that encourages diversity, that turns away from the one-size-fits-all approach of the last 20 years and that questions the government’s approach of ‘Moscow on the Molonglo’, of determining from Canberra the minute details of the operations, courses and practices of universities all around Australia. Labor’s proposals reward and encourage excellence. They are subject to quality assurance. Just as this legislation provides some quality assurance, Labor believes in quality—not in a highly interventionist approach but one that ensures our public universities are absolutely up to scratch. That is where we are. The OECD report is not a goldmine as it should be; it is a minefield for the coalition government because of its neglect of higher education in this country. It will only be a Labor government that invests truly because it is only a Labor government that believes in higher education in Australia. 114 17:38:00 Macklin, Jenny, MP PG6 Jagajaga ALP 0 0 Ms MACKLIN —I am pleased to speak on the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006 and the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 2) Bill 2006 that amend the Education Services for Overseas Students Act, because Labor certainly does believe that Australia’s international education services industry must be properly regulated to maintain high-quality standards, and that international students studying in Australia must have the strongest consumer protection measures to make sure their rights are protected and that they receive the education they pay for. Firstly, I thank the member for Capricornia, Labor’s shadow parliamentary secretary for education, for taking the lead for the opposition in the consideration of and response to these bills. The member for Capricornia has dealt with the details of the bills and has indicated Labor’s support. In my contribution I want to speak briefly about why a strong consumer protection and quality assurance regime for international education fits as part of Labor’s overall commitment to lifting quality and standards in higher education. As many members know, education services are Australia’s fourth largest export industry, worth about $8 billion annually. As a nation with record and sustained trade deficits, when we have something the world wants to buy our national government must be ever vigilant to make sure our viable exports remain valued. While commodity prices can rise and fall and rise again with changing international demand and prices in the global marketplace, our education services sector is sustained by Australia’s reputation as a high-quality provider. Protecting the reputation of a service involves a different equation from reducing the supply of a physical commodity. Reputations, of course, are built over time, potential users taking a longer term assessment. However, they can be quickly compromised by education service providers who mistreat students and by students dissatisfied with their education experience spreading the word about poor quality back home. Labor has been a very strong supporter of the education services sector for some time. In fact, it was the Hawke Labor government that allowed Australia’s universities to accept international students in the 1980s, opening up this very important new market for Australia. The latest figures show that from that decision of 20 years ago there are now 239,000 overseas students studying in Australia. About 136,000 of these are at an undergraduate level, and over 70,000 are undertaking masters by coursework programs. The international student body has grown rapidly over a decade from less than 10 per cent to around 23 per cent of enrolments on average. In 13 universities the international student body is over 25 per cent of total enrolments. Enrolment growth has, however, slowed over the past two years, and last year the total number of overseas students commencing in Australian universities actually fell. The countries of origin have also changed in recent years away from tradition markets, such as Malaysia and Singapore, towards India and China. These students are very important to our education system. International student fee income provided $2 billion to our universities in 2004. This rapid enrolment growth, a feature of the system until last year, with its accompanying income generation has followed a period of cuts, neglect and underfunding during the period of the Howard government. Growth in international student income contrasts sharply with public investment by the Howard government in tertiary education. According to the OECD—and new figures out last night confirm this once again—Australia is the only developed country to have reduced public investment in tertiary education since 1995. While Australia went backwards, the rest of the world increased their investment. The developed world knows that it is important for their future economic prosperity to put public investment into the tertiary education system. It is only in Australia where this economic message is constantly ignored and, as a result, Australia is falling behind. Our universities have turned to international student income to supplement, and supplant, proper funding from the Howard government. The cuts of this government that has now been in power for 10 very long years have hurt our university sector badly. The cuts are worth about $5 billion since 1996 and they are having a serious impact on quality. Funding cuts have pressured universities to chase revenue, increase student numbers, raise student to staff ratios and class sizes, cut back tutorials and cut corners on student assessment. The consequence is that the quality of Australian higher education is under pressure with, most seriously, risks to the reputation of Australian degrees. The government recognised the problem in 2002 when its Crossroads review noted allegations of: ... falling standards, courses lacking academic rigour, deterioration of the calibre of students entering university, and claims of soft marking. But I am sorry to say nothing was done by the former minister for education and nothing has been done by the current Minister for Education, Science and Training to address these concerns. Concerns have also been raised by international students, foreign governments and employers about the quality of offerings from some higher education providers. In June 2006, the Asia working group advising the Prime Minister’s science and innovation council reported: There is the belief held by the working group that the quality of our university degrees is declining. You would think that the federal minister for education would take some notice of these very significant concerns. Unfortunately, they seem to be falling on deaf ears. These are the messages that the Howard government has been getting. At the same time, we have had the rest of the developed world supporting their universities, we have had growing competition coming from other countries and we have had the expansion of domestic supply within Australia’s traditional source countries of South-East Asia—notably Malaysia, Singapore, Hong Kong and Indonesia. Those countries, which used to send significant numbers of overseas students to Australia, are now recognising the importance of developing their own higher education sectors to a very high quality. Of course, if we do not pay attention to the quality of our degrees, we are going to lose this very significant market. The concern is that we will no longer be the favoured destination for high-quality students. Our universities are certainly very concerned about this prospect. Much depends on the reputation of higher education, the quality of student experiences and the standards of degrees in Australia. Our competitors can be quick to exploit deficiencies in the quality of Australian providers. There are no systems in place in Australia for assuring the standards of degree quality. Compared with 30 years ago, in higher education there are now four times the number of students, twice the number of universities and 10 times the number of private providers. The rapid growth in the number of students and new higher education providers has led to concerns being raised about the quality of Australian degrees. While the measures in these bills here today tinker with some of the systems under the ESOS Act, they do not go to the heart of the quality issue. Unfortunately, the government has no plan to deal with these very serious concerns. We have a new minister for education who is very big on rhetoric but does not seem to have either the ideas or the capacity to implement the changes that are needed. We must lift quality and standards in our universities. Australia needs a national commitment to tackle the problem of standards and quality head-on where it exists. Otherwise, the effectiveness of our universities to attract international students will be lost. Just two months ago I issued Labor’s higher education white paper, Australia’s universities: building our future in the world, which focuses on strengthening the quality of educational offerings in higher education in Australia. We need to raise higher education standards generally to give our students the best opportunity to develop their abilities and to build a competitive economy. Students deserve the confidence that they will receive a high-quality education and that their degree will be recognised both in Australia and overseas as a credible qualification for work and further study. Employers are entitled to expect the highest standards when they hire Australian graduates. They should understand the meaning of different grades of higher education attainment. We should expect the best from our universities because of the significant public investment that they receive. It is not to the advantage of any higher education institution to be part of a system that does not assure at least minimum standards of quality in its educational qualifications. Yet at the moment, and this has been the case for the 10 years we have had this government, there is no way of knowing whether minimum acceptable standards in a degree are achieved. We have no reliable information about the grades of achievement of different graduates from different institutions in different fields of education. Labor’s commitment is, first of all, to increase public investment in higher education, and that is predicated on a reciprocal commitment by universities and other providers to demonstrate higher standards of higher education quality. Labor will act to protect our universities’ reputation for international excellence, which they have taken generations to build but will only, unfortunately, take a moment to compromise. Very sadly, we have a government in Canberra that has no plan, no policies, to protect and raise educational quality in this country. Even the tinkering is incomplete, and it is certainly not thought through. While these bills do take some action to deal with some of the issues raised in the independent evaluation of the ESOS Act tabled over a year ago, they do not address all the recommendations. I know that Labor’s Northern Territory senator, Senator Crossin, has been in correspondence with the minister regarding recommendation 3. That is about the extension of the ESOS legislation to enable providers in the external territories, especially Christmas Island, to register on the Commonwealth Register of Institutions and Courses for Overseas Students, or CRICOS, as it is known. It is disappointing that this and many of the other recommendations from the review have not been acted upon. The member for Capricornia has indicated that Labor intends to move a substantive amendment to the first of these bills. The No. 1 bill proposes a new provision to automatically suspend providers from CRICOS if they do not pay their annual registration charge by the due date. Clearly the government have identified late payment of the annual registration charge as a problem, which they are seeking to remedy by imposing a very severe sanction. During the estimates process, Labor senators raised this issue with the government. In answer to our questions the department revealed that, of the 1,193 providers liable to pay the registration charge this year, 493 had not paid by the due date. Yet all bar one provider has since paid, and the CRICOS registration of the outstanding provider is currently suspended. Suspension from CRICOS is a very serious and severe sanction, as registration is mandatory for all Australian providers wishing to operate in the international student market. Automatic suspension for nonpayment of the annual registration charge could be unfair in circumstances where the department of education is under no obligation to inform the provider of their precise liability in a reasonable time before payment is due. The amount each provider is liable to pay as their annual registration charge is determined by the Education Services for Overseas Students (Registration Charges) Act 1997. Section 5 of that act calculates the charge at a $300 base amount plus a $25 per student contribution based on enrolments with the provider in the previous year. The annual registration charge relies on an agreement between the provider and the department on the total enrolments in the previous year. Resolution of discrepancies can affect the amount to be paid. Automatic suspension for nonpayment by the end of February, when the department is under no obligation to detail the extent of liability, could certainly be seen as unfair. Labor’s amendment would require the department to give registered providers 28 days notice of the specific amount they are required to pay as the annual registration charge under section 23 of the act. Suspension from CRICOS would only be automatic when a provider fails to pay the charge 28 days after a final determination of their liability is received. This amendment was suggested to the opposition by the Australian Vice-Chancellors Committee, which is concerned about automatic suspension when providers may still be in discussion with the department about final student enrolment numbers; especially given that payment is due by the end of February. I urge the government to support Labor’s practical amendment. 118 17:54:00 O’Connor, Gavan, MP WU5 Corio ALP 0 0 Mr GAVAN O’CONNOR —The bills we are debating here today, the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006 and the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 2) Bill 2006, seek to amend the Education Services for Overseas Students Act 2000 and follow a review in late 2003 and subsequent recommendations proposed to improve the operations of the act. This legislation that we are debating here today, which is complementary to the original act, is, according to the second reading speech by the Minister for Education, Science and Training, designed to: ... ensure the quality of education and training provision to overseas students, provide overseas students with consumer protection and maintain the integrity of the student visa system. These are very important objectives which the opposition has no hesitation in supporting in this place. Since the decision by the Hawke Labor government in 1986 to open up Australian education to full fee paying students, Australia has seen a dramatic growth in the export income from the provision of educational services. At this time the industry ranks fourth as an earner of export income. There were very sound economic reasons as well as other reasons for this decision, which has yielded enormous economic benefits and other benefits to this country. The Hawke government was a trade orientated government which had the foresight to see that Australia’s global future would need much more than a dependence on digging resources out of the ground or exporting agricultural commodities to secure future living standards of Australians. So it took an inward-looking economy that had been stagnating under years of Liberal-National coalition government and gave it an outward and global orientation. That had as a consequence an enormous growth in manufactured exports and service exports. Educational services became a central factor in the enormous growth in the services sector. Educational institutions around Australia responded to the Hawke government’s economic leadership and its foresight, and the rest is really a matter of history. Where previous coalition governments had failed to capitalise on Australia’s economic strengths, Labor in government provided not only the leadership but the financial support to those institutions that had the will to get into the export ring. The Hawke Labor government recognised that the quality and the diversity of our education sector was an economic strength with obvious potential for earning export income, and also that it was a sector that had the potential to do much more for Australia’s position in the region and the world. Labor saw the educational experience for overseas students as a vehicle for elevating the understanding of Australians and their culture by others in the region. And here we are 20 years later, where in our region many government ministers, high-ranking businessmen, public servants, educators and others fondly recall their educational experience in Australia. You simply cannot buy that goodwill, and any Australian government investment in this area of activity has borne economic and other advantage well beyond the value of the initial investment. We on this side of the House cannot understand a government which in 10 long years in office has cut to pieces educational expenditure in this country. It makes no economic sense for Australia not to be at the top of the educational tree in this global trading environment. I would have given ministers in this government the benefit of the doubt, having come through the political ranks in their respective parties, that they would not engage in the politics of stupidity over the past 10 years and that they would see, as the Hawke government saw before them, the enormous advantages that could accrue to Australians and to this nation by enlarging and expanding our educational sector. But, as the member for Jagajaga outlined in her excellent contribution to this debate, the decline in quality that is now occurring in our tertiary sector and the enormous pressure that it is under are because of the actions of this government. I cannot believe the crass stupidity of the Howard government in this area. This is a government that has failed Australians and now we are seeing reports like the OECD’s, which are shining the spotlight on the comparative disadvantage that Australia now experiences compared with other countries around the world of similar economic structure and economic development. This government has for 10 long years, with its ideological obsessions, been squandering the great advantage and legacy that were given to it by the Hawke and Keating Labor governments. That is a cause of great disappointment, because I would have thought the art of politics was not engaging in an orgy of stupidity in a particular sector but picking the eyes out of the strengths of a previous government and building on them in the interests of the Australian community. That would seem to me to be a logical policy proposition, but it is one which is lost on the tired and visionless government that we have in place. I have always said that the Prime Minister’s great vision for this nation was a limited one—and, of course, it is. It was basically based around implementing a goods and services tax, selling Telstra and wrecking the lives of Australian working families, including those in the education sector, through a draconian industrial relations system. If that is all the Prime Minister has to show for his time in Australian political life, you would have to rate him as an abject failure. The government that he is leading—and which I am sure will shortly have its mandate terminated by the Australian community—similarly reflects the lack of vision that the Prime Minister has shown throughout his political career. I would have thought the objective of putting Australia front and centre in the education of the world was something that we could all aspire to in a bipartisan way. To do that and to maintain it you would need to ensure that our educational institutions were properly funded, that we were world leaders in all the benchmarked areas in the tertiary sector, and that people were looking to Australia. I know the government will argue that per head of population, or whatever criteria it might employ, Australia leads the world and that we are the third-largest provider of export services in the English-speaking world behind the United States and the United Kingdom. So what’s new? The government was left a sector that was in an enormous pattern of growth and, thanks to the vision of the Hawke and Keating governments and the basis and the foundation that they laid in this particular sector, we have seen Australia’s educational exports grow. Like any industry sector that has undergone a rapid expansion, it is not always, and not on every occasion, plain sailing for those institutions or for overseas students. That is the reason for the legislative framework we are debating here today and the reason why Labor will be supporting the thrust of this legislation. As I have mentioned, Australia is now the third-largest English-speaking provider of educational services, and we hold seven per cent of the market behind the United States of America, with 32 per cent, and the UK, with 15 per cent. Per head of population, we are the largest provider. It is therefore very important that everything is done by government and educational providers in this market to secure and expand our market share—and so the necessity for this legislation to ensure that students get the education for which they have paid and that students comply with their student visa conditions. There are many technical aspects to this legislation which are outlined in the explanatory memorandum that has been provided to members of this House by the minister. I note her presence in the chamber at this point in time and I thank her for that explanatory memorandum. It goes to a whole host of technical provisions that I will not be discussing in detail today. Suffice to say that the measures that have been included in this bill are a positive refinement that the opposition will support because we support educational institutions that are cutting the mustard in this increasingly competitive market, and we want to see and ensure that the legislative framework that governs their operations and sets out the immigration and responsibilities of overseas students is of the highest quality and standard. The Geelong region is blessed in that it is served by two educational institutions that have very high international reputations—the Gordon Institute of TAFE and Deakin University. Both were early players in the provision of educational services to overseas students and both are active participants today in offering courses to overseas students. The Gordon currently, in 2006, offers education across a variety of courses to 113 inbound students. Traditional inbound student markets for the Gordon have been Hong Kong, Korea, Japan, Taiwan and Thailand, and we are seeing now some expansion in developing markets in China, India, Indonesia and South America. I note that around 65 per cent of those 113 students come from Korea, Japan, China, Hong Kong, Malaysia and Taiwan. That is a very significant number of inbound students from our region. Some 70 courses are offered by the Gordon to international students. Not only does it offer these courses; it also hosts delegations and offers training in specific areas. I note in the 2005 annual report the involvement of the Gordon in providing training to Vietnam Airlines Corporation and Vietnam Steel Corporation. It has also provided training and support to the Toba Pulp Timber Mill in Sumatra, Indonesia. The Gordon continues to promote its educational services and project itself into our immediate region. Current enrolees at the Geelong campus of the Deakin University number 616. The main sources of these students are India, 16 per cent; Zimbabwe, 14 per cent; and China, 13 per cent. The students participate in a range of courses, including commerce, engineering, arts, construction, management, public relations, education and information technology. Deakin has projected that these student enrolments will grow at around 10 per cent in coming years. Both institutions take their responsibilities to overseas students who choose to study in Geelong very seriously indeed and offer them a range of support services on their arrival and while they are studying. They assist them in their search for housing and to get a better command of the English language to help them in their studies. In addition, they assist them in a host of other areas related to their personal needs. I note that the range of support services offered by Deakin University is quite extensive. It offers exchange/study abroad orientation programs to introduce new students to the university and to Australian life and culture, and it offers an international enrolment and orientation program, which certainly goes deeply into the demands of university life and various other matters related to studying in Australia. It provides reception service and post-arrival support, which involves airport reception and first-needs support to assist the student in settling in. That includes peer support programs for friendship, links and networking. Also provided are shared experiences and support in banking, first-meal shopping, campus familiarity, city orientation, off-campus housing appointments and other support materials. It provides a community links program to connect the student with local service organisations, sporting clubs, community radio stations, churches et cetera, and an international student orientation camp which is run out of the faculty of education. The university provides academic monitoring, networking and life skills seminars, and an international students program is run by the faculty of the arts. I mention these because I think there has been a tendency in the past for some educational institutions that have entered the export services arena not to meticulously plan and prepare to support students who choose to undertake courses with them, and I am very pleased that Deakin University is providing these sorts of support services. I was recently part of an Australian parliamentary delegation that visited Malaysia and Japan, and the provision of educational services to those countries by Australia was the focus of our discussions with senior ministers and others in the business communities. Some quarter of a million Malaysians have been trained in Australia and that can only be a good thing for Australia. In conclusion, Australians now live and work in a global village and, across the globe, students are seeking to be educated in environments other than their own. It is estimated that the world demand for higher education could increase from around two million to eight million students by 2025. We now have a global education market which is rapidly expanding, with enormous growth being generated by demand from Asian countries—particularly emerging economic giants such as China and India and established developing economies such as Japan, Taiwan, South Korea and other Asian countries. It is a simple fact that economic growth generates a strong demand for education and alters a country’s demand profile for educational services. It is very important that Australia maintain its pole position in the provision of educational services.—(Time expired) 121 18:15:00 Bishop, Julie, MP 83P Curtin LP Minister for Education, Science and Training and Minister Assisting the Prime Minister for Women’s Issues 1 0 Ms JULIE BISHOP —in reply—We have before the House this evening for consideration two bills to amend the Education Services for Overseas Students Act 2000, the ESOS Act. The ESOS Act and its complementary legislation represent international best practice in the regulation of education and training delivery to overseas students. The growth of the industry to date is in no small part due to the effectiveness of this regulatory framework. However, Australia’s position as market leader is under challenge from our traditional competitors, a number of whom are duplicating aspects of the ESOS framework. In this environment it becomes critical that Australia continues to set the pace in the effective regulation of our international education and training services to remain competitive. The amendments to the ESOS Act in the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006 and the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 2) Bill 2006 demonstrate Australia’s ongoing commitment to ensure the delivery of high-quality education to international students studying in Australia. The ESOS Act protects the high-quality reputation of Australia’s education and training export industry by regulating education and training providers, providing consumer protection for overseas students and ensuring the integrity of the student visa program. The evaluation of the ESOS Act made recommendations for the improvement and clarification of provisions to support its effectiveness. The amendments proposed in these bills will have a beneficial impact on each of the three main objectives of the ESOS Act. The ESOS Act safeguards the interests of overseas students by setting standards for education and training providers. All providers who deliver education and training to overseas students must be registered on the Commonwealth Register of Institutions and Courses for Overseas Students, CRICOS. Before registration, in addition to meeting state based quality requirements, providers must demonstrate that they are fit and proper to be registered. The ESOS Act currently applies the ‘fit and proper’ test to providers and their prescribed associates. Amendments will extend the test to others with positions of authority with providers and will allow for the ‘fit and proper’ test to be applied not only upon registration but at any time during a provider’s registration. Sanctions can be applied for noncompliance. These amendments will prevent persons with a history of noncompliance with the ESOS Act from taking up positions of responsibility with other providers and will allow for enforcement action to be taken against providers who no longer meet the ‘fit and proper’ requirements. They will provide a further guarantee of the credentials of CRICOS registered providers. The ESOS Act provides three levels of consumer protection for overseas students. It places refund obligations on registered providers, allows for placement in any alternative course by the provider or their tuition assurance scheme—another acronym, TAS—and establishes the ESOS Assurance Fund to place a student in an alternative course or provide the student with a refund if the two previous consumer mechanisms fail. Amendments will oblige a provider who offers a student placement in a course as an alternative to a refund to obtain the student’s acceptance of the placement in writing. If there is a claim on the fund, this will clarify whether a suitable offer has been made and whether or not it has been accepted. The ESOS Assurance Fund was established with Australian government support and is now maintained by annual provider contributions. This bill addresses industry concerns that the current provisions of the act which govern fund refunds may result in some students effectively receiving part of their education at no cost, which was not the original intent. This instance could occur if a student receives academic credit or recognition of prior learning for completed study in addition to a full refund from the fund. An amendment will now allow the fund manager to reduce the amount of a refund where it can be demonstrated that a student has received academic credit or recognition of prior learning for study undertaken with their former provider. The legislation should work to ensure that students receive the education and training for which they have paid and that they do not effectively receive part of this education at no cost if a provider fails. Similarly, the introduction of a 12-month sunset clause for claims on the fund will provide the fund manager with more certainty regarding liabilities and assist with managing the fund’s assets. To date, lack of access to student information has hindered the TASs—tuition assurance schemes—in fulfilling their placement function, but an amendment which will give TASs access to student information will facilitate a faster placement of students in alternative courses. The ESOS Act supports the integrity of the migration system by placing obligations on registered providers to recruit only genuine students and to monitor and report on breaches of visa conditions relating to attendance and satisfactory academic performance. A breach of these visa conditions may result in the cancellation of a student’s visa. The extensive consultation with industry undertaken as part of the ESOS evaluation revealed that the attendance and satisfactory academic performance visa conditions no longer reflect educational practice. The Department of Education, Science and Training has been working with the Department of Immigration and Multicultural Affairs and peak bodies to develop changes to providers’ monitoring and reporting obligations that better reflect teaching, learning and assessment in each sector while maintaining the visa integrity intent of the act. The revised national code will reflect the outcome of these discussions. The migration regulations will be amended to impose student visa conditions that support the revisions to the national code, and these visa conditions will be prescribed in the Education Services for Overseas Students Regulations 2001. In conclusion: protection and enhancement of Australia’s reputation for providing reliable and high-quality education is absolutely crucial to achieving sustainable growth of this important export industry, which is currently worth over $7½ billion annually to the Australian economy. These measures will further strengthen the ESOS regulatory framework and ensure that Australia continues to be a destination of choice for overseas students. I commend these bills to the House. Question agreed to. Bills read a second time. 123 BILLS R2577 123 Bill—by leave—taken as a whole. 123 18:22:00 Livermore, Kirsten, MP 83A Capricornia ALP 0 0 Ms LIVERMORE —I move the amendment as circulated in my name:                 Schedule 1, page 5, after item 16 (after line 30), insert: 16A  Section 23 Repeal the section, substitute: 23  Annual registration charge          (1)    The Secretary must give to each provider who is liable to pay an annual registration charge for a year a written notice stating the amount of the charge.          (2)    A notice under this section must be given to a provider by the last business day of January of the year.          (3)    Subject to subsection (4), a registered provider must pay the annual registration charge for which the provider is liable by the last business day of February of the year.          (4)    If the notice has not been given to a provider by the last business day of January, the annual registration charge for which the provider is liable must be paid within 28 days of the day on which the notice was given to the provider. Providers under the ESOS system are required to pay an annual charge to maintain their CRICOS registration. That payment is due each year by the last day of February. One of the amendments contained in the Education Services for Overseas Students Legislation Amendment (2006 Measures No. 1) Bill 2006, which we have been debating here today, provides for automatic suspension of a provider’s registration if payment of the ARC is not made on the due date, which is, as I said, the last day of February. A problem that has been brought to our attention is that the amount of the ARC payable by a provider relies on agreement between the provider and DEST of the total enrolments of international students in the previous year. It is quite possible for there to be discrepancies between the figures used by the provider and those claimed by DEST. This can affect the amount to be paid and take some time to resolve. In these circumstances, it seems quite unfair for DEST to be threatening automatic suspension of registration for non-payment when under the present system DEST is under no obligation to detail the extent of the provider’s liability. The prospect of automatic suspension for non-payment as proposed by the amendment to section 23 of the act is of great concern to the Australian Vice-Chancellors Committee. The AVCC— 83P Bishop, Julie, MP Ms Julie Bishop —Universities Australia. 83A Livermore, Kirsten, MP Ms LIVERMORE —Yes, the minister is correct: Universities Australia, as they are now calling themselves. Universities Australia has written to Labor, and I am sure also to the minister, requesting a change to section 23 as it is currently before the parliament. The letter that we received from Universities Australia said: Timely payment by universities or any other provider is contingent upon early receipt of notification from the Department of Education, Science and Training regarding the rules and calculation of the ARC for the period, which should include time to discuss any discrepancies between DEST and provider calculations. The AVCC wishes to insert a clause into the legislation stating that providers must receive the ARC notification from DEST at least 28 days before the due payment date. Labor’s amendment seeks to address those concerns expressed by the AVCC. The amendment that we have proposed relating to the annual registration charge—among other things—requires that the secretary give written notice to providers stating the amount of the charge. That notice is to be given to providers by the last business day of January of the year. As happens under current arrangements, the ARC must then be paid by the provider by the last business day of February of the year. If the notice was not given by the last business day of January then payment has to occur within 28 days of the day on which the notice was given to the provider. We believe that this is an entirely reasonable amendment and can see no reason why the government would not support it. I notice that the department’s information sheet on these changes to ESOS refers to enforcement action which is currently possible. It talks about the fact that, according to the department, the enforcement provisions are administratively cumbersome for an annual obligation that is a clear and regular legal requirement. That claim by the department has to be weighed against the seriousness of the repercussions for late payment. It occurs to me that surely DEST would have to reconcile in some way the payments received from providers against DEST’s figures anyway. When the payment is received on the last day of February, surely DEST has to look at the figures and look at the numbers of students that they have on their records and do that reconciliation of those figures against the payment that they receive from the providers. How hard can it be to work those amounts out and notify providers before the due date as our amendment suggests and as the vice-chancellors have put to us in requesting that amendment? The sanction being proposed for non-payment on the new date is quite harsh—automatic suspension of CRICOS registration—and that has major repercussions for providers and students. In those circumstances, we believe that our amendment is fair and reasonable and reflects the partnership approach that should underpin the administration of ESOS by both DEST and the provider. It is a way of DEST showing that it is prepared to do its bit to uphold the compliance regime, along with the expectations that they place on providers. 125 18:28:00 Bishop, Julie, MP 83P Curtin LP Minister for Education, Science and Training and Minister Assisting the Prime Minister for Women’s Issues 1 0 Ms JULIE BISHOP —I acknowledge the amendment proposed by the member for Capricornia. But I point out that there is no need for the amendment proposed by the opposition, and let me explain to the House why this is so. Providers contribute to the cost of regulation of the ESOS Act through payment of the annual registration charge—the ARC. This is a legislated charge payable by the last business day in February each year. Current procedures for taking action against providers who fail to pay by the due date are administratively cumbersome in light of the fact that this is an annual obligation and as such is a clear and regular legal requirement. Automatic suspension of a provider’s registration for failure to pay the annual registration charge by the due date will streamline the enforcement action taken against providers who breach this legislative requirement and encourage compliance. This amendment, together with those which will require payment of certain specified charges before rather than after a specified event, will reduce time spent by the department in pursuing providers for outstanding fees and prevent those providers who do not abide by the rules from remaining in the industry. The department already provides written notice to education providers in relation to the annual registration charge. The process for reminding providers of their legislative obligations starts in November of the previous year for a payment that is due at the end of February of the following year. Initial contact is made with providers by letter to advise them that the ARC process is approaching and to encourage them to ensure that their contact details are correct. This is followed by alerts which are given through the Provider Registration and International Students Management System, or PRISMS, and also the department website before formal notification is sent to the providers in mid-January. Upon receipt of the ARC notice, providers have approximately six weeks before the due date within which to calculate their enrolment figures for the previous year. The department provides an ARC enrolment count export report and reminder notices through the Provider Registration and International Students Management System to assist the providers with their calculations. Also in 2006 the department produced a brochure entitled How to Pay your Annual Registration Charge as well as several other products to help providers with this obligation. They ran an ARC-specific hotline from December to April to assist providers with any queries that they might have had about calculating their enrolment figures and paying their annual registration charge. There are processes in place to resolve any discrepancies after the charge is paid. So I can assure the House that there is no need for a legislative change due to the extensive information and reminder services which are already in place to assist providers, including universities, to meet their payment obligations. The government does not support this amendment. Question negatived. Original question agreed to. 125 Ms JULIE BISHOP (Curtin —Minister for Education, Science and Training and Minister Assisting the Prime Minister for Women’s Issues) 18:31:00 —by leave—I move: That this bill be now read a third time. Question agreed to. Bill read a third time. 126 BILLS R2613 126 Debate resumed from 6 September, on motion by Ms Julie Bishop: That this bill be now read a second time. 126 Ms JULIE BISHOP (Curtin —Minister for Education, Science and Training and Minister Assisting the Prime Minister for Women’s Issues) 18:32:00 —by leave—I move: That this bill be now read a third time. Question agreed to. Bill read a third time. 126 BILLS R2614 126 Debate resumed from 6 September, on motion by Ms Julie Bishop: That this bill be now read a second time. 126 18:33:00 Macklin, Jenny, MP PG6 Jagajaga ALP 0 0 Ms MACKLIN —The introduction and timing of this legislation really reeks of the arrogance that the parliament has come to expect from this government. This bill was introduced only last Wednesday. Members have had just one week to consider its nine separate schedules of amendments to the Higher Education Support Act, the Higher Education Funding Act and the Australian Research Council Act. The time frame has been so short that the Parliamentary Library staff, who have been working extremely hard in the past week dealing with this legislation as well as the two ESOS bills, have not have the chance to prepare a Bills Digest for members. Rushing this legislation into the chamber and out again means, of course, that members have been rushed in their consideration of its contents and its implications. You could say that we expect nothing more from this government. We have seen it so many times. They seem to treat the parliament with the most extraordinary contempt. That being said, we have certainly considered the bill and the many and varied measures contained within it. We will be supporting this legislation; however, in doing so, we reiterate our criticism of this government’s approach to higher education—of course, characterised by budget cuts, fee increases and a continuing lack of policy direction. I formally move: That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House condemns the Government for: jeopardising Australia’s future prosperity by reducing public investment in tertiary education, as the rest of the world increases their investment; failing to invest in education, training, distribution and retention measures to ensure that all of Australia has enough doctors, nurses and other health care professionals to meet current and future health care needs; massively increasing the cost of HECS, forcing students to pay up to $30,000 more for their degree; creating an American style higher education system, where students pay more and more, with some full fee degrees costing more than $200,000, and nearly 100 full fee degrees costing more than $100,000; massively increasing the debt burden on students with total HELP debt now over $13 billion and projected to rise to $18.8 billion in 2009; failing to address serious concerns about standards and quality in the higher education system, putting at risk Australia’s high educational reputation and fourth largest export industry; and an inadequate and incoherent policy response to the needs of the university system to diversify, innovate and meet Australia’s higher education needs”. Today we have seen the release of yet another report condemning the Howard government’s performance on higher education. The OECD’s Education at a glance 2006 is a 454-page in-depth analysis of education systems across the developed world. It certainly shows that this Prime Minister and this government deserve an F for education and training. While the rest of the OECD countries have increased their public investment in tertiary education by an average of 48 per cent—so the rest of the developed world is significantly increasing public investment in its tertiary education—at the same time Australia is the only country in the developed world to see a decline, of seven per cent. That is an increase of 48 per cent for the rest of the developed world and a decline in public investment in tertiary education by the Howard government of seven per cent. What that means is that Australia is going backwards while everyone else is going ahead. Worse still, the report shows that the Howard government’s HECS hikes mean Australian university students are now paying the second highest fees in the world. The report comments on trends in higher education around the globe and says: ‘Increasing private spending on tertiary education tends to complement, rather than replace, public investment. The main exception to this is Australia.’ Under this government Australian students are footing the bill for massive funding cuts, and we are one of the worst countries in the world. Before expanding on the points highlighted in the second reading amendment, I briefly want to give the opposition’s perspective on the multiple and disconnected series of amendments in this omnibus bill. Schedule 1 funds government commitments arising from the Council of Australian Governments’ Health Workforce and Mental Health packages, including new medical, general nursing, mental health nursing and clinical psychology places and increased funding for nurses’ clinical training. Labor welcomes the additional places to deal with health workforce shortages, but the government of course has neglected this area for far too long. The government has failed to invest in education, training, distribution and retention measures to make sure that all of Australia has enough doctors, nurses and other healthcare professionals to meet current and future healthcare needs. The bill also increases funding in the Capital Development Pool program for universities from 2007 and funding to the Commercialisation Training Scheme for new postgraduate research places in science and innovation. There is also funding for the Federation of Australian Scientific and Technological Societies and the Council for the Humanities, Arts and Social Sciences. Labor certainly supports these new measures. Included in the funding this bill proposes is the application of indexation to university grants across the forward estimates years. This is a very serious matter indeed because our universities continue to suffer from inadequate indexation. The rate of indexation being applied to university operating grants this year means that they will increase by just two per cent. By comparison, average weekly earnings rose by an average of 4½ per cent annually between 1998 and 2004. As salary costs are the largest component of university operating expenses, ranging between 45 per cent and 70 per cent, this gap between indexation and wage costs continues to rise. Since 1995, the gap between rising average salary costs and the rate of indexation provided by the Commonwealth has accumulated to more than $500 million. So adequate indexation is essential to sustain and strengthen the quality of university education in this country. Labor does support the indexation in schedule 9 of the funding cap for research spending in the Australian Research Council Act 2001. The significant measure in schedule 2 of the bill is to increase the FEE-HELP limit to $80,000 for most students and to $100,000 for medical, dental and veterinary science students. This was announced in the budget and is the second proposed FEE-HELP increase this year. These changes to FEE-HELP are significant, increasing the total debt available to students. There are now almost 100 full-fee degrees in Australia costing more than $100,000, so it is clear that these increases in FEE-HELP are not sufficient to meet the real cost of these degrees. We now know that under this government you can pay as much for a university degree as you do for your home. The average new mortgage today is about $222,000 and, according to the Good Universities Guide 2007, a full fee paying place in medicine-arts will set students back a staggering $237,000 at the University of New South Wales and $219,100 at the University of Melbourne. Medicine at Bond University costs $233,100 while medicine-law at Monash University would rack up a debt of $214,600. These are the fees being imposed on students by the Howard government and are nothing more than a disgrace. LL6 Baldwin, Robert, MP Mr Baldwin —They are full-fee degrees. PG6 Macklin, Jenny, MP Ms MACKLIN —The member for Paterson says they are full-fee degrees. They certainly are full-fee degrees—full-fee degrees introduced by the Howard government, of which the member for Paterson is obviously a very proud member. The member for Paterson obviously agrees that paying $200,000 for a university degree is just fine. I am sure that not very many people in his electorate think so. LL6 Baldwin, Robert, MP Mr Baldwin —Mr Deputy Speaker, on a point of order: I take umbrage that the member has totally misrepresented what I just said. 10000 Causley, Ian (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. IR Causley)—There is no point of order. If the member for Paterson wants to use the standing orders he should clarify the position later when the member for Jagajaga has finished her speech. PG6 Macklin, Jenny, MP Ms MACKLIN —Under the Howard government, Australians are paying more and more for a degree and more and more in mortgage repayments. These massive increases in university fees are forcing up the total debts faced by students and graduates by $2 billion a year, taking Australia further down the track of an American style university system. The new Senate estimates figures from the Department of Education, Science and Training show that university graduates and students will owe $18.8 billion by 2008-09. The Minister for Education, Science and Training tried to spin herself out of trouble by saying that the massive rise in debt was due to rising student numbers. This performance of hers was repeated by the Prime Minister in question time today. But as the Sydney Morning Herald was quick to point out this morning: However, figures from her own department— that is, the minister’s department— showed that domestic student numbers rose by just 0.2 per cent from 2004 to 2005 while the accumulated HECS debt rose by nearly $2 billion. The minister’s attempt at fancy footwork and spin—the sort of spin we have come to expect from the Howard government—to hide these skyrocketing debts certainly fell very flat for one very simple reason: the facts do not lie. Labor also welcomes the clause in the bill to clarify that a person who has had FEE-HELP recredited does not have their future entitlement to FEE-HELP reduced by that amount of recredited FEE-HELP. However, we will be seeking further details regarding the application of this change in the upcoming Senate inquiry into this bill. Schedule 3 allows the universities to charge different students in the same unit different amounts of HECS and tuition fees. This does change the existing rule that the same types of students enrolled in the same course of study pay the same fees. Under the proposed changes there will now be wide discretion for the provider to set varying fee levels based on any factor they deem appropriate with only limited scope by the government to determine matters that are not appropriate. It is certainly the case that more detail on these prohibited factors needs to be made clear to both the parliament and the public. There may be cases where differential fee structures are used to assist students from disadvantaged backgrounds through targeted fee relief based on location or mode of delivery. However, Labor would not support fee deregulation resulting in higher general fee levels and we will certainly be monitoring this during the implementation of these new provisions. Labor does support the minor technical amendments in schedules 4, 5 and 7 and the creation of the new concept of winter schools in schedule 6. These winter schools are analogous to summer schools and allow students to study units intensively where academically appropriate and complete their degree programs more quickly. Labor supports universities undertaking new and innovative activities to provide a wide range of educational options for our students. Unlike the government, this forms part of an overall and cohesive policy agenda for Labor. Our higher education white paper, which I will mention a little more about later, contains a new funding model for universities, and one element of that is to provide specific funding for what we call ‘innovative activities’. The white paper targets accelerated degree options for students as one sort of innovative activity that we will pursue in government. The changes to the procedures for accreditation and approval of higher education in external territories in schedule 8 is another matter that needs more information and more detailed consideration, which we will pursue in the Senate inquiry. The bill proposes to give the minister greater powers to determine matters in accordance with new ministerial guidelines for approval of higher education in the external territories. Labor is concerned to make sure that any approval and accreditation is consistent with the national protocols for approval of higher education providers developed jointly with the states and territories and endorsed by the Ministerial Council on Education, Employment, Training and Youth Affairs. We believe that the new guidelines proposed by this bill should also be endorsed by MCEETYA. This bill contains a series of unconnected and piecemeal amendments to higher education legislation in Australia. We do understand that there is a need for governments to make amendments like this from time to time but it does seem to be the case that it is all this government is doing in higher education. At a time when our university system needs serious attention all we are getting from the government is inadequate and, I would have to say, incoherent policy responses to the needs of our university system to diversify, innovate and meet Australia’s higher education needs. The government continues to fail to address serious concerns about standards and quality in our higher education system, putting at risk Australia’s high educational reputation and our fourth largest export industry. While the government may have no future direction, Labor does. We have been doing some very serious policy work, setting directions for where our universities should be heading to make sure that they are ready for the challenges of tomorrow. To put it very simply indeed: our universities are much too important to ignore. In July this year I launched Labor’s higher education white paper entitled Australia’s universities: building our future in the world. That white paper sets out our new policy framework for higher education, research and innovation that is necessary to address Australia’s future needs. This nation-building reform will result in real choice and higher quality education and training for Australians and international students coming to this country. Lifting our universities up is central to a Beazley Labor government’s economic agenda to build a prosperous future for all Australians. Our white paper details how our education system must change. There is no question that our universities are already different. We on this side of the House understand that simple reality, and it is time that the government recognised that this difference exists through more than mere platitudes. When the minister for education was new to her portfolio she was quick to claim the ownership of the diversity mantra. Interestingly, Minister Nelson did the same when he first took on the education job back in 2001. But saying it does not make it so. In fact when Dr Nelson was the minister for education he imposed a red-tape nightmare and funding straitjacket on our universities. So much for diversity! If this government really wants diversity in our higher education system it has to take action to make it happen. You do not go about dealing with these problems by just talking about them. The first thing that needs to be done is to release our universities from the straitjacket imposed by Dr Nelson’s changes. Particularly as a result of the government’s 2003 changes, universities have been given less discretion to spend the diminished proportion of government funding they receive. In the 2003 Higher Education Support Act, the Howard government designed a straitjacket for universities. Every university is paid the same amount for each student, irrespective of differences in their missions and purpose, student mix and cost structures. The government’s insistence on funding every university at the same rate per student is the basic constraint on diversity in the system. So it is government’s own legislation that is creating the constraint. Universities are penalised if they enrol above or below their undergraduate enrolment quotas. They have no flexibility of operation. Without approval from Canberra, universities cannot move places from one campus to another, from one semester to another or across the funding clusters. They cannot change their range of courses. They cannot even change how they intend to use a piece of research equipment purchased through government grants without the written approval of the education minister. Talk about red tape! True diversity can only be achieved through fundamental change, freeing our universities from this red tape and bureaucratic control. In Labor’s white paper we have proposed the changes necessary to allow our university system to innovate, to grow and to prosper. Labor will end government interference in the internal management of universities and reduce compliance and reporting burdens. Labor’s stronger focus on the quality of educational outcomes will loosen the Howard government’s excessive controls on inputs and processes. Labor will fund public universities through a compact, negotiated to value universities’ individual missions and their different roles and circumstances. There will be a compact with four components of funding that universities will be funded for: education, research, community engagement and innovative activities. The education component is for undergraduate and postgraduate coursework programs. Teaching cost relativities will be updated, reflecting clinical, laboratory/field and classroom teaching. Funds will include regional loadings and loadings for students with special needs. Within its funding envelope a university may shift places from low- to high-cost fields and from undergraduate to postgraduate level, or vice versa. The Commonwealth will of course safeguard courses of national priority. The research and research education component will continue to operate as a dual funding system through national competitive grants and institutional block funds. Funding of places for research students will be provided only in those areas where the quality of research performed within the university meets high standards. Labor will support community outreach by universities, as we recognise that our universities are more than providers of education; they are very important members of their local communities, and that is particularly so in regional Australia. As mentioned earlier, universities that undertake innovative activities will also be supported. This component is to fund structured activities additional to normal operations, to drive innovation and diversity within the university system. These would include knowledge transfer services to business and other groups, collaboration with other universities and institutions, accelerated study programs, and education or research aligned with the Northern Hemisphere academic year. Each university will be funded for the first component but need not be funded for all four. Universities will determine their own priorities and shape their activities to suit their different missions. The excluded option is that of the ‘teaching only’ university. Labor believe that all academic staff must have the opportunity to conduct research, so our approach will promote improved responsiveness of universities to student demand and community needs. It will enable universities to focus on what they do best. We will restore rolling triennial funding to make sure that universities have certainty in their planning. Our mission based compacts will facilitate diversification of the higher education system, wider student choice and the continuation of university functions of wider community benefit that would otherwise be lost in a purely market driven system. Labor will provide additional public money to our universities through this new funding model. We will make sure that there is adequate indexation of university grants. As mentioned earlier, the current indexation arrangements are costing our universities and must be changed. It is only Labor who are prepared to make the necessary changes and link these additional funds to quality improvements. The consequence of 10 long years of Howard government cuts to our universities is that the quality of Australian higher education is now under pressure, with risks to the reputation of Australian degrees. There are no systems in place in Australia for assuring the standards of degree quality. Funding cuts have pressured universities to increase student numbers, chase revenue wherever they can find it, raise student-to-staff ratios and class sizes, cut back tutorials and cut corners on student assessment. Is it any wonder that quality is under pressure? On the Labor side of politics we want to see higher education standards raised to give our students the best opportunity to develop their abilities and build a competitive economy. Students need to know that they will get a high-quality education. Employers also want the same information and reassurance. It is not to the advantage of anyone—students, parents or employers—and certainly not to the advantage of any higher education institution to be part of a system that does not assure at least minimum standards of quality of its educational qualifications. That is why Labor will establish a tough new standards watchdog, the Australian Higher Education Quality Agency, and give it real teeth to enhance degree standards and to protect quality teaching and research. Our commitment to increase public investment in higher education is predicated on a reciprocal commitment by universities and other providers to demonstrate higher educational quality standards. As I mentioned earlier, student debt in Australia is skyrocketing for one reason and one reason alone. The average HECS fee paid by Australian students has doubled under the Howard government, discouraging prospective students from taking university places that they have worked so hard for. The Howard government’s HECS hikes mean that medical students are now paying more than $30,000 over and above what they would have paid when Labor left office. Law students are paying more than $20,000 extra; engineering students, more than $16,000 extra. These are massive increases in fees. Students and their parents only have one place to lay the blame, and that is the Howard government. There is no question that these significant HECS increases have adversely affected student participation and are now denying Australia the human capital investment needed to underpin future productivity growth. In our white paper we make it plain that we intend to relieve the HECS burden on our students, and we have put forward a number of options for public discussion and debate. When we put out our detailed policy we will set out the details of this relief for students. We have also made it very clear that we will phase out full-fee places for Australian undergraduates at public universities. Under Labor students will get access to higher education according to merit, not their financial means. That means there will not be any more $100,000 or $200,000 degrees at our universities. There is one government that believes in university degrees costing $100,000 or $200,000, and that is the Howard government. Labor will put an end to that. Unlike the government, who seems to be so bereft of fresh ideas and unable to articulate coherent policy, Labor do believe that the only way to promote diversity and innovation is to restore faith, confidence and, most importantly, public investment in our universities. We do have a vision for higher education in Australia. We intend to back it up with substantive, contemporary policies that tackle the problems created by this government. 10000 Causley, Ian (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. IR Causley)—Is the amendment seconded? JH5 George, Jennie, MP Ms George —I second the amendment and reserve my right to speak. 132 19:02:00 Tuckey, Wilson, MP SJ4 O’Connor LP 1 0 Mr TUCKEY —Early in the life of the Whitlam government a commitment was made that Australians would all have free access to university education. The Fraser government struggled with the ever-increasing cost and discovered that, in fact, the subsidy was not going to the poorer sections of our community; it was just a subsidy to many people who previously had been able to pay for their children’s education anyway. But the Hawke government was eventually obliged to confront the situation. It had a committee, I think it was run by Neville Wran, and they invented HECS. But if you heard the member for Jagajaga today you would think it had all been invented by the Howard government. It is pretty interesting when you hear Labor members of parliament not recognising that history, nor recognising that the free education was not taken up to a substantial degree by those who could least afford to otherwise pay. Knowing all of that, and knowing that many of their voting constituency would prefer more help through the TAFE system, we hear this standard promise that the Australian taxpayer will find heaps more money or the government finances will revert to deficit so that a group of people, most of whom anticipate through their education to have very highly paid jobs, get it for free and do not even contract loans as a 25 per cent contribution to it. It is amazing that three of the amendment clauses proposed by the Labor Party to the Higher Education Legislation Amendment (2006 Budget Measures) Bill 2006 deal with this matter of ‘jeopardising Australia’s future prosperity by reducing public investment in tertiary education’. That, of course, is completely rejected by the financial impact statement to be found in the explanatory memorandum, and an obligation to include in legislation a financial impact statement was introduced by the Hawke Labor government. It is just a litany of increased expenditure: there will be increases in the overall appropriation of $6.23 billion for the period 1 July 2006 to 31 December 2010; the estimated financial impact of increasing the FEE-HELP scheme will be $78 million—in fact there are three figures there; there is the estimated financial impact of introducing winter schools; and it goes on. In the financial impact statement are clause after clause that tell us very clearly that the Howard government is substantially increasing its financial commitment, which makes a farce of clause 1 of the amendment. Then the amendment mentions ‘failing to invest in education, training, distribution and retention measures’, and it goes on about doctors, nurses and other healthcare professionals. It was as a result of Medicare that the Hawke government—because they got terrified by bulk-billing costs and came to the conclusion that too many graduates from the medical profession were just moving into cities where on a free service they could get as many customers as they wished—cut back the intake of medical undergraduates by 4,000. When one thinks back 10 or 15 years one realises the impact of that decision has only been felt in the last three or four years. They are crying crocodile tears in this place that that is the situation when in fact, as the Minister for Education, Science and Training told us in the second reading speech: The government will fund 605 new commencing medical places and 1,036 new commencing nursing places, as well as funding a significant increase in the contribution to support clinical training for nursing students ... It goes on: This bill also includes $25.5 million in capital funding to support new medical places at James Cook University, the University of New England and the University of Queensland. In addition, this bill provides funding for 431 new mental health nursing places and 210 new clinical psychology places ... In their typical fashion, the opposition tell us that the government has failed in these areas, when the first thing we had to do when we came to government was replace the 4,000 places they removed from the system during the Hawke government. They complain in this amendment about ‘massively increasing the cost of HECS, forcing students to pay up to $30,000 more for a degree’. I have made the point already: students graduating from the higher cost courses in particular almost immediately receive very high incomes—I think the figure cited was three or four times that which might be earned by a working-class person. But I have never heard the opposition suggest that some of those working-class people should be loaned $100,000 to buy into a taxi or a couple of hundred thousand dollars to buy into a delicatessen. They have to go and make their own commercial arrangements if they want to be involved in those sorts of business activities. So why is it unreasonable to ask somebody who gets their business created for them through education—and I certainly welcome the fact that they take that option—to pay for it? Why should it be that the Labor Party stand up and differentiate between them and all those other people, who are more than likely to vote Labor, who want to move into private business or increase their income and typically and frequently work extremely hard thereafter? If you are going to earn the sort of income that a medical practitioner can earn, is it unreasonable to pay $100,000 for your education over the period involved and be grateful to a government that lends it to you, either through FEE-HELP or through HECS? People might want to go and work in the mines for a few years in the Pilbara or somewhere else and save good money up there, and then come back to a metropolitan area and buy a small business. We do not hear the member for Jagajaga putting a case for those people to get a government loan and only pay it back if they are making a profit—and the income threshold is already close to $30,000 a year before you start repaying HECS. I am unable to understand the mentality of that. This is an education legislation amendment bill and we heard not one word during the member for Jagajaga’s speech about other areas of tertiary education and how it is funded. Of course, tertiary education is typically a service provided by state governments, all of whom are of the Labor Party persuasion—and we are not allowed to criticise them. These Labor amendments have no foundation. They are refuted by the financial impact statement to be found in the explanatory memorandum. They are refuted by the minister’s second reading speech, which clearly designates all the new places that will be created and funded under these arrangements. To its great credit the bill highlights new regional universities opening up schools of medicine where it has been well proven that students are more likely to stay having achieved graduation, be they nurses or otherwise. To me, that is one of the better aspects of the bill. The minister advises us there will be some bonded places whereby the bonding is associated with a scholarship payment—I think it will be about $20,000 a year. Of course there is a bond because if you take that option as compared to paying as you go or working at night or something like that for your pocket money then you have made a commitment to go and work in remote and regional areas, where there is still a shortage of medical practitioners. So the bill is to be recommended for greatly increasing the funds that the government is going to provide, whilst retaining a surplus, I might add. The one thing that was not mentioned by the member for Jagajaga—and the next speaker, the member for Rankin, might like to bring it to our attention—was the cost of some of the proposals she put forward. Tell us where the money is coming from. What is to be cancelled? I do not know, but it seemed to me that she made a straight-out promise of extremely increased financial expenditure on behalf of a group of people who, in many regards, through the benefits that their education will provide, presently have the financial capacity to repay the government. I have never been able to understand the paranoia of the opposition when it comes to full fee paying domestic students. There are all sorts of reasons that a person may not be able to commence an education or achieve the appropriate tertiary entry level, which in the state of Western Australia was so corrupted that it was no indication of people’s merit, as the member for Jagajaga said. It was all airy-fairy stuff—OBE, as it was known—and even the teachers union revolted against it. A granddaughter of mine was told in an expensive private school, ‘You may as well take the weakest form of mathematics because you will get better marks and your merit will appear to be greater.’ I corresponded with the University of Western Australia on that, and they had a slightly different message—that they were prepared to weight these more difficult maths subjects, which my granddaughter could have easily managed. What is more, to get entry to engineering and other fields, they insist on them. But here we have a secondary education system decreed by the state government in WA that is trying to dumb everything down. The Labor Party never stop talking about wages sliding to the bottom, while of course they continue to escalate in real terms, but they do not seem to have any concern about the dumbing down of our educational processes. They are still fighting bitterly to prevent giving grades to students, because the teachers know that is an examination of their personal effort. The legislation is all about money. It is all about paying for the additional needs of the tertiary education system and it is therefore to be commended. The member for Jagajaga also had something to say about giving more freedom and flexibility to the university sector. I think that is a good idea, provided you transfer the buying power to students and their families. A simple solution for that is vouchers. I think the member for Rankin might have some support for that particular idea. He is probably as isolated on his side in promoting things of that nature as I was when my press release was brought out which said I would sell Medicare—and so I would, but do not think anybody else on my side agrees with me. I am a great believer in funding people, not institutions—in the case of health, through subsidising people to buy private health insurance and, in the case of education, through giving parents, from first bubs up, a piece of paper that can be targeted for both socioeconomic and geographic reasons and says, ‘This is worth X at one of the enclosed group of approved schools,’ which might be state or private. There would be no arguments about which school got the most money because the money would go to parents and they would make a choice. I think, if students wanting a university education had that sort of buying power and the government left it at that, universities would respond to the marketplace and they would have all the flexibility they wanted. It is a very important aspect. Let me record my concern, relevant to my earlier remarks, that I think it is a tragedy that not enough students are going into the engineering and science disciplines. It is so important to our economic growth that we have those sorts of people in society. I know it is a tough ask and they are sometimes not as glamorous as other disciplines, although persons known to me, having commenced a career, for instance, with an engineering degree, are now highly respected, high-flying stock market analysts because their foundations are such that they are truly analysts. They are not just statisticians; they are people who understand the workings of the mining sector or whatever. They have been there and done that and they have had the opportunity later to take up what might be considered more high-flying disciplines. I sometimes wonder about tertiary education. I note with approval we are funding another 1,036 nursing places. From personal experience, I spent five months in hospital on one occasion—it was self-inflicted—and I was looked after by nurses that lived at the hospital and were trained in the hospital, right up to the matron and the other more experienced nursing personnel. I still think that is the best way to teach someone to be a nurse. I think the problem with a university education is that it does not properly expose young people to the difficulties of being a nurse. It is a tough job. I do not think university gives them that hands-on experience, and they come out with an expectation that they are just a small step below a doctor. That is not what a nurse is, although I applaud the fact that in some remote areas we are going to have practice nurses and they will have an opportunity to get those additional qualifications, as used to be the case. I think one of the problems with university education for teachers is that there is insufficient accent on teaching. Teaching is a skill. Knowledge that you need to teach is easily acquired. The most impressive teacher I ever knew was my English teacher at Perth Modern School, who on his first day in our classroom said: ‘You might think I know everything; I do not. But I know where to go and look for it.’ In those days you did not google it. He said, ‘What I don’t know today, I’ll tell you tomorrow.’ The way he, as a quite laid-back person, enthused us to study and succeed in English was quite amazing. He was a great teacher. I think there is a lack of that because the culture of university teaching is not what is needed back at the primary school and the secondary school. I think there is probably insufficient capacity, as compared to the old teaching colleges, for that sort of training. I guess, as with other things I have said today, I am not going to change that. My time has run out. I commend this legislation. I reject the criticism found in the Labor Party’s amendments. They are not sustained by the facts and I think they are completely incompatible with the Labor Party’s responsibility to a primarily working-class electorate. I have never been able to understand why they take that view and they do not have plans in TAFE and other areas that they lecture us on on these occasions. (Time expired) 136 19:22:00 Emerson, Craig, MP 83V Rankin ALP 0 0 Dr EMERSON —The Higher Education Legislation Amendment (2006 Budget Measures) Bill 2006 will fund 605 new commencing places and 1,036 new commencing nursing places. In addition, the bill will fund 431 new mental health nursing places and 210 new clinical psychology places. That is part of the Commonwealth government’s contribution to the Council of Australian Governments’ mental health package. The legislation contains a number of other funding commitments. I know the public perception is often that in this parliament the government and the opposition never agree on anything. I can assure the public that on these matters—increased funding for higher education and, in particular, nursing, medical and mental health places—Labor fully supports what the government is doing. I wanted to say that, and I also want to support the second reading amendment moved by the Deputy Leader of the Opposition, which includes the provisions: “whilst not declining to give the bill a second reading, the House condemns the Government for: jeopardising Australia’s future prosperity by reducing public investment in tertiary education, as the rest of the world increases their investment; failing to invest in education, training, distribution and retention measures to ensure that all of Australia has enough doctors, nurses and other health care professionals to meet current and future health care needs; …            …            … an inadequate and incoherent policy response to the needs of the university system to diversify, innovate and meet Australia’s higher education needs”. The Queensland election has just been decided, and one of the big issues there was health. It had been suggested that the Commonwealth government under the leadership of the Prime Minister had been very generous in providing medical places at university; the trouble is that the number was not adequate and the delays were extraordinary. It points to the benefits of a cooperative federalism rather than a confrontational federalism—a cooperative federalism made possible by the election of a Beazley Labor government which, in a consensus style of political behaviour, would ensure that these problems did not continue to develop to the point of a crisis in the number of medical places being made available in Queensland, which they were allowed to develop to under this federal government. More generally, in the area of higher education in this country, I can scarcely imagine an area—other than industrial relations—where this government has been so poor and so appallingly bad in the development of public policy. It is clear that the Howard government does not have a commitment to higher education. We have just heard the member for O’Connor saying that the private returns for a higher education are such that essentially it should be funded by those people who enter the university system. Labor fundamentally disagrees with this philosophy. Labor has always held the view that, in addition to the private benefits from higher education, there are very large benefits for the nation as a whole. There are so-called positive spillovers where the wider community is the great winner from young people going to university. That establishes a philosophical divide between the coalition and Labor. It also explains why there has been such appalling underfunding of our public university system in Australia. That underfunding has become so chronic that all of the enrolment growth since the change of government in 1996 in Australian universities has been in full fee paying students—predominantly in foreign full fee paying students but more recently in Australian full fee paying students. The government is so committed to full fee places that it deprives young Australians of the opportunity of getting into university on a subsidised basis. Over the period about which I am speaking there has been zero growth in the number of Australian undergraduate places. Indeed, in the last couple of years there has been a decline in the number of Australian undergraduate places that are subsidised by HECS, and that has occurred for the first time in half a century. Just as disturbingly, the government forecast in a statement made by the then education minister—and now the Minister for Defence—that there will be fewer undergraduate students in Australia over the coming decade. So, where Labor has an aspiration to increase access and increase the number of university graduates, the coalition government is forecasting a decline. The outlook for our public universities is a very sombre one. Some of them will succeed because of their reliance on foreign full fee paying students, but the truth of the matter is that we are losing competitiveness as a destination for foreign full fee paying students. As a consequence, as a revenue source that is now beginning to taper off. I am conscious that I will be continuing my remarks tomorrow on this matter, so I will not go into this particular dimension of the problem in detail now. But it is clear that a number of universities in Australia will be in very severe financial straits if the government does not inject extra funding into our public universities in the coming year. A number of our universities will be looking at insolvency unless the Minister for Education, Science and Training is able to convince her cabinet colleagues that there is a funding crisis and that it will need to be resolved and resolved quickly. I am putting it clearly on notice that a number of our universities will be in great peril because of the tapering off of growth in full fee paying students and in domestic full fee paying students, despite a big increase in the year before last. We do not have the latest figures, but I am told that even domestic full fee paying students are not providing the revenue that was anticipated. Debate interrupted. 138 ADJOURNMENT 10000 SPEAKER, The The SPEAKER —Order! It being 7.30 pm, I propose the question: That the House do now adjourn. 138 138 19:30:00 Livermore, Kirsten, MP 83A Capricornia ALP 0 0 Ms LIVERMORE —Last night during the adjournment debate the member for Oxley highlighted comments by the member for Moreton about last weekend’s Queensland state election result. In a remarkably accurate summation of the result, the member for Moreton went on ABC radio on Monday morning and said: ... the National Party should be really upset about their result. All they’ve done is win back a seat. They lost a half a dozen years ago, which they held for 60 years before that. So it’s not much of a result for them and I think that one of the messages the National Party have got to get out of this election is to get the hell out of south-east Queensland. The member for Moreton, who is also the Minister for Vocational and Technical Education, went on to say: The reality is there will never be a National Party Premier in Queensland ever again, and the result over the weekend showed that. The member for Moreton is not much chop as a minister—who could forget last week’s TAFE colleges in Africa clanger?—but he is on the money when it comes to the National Party. You can only sell out your constituency so many times before it abandons you, and the National Party has sold out its constituency big time—time and time again. No state has been more let down by the National Party than my home state of Queensland. Let us have a look at what they have been responsible for. The Nationals abandoned Queensland sugar growers in the US free trade negotiations, sold out rural and regional Queenslanders by rolling over on the sale of Telstra, approved the importation of whole peeled bananas from Vietnam in the wake of Cyclone Larry—a natural event that devastated the Queensland banana crop—and agreed to the sale of Medibank Private despite the opposition of Queensland policyholders. Just this week it got worse. The government announced it had formally abandoned the commitment to introduce a mandatory code of conduct for the horticulture industry. This was no ordinary commitment. It was made during the 2004 election campaign by no less a figure than the member for Gwydir in his capacity as the Leader of the National Party. Queensland fruit and vegetable growers were entitled to rely on the word of the member for Gwydir when he said: A re-elected Coalition Government will impose a mandatory Code of Conduct on the horticultural industry. Fruit and vegetable growers were also entitled to rely on his word when he said the commitment would be honoured within 100 days of the government’s re-election. Unfortunately for Queensland’s fruit and vegetable growers, ‘truth’ and ‘National Party election commitment’ are not synonyms. The fact is that Queensland fruit and vegetable growers have been dudded by the National Party. The man who made the promise, the member for Gwydir, did not bother seeing it through. The member for Wide Bay had carriage of the agriculture portfolio for the first seven months of the government, but he did not see it though either. However, the current Minister for Agriculture, Fisheries and Forestry, the member for Gippsland, takes the cake. This minister is so weak that he has let the Liberal Party take responsibility for the code out of his party’s hands—out of the National Party’s hands, out of the hands of the party that purports to stand up for the interests of farmers and people in rural and regional Australia. This week the Minister for Industry, Tourism and Resources, the member for Groom, stepped in and he put the kybosh on a mandatory code, announcing, ‘The government’s undertaking as part of our 2004 election commitments was that we would introduce a voluntary code.’ A voluntary code indeed! Tell that to the member for Gwydir, who was up there talking about a mandatory code in 2004. According to today’s Crikey newsletter, senior staffers for Liberal ministers are openly rubbishing the National Party pledge. Like Labor, the minister for industry and his Liberal colleagues know that National Party promises are worthless, and fruit and vegetable growers around the country are finding that out for themselves right now. It is no wonder that the Minister for Vocational and Technical Education said The Nationals are finished as a political force in Queensland. What has surprised me is the meek response to the minister’s comments by National Party members and senators. The member for Dawson made a few remarks on the way into the building about how unhelpful she found the comments, but that was about it. Notably, the Leader of The Nationals has failed to defend his party. Not one of his colleagues, including the member for Dawson, has come into this place and defended The Nationals from the minister’s prediction that the party is over. And you would have to say that their silence speaks volumes. (Time expired) 139 139 19:35:00 Vale, Danna, MP VK6 Hughes LP 1 0 Mrs VALE —In our society today, especially for the young people of our cities, suburbs and towns across Australia, illicit drug use is a problem and a real challenge for our nation. While we are all well aware of the devastation that drugs cause individuals, their families and our community, many, including me, fear that their use may soon become endemic. We in this place must continue to give our fellow Australians the clear message that illegal drug use is dangerous and that it is not acceptable for the future of our children and for their future happiness and fulfilment. We must also offer our children a word of hope and educate them about the dangers of drug use. One person doing a wonderful job on this front in my electorate is Sutherland shire resident Darren Marton, who launched his No Way antidrug campaign at the Cronulla Sutherland Sharks Leagues Club earlier this year. Darren is well placed to comment on substance abuse, having succumbed to the lure of drugs at a very early age and gradually ruined a promising career in the sports of rugby league and water polo. As a rising young sports star, Darren Marton began smoking cannabis in high school but, as so often happens, progressed to heavier drugs and by his early 20s was addicted to heroin. After a tumultuous decade, which included stints in jail and psychiatric wards, Darren finally experienced the terrors of crystal methamphetamine, more commonly known as ice. However, in 2004, after a great struggle and great unhappiness in his life, Darren turned his life around. He then vowed to use his own life experience to educate young people about the dangers and consequences of illicit drug use. I was privileged to attend the launch of Darren’s Drugs No Way campaign and hear him give a deep and moving account of the impact of drugs on his life. Darren was a gifted young athlete who had the world at his feet. He played junior representative football with the Cronulla Sharks in New South Wales and accepted a scholarship with the Sharks at the young age of 16. He had been a state rep player and, over a period of nine years, had captained his junior rugby league football team, the Gymea Gorillas, to a record nine-year premiership—all before losing it to drugs. However, Darren will say that he lost to drugs more than his bright future in sport; he lost his self-esteem, his self-confidence, his opportunity for a good education and his career opportunities—worst of all, he almost lost his family. It was only last year that I met Darren Marton and became aware of his story and his driving motivation to help others learn from his mistakes. At a meeting in my office, I gave Darren my full support. Since then, he has been able to gain the support of many local people—including Mr Alan Jones of Radio 2GB—to assist him in spreading the word of his campaign. I am now pleased to report that the National Rugby League has fully endorsed Darren’s campaign and produced 500 t-shirts bearing the NRL logo and the Drugs No Way campaign logo. Darren will speak to players from every team in the Harold Mathews Cup, the under 16s and the SG Ball, the under 18s junior representative rugby league competition. He also has spoken with players at Gymea and Camden Junior Rugby League football clubs. He has spoken to many schools and has invitations to speak at many others, including St Patrick’s College in Sutherland, Holy Cross College in Ryde, Macquarie College in Newcastle, Boystown at Engadine and Granville Boys High School. Since 17 May this year, when the campaign started, Darren has spoken to over 1,500 young people and their parents. Darren has also been invited to speak at Drug Free Australia in Adelaide next year at a major drug conference. Back in my electorate, Darren will be raising money for his campaign with the Drugs No Way sportsmen’s luncheon to be held at the Sutherland United Services Club on Friday. Former Parramatta legend John Peard will be the MC. Former Sharks and current South Sydney fullback David Peachey will attend, as will Bulldogs prop Mark O’Meley, who has played State of Origin for New South Wales and test for Australia. I would like to pay tribute to the work that Darren is doing, to his courage and determination in giving his time to warn young people about drugs, and to his commitment to creating a confronting and powerful campaign to warn our precious young Australians of the dangers of drug use. However, Darren should not be alone in his efforts to encourage young people to fulfil their dreams. We all have a duty to educate our young people about the dangerous ramifications of drugs, both legal and illegal. This combined with a zero tolerance approach to illicit drugs is the only way to go. I would like to finish with a quote from Kofi Annan—and Darren quotes this message often. He said: Let us arm our young people to say no. (Time expired) 141 141 19:40:00 Ellis, Kate, MP DZU Adelaide ALP 0 0 Ms KATE ELLIS —I rise to bring to the attention of the House a very public dispute that is currently unfolding in my electorate. It involves one of South Australia’s iconic businesses, a group of 16 suspended service technicians and the federal government’s extreme industrial relations laws. At the heart of the dispute is the Radio Rentals store at Prospect. Radio Rentals is a household name in my home state. The company has a long history of employing and trading in the state and has justly earned its reputation as a reliable electrical retailer. Yet in the past few months events have unfolded at Radio Rentals in Prospect that have seen some customers pledging to boycott the company, three long-serving workers made redundant, 16 staff being locked out, without pay, for a month and the company having to employ a high-profile public relations firm to counter all of the negative press that has occurred. The conflict centres on the conditions of employment of the Prospect store’s service technicians, whose collective contract was terminated by Radio Rentals earlier this year under the Work Choices legislation. The proposed replacement collective agreement was deemed inadequate by the employees and, following the termination of agreement, three long-serving technicians—with 30, 26 and 17 years service with the company—were made redundant. Unfortunately for them, the terminated agreement had included more generous redundancy payments, which had been negotiated through collective bargaining, rather than higher rates of pay. As a result of being made redundant, following the termination of the agreement, one of these technicians lost $86,000 in redundancy pay. The remaining staff members, none of whom has received a pay increase since 2003, were offered AWAs. These were not offered by Radio Rentals but by the entity known as Walker Stores Pty Ltd. The AWAs offered a pay increase of only one per cent, and 2.5 per cent conditional on what have been described as impossible production targets. Radio Rentals unilaterally denied the employees a right to choose collective bargaining and pursue a fair collective agreement, even though the majority of the affected employees wanted to do just that. With negotiations stalled, over half of the affected technicians determined to apply for protected industrial action in what is the first instance of industrial action in South Australia under the federal government’s new Work Choices legislation. They did everything by the book—applying to the Industrial Relations Commission for a secret ballot, balloting affected members, notifying Radio Rentals management three days in advance of the industrial action and then taking only four hours in a protected action last Thursday afternoon. However, in response, in an overly heavy-handed manner, Radio Rentals management determined to lock these workers out, without pay, for a month. They changed the locks and ensured that these workers were denied access when they returned to work. In a manner which I personally think is a disgraceful way to treat any workers, the company’s management issued a media release in which, instead of noting the many years of loyal service that these employees had put in, they referred to them as ‘traditionally militant employees’. They then took out a full-page ad in the Advertiser, which stated that these workers undertook ‘work performance that is well below that of the industry’. Is this an example of the balance in the relationship between employer and employee that the Prime Minister is so keen to promote? The tragedy here is that this need not be happening. Make no mistake: it is the Howard government that has brought us here. The way that these Radio Rentals technicians are being treated is disgusting. But what is more disgusting is that not only does the Howard government allow this treatment to take place but its laws encourage it. I would ask the government just where is the choice that it likes to talk so much about for these workers. The only choice for these workers is to take the AWA or be locked out of their workplace, without pay, for a month. In a disturbing update, which I heard today, Radio Rentals went to the Industrial Relations Commission today to try to cancel a show of community support for these workers, which is being held tomorrow. Let us be clear about Labor’s position on this. Under a Labor government, when a majority of workers want a collective agreement, it is a collective agreement that they will get. When a strong, independent umpire is required to step in, we will ensure that there is one to do just that. I put on record my support for the workers at Radio Rentals—indeed, for all workers in my community—who want nothing more than the choice of a fair collective agreement. I will be there to support them tomorrow and I will continue to fight for them, just as I will continue to fight for all the Aussie workers who are suffering from this government’s extreme attacks upon them—until we can stand in this place and tear up this legislation. (Time expired) 142 142 19:45:00 Jensen, Dennis, MP DYN Tangney LP 1 0 Dr JENSEN —Last year there were 312,000 Australians aged 85 and over. Over the next 20 years the number of Australians aged 70 and over will grow at a rate 3.3 times faster than the growth of the total population. Our population of people aged over 80 will double over the next 20 years and triple over the next 50. Importantly, the type of accommodation available to those of us who will require supported accommodation is a huge concern to those drawing close to that age. I am extremely fortunate to have in my electorate of Tangney the Regent’s Garden Group. They operate two facilities: one in Bateman, which has 17 single suites with private ensuites for low-care residents and 45 high-care beds in single or double bed units, and a second in Melville, which caters for a further 100 people with accommodation ranging from low to high care. The philosophy behind Regent’s Garden is that we should approach old age with joy. Mr Salim Lee, CEO of the group, started designing nursing homes as a young architecture student in 1973. At the time, he was designing nursing home accommodation along hospital class C design. He was troubled by the idea that old people were destined to spend their remaining days in often stark facilities designed for the ill, whilst these people were simply growing old. His strong belief is that aged care is different to hospital care in that the people are not sick; they are just needing assistance. This led to a change in not only design but focus. Lakeside Nursing Home was the group’s first foray into this concept. Five years ago Salim started concentrating on changing not only the types of facilities available but the mindset as well. Services were no longer seen as treatment; instead they became activities. The focus shifted from physiotherapy rooms to well-appointed gymnasiums, which today include weight training, treadmills and fit balls. There is a wellness centre which includes a spa suite, massage, reflexology, aromatherapy and a beautician. Maintaining connectedness with the family is very important. This is achieved simply: having a cafe equal to those found in the local community so that grandparents can take their children and grandchildren for lattes and babycinos, banquet halls for the entire family to dine together and movie theatres equal to the best theatres with big comfortable chairs so that families can enjoy home movies and movies together. Residents can enjoy themselves with a glass of sherry in hand whilst having a singalong or merely listening to someone tickling the ivories on the baby grand piano. The accommodation areas are so well designed that you are left feeling that you are walking along a European avenue, with each residence clearly marked with a large brass number and a big letterbox. There are park benches and plants within these areas. It is hard to believe that you are actually under a main roof. Water features, artworks and quiet sitting places leave you with the impression that you are at an expensive private hotel. But this is far from the reality. Salim Lee’s belief that we should look forward to old age with joy fits with the idea that you should not have to pay an arm and a leg for this type of accommodation and service. We all know how carefully we watch our money as we grow older. Regent’s Garden have managed to build and operate their facilities in such a way that they are creating competitiveness within the market. I am pleased to see other nursing home operators taking up the challenge as the standard of new facilities is improving. I believe that the ethos behind the Regent’s Garden Group has been the driving force to improve accommodation and provide better care. I would like to see their benchmark set as the industry standard. I have raised with the Minister for Ageing the positive influence that this impressive facility has on the aged population. He has indicated his willingness to visit the facilities and I am hopeful that he can officiate at the opening. My electorate was also fortunate to be granted extra service approvals—32 high-care places at Howard Solomon Aged Care Facility in Ferndale and six high- and 18 low-care places at Regent’s Garden. 143 143 19:50:00 O’Connor, Gavan, MP WU5 Corio ALP 0 0 Mr GAVAN O’CONNOR —A fascinating article appeared in the Australian newspaper on 4 September this year. It was clearly a leak from the sources very close to the member for Gwydir, who is the former Deputy Prime Minister and Leader of the National Party. According to that leak, dutifully reported by Steve Lewis, the Minister for Agriculture, Fisheries and Forestry was rebuked for displaying insufficient loyalty to the National Party. According to the Lewis story, the member for Gwydir gave the minister a dressing-down in front of his colleagues, telling him he needed to show more commitment to the party, beginning with turning up to meetings on time. That is a good start! There is absolutely no doubt that the member for Gippsland has been a disaster in the key agriculture portfolio. The recent decision by the government to abandon and betray farmers in its commitment to a mandatory code of conduct for the horticultural sector is a perfect illustration of the minister’s failure to stand up for producers. Far from standing up for fruit and vegetable growers, the minister has simply rolled over in the face of a Liberal onslaught. In the lead-up to the last election, the Howard government, through the then Deputy Prime Minister, a member of the National Party, committed to establishing a mandatory code of conduct for the horticultural sector within 100 days of being returned to office. There were endless repetitions of this promise, not only by Mr Anderson but by the member for Wide Bay and the member for Gippsland himself. In fact, the minister came into this place in November last year and restated the pledge. In response to a question without notice he said: The government, pursuant to its election commitment to develop a mandatory code of conduct, is in the process of doing exactly that. He said the government would introduce a process which conformed with its guidelines for prescribing mandatory codes under the Trade Practices Act 1974. But not only is the mandatory code off the table; the management of this important matter has been transferred from the National Party to the Liberal Party. We now see the minister for industry taking over an issue—at the insistence of the Prime Minister’s office—that should be managed by the agriculture minister. The interests of tens of thousands of hardworking fruit and vegetable growers are now being managed by the minister responsible for the big end of town and by a party that is in the pockets of retailers and wholesalers. The dismal performance of the member for Gippsland—‘Senator’ Peter McGauran, as he was described twice on ABC AM this morning—explains why the Prime Minister removed this important issue from his control. This vote of no confidence by the Prime Minister in the member for Gippsland should have resulted in his resignation from the portfolio. The fact that the minister for industry has completely abandoned the government’s election pledge—he has even denied that the government even made it in the first place—makes the agriculture minister’s position even less tenable. The Prime Minister’s action also shows that the current Leader of the National Party lacks any real authority inside the government because he cannot deliver on a cast-iron promise made by his predecessor. It is widely understood that the minister for agriculture has been considering following his brother and defecting to the Liberals. Like his brother, he would be no great loss to the National Party, and neither would he be a great gain for the Liberals. Senator McGauran reflected the attitude of his brother when he told the ABC Stateline program on 25 August that in Canberra the National Party is fading out. That statement is no great revelation to people on this side of the House or to farmers throughout Australia. It is clear to everyone, and especially to their constituents, that the National Party stands for nothing and has no future. In relation to the member for Gippsland’s immediate future, I understand that he has been told to stay exactly where he is by the Prime Minister’s office: it is better to have a compliant junior partner than to upset the coalition by allowing more Nationals to jump ship to save their political skins. The interests of Australian farmers are now being represented by a member who wants to be a Liberal, in a party with a leader who is too weak to stand up to the Prime Minister. Thank God the farmers have the Labor Party in their corner. 144 144 19:55:00 Draper, Trish, MP 0L6 Makin LP 1 0 Mrs DRAPER —Firstly, in response to the member opposite’s outrageous contribution, I am very proud to be a member of the coalition of Liberal and National Party members. All of our members, National and Liberal, do an outstanding job representing their electorates, which is why we are in government and the Labor Party is still in opposition. God help those in rural and regional areas who are ever represented by the Labor Party. The member for Gwydir and former Deputy Prime Minister has contributed outstanding service to our nation both here in Canberra and in his electorate. In terms of a code of conduct, members opposite need to take a powder, calm down and watch this space. On Tuesday 29 August, I had the pleasure of launching the Communities for Children program in my electorate of Makin on behalf of the Minister for Families, Community Services and Indigenous Affairs, the Hon. Mal Brough. The Communities for Children program is a $140 million initiative and is a key part of the Stronger Families and Communities Strategy, with $3 million being allocated to the Communities for Children project in my electorate of Makin. The program overall supports 45 communities across the nation for local early childhood development programs. The main goal of Communities for Children is to assist areas such as the suburbs of Ingle Farm, Para Hills, Para Hills West, Salisbury East and Pooraka to take a community wide and joint approach to assisting our youngest citizens and their families. In essence, the program is about community capacity building by helping to create closer links and ongoing cooperation between all the people who have a close interest in the health and wellbeing of young children. This includes families and schools, local councils, churches, clubs, businesses, community service providers, charities, volunteers, neighbourhoods and, indeed, whole communities, with facilitation and support from the federal government. The Communities for Children initiative is designed to ensure that services for children and families have the flexibility to respond to local needs and are accessible to those who need support. Most importantly, it is change driven from within my own community and not imposed on them from outside. This reflects the belief that everyone has a part to play in dealing with community based issues and that the best solutions lie in the combined wisdom and expertise of a broad cross-section of people and organisations. I would like to congratulate the Salvation Army Ingle Farm in their role as the facilitating partner, as they are managing the $3 million allocated by the government for the Communities for Children site. The money is going towards a whole range of activities and services designed to help achieve a common vision. That vision is to have a community where all children experience the best in parenting from supported, empowered parents who are connected with a community that values early life-enhancing and intervention activities for children; parent building and maintaining positive relationships; and community services, agencies and institutions working together. That is a vision worth working towards and one that I believe other communities around the country can share. There is no doubt that the Salvation Army Ingle Farm has the background and experience to successfully make the vision a reality. But it is the reputation of the organisation for delivering services and support in such a compassionate and caring way that sets them apart and allows them to make a real difference to people’s lives. I would like to take this opportunity to thank the Communities for Children committee in my electorate. I would especially like to thank Alan Steven, director of community services at the Salvation Army Ingle Farm, for taking on the responsibility—and it is a huge responsibility—for managing Communities for Children and for his passionate commitment to helping families and children in my community. I would also like to thank David O’Brien, the Principal of Ingle Farm Primary School, who right from the start believed in and supported the development of the FamilyZone Hub at Ingle Farm Primary. I would also like to thank all of the stakeholders, including the staff from the Department of Family and Community Services, who have put in a tremendous effort. 10000 SPEAKER, The The SPEAKER —Order! It being 8.00 pm, the debate is interrupted. 146 20:00:00 House adjourned at 8.00 pm 146 NOTICES The following notices were given: 2K6 Brough, Mal, MP Mr Brough to present a bill for an act to amend the law relating to child support, and for related purposes. (Child Support Legislation Amendment (Reform of the Child Support Scheme—New Formula and Other Measures) Bill 2006) 2K6 Brough, Mal, MP Mr Brough to present a bill for an act to deal with transitional and consequential matters relating to the enactment of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 and to amend the Native Title Act 1993, and for related purposes. (Corporations (Aboriginal and Torres Strait Islander) Consequential, Transitional and Other Measures Bill 2006) 2K6 Brough, Mal, MP Mr Brough to present a bill for an act to amend the Corporations Act 2001, and for related purposes. (Corporations Amendment (Aboriginal and Torres Strait Islander Corporations) Bill 2006) 2K6 Brough, Mal, MP Mr Brough to present a bill for an act to amend the law relating to social security, veterans’ entitlements, family assistance, student assistance, aged care and child support, and for related purposes. (Families, Community Services and Indigenous Affairs and Veterans’ Affairs Legislation Amendment (2006 Budget Measures) Bill 2006) 1K6 Billson, Bruce, MP Mr Billson to present a bill for an act to amend legislation relating to defence, and for related purposes. (Defence Legislation Amendment Bill 2006) 1K6 Billson, Bruce, MP Mr Billson to present a bill for an act to provide for testing for and treatment of malignant neoplasia in Australian participants in British nuclear tests, and for other purposes. (Australian Participants in British Nuclear Tests (Treatment) Bill 2006) 1K6 Billson, Bruce, MP Mr Billson to present a bill for an act to amend laws, and to deal with transitional matters, in connection with the Australian Participants in British Nuclear Tests (Treatment) Act 2006, and for related purposes. (Australian Participants in British Nuclear Tests (Treatment) (Consequential Amendments and Transitional Provisions) Bill 2006) FK6 Kelly, De-Anne, MP Mrs De-Anne Kelly to present a bill for an act to amend the law relating to communications, and for other purposes. (Communications Legislation Amendment (Enforcement Powers) Bill 2006) OK6 Nairn, Gary, MP Mr Nairn to move: That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: Facilities upgrade to Shoalwater Bay Training Area, Rockhampton. OK6 Nairn, Gary, MP Mr Nairn to move: That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry ojut the following proposed work whichj was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: Facilities for Troop Lift Helicopter, RAAF Base Townsville. OK6 Nairn, Gary, MP Mr Nairn to move: That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Proposed extension and accommodation upgrade to the existing Chancery of the Australian Embassy in Beijing. 2006-09-13 The DEPUTY SPEAKER (Hon. IR Causley) took the chair at 9.30 am. 148 STATEMENTS BY MEMBERS 148 Roxon, Nicola, MP 83K Gellibrand ALP 0 0 Ms ROXON —Last weekend I attended the opening of a new Vietnamese Cultural Heritage Centre in Sunshine, established by the Victorian Chapter of the Vietnamese Community in Australia for the benefit of the community. I would like to take this opportunity to congratulate the Vietnamese community, especially Phong Nguyen, the President of the VCA, and the committee members for their commitment to this project. It has taken four years to bring this project to fruition. I know that the centre will contribute significantly to the community and will provide space and facilities that complement all of the great work that the community group already does. I also want to record in parliament my public thanks to all those volunteers, donors and other community members who gave their time, their skills and their money to support this project. The centre will initially host two new community programs—the Vietnamese martial arts program and the Vision Aged Care Vietnamese Group. It is planned that the aged care group will prepare entertainment and learning activities for a children’s playgroup, which will provide unique opportunities for intergenerational interaction. I am sure that, with room to grow in this new centre, the VCA will soon expand the services and activities that they provide—for example, the centre’s kitchen may soon host an employment program of the Department of Employment and Workplace Relations for a Vietnamese cooking and catering service. I certainly hope the department will support this program at the appropriate time. Sunday’s event was an occasion to mark the official opening of the centre and gave people a preview of what more can come as the council seals the roads and as other development continues in the area. But it was also an occasion that the Vietnamese community took to mark the coming retirement of the state member for Footscray, Mr Bruce Mildenhall, who was honoured for his service to the community. He spoke in a very heartfelt way about how the partnership between him and the Vietnamese community had been one of the most rewarding parts of his 24 years in public life. Just as importantly, Mr Quang Luu, former head of SBS Radio and of Vietnamese background himself, was honoured for his many years of great work for the community. The community spoke of the special pride that they have had for the roles he has held over the past years. In the last 30 years the Vietnamese community as a whole has made an extraordinarily valuable contribution to Australian society in business, the arts and civic life and particularly to my electorate of Gellibrand, where over six per cent of the population is of Vietnamese background. I think it is important to acknowledge the contributions that Australia’s first wave of non-European refugees has made. The recent 30th anniversary of Vietnamese migration to Australia was a significant milestone for the community to mark. They have faced significant challenges but have successfully overcome these barriers to become integral members of the Australian community. It is particularly through the support and advocacy of organisations such as the VCA and the new Cultural Heritage Centre, which play an important part in this, that this has been able to happen successfully. (Time expired) 149 149 09:33:00 Gash, Joanna, MP AK6 Gilmore LP 1 0 Mrs GASH —I would like to speak today about the new pilot scheme proposed by the government for shifting people from areas of high unemployment to areas of employment. Shoalhaven, in the electorate of Gilmore, is one of the areas that has been mentioned in this regard because, unfortunately, we have lost some 530 jobs in the past six or seven months through no fault of anybody specifically. To shift our people from a high unemployment area to other areas is a very good bonus. There are a lot of people in the area who are interested in working but, unfortunately, there are no jobs available for them, so this proposal is very important for our electorate. I am very thankful to the minister for proposing this pilot program. The other issue I would like to discuss is school captains. I know that most members would be in touch with their school captains. We are meeting with our school captains next week and it is very important that we do so. It is a very rewarding exercise because we can learn what the schoolchildren are thinking about in their schools. It is very important for us to hear their concerns and to try to address them. We do this on a regular basis. I have also invited the state member to come along so we can discuss those issues of concern. There is another area I would like to address. I would like to say thank you to the parliament for allowing me to go to Africa. I have just come back from Africa. There are 21 women in our electorate who actually built a school 500 kilometres out of Nairobi, almost in the desert. Some 50 children started and there are now 370 children going to this school. Those 21 people went with me. They asked me to help them to open the school. I cannot begin to tell you how proud I was to do that and to see the facilities that these children now have. They are now able to attend a school, which they could not do before. Those people who have been to Africa will probably know—and I notice that the member for Fowler is nodding her head; she has been there—that visiting Africa brings you back to earth. It lets you see how good we have it here in Australia. I cannot begin to tell you of the areas that I saw. I saw the slum areas and the orphanages for young children who, since birth, have been on HIV-AIDS programs and will continue to be until they actually pass on from this world. It was rewarding that I was able to attend. I thank the parliament for allowing me to go to that. 149 149 09:36:00 Georganas, Steve, MP DZY Hindmarsh ALP 0 0 Mr GEORGANAS —Since 1996, Australia’s foreign debt has spiralled up from $193 billion to $494 billion. That is a 155 per cent increase. That is $24,000 for every man, woman and child. It is equivalent to 52 per cent of our gross domestic product. Australia’s imports exceeded exports by $16.7 billion over the last year. Annual interest in Australia’s foreign debt has jumped 40 per cent in the last year to $21.8 billion lost to our country. The current Treasurer said in 1995 that high foreign debt puts a premium on Australian borrowing that flows through and every Australian pays for the consequences. The consequences are increasing interest rates. The consequences can be seen in the number of people’s own homes being repossessed throughout Australia, doubling within New South Wales between 2003 and 2005. Other people have been subjected to even higher interest rates since. Australians acting individually and in concert continue to do the right thing for local jobs and Australian self-reliance by using their purchasing dollar to support local industry and Australian made goods, be it primary produce, garden tools or the family car. The Australian Made campaign has commissioned research that reports that 45 per cent of surveyed customers prefer to buy Australian made products and over 30 per cent deliberately look for products demonstrating the Australian Made logo. Eighty per cent of Australian consumers appear to be aware that a label consisting of the words ‘Product of Australia’, ‘Produce of Australia’ or ‘Produced in Australia’ identify more substantial Australian content than Australian Made. But the specific requirements of each label certainly are not well known. The amendment to the Trade Practices Act in 1998 allows goods to wear the Australian Made label or a variation if the goods have been substantially transformed in Australia—that is, they have undergone a fundamental change—and 50 per cent or more of the costs of producing or manufacturing the goods are attributed to processes in Australia. The ‘Product of Australia’ label requires that each significant ingredient or component must be sourced from Australia and virtually all production or manufacturing processes must have occurred within Australia. How each of these classifications works in practice falls to the trade practices court. Anecdotal explanations from previous cases, even those within the legislation’s explanatory memorandum, give more certainty. Most Australians may never digest the subtleties of the law. I think Australians have the right to know where their products come from, where they are made and if they are made here in this country. Fears exist that rules have been compromised to allow wide use with limited meaning. Fears also exist that advertising is included within the production costs, further decreasing the local input to the product. I certainly hope that the trade practices commission and the ACCC can allay such fears and reinforce the good work they do in policing the law with education campaigns so that people can purchase with confidence in the knowledge that, by purchasing a good labelled ‘Product of Australia’, the consumer is doing their best for our country. (Time expired) 150 150 09:39:00 Lindsay, Peter, MP HK6 Herbert LP 1 0 Mr LINDSAY —I have good news this morning for the parliament. James Cook University in Townsville will become the first university outside Europe to receive international recognition for its degrees in marine science. JCU is already acknowledged as Australia’s leading tropical research university and this first five-year accreditation adds to its international standing. London based IMarEST is an international body that oversees professional standards and provides professional focus for all areas of marine science, technology and engineering. Recognition of the Bachelor of Marine Science and Bachelor of Science Tropical Marine Network Program reflects its assessment that the programs meet international professional standards. It does not stop there. James Cook University academics are the most highly cited university researchers in Australia in the field of environment ecology, according to the latest rankings of the international ISI Web of Knowledge. On the world stage of 402 institutions ranked by ISI in this field, CSIRO appears at No. 7 in the world with only JCU followed by the ANU and the University of Queensland also making the top 100. JCU academics either authored or co-authored 25 per cent of the top 20 most cited Australian papers in this field. The latest ISI citation ranking comes at the same time as the publication by Shanghai Jiao Tong of the academic ranking of world universities for 2006, in which JCU is one of only 16 Australian universities to make the top 500. It is wonderful for JCU and its academics that these completely independent and objective measures place their research at the leading edge internationally. I say JCU is Australia’s leading tropical research university and that is confirmed by both ISI and the Jiao Tong index. ISI also ranks JCU research papers in the categories of plant and animal science and geosciences in the top 10 of Australian universities for the most highly cited papers. The very high ranking of CSIRO was further indication of the likely future impact of the Australian tropical science and innovation precinct which is to be based at James Cook University in Townsville. This is largely a partnership between JCU and CSIRO, and the JCU rankings on the ISI list show what a powerhouse for research that this precinct will be on the national and the world stage. While JCU is both a regional and middle sized university in the Australian context, it is holding its own and in some cases surpassing the long established and much larger metropolitan universities. Well done, JCU. 151 151 09:42:00 Irwin, Julia, MP 83Z Fowler ALP 0 0 Mrs IRWIN —In recent days we have heard a number of comments on what are referred to as Australian values. Some have called for such values to be taught in our schools and signed off by persons entering Australia. But what are the values to be enshrined as Australian? I must admit I have not seen any statements I could fully agree to. So without mentioning the words ‘mateship’, ‘digger’, ‘vegemite’ or ‘fair go’, I have put together my own statement of Australian values and I invite my fellow Australians to accept or reject them as they see fit. Here is my statement of Australian values. Australia is a society which by law and custom respects and shows tolerance to the political, social and religious beliefs of all its citizens and residents. Australia is a democracy with its government freely elected by the people and governed according to the rule of law. The official language of Australia is English. Australians respect the rights of individuals to pursue happiness in their own ways, provided they do not injure or unreasonably offend others. In respecting the diversity of their population, the people of Australia expect all within their borders to treat each other as equals regardless of race, gender, marital status, sexual preference or disability. Australia supports its families in the nurture and education of children and seeks to improve the skills, intellectual development and cultural enrichment of all its people. Australians come together in communities, in corporations, in workplaces, in social, sporting and cultural organisations and as a nation to promote their mutual benefit, advancement and protection in the face of adversity. Australians care for their natural environment and hold in trust their heritage for future generations. Australia provides care and support for the social security of its aged, disabled, infirm and economically disadvantaged citizens and residents. As a nation Australia is proud of the achievements of its citizens—proud of its multicultural and inclusive society and confident of its future. Those are my Australian values. I welcome the comments and the criticism of my fellow members of parliament and all my fellow Australians. 151 151 09:44:00 Keenan, Michael, MP E0J Stirling LP 1 0 Mr KEENAN —I rise to talk of the four RSL clubs in my electorate of Stirling—in Scarborough, Osborne Park, Nollamara and North Beach. Together they form a vital part of the community infrastructure of my local area. I am very pleased to say that the North Beach RSL sub-branch has been successful in its submission to the Australian government for funding that will greatly benefit its 400 members. It will especially benefit those who are isolated from the rest of the local community, whether through a lack of confidence or issues of physical or mental health. The North Beach RSL will receive Veteran and Community Grants scheme funding for a laptop computer and a printer. These items will allow its volunteers to produce a regular newsletter containing all the latest actions of the sub-branch as well as vital information for veterans and their families. The North Beach RSL newsletter will be distributed by hand, another enormous commitment by its volunteers. Close to 400 veterans will benefit from this newsletter delivery. Sadly, many veterans live quite isolated lives, and their lives are enormously changed by the human contact that occurs through regular visits to their homes by other veterans and volunteers. This encourages their participation in the North Beach sub-branch and the many activities that it undertakes. This funding gives local veterans a voice, just as all of our veterans should be given a respected and meaningful voice within their local communities and Australian society as a whole. We should never forget the great sacrifices of our veterans in the defence of our nation and their continuing role in our communities. The Howard government recognises this and, as a result, the Minister for Veterans’ Affairs made the announcement to the RSL national congress yesterday that there would be an extra $400 million over the next five years to ensure that gold and white card holders will continue to enjoy access to free health care. Veterans and war widows with gold or white cards can now confidently access the services of healthcare professionals that they know and trust without having to pay anything themselves. Any veterans requiring a hospital stay can now access the services of large surgical hospitals, regional facilities and small local hospitals close to family and friends. I heartily commend the minister for this program, which will benefit 300,000 veterans across Australia as well as many within my electorate of Stirling. The RSL sub-branches in Stirling, Nollamara, North Beach, Osborne Park and Scarborough, do vital work assisting our veterans. These RSL units ensure that we continue to recognise the role of our veterans and that the veterans can fully participate in Australia’s important commemoration and remembrance ceremonies. They also allow for members to engage in the education of our younger generations, and I congratulate them for everything they do. (Time expired) 152 152 09:47:00 George, Jennie, MP JH5 Throsby ALP 0 0 Ms GEORGE —I have made representations on several occasions, both to Australia Post and to Minister Coonan, seeking approval for an Australia Post agency to be established at the newsagency of one of my constituents, in Farmborough Road, Unanderra. To date my representations have been unsuccessful and the request has been refused. I am hoping that yet another petition signed within a short time frame by more than 1,000 local residents might lead to a reconsideration of this decision by the government and Australia Post, and I intend to formally table the petition in the House. The arguments in support of the proposal advanced by Mr Harper include the need for such a service, as indicated by the large number of signatures on the petition from the local residents. He points out too that the postal agency would be of great benefit to many elderly residents who live nearby and do not have transport. It would service a growing number of retirement villages and nursing homes in the area. The service would also be available to workers at the Unanderra industrial area, following the closure of the mail exchange in Glastonbury Avenue. Population increases in the surrounding neighbourhoods of Unanderra, Farmborough Heights, Coachwood Estate, Mount Kembla Heights and Highview Estate mean that the demand for postal services has outgrown the one available local postal service. I find it very hard to understand why Australia Post has responded by saying a new post office is not warranted. That is certainly not the view of local residents. The government made an election commitment in 2004 that it would ensure that the needs of elderly and disabled Australians and those living in regional and rural Australia would be taken into account. Why then are the needs and wishes of local residents, many of whom are elderly and without access to transport, being ignored by Australia Post? I urge the minister and Australia Post to respond to the request of the petitioners and approve an Australia Post agency at Mr Harper’s newsagency on Farmborough Road, Unanderra. 153 153 09:50:00 Randall, Don, MP PK6 Canning LP 1 0 Mr RANDALL —I would like to raise the issue of the Pinjarra bypass in my electorate. Pinjarra is a town where there is an enormous amount of growth going on, particularly the expansion of the Alcoa mining activities in that region, the expansion of the Wagerup refinery and also the Boddington goldmine, which is coming on stream. It puts thousands of trucks a day through the centre of the Pinjarra town. I have, as a result, had a delegation from the Pinjarra shire, led by Neil Leach, and the Peel Development Commission, led by Maree De Lacey, asking that I support their application for AusLink strategic funds to help build a bypass, which would go from Greenlands Road around Pinjarra to save the congestion through the middle of this town. In fact, there are a number of towns in my area that have looked for bypasses. Byford is another one and so is the town of Waroona, but Pinjarra at the moment is quite vital in that the traffic is choking the middle of the town. I supported their application, as I supported an application for Ranford Road, which is in the shire of both Gosnells and Armadale in my electorate. That was supported by the shires and, to a small extent, by the state government. I am confident that that funding, because of the way it has been supported, will come for Ranford Road. However, in an absolutely bizarre turn of events, when I inquired as to the prospects of the Pinjarra bypass I was told that the feedback from the federal department was that they had not recommended it as a high priority. I asked why. When the state government were asked if they would support it in matching funding through the AusLink strategic road funding program, they said, ‘Yes, we’re happy to support it but the funds will have to come from the Perth to Bunbury highway funds that the state government are putting into.’ This is just absolute chicanery by the state minister— A division having been called in the House of Representatives— Sitting suspended from 9.52 am to 10.14 am They are saying: ‘Pull the money out of the Perth to Bunbury highway. We are not going to put any additional new money into this bypass.’ As a result, the much needed vital bypass in Pinjarra will not go ahead and, because of the stunt of the state minister, Alannah MacTiernan, and her department, the people who will miss out will be the people of my electorate. (Time expired) 154 154 10:15:00 Ferguson, Martin, MP LS4 Batman ALP 0 0 Mr MARTIN FERGUSON —I call on the Treasurer and the ministers responsible for corporate governance to properly monitor foreign nationals and multinationals so that they can no longer hide behind voluntary administration as a method of stripping hardworking Australians of their life’s work. A recent example of the failings of the Australian court is that of Bob Bosnjak who, along with his father, Simon, and brothers John and Jim, built up one of Australia’s biggest and most successful bus companies: Westbus/Bosnjak Holdings. After having been first swindled of much of his share in Bosnjak Holdings and going through lengthy court proceedings to have an order made against Jim Bosnjak for an account of profits for his dishonest dealings with the National Bus Co., Bob Bosnjak has now been swindled out of any practical redress by National Express. After Bosnjak Holdings was put into voluntary administration, National Express made it a condition of standing behind ordinary trade creditors that it and all its directors be indemnified against any claim Bosnjak Holdings might have against it and its directors, effectively leaving Bob Bosnjak out in the cold with little means of redress. National Express has gone on to secure three transport franchises in Victoria—namely, V-Line, M-tram and M-train—and has also bought Jim Bosnjak’s share of the National Bus Co., allowing National Express to effectively treat Bosnjak Holdings as a wholly owned subsidiary without regard to Bob Bosnjak who currently has further legal action under way in relation to this matter. However, the reckless corporate behaviour of National Express continues further by the fact that it saddled Bosnjak Holdings with a debt it could not survive, effectively running it into the ground, resulting once again in voluntary administration and the subsequent sale of Bosnjak Holdings assets to a Singaporean Cabcharge Jointventure. I therefore say that National Express, so far as I am concerned, has swindled Bob Bosnjak of his life’s work and of the legacy left to him and Jim by their father, Simon. This should have been without any doubt an example of a great migrant success story but the antics of National Express have ensured that not only was Bosnjak Holdings managed abysmally whilst under voluntary administration but it was effectively run into the ground and destroyed and then had its assets sold to another foreign company, leaving Bob Bosnjak with literally nothing. That National Express and its directors can destroy an Australian company then hide behind voluntary administration is a travesty of justice. This is an example that requires Australian government action. It is a lack of corporate governance and this matter needs to be fully investigated and attended to. It is about time successful migrants and other Australians who build successful companies were protected from foreign multinationals who come in to destroy their life’s work and effectively swindle them out of their just entitlements and rewards for their life’s work. 155 155 10:18:00 Gambaro, Teresa, MP 9K6 Petrie LP Parliamentary Secretary (Foreign Affairs) 1 0 Ms GAMBARO —Today I would like to speak on the work the Howard government has done to support small business. Small businesses are a very active part of the economy of the Petrie electorate, as they are across Australia, and they provide a most incredible source of jobs, economic growth and innovation. Even the largest companies have started with spirited vision and realised their ambition and dreams. I want to speak about one of those incredible companies. I recently had the great pleasure of visiting Paul Gripske of Roy Gripske and Sons, which is a small engineering parts specialist which is based at Narangba. With the assistance of an Australian government grant through the Commercial Ready Program, Paul was able to use the dollar-for-dollar funding to transform his prototype of a world first. It is an outdoor vacuum cleaner, which will be a sellable product pretty soon. The Powerup Vac attachment converts a conventional outdoor blower machine into a vacuum unit that can suck up rubbish such as cans and bottles. It might sound a little uninteresting, but the applications are just amazing, particularly after major sporting events, major carnivals, State of Origin matches et cetera. The first of these outdoor vacuum cleaners will be available on the shelves by mid-2007. Those entrepreneurial developments are incredible and should always be encouraged to grow. The feedback I get from businesses over the year is always about red tape and the way they operate their enterprises. The government has recognised that and made some real changes, particularly for small business. Recently and more broadly, the Australian government presented a final response on the Banks task force report Rethinking regulation. This was the report of the Taskforce on Reducing the Regulatory Burden on Business. The government agreed to 158 of the 178 recommendations, which cover a whole variety of sectors. The strengthened Office of Best Practice Regulation will act as a gatekeeper to stop red tape reaching the statute books in the first place. The federal government is working in other ways with state and territory governments to harmonise conveyancing laws et cetera to cut down red tape. On a local government level we have provided $50 million worth of regulation reduction incentives to reduce compliance. Petrie’s 3,000 businesses will be able to continue their very valuable work unhindered by the enormous burden of accounting red tape, and simplified accounting methods will be developed. These businesses will be able to do what they are best at—developing innovation and employing many more Queenslanders. 10000 Causley, Ian (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. IR Causley)—Order! In accordance with standing order 193 the time for members’ statements has concluded. 155 BILLS R2608 155 Debate resumed from 16 August, on motion by Ms Ley: That this bill be now read a second time. 156 10:21:00 O’Connor, Gavan, MP WU5 Corio ALP 0 0 Mr GAVAN O’CONNOR —The opposition will support the National Cattle Disease Eradication Account Amendment Bill 2006, but with some reservations, which I will outline to the chamber. The bill amends the National Cattle Disease Eradication Account Act to enable the funds currently held in the National Cattle Disease Eradication Account—an account held and operated by the Department of Agriculture, Fisheries and Forestry—to be transferred to the Cattle Disease Contingency Fund, an account held by Cattle Disease Contingency Fund Pty Ltd. The owners of this new company are the Cattle Council of Australia, the Australian Lot Feeders Association and Animal Health Australia. Since 2002, cattle industry levy moneys have been paid into this account. The National Cattle Disease Eradication Account was set up in 1991 to hold and distribute funds for programs aimed at eliminating brucellosis and tuberculosis from the Australian cattle and buffalo populations. That was a successful initiative of the then Labor government. It is pleasing to see that the original objectives of that scheme, which at the time met with some opposition from some industry operators and farmers, have been fulfilled and we have managed to eradicate those diseases from our herds. The current balance in the account is approximately $13.5 million. The Cattle Disease Contingency Fund Pty Ltd, as trustee, is permitted to use the funds in the Cattle Disease Contingency Fund for a number of specific purposes, including prevention and control of endemic or exotic cattle diseases, research and other animal health activities likely to benefit the Australian cattle industry. I note that the proposal has received support from industry groups and Labor will not be opposing it, but I point out on the floor of the Main Committee our concerns with what would seem to be the privatisation of many of the functions of the Department of Agriculture, Fisheries and Forestry. This has the potential at the end of the day to reduce Commonwealth scrutiny over these matters and accountability for the use of the funds. I have observed this trend over the 10 years this government has been in office—accountability mechanisms have not been as stringent as we would expect. Many bodies are at arm’s length from this parliament, which makes it increasingly difficult for the parliament to exercise scrutiny over their funds. This money was collected from levy payers for a specific purpose, and now, with the agreement of industry groups, it is about to be used for other closely related purposes. As I said, we are not going to oppose the legislation, but we do point out that this is part of a trend that has occurred over the past 10 years of these sorts of bodies being put at arm’s length from the parliament to reduce the scrutiny of them and the accountability for their funds. We can see how, when ministers put firewalls around particular issues, all of this can go wrong. The AWB is a classic example of this. We certainly do not want a situation where funds that belong to producers in this industry are misused in any shape or form. I certainly hope that the minister has his eye on this whole accountability issue. From an opposition’s point of view, we have found it very difficult at times to get appropriate information on the activities of many of these bodies through the estimates committee process of the Senate. As members would know, that is a very important way in which oppositions and industry groups get to scrutinise some of these proposals and how they are operating. It provides a forum for industry groups when they have complaints about these sorts of matters. We know that in the beef industry and livestock industries generally there is a lot of concern among producers on these issues. In the past this has led to the formation of different organisations to represent producers. There has been significant controversy over the live export trade and aspects of that industry. I note that the Lot Feeders Association will be a party to the company that is being set up under this legislation. As you would know, Mr Deputy Speaker Causley, as somebody who has been intimately involved with the beef industry in your electorate and in your past political life and the one in this parliament, the legislation deals with a very significant industry that is most important to Australia’s economic fortunes and the futures of regional communities throughout Australia. Each year Australia produces just over two million tonnes of beef. That is an estimate provided by the ABS in 2005-06. The gross value of Australian cattle and calf production, including live cattle exports, is approximately $7.4 billion. That is ABARE’s figure for 2005-06. There were in excess of 74,000 properties with cattle, according to a June 2005 estimate, holding 27.78 million cattle and calves and 12.9 million beef cows and heifers. Domestic expenditure on beef is estimated to be in the region of $6.4 billion and, as members would know, it is a significant export earner for Australia. In 2005-06 we exported 65 per cent of our beef production, with a total value of approximately $4.5 billion. I have given a thumbnail sketch of the industry, but it is a big player in economic terms in regional Australia and as far as the national economy is concerned. We must do whatever we can to protect it, to protect its integrity and to ensure that the diseases that ravage livestock are contained and do not have an adverse economic impact on the industry. A lot of research is done in many places on a whole range of pests and diseases that affect production in this industry. We could speak at quite considerable length about those exotic pests and diseases, but there are two that have caused devastation in other economies and had enormous adverse economic impacts. I refer here to the foot-and-mouth disease outbreak in the United Kingdom. I was recently in the United Kingdom—I think perhaps I might have been there at the time you, Mr Deputy Speaker, were there—speaking to various rural groups about the impacts of foot-and-mouth disease and how we might better prepare for the prospect of a disease outbreak. Foot-and-mouth disease had a devastating effect on British beef exports and on the domestic industry in that country. Of course, there have been some estimates of the impact that it might have here in Australia. In a publication by the Department of Agriculture, Fisheries and Forestry there was a review of the new technologies and the potential impact of new technologies on Australia’s foot-and-mouth disease planning and policies. In that report, the estimates of the effect of even a small-scale outbreak were the immediate closure of many of Australia’s major export markets for livestock and livestock products and an estimated minimum loss to the national economy of between $2 billion and $3 billion in GDP rising to between $8 billion and $13 billion 12 months after the outbreak. This is an enormous impact that would occur if we in Australia had an outbreak similar to the one experienced in the United Kingdom. The United States, with the BSE outbreak and the failure of the systems there to be able to effectively trace where that outbreak occurred, has been excluded from the Japanese market, and of course Australia has been fortunate enough to be able to partially fill that gap and increase its exports into that market. That has strengthened the export market for Australian beef and provided in some very difficult times extra income and a certain bottom under the international prices received for Australian meat exports. I note here in the chamber the presence of the honourable member for Grey, who has an intimate knowledge of the beef industry and knows how important it is to South Australia and many producers in his state. I think that honourable members from both sides of the House—it does not matter what their political complexion is—understand very clearly how important these industries are to regional communities. They are important not only in the production end but in the value adding up the chain where jobs are provided in the meat and livestock industries. They are critical jobs to regional areas. If we do not have them, the communities dry up even faster in an economic sense. So it is very important that we keep on top of exotic pests and diseases. Past Labor governments have certainly turned their minds to this and to the substance of this bill, which concerns two diseases, tuberculosis and brucellosis, and their eradication in our herds. But, as we know, you have success on that front and other potentially more devastating diseases are waiting in the wings. I hope that these funds will be spent wisely and I note the involvement of key industry groups in that process. I have confidence that those groups will spend this money wisely, but I urge them to keep in mind that these moneys were raised for one purpose and are now going to be used for a different one and there is a heavy responsibility not only to growers but also to the taxpayers of Australia and to this parliament. The taxpayers of Australia support the meat industry in a variety of ways, and I think it is important that we have proper accountability for allocated funds. While I am on the issue of exotic pests and diseases, it disturbed me greatly when I heard on AM this morning Professor Max Whitten and Dr Jim Cullen, two eminent scientific specialists in Australia in pests and diseases, speculating about the impact of the shortage of scientists appropriately trained in the quarantine area. We have had plenty of debates about this in this place. I will be followed in this debate by the member for Lingiari, and the comments I make are particularly pertinent to his electorate. There has been a massive increase in illegal fishing incursions to our north. Failed government policy has seen an extraordinary number of incursions, with some of these illegal fishers setting up base camps on Australian soil. They have been apprehended with animals on board their vessels and in their camps. Anybody who knows anything about the Northern Territory cattle industry would know that it is not just about cattle but about feral pigs and other animals. If a disease like foot and mouth were introduced and took hold, it would decimate a very important industry in the Northern Territory and would certainly affect the whole Australian meat industry. So here we have two eminent scientists commenting on the shortage of scientists, particularly in the area of exotic pest and disease analysis and prevention. They made some scathing comments about the situation today compared with 10 years ago. They are reported to have said that, 10 years ago, there were three times more technical scientific specialists than there are today and that the system today is overloaded with administrative staff. These eminent people were commenting on a deficiency in an organisation which is at the front line in our fight against exotic pests and diseases, including foot and mouth, BSC and a range of other diseases that affect the livestock industry. A very sombre warning has been sounded and I congratulate these scientists for coming out into the open on this matter. I have been saying for many years that, unless you get the infrastructure right, you cannot get on top of these problems when they occur. The opposition have been arguing—and we are supported by the New South Wales farmers on this—that we ought to have a thorough inquiry, review and overhaul of Australia’s quarantine arrangements. We are in a new era of global trade. We are in an era of bioterror. We are in an era of massive illegal fishing and there are difficulties in defending our coastline. We are in an era where many of our critical rural industries face the prospect of significant outbreaks of exotic pests and diseases. For many of those industries it is not a question of if; it is a question of when. When these incidents occur, you have to minimise the damage. There must be research into not only the exotic pests and diseases but how we should respond. I note that in the chamber with me today is the member for Lingiari. I have made some comment on the Northern Territory cattle industry and the importance of getting on top of the exotic pest and disease situation. Productivity in the cattle industry in his electorate is dependent on the ability of producers to keep on top of particular exotic pests, which have the potential to decimate that industry. In conclusion, the opposition will be supporting the legislation, but we sound a note of concern and warning about the lack of accountability for funds that has occurred in some organisations over the life of this government when bodies at arm’s length to government have been set up. The entities that are involved in this new company are reputable ones, but I just sound a note of caution to the parliament that there are what we thought were quite reputable organisations now under the pump for a massive misuse of funds. We must be eternally vigilant in this regard. Our responsibility as members of this parliament is to ensure that accountancy and transparency arrangements are there so that the Australian taxpayer, producers and the general community are able to scrutinise these funds. 159 10:41:00 Thompson, Cameron, MP 84C Blair LP 1 0 Mr CAMERON THOMPSON —About a quarter of Australia’s 133,000 farming establishments derive their main income from beef cattle farming. The National Cattle Disease Eradication Account Amendment Bill 2006 will materially affect an important part of the process that supports a large slice of our rural industry—particularly our opportunity to export product from rural areas. Beef cattle farming is providing great opportunities and has traditionally provided great opportunities for Australia to export. Last financial year, there was $13.5 million within the fund that we are talking about. It raises a considerable amount of money to be used to protect our rural industries and we need to ensure that there is sufficient flexibility within our system to arrange protection in ways that will be effective. We should not put it in straitjackets or implement guidelines that limit its effectiveness. We heard from the member for Corio opposite about some of the new threats that are appearing all the time that could potentially cause a danger to our very important beef cattle industries. I would just remark a little bit on the evolution of the cattle industry in Australia. I do not know how many members know it, but cattle first arrived in Australia in 1788 on the First Fleet—there were six of them. By 1800, we had 1,044 head of cattle in Australia. By 1850, there were nearly 1.9 million head of cattle. In 1900, that had grown to 8.6 million. By 1950, we had 9.7 million and in 2002 we saw the peak in the cattle herd at 24.7 million head of cattle. The drought that we have been suffering that has been causing all the pain and anguish in rural areas has caused numbers to tail off a bit since then. There are up to 24.7 million head of cattle in Australia, providing great support for communities in all kinds of different regional areas in our country and also providing export income. In 2003-04, for example, exports of beef earned Australia $3.9 billion, which is 3.5 per cent of the total of our merchandise exports. Live cattle exports earned an additional $460 million. We are among the top producers of beef, with the 10th largest herd in the world. We are also the world’s largest exporter of beef, with 25 per cent of the total of our beef production being traded. We had 36,200 beef cattle farms in 2002-03, accounting for 27 per cent of Australia’s agricultural establishments. It is important that we look at ways of providing additional support. We have seen growth in the cattle herd over the years on the average farm. In 1979 the average cattle herd on a farm would have been 218. Two decades later it reached as high as 301. That does reflect the growth and the trend within our rural industries towards greater, bigger and more substantial enterprises, and also towards greater efficiency and a more competitive industry which builds very strongly for the future of our country. The National Cattle Disease Eradication Account is used to fund initiatives in the eradication of brucellosis and tuberculosis. The original brucellosis and tuberculosis eradication campaign started back in the late eighties. It has been successful. Since then we have seen a number of programs, such as the Tuberculosis Freedom Assurance Plan and the Tuberculosis Freedom Assurance Plan 2, to monitor effectiveness. They ensure that the achievements of the eradication program for brucellosis and tuberculosis have been effective and long-lasting and that we do not see any resurgence of either of those two deadly diseases within our cattle herds. I thought I should say just how effective that has been. The last case of TB was found in Tasmania in 1972, in Victoria in 1991, in New South Wales in 1995, in South Australia in 1996, in Western Australia in 1998, in Queensland in 2000, and in the Northern Territory in 1999 in cattle and in 2002 in buffalo. I remember they spent an awful lot of effort trying to completely wipe out the buffalo herd in the Northern Territory, but I think that, as the member for Lingiari will probably tell us, there are still some out there. It is still important that we continue to maintain a watch on what is going on. I thought I might move from that discussion of the program to the importance now of providing greater flexibility. The purpose of this bill is to enable funds to be available for transfer—and I spoke before about $13.5 million in the last financial year being available in that fund—into a fund for a broader attack on cattle diseases through the Cattle Disease Contingency Fund. I think that, on the face of it, is quite clearly very much a desirable outcome. There are plenty of other threats out there for the cattle industries and it is very important that we enable that flexibility to exist. The scope of the Cattle Disease Contingency Fund is much wider and it will be used for the prevention, eradication and control of diseases as well as for research. I want to come to that in the short bit of time that remains to me. I would like to inform the House that there are significant changes occurring in my electorate that will contribute manifestly to this program. In the electorate of Blair we have the University of Queensland Gatton campus. Recently the University of Queensland, a very strong and reputable university with a significant worldwide reputation in veterinary achievements, announced that they are going to be transferring their vet school from St Lucia, in the leafy suburbs in the western part of Brisbane, to Gatton. This will enable students to have much more direct exposure to the heavy animal industries and to the wide range of rural pursuits that are engaged in in Queensland, particularly in areas like beef cattle. This will give the students greater awareness of the risks of these diseases. It is also significant that, once this revised school is established at the Gatton campus of the University of Queensland, we will have a much greater focus on those diseases and on those other diseases that threaten the future of our cattle herd. Students undertaking study there, as opposed to students who in the past studied at St Lucia, will be much more focused on those heavy animal industries and much more prepared and able to support our endeavours in the beef cattle industry than I think they could ever have been being trained within the built-up area of Brisbane. That is a good thing. I want to point out the cost of transferring that incredibly difficult learning process. It is the most complex learning process. They say that doctors have to study only one type of organism, whereas vets have to study a huge number of different animals and all the complexities that go with them. So it is a very complex undertaking. That transfer is not going to be free. For example, funds from sources such as the one that we are discussing today should be brought into play to ensure that those students have the best facilities. About $80 million is required to re-establish the facility at Gatton. To be honest about it, the university has been pursuing the Commonwealth for something like a $25 million contribution towards that. It may be that the stakeholders within this fund, the Cattle Disease Contingency Fund, will find it a worthwhile investment to help with the establishment of that facility, because the more we can train vets with a focus on the rural industries as opposed to dogs and cats in the cities, the better off we will be, the greater the future will be for our nation and the greater strength there will be within our rural industries. 161 10:51:00 Snowdon, Warren, MP IJ4 Lingiari ALP 0 0 Mr SNOWDON —I want to thank my colleague the member for Blair, who has just spoken, for cutting the time of his contribution to enable me to speak on this legislation. The National Cattle Disease Eradication Account Amendment Bill 2006 amends the National Cattle Disease Eradication Account Act to enable funds held in the National Cattle Disease Eradication Account—an account held and operated by the Department of Agriculture, Fisheries and Forestry—to be transferred to the Cattle Disease Contingency Fund, or CDCF, an account held by Cattle Disease Contingency Fund Pty Ltd. Since 1991—and this date is important to note when I come to the discussion about the campaign on tuberculosis and brucellosis shortly—the cattle and buffalo industries have been contributing through levies to the National Cattle Disease Eradication Account. That money was raised for initiatives to combat brucellosis and tuberculosis. The most recent initiative was the Tuberculosis Freedom Assurance Program, or TFAP. I am aware of this program simply because of its impact upon the Northern Territory cattle and buffalo industries. We should be in no doubt about the trauma placed on many producers as a result of this campaign, which was developed in the early nineties to eradicate brucellosis and tuberculosis from cattle and buffalo in Australia. This had a dramatic impact upon the cattle and buffalo numbers over a period of time. Whilst moneys were being paid out to the buffalo and cattle industries, many producers were left short. In some cases, smaller owner-operators found it very difficult to sustain their operations in the cattle industry as a result of the costs incurred. They did not believe that they had received adequate compensation for the eradication of brucellosis and tuberculosis from their herds, and such eradication often meant the destruction of large herds of cattle. One particular property that I am aware of, Nutwood Downs in the Northern Territory, is owned by the Dunbars. They had a significant cost to bear as a result of this campaign. I think they, like others in the industry, found it very difficult over a period of time to sustain their activities in the industry as a result of the costs that were incurred. Be that as it may, they are still in the industry. They are still producing very fine cattle off their property, as are other cattle producers in the Northern Territory. But the buffalo industry is very different. The impact on the buffalo industry was very dramatic to the point where the number of commercial buffalo producers was reduced substantially as a result of this campaign. The Tuberculosis Freedom Assurance Program finishes on 31 December. At the request of the cattle and buffalo industries, the remaining funds, approximately $13½ million, will be transferred to the more broadly focused Cattle Disease Contingency Fund—a trust fund established to fund such programs. The Cattle Disease Contingency Fund Pty Ltd is a private company jointly owned by the Cattle Council of Australia, the Australian Lot Feeders Association and Animal Health Australia, itself a private company owned by industry and state, territory and Commonwealth governments. Since 2002, cattle industry levy moneys have been paid into this account. The member for Corio, the shadow minister, raised governance issues which we have some concerns about in relation to this program. We know that moneys which were collected for a specific purpose will now, with the agreement of industry groups, be used for other closely related purposes. We support this legislation. I do so because I am very much aware of the importance of the cattle industry to the Northern Territory economy. The peak body for the cattle industry in the Northern Territory, the Northern Territory Cattlemen’s Association, represents around 98 per cent of the Northern Territory cattle herd, from small family operations to large corporate organisations. I have some figures from the association. Their members managed a land mass in excess of 620,000 square kilometres in 2005 and produce 532,000 high-quality cattle each year. Over 212,000 head of cattle are delivered directly to the port of Darwin for export to the Asia-Pacific region, and a further 320,000 head of cattle are transported and sold to all states and territories in Australia. We know that this is of tremendous importance to the Northern Territory economy. The pastoral industry generates over $330 million directly and another $180 million indirectly for the Territory economy. But there are animal health issues which remain a concern for the cattle industry. The biggest animal health concern for producers in the Northern Territory is botulism. Producers in the Alice Springs region are also concerned about lice, and Top End producers are concerned about buffalo fly. The most common disease that producers vaccinate for is botulism, with a smaller number of producers in the Top End, Katherine and the Barkley region vaccinating for vibriosis. Based on producer estimates—and I am relying here on information from the Department of Primary Industry, Fisheries and Mines in the Northern Territory—carrying capacities across the Northern Territory are expected to rise through increases in station infrastructure. Estimated increases are 29 per cent by 2009 and 54 per cent by 2014, with the largest increases in carrying capacity relative to area being in the Top End due to planned improved pasture development on already cleared land. There are other pests, of course, which concern the cattle industry. Animals such as wild dogs and pigs have a very substantial impact on the industry. Wild dogs were named as the feral animal receiving the greatest amount of control because of the impact they were having. The average cost of control of feral animals in the Northern Territory in 2004 was $4,928 for each property. We know the importance of this industry to the Northern Territory and Australian economies. What we need to appreciate is that we cannot allow that industry to be devastated in the way it could potentially have been as a result of the brucellosis and tuberculosis infestation that occurred in the late eighties. While there was an infestation, we reached an agreement for our producers to be able to export to the United States market—if my memory serves me correctly—and we needed to ensure that our herd was clean. As a result, we embarked upon a massive program for the cattle industry right across the Australian community. Just as we are concerned about brucellosis and tuberculosis, we need to be aware that there are other exotic diseases which could potentially decimate the Australian cattle industry. We need to be very aware of that. We need to be supporting producers and producer organisations and we need to be supporting government agencies who are involved in assisting in managing those threats. I want to commend to the chamber the work which is being done by all sections of the cattle industry in the Northern Territory and also the work which is being done by the relevant department in the Northern Territory government, the Department of Primary Industry, Fisheries and Mines. 163 11:00:00 Scott, Bruce, MP YT4 Maranoa NATS 1 0 Mr BRUCE SCOTT —I rise with great pleasure to speak on the National Cattle Disease Eradication Account Amendment Bill 2006. Having been involved in the very early stages of the development of the program and involved at a personal level in the sense of having cattle involved in this scheme in those very early days, it is a great pleasure to see that the scheme has been so successful that we are winding up the residual levies and putting them into a fund that will be used for research and for the benefit of the cattle industry in the future. The bovine brucellosis and tuberculosis eradication campaign is possibly one of the most successful campaigns of its type anywhere in the world. We have to give great credit to the industry itself. It led this campaign with the cooperation of state, territory and federal governments, departments of agriculture, field workers, veterinarians and staff on cattle properties right across Australia. Obviously public health is of paramount importance to the food industry in Australia and of course the cattle industry wanted to make sure that they were able to meet the increasing need to give the countries importing our beef guarantees that our beef going into their markets is free of diseases that could have a public health risk attached to them. There was a huge challenge in implementing this program. I think the experience that it built on was the eradication of pleuropneumonia from the beef industry. That was eradicated from the beef industry by about 1967. It was running post the Second World War. We built on that experience to implement the program for the eradication of brucellosis and tuberculosis from the beef industry in Australia. I mentioned a moment ago that this was a huge challenge to the beef industry. This was because we were dealing not only with small holdings in Southern Australia that were probably going to find it very easy to manage this scheme but also with large pastoral areas in Northern Australia. You have to make sure you are able to test all the cattle in these large pastoral areas. That means you have to muster them in, contain them, inoculate them and read the reaction to that inoculation in very large herds. You also have to deal with the wild buffalo population, which also could be a carrier of the disease. These animals are roaming wild in northern parts of Australia. The other problem was feral pigs. So it was probably the most ambitious eradication program that has ever been conducted in Australia. The great success, as I said a moment ago, should be seen as a great benefit to the industry and we should commend the leadership of the industry in wanting to make sure that they persevered with what was going to be an incredibly difficult campaign. The funding for this program came with a levy attached to it which was funded by 50 per cent of the cost being borne by the producers, 20 per cent at least by the federal government and 30 per cent by the state and territory governments. The residual funds that are in this fund now will be transferred to a more permanent fund that will enable the cattle industry to use them perhaps for further exotic disease research and also, importantly, for the benefit of the beef industry more generally. Brucellosis was eradicated in Australia in 1989 but to eradicate tuberculosis from the beef industry was going to be far more difficult. The complexity of where cattle run in Australia and the difficulties in Northern Australia meant that this area was going to be dealt with last. As difficult as it was to implement the program it was nonetheless successful and in 1997 Australia was declared free of tuberculosis. The importance of the beef industry to our regional communities cannot be understated. The beef industry and its exports—whether in processed or live cattle form—contribute enormously to our export wealth. But it is also the jobs that the beef industry creates at a local level which are important to regional economies and rural communities. That is underpinned by the ability of Australian cattle producers and meat exporters to be able to export our beef or live cattle into other markets with confidence. To now be able to give that guarantee—that our cattle and beef are going to be free of brucellosis and tuberculosis—gives us an advantage in many ways over other countries that cannot give that guarantee to importing countries. The beef industry have moved ahead again with the desire to ensure that they are able to identify at a consumer level the cattle and meat produced by them. That led to the introduction of the National Livestock Identification Scheme, commonly known as NLIS. There was a very difficult debate within the industry as to who would fund it and whether it would be successful, and there have been teething problems with the roll-out of that scheme across Australia. The National Livestock Identification Scheme ensures that cattle can be traced from their property of origin from the moment they leave a property to go through to feedlots or into the meat processing chain. That is important because, if we have exported beef to the United States, we are able now to identify the source of the meat, the history, and trace its progress from paddock to plate. That gives Australian producers another marketing edge: an ability to guarantee that, if there is a problem, we are able to trace at very short notice the source of contamination or possible disease. God pray it will not happen but, if it does, we are able to trace it quickly and efficiently. If quarantine is required—if an exotic disease has emerged and has arrived on a property by accident—then a particular area or property can be quarantined and dealt with very quickly. We have only to look at the experience of the United States with mad cow disease to understand just how important traceability is today. A number of years ago the beef industry in the United States identified two or three cows that had entered the food chain or had been identified with mad cow disease. The problem for the beef producers of the United States was that they were not able to guarantee that cattle which could have mad cow disease had not entered the food chain. Importing countries such as Japan then immediately put a ban on the importation of beef from America. That has been a huge advantage to Australia because we have been able to guarantee that our beef on the market in Japan is able to be traced to its source and that this traceability extends to being able to trace its history from property to property and from feedlot to processor to a retail outlet. You have only to look at what has happened in the United States and how they have been kept out of a very valuable market—the Japanese market—to understand that the traceability of animals today is an important issue for us. We have a competitive advantage because of the introduction of the National Livestock Identification Scheme. I am pleased that this federal government injected some $20 million into that scheme to help with the set-up of the infrastructure required for the reading of cattle at saleyards. Some state governments assisted with the subsidy on ear tags, which have an electronic chip in them, and production costs. Unfortunately, our Queensland government failed to a large extent to support our cattle producers in Queensland in relation to the cost of those ear tags. But that is a debate we have had and the beef industry in Queensland will always hold the state Labor government accountable for their failure to support a scheme that was going to guarantee the export status of beef from Australia. In Queensland the beef industry is our second largest export by value, which gives you some idea of the importance of it to Queensland. It is the second largest export by value—second only to coal—out of Queensland. It underpins jobs in regional areas, meatworks and export shipping terminals, and it is an example of why the livestock identification scheme was so important as part of the brucellosis and tuberculosis identification scheme in being able to identify cattle and individual properties. The principle used, dating back to the eradication of pleuro in Australia and then followed with brucellosis and tuberculosis, was about identification of cattle and properties so that if cattle were identified as part of that scheme they were able to be traced and dealt with accordingly with regard to the eradication of those diseases. I want to conclude by saying that, having been involved personally as a beef producer in the early days of the scheme, happily our own cattle did not read positive in any way to brucellosis or tuberculosis. But having been involved at an industry level and having watched with great interest the challenges that the beef industry right across Australia had to eradicate this disease, I commend the industry. I commend all those who have been involved in it from government, at a departmental level, from producer organisations and the producers themselves, because not only are we winding up this scheme in terms of the levies but that levy will go on to great use for the benefit of the beef industry in a contingency fund. I commend the bill to the chamber. 165 11:13:00 Ley, Sussan, MP 00AMN Farrer LP Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry 1 0 Ms LEY —I thank members who have contributed to the National Cattle Disease Eradication Account Amendment Bill 2006—the members for Corio, Blair, Lingiari and Maranoa. The conclusion of the Tuberculosis Freedom Assurance Program, TFAP, at the end of this year will mark a significant milestone. Successive campaigns over a number of years have resulted in both brucellosis and tuberculosis being considered to be eradicated in Australia. However, ongoing vigilance will still be required for these and a number of other diseases. The National Cattle Disease Eradication Account, NCDEA, has played an important role by holding the moneys used to fund the tuberculosis program and previous initiatives. These funds have been contributed by the cattle and buffalo industries through charges on export of cattle and buffalo and levies on cattle transactions and slaughter of cattle. I stress that funds held in the NCDEA have been derived solely from industry levies and charges and the interest on those moneys. In anticipation of the completion of the Tuberculosis Freedom Assurance Program, the cattle and buffalo industries have requested that residual funds in the National Cattle Disease Eradication Trust Account be transferred into the more broadly focused Cattle Disease Contingency Fund. This legislation is required to enable the transfer to take place. The cattle and buffalo industries are very aware that, although the threats posed by brucellosis and TB have been reduced, other diseases could have a significant impact on their herds. Transfer of NCDEA funds to the CDCF will ensure that these moneys can be used for a wider range of purposes related to cattle health and diseases while still retaining the ability to fund any future activities related to bovine tuberculosis or brucellosis. There are a number of safeguards to protect the use of the funds. These include the fact that the Cattle Disease Contingency Fund is a trust fund. The CDCF was established in 2002 by the Cattle Council of Australia, the Australian Lot Feeders Association and Animal Health Australia in recognition of the ongoing importance of biosecurity matters. The provisions of a trust deed that these bodies have signed outline the financial accountability of the trustee and specifies the use to which fund moneys can be put. Hopefully we can therefore allay concerns the opposition has expressed that this move will reduce the scrutiny and accountability in the use of the funds. That clearly will not be the case. While the legislation allows the transfer of NCDEA funds to the CDCF, I can assure you that this will not occur unless the trustee can demonstrate that full accountability for these funds will be maintained. I anticipate that this will be achieved through an agreement between the trustee and the Department of Agriculture, Fisheries and Forestry, which currently administers the NCDEA. The bill enables any funds in excess of what will be required in the future for brucellosis and TB programs to be used in the ongoing work of building a strong biosecurity framework for the Australian buffalo and cattle industries. It has the full support of these industries and will foster their ability to play an active role in maintaining Australia’s animal health status. In conclusion, I congratulate the cattle and buffalo industry on its management of disease risk in its herds and its proactive approach on this issue. It is recognition that the focus has shifted now from diseases which are largely of the past to those of the future, which we obviously have less knowledge about, but we need to maintain security and obviously sufficient funds in accounts should a disease risk occur. I commend the bill to the House. Question agreed to. Bill read a second time. Ordered that this bill be reported to the House without amendment. 167 BILLS R2393 167 Debate resumed from 7 September, on motion by Mrs De-Anne Kelly: That this bill be now read a second time. upon which Mr Bevis moved by way of amendment: That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House condemns the Government for its failure to provide necessary maritime security and protect Australians, including: its careless and widespread use of single and continuing voyage permits for foreign vessels with foreign crew who do not undergo appropriate security checks; permitting foreign flag of convenience ships to carry dangerous goods on coastal shipping routes; and failing to; ensure ships provide details of crew and cargo 48 hours before arrival; x-ray or inspect 90 per cent of containers; establish and properly fund an Australian coastguard; and establish a Department of Homeland Security to better coordinate security in Australia”. 167 11:18:00 Wilkie, Kim, MP 84G Swan ALP 0 0 Mr WILKIE —I have recently been reading a fascinating book produced last year by the Commonwealth Department of the Environment and Heritage, called Great Southern Land, which examines the maritime exploration of Australia. There is an interesting section on the early protection of Australian sea routes, which outlines how the colonies initially felt comfortable under the protective shield of the British Army and the Royal Navy. It continues: However, as the colonies developed their own economies, and as the demands of the empire changed, Britain began to demand joint funding of defence, then withdrew land forces altogether in 1870, and cut back on its naval presence. In response, the colonies started to build their own tiny navies. The protection of the major coaling stations located on the distant shipping routes at Thursday Island in Torres Strait and at Albany in King George Sound was a defence issue that concerned all colonies, and in 1890 they agreed to co-fund defensive fortifications at these places. Britain offered to provide the ordnance to arm them. We do indeed have a rich maritime tradition. Indeed, our nation’s social history is positively linked with the ocean, from the arrival of the first Australians and the European excursions to our shores to the influx of new Australians by boat from Greece, Vietnam, the United Kingdom and eastern Europe. Unfortunately, the oceans and seas around Australia may also be the source of our most imminent threat. We have a vast coastline, and preventing terrorism in our region requires enhanced cooperation with our neighbours on maritime security. As the Leader of the Opposition has previously stated: Australia is a maritime nation in a maritime region; the world’s largest island, next to the world’s largest archipelago. Increasingly, the problem of terrorism in south-east Asia is a maritime problem. From Jemaah Islamiyah’s bases in the southern Philippines, to the growing menace of piracy in the Malacca Straits, and through the traditional smuggling and piracy routes throughout the region, the threat is growing. Since the attack on the French oil tanker the MV Limburg in Yemen in October 2000, the terrorist attacks of 11 September and the Bali bombings of 2002 and 2005, awareness about terrorism has increased. It is recognised that the maritime sector could be a target of terrorism or indeed a vehicle for terrorism. In the view of the Organisation for Economic Cooperation and Development, OECD, the stakes are extremely high as any important break time in the maritime transport system would fundamentally cripple the world economy. The OECD has previously stated that the government and transport authorities must act to tighten security of the freight container industry in order to reduce the possibility of terrorist attack. More than 80 per cent of goods traded worldwide are transported by sea, much of them in containers. This involves thousands of container vessels and more than 250 million container movements every year. In Western Australia one of the main container terminals used by rail and eventually sea is in my electorate, in Belmont at Kewdale. They move something like one million containers a year. When you consider the possible threat of terrorism in this industry, you realise how big the issue is and how big the problem is. Of course, the vulnerability of cargo containers has been the focus of international policy since the attacks of September 11 in 2001. Although security on ships and at ports has been strengthened in recent years, little has been done to address inland security risks relating to cargo containers. The OECD report notes that security measures should not unduly slow down or block the flow of goods nationally or internationally. In fact, countries have many options. They can increase security and actually facilitate the free flow of trade. Better coordination between transport authorities, Customs officials and police forces can help. The report also advises governments to work closely with transport authorities when designing and implementing security measures. As I said, some good measures have been implemented in this regard and this side of the House supports this bill, but we condemn the government for not going far enough. We condemn the government for its failure to conduct security checks on foreign crews, to ensure foreign ships provide manifestos of crew and cargo before arriving at an Australian port and, most critically, to create a department of homeland security and establish an Australian coastguard to patrol our coastline. The dangers posed to the maritime industry in our region are revealed by the fact that insurance premiums are going through the roof. I refer to a recent report in the New York Times on 24 August. It says: Malaysian commandos captured a freighter after a 17-hour sea chase in the Strait of Malacca, maritime authorities said Wednesday, an event that has sharpened a debate between insurers and shipowners over premiums on voyages throughout the waterway. The commander of Malaysia’s maritime police said that special operations commandos and marine police had recovered a vessel early Tuesday that had disappeared nearly three years ago after being reported as hijacked. After the ship initially sailed on in defiance of orders to stop, the crew of 20 Chinese sailors surrendered without a fight when commandos boarded the freighter from police vessels, he said. The incident comes as many insurers have begun charging extra premiums for ship passengers throughout the strait, one of the world’s busiest seaways, in response to fears of a possible terrorist attack. While the recovered ship was linked to piracy, not terrorism, the strength of radical Islamic groups in Southeast Asia is increasingly worrying insurers. Neil Roberts, a technical manager at Lloyds Market Association in London, which helped prepare a list of risky regions that included the strait, said insurers wanted to be financially ready in case an attack occurred. ‘They’re preparing to fund a loss, they’re building up a reserve to fund a loss, if and when that occurs,’ he said. Bombings in Indonesia over the last several years—in Bali and at the Australian Embassy and a Marriott hotel in Jakarta—have focused attention on the country’s radical groups. The risk to insurers has been that terrorists might ally themselves with the many seasoned pirates in Indonesia who conduct attacks on commercial vessels for profit, robbing crew members and sometimes kidnapping them as well. The Joint War Committee, which represents the London marine insurance industry and includes members of both the Lloyds Market Association and the International Underwriting Association, issued a new list of risky regions around the world in June. The main changes were to remove a dozen countries from the list, mainly in the Middle East and West Africa, and to add the Strait of Malacca, the southern Gulf of Thailand and parts of the southern Philippines. Labor supports the general thrust of the bill, because Labor has been calling for urgent maritime security reform for some time. But, unfortunately, as I have said, it does not go far enough. More reforms are urgently needed to improve Australian maritime security. The concern remains that there is essentially no consistency in the federal government’s approach. Australia desperately needs a coordinated, consistent approach to all levels of transport and maritime security. In April 2005, the Australian Strategic Policy Institute published the document Future unknown: the terrorist threat to Australian maritime security. The report states: The basic problem in defence planning is determining how much defence is enough. Similarly, there’s a challenge in providing security against the threat of maritime terrorism: finding the right balance between assessments of risk on the one hand and realistic costs on the other. And there must also be contingency arrangements to deal with higher levels of threat within the assessed warning time. The OTS and ASIO have assessed that there’s a terrorist threat to our shipping and ports, but it’s clear that our resources are quite inadequate to deal with higher levels of threat that could arise with only a short warning. The additional resources committed by the Australian Government have largely gone towards enhancing the infrastructure of its own agencies. Industry and state and local authorities are being expected to provide much of the capacity to deal with and prevent higher levels of threat, while also meeting their basic protection requirements. This is an unsatisfactory approach. Assuming that the Commonwealth accepts its own risk assessments, it must then be prepared to accept a greater part of the financial burden in countering the threat. The report continues: ... there seems to be little testing of maritime security risk assessments and maritime counter-terrorism measures. They’re simply asserted by the Commonwealth, and the private sector and state authorities are expected to comply. This situation is unsatisfactory. There’s a need for greater transparency of the process to avoid excessive burdens being placed on industry and state governments. I agree. Not only do we need greater transparency; we need a change of government to a government with the likes of the member for Brisbane, who understands what is required to best protect Australia’s maritime interests and ensure that those vessels entering Australia are not infiltrated with cargo or crew in the pay of Jemaah Islamiah or al-Qaeda. Under Labor’s plan, a department of homeland security would be organised around two core responsibilities: border protection and protecting against terrorism attack within the border. Australia has a mainland border of some 36,000 kilometres. This figure is considerably higher if you include our various islands; although, I am not sure whether, under the current government, we include those islands in our calculations any longer. This is a government that has, of course, a Brisbane-line view of Australia’s security. Only Labor has a plan for Australia’s maritime and border security and integrity. I commend Labor’s view to the chamber. 170 11:28:00 O’Connor, Brendan, MP 00AN3 Gorton ALP 0 0 Mr BRENDAN O’CONNOR —I am happy to speak to this very important bill, the Maritime Transport and Offshore Facilities Security Amendment (Maritime Security Guards and Other Measures) Bill 2005, which is an amendment to the substantive bill debated in the House last week. That bill sought to introduce a maritime security framework for Australian ports and shipping and it also dealt with some aspects of foreign shipping in Australian waters. That security framework was subsequently extended to oil and gas facilities in offshore waters by the Maritime Transport Security Amendment Act. As I have said, this bill amends the 2003 act. Primarily, it increases the statutory powers of maritime security guards. Maritime security guards are similar to aviation security guards, with broadly similar qualifications and responsibilities. Before I go further into some of the important parts of the bill before us today, I indicate my support for the shadow minister’s amendment to this bill. I would rather outline that amendment now because I think it is significant. As the member for Swan said, whilst we agree that something had to be done—there had to be a response by the government with respect to these very important security matters—we do not think the government has gone far enough. On this side we find that the government fails to match its rhetoric with proper, comprehensive responses to security threats. Mr Deputy Speaker, you would understand that, as would Mr Deputy Speaker Wilkie, who is about to take the chair. He also understands, as he just said in the debate, that this amendment moved by the shadow minister is very significant in that it highlights the deficiencies in Commonwealth law being proposed today. The first concern raised by the shadow minister that I agree with is that, whilst we support the bill, we believe the government has failed to provide necessary security and protect Australians through its careless and widespread use of single and continuing voyage permits for foreign vessels with foreign crew who do not undergo appropriate security checks. We also believe that there has been a failure to provide the necessary maritime security by permitting foreign flag of convenience ships to carry dangerous goods on coastal shipping routes and, further, a failure to ensure ships provide details for crew and cargo 48 hours before arrival, a failure to X-ray or inspect 90 per cent of containers, a failure to establish and properly fund an Australian coastguard—something that has been a Labor commitment for many a year—and a failure to establish a department of homeland security to better coordinate security in Australia. These deficiencies in the bill are not so significant that we will vote against it, because, as we say, there will be a negligible improvement as a result of this bill being enacted, but we do think that the government must attend to some of the issues we have raised and we think it is tardy of the government, to say the least, not to incorporate some of the recommendations made by Labor in this area. Can I just return to the substance of the bill. This amendment provides maritime security guards with limited move-on powers, including the power to request certain information from a person found in a maritime security zone, and makes a number of miscellaneous amendments to clarify intent. With the purpose of clarifying and increasing the powers to maritime security guards, this bill contains the following provisions: a maritime security guard may request that a person found within a maritime security zone provide identification and reason for being in the zone ... Clearly here the government has identified a concern as to the possible occupation of a person entering a particular area who is unknown to the security guard. I think this example is one where, when the law-makers consider the balance between national security on one hand and individual freedom on the other, the government rightly has indicated that there is a need to make certain assumptions about the presence of particular people in these areas and has placed the onus on those people to explain why they are there and to identify themselves. Further: a maritime security guard may request a person found in a maritime security zone without authorisation to move out of the zone, and if that request is not complied with, remove the person from the zone; and a maritime security guard may remove, or have removed, vehicles and vessels found in maritime security zones without authorisation. Labor is repeatedly on the record as lobbying for specialised security guards at our ports across the country. We believe that those security guards must have defined powers. The maritime environment requires specialised people to ensure that the security we have in place is sufficient. Terrorist threats and organised crime pose real dangers to this country and we believe it is up to the government to ensure that it enacts real measures to combat terrorism. As I said earlier, and as other speakers on this side have raised in this debate, we consider that the Howard government—on occasions at least—is completely ignorant of the terrorism threat by sea. As you, Deputy Speaker Wilkie, said in your contribution to this debate, they talk tough about security but when you examine their so-called policies they are more often than not all form and no substance in attending to the concerns that we have. Particularly in northern parts of Australia, but really in all the large ports, there have been a number of security breaches. Just five years on from the awful events in New York, Washington and Pennsylvania, there has been a focus on the potential destruction that can arise from a hijacked plane. It is understandable that the public’s memory of that awful event on 11 September 2001 would have them consider that the greatest threat to our national security in terms of transport would be by plane and have them focus on the way in which we regulate and monitor air transport. But we have to remember that there has been awful devastation, loss of human life and tragic injury caused by explosions occurring on trains and buses in Spain and London. Labor considers that serious threats exist and that we need to secure the way in which ships come into our harbours and into our ports. We know that there are certain explosive chemicals that can wreak havoc if they enter our ports—or indeed the ports of other sovereign nations—unchecked and undiscovered because of the failure to regulate security. We support the government in moving in this direction, but it is wanting; it falls short of a proper response to security at ports across our country. I would also like to allude to Labor’s task force on transport and maritime security, which was chaired by the member for Chisholm, Anna Burke, this year. Its other members included Steve Gibbons, the member for Bendigo; Dick Adams, the member for Lyons; the chief opposition whip, Roger Price; and senators Glen Sterle and Ruth Webber. That task force enlightened me insofar as the report drafted uncovered some real problems with the failure to secure our ports in the areas that they visited in producing this report. Just to show that Labor not only speaks about these issues but investigates the way in which they should be attended to, that task force visited Perth and spoke to the Western Australian Minister for Fisheries and the Western Australian Fishery Industry Council. It visited Broome in Western Australia and spoke to a whole host of witnesses. While it is likely that most people’s preoccupation with security goes to the potential threat of terrorism, there are some real breaches of our security—and indeed breaches of our laws—in the incursions by foreign fishing vessels which the government seems to blithely ignore. So little of this nation’s resources is being provided to securing our fishing waters, protecting our fishing industry and protecting our borders in relation to fishing by preventing the incursions of those unlawful fishing boats into our waters. I think that, in going to Broome and One Arm Point in Western Australia and to the Northern Territory, speaking to a whole host of witnesses—people and organisations—and discussing not only the security concerns in relation to the potential terrorism threat but also the ongoing threat to our fishing industry and the security breaches that arise from those breaches, the task force showed that we do more than the government does in relation to these matters. The report also shows that. It is also shown by the fact that, whilst we have a series of advisers who sit and listen to the words of both government and opposition members of this place—which I understand is not only their right but their obligation—and yet again I speak on this matter and following me will be the member for Holt and preceding me was your good self, Mr Deputy Speaker Wilkie, we find that the government talks about national security by media release but does not enter into the debate in this place about matters that it says are important to this nation. The government does not think that it is important enough for it to debate some of the amendments that we put together and propose to the government and when we say, in a bipartisan matter, that we believe that we can help improve the bill. Here we are, supporting the substantive provisions of this bill and suggesting in good faith amendments that we think would improve the bill, and in this continuing debate today not one member of the government is responding to these matters. But, of course, what you will have from time to time is the Prime Minister calling a media conference and saying ‘national security’ four times and then closing his doors as he goes back into his office. If government members are genuinely concerned about security matters, why is it that they are never here to discuss them? Why is it that in this place, in this chamber, they fail to respond to the concerns that we have? Surely, if we cannot find some bipartisan positions on national security, what could we find a bipartisan position on? The shadow minister has moved his amendments in good faith. The amendments do not criticise the proposals that would amend the changes, in so far as how they have been outlined, but say that we think it can go further. Mr Deputy Speaker, as you said in the debate, we think they can go further in securing the citizens of this country in a manner that they deserve and, indeed, expect of the government. I am disappointed that the government is mute today in relation to this very important area of national policy, particularly following the fifth anniversary of the awful events of 11 September 2001. One would have thought that the government would be sensitive to the concerns of the community, would treat this place with the respect that it deserves, would treat the matter that is being debated now with the respect that it deserves and would engage with the opposition on these matters. I would like to finish by saying once again that we support the bill. It does not go far enough. We ask the government to, in good faith, consider the amendments moved by the shadow minister, the member for Brisbane, because they strengthen this bill, engage the parliament and treat this place and this matter with due respect. 173 11:43:00 Byrne, Anthony, MP 008K0 Holt ALP 0 0 Mr BYRNE —I have pleasure today in addressing the Maritime Transport and Offshore Facilities Security Amendment (Maritime Security Guards and Other Measures) Bill 2005. I welcome the contribution of my colleague the member for Gorton on this matter. I emphasise at the start that there is some concern about the importance of this bill and the fact that there have been so few speakers on the government side who want to make a contribution when the most important priority of a government is to ensure the security of its citizens, particularly as we stare at this bill in the shadow of the events that occurred in New York and Washington five years ago. What happened there was an attack upon a target that was not intended to be hit, and intelligence agencies and governments at the time did not anticipate that an attack of this nature would take place. Some threads ran through some of the intelligence agencies. Consequently, in light of the fact that the strategy of groups like al-Qaeda and Jemaah Islamiah is to attack the weakest link, the government and we as an opposition, in trying to assist the government, must do everything to highlight measures that we think could be more effective in improving national security. I emphasise again, in the shadow of September 11, five years ago, that we must do everything that we can to protect our citizens. That is our highest national priority. The amendments to this bill that we have introduced we believe would actually strengthen the legislation. To provide a bit of a framework, I operate as the deputy chair of the Parliamentary Joint Committee on Intelligence and Security, and that is a committee that on virtually every occasion in matters of national security has delivered a report with bipartisan support, particularly with the oversight of intelligence agencies. It has dealt with a lot of very controversial issues—ASIO’s questioning and detention powers, for example, and the proscription of terrorist organisations. On every occasion bar one there has been a completely unanimous report. That says that, when they have the opportunity, people of goodwill on both sides can, in the national interest, put their own political interests aside and act for the national good. We believe this bill has deficiencies. We believe that the government, in the way in which it is attacking national security, particularly in areas like maritime security, is not doing enough. So the measures that were put forward in the second reading amendment, which I support wholeheartedly, are suggested improvements to security. I would like to detail those to the chamber at this time. We on this side are obviously not declining giving this bill a second reading, but we condemn the government for its failure to provide the necessary maritime security and protect Australians, which, as I said, should be our highest priority. We are concerned about its careless and widespread use of single and continuing voyage permits for foreign vessels with foreign crew who do not undergo appropriate security checks. We worry about permitting foreign flag-of-convenience ships to carry dangerous goods on coastal shipping routes. We worry about the government’s failure to ensure that ships provide details of crew and cargo 48 hours before arrival, its failure to X-ray or inspect 90 per cent of containers, its failure to establish and properly fund an Australian coastguard—which we believe is appropriate and would do the job, as has been demonstrated by the American coastguard—and its failure to establish, like the Americans, a department of homeland security to better coordinate security in Australia. It is interesting that, when I spoke on another bill of a similar nature in the House last week, the minister responsible, in talking about the US Department of Homeland Security, basically said that it did not work very well, because of Hurricane Katrina. We acknowledge that the system that the US has created is not perfect, but its intent—to create a unified force in the struggle against terrorism—and its implementation by one of our major allies should send a very clear signal to the Australian government. We on this side believe that the only reason that the idea of a department of homeland security has not been adopted is that we put it forward. As I have said before, if a committee that consists of both Labor and Liberal Party members can come up with bipartisan recommendations which the government takes seriously and if it has a proven track record of improving legislation that has been put before it, I find it quite unbelievable—given what I believe can transpire and given the threat level to Australia—that the government can disregard a sensible suggestion in the national interest. I want to talk about the specific provision that we are looking at that would be enacted by this legislation. It follows the 2003 Maritime Transport and Offshore Facilities Security Act, which introduced a maritime security framework for Australian ports and Australian shipping and also dealt with some aspects of foreign shipping in Australian waters. That security framework was subsequently extended to oil and gas facilities in offshore Australian waters by the Maritime Transport Security Amendment Act 2005. This bill clearly amends the 2003 act, but what we are debating today is a bill that primarily increases the statutory powers of maritime security guards. Maritime security guards are similar in lots of ways to aviation security guards, with broadly similar qualifications and responsibilities. Maritime security guards are required to have a certificate II in security operations, or equivalent training, as the appropriate qualification level. The Maritime Transport Security Regulations 2003 require the guard to have a working knowledge of the act and these regulations. Section 162 of the act already deals with the prescribed training and qualification requirements for maritime security guards. It says: A maritime security guard is a person who: satisfies the training and qualification requirements and any other requirements prescribed in the regulations for maritime security guards; and is on duty at a security regulated port, on a security regulated ship or on a security regulated offshore facility; and is not a law enforcement officer. The regulations must prescribe the following for maritime security guards: training and qualification requirements; requirements in relation to the form, issue and use of identity cards. The regulations may prescribe the following for maritime security guards: requirements in relation to uniforms; any other requirements. The Maritime Transport Security Regulations 2003 stipulate: the person: must hold at least a Certificate II in Security Operations that is in force; or must hold a certificate or qualification that is in force and that is equivalent to at least a Certificate II in Security Operations (for example, a Certificate II in Security (Guarding)); or must have undergone training and acquired experience while working as a security guard that is sufficient to satisfy the requirements for obtaining a security guard license in the state or territory where the person intends to work as a maritime security guard (the relevant state or territory); the person must hold a licence to work as a security guard, being a licence that was issued or recognised by the relevant state or territory and that is in force; the person must have a working knowledge of the Act and these Regulations, including knowledge about how to restrain and detain persons in accordance with section 163 of the Act. So what powers will a maritime security guard now have under this bill? The bill provides maritime security guards with limited move-on powers, including the power to request certain information from a person found in a maritime security zone, and makes a number of miscellaneous amendments to clarify intent. With the purpose of clarifying and increasing the powers of maritime security guards, this bill contains the following provisions: a maritime security guard may request that a person found within a maritime security zone provide identification and a reason for being in the zone; a maritime security guard may request a person found in a maritime security zone without authorisation to move out of the zone and, if that request is not complied with, remove the person from the zone; and a maritime security guard may remove or have removed vehicles and vessels found in maritime security zones without authorisation. These are all very well sounding and well intentioned amendments. But my question to the House—and I would reflect that there are a number of concerns held within the industry—is whether the training and qualifications of the guards that would enforce these new powers is appropriate. In fact, these people are quasi law enforcement officers, with powers to move on and powers to use reasonable force in certain circumstances. Yet to exercise these significant powers all they are required to have is a certificate II. This level of training is defined by the Australian Standard Classification of Education as follows: Certificate I and II level provides a knowledge and skills base ranging from basic knowledge in a narrow range of areas to basic operational knowledge in a moderate range of areas. My view and the view on this side of the chamber is that we should have specialised law enforcement officers to administer this particular act, because we believe that the most appropriate people to be exercising these powers are qualified law enforcement officers. Certainly, my experience in terms of understanding the security threat in this country is that these people are qualified enough. There has been some level of concern about security guards being used, and yet we know that security guards can in fact police these particular matters. I believe that is a concern. The Senate Rural and Regional Affairs and Transport Legislation Committee was quite critical of the government for proceeding with the legislation before appropriate regulations had been drafted and circulated to all industry participants and all governments, and clearly that is a concern that should be recognised by the parliament. Australians are entitled to question, at the end of the day, whether the security of our ports should be based on a network of private security guards, as the current legislation anticipates. For instance, in their submission to the Senate inquiry into the bill, the Association of Australian Ports and Marine Authorities said: Port authorities and facilities generally employ contractors as security guards. In relation to the level of training provided to those security guards, they said: It is … nowhere near the level of that provided to law enforcement officers, yet, MSGs— maritime security guards— are expected to carry out the duties set out in the Bill. As a previous speaker said in the other chamber: ... security guard will perhaps one day be guarding a council shopping centre and on another day be required to exercise these very important and now significant powers with respect to the policing of our ports. I question whether that is appropriate. We have a network of Australian Protective Services officers which is supervised by the Federal Police at our airports. Given the level of threat—and we know that there is threat to our ports and to our maritime lines—I do not understand why the same measures are not being employed in this area. I have yet to basically understand why that is the case. We have lobbied repeatedly for specialised police at Australia’s ports because, as I have just said, the maritime environment requires specialised people who understand it. That is a concern. The Department of Transport and Regional Services has said in a Senate committee that, when it considers the approval of a single voyage permit, no additional checks are made to look at particular seafarers—that is, the department does not care about the security background of the crews of the foreign ships. The failure of the government in dealing with these matters is, in itself, alarming. As well as careless and widespread use of single voyage permits for foreign crews, most of the containers that arrive in Australia are not scrutinised or checked. The Howard government seem comfortable with their approach of allowing 90 per cent of the containers entering Australia to go unopened and without being X-rayed. Yet, it is interesting that Hong Kong, one of our major trading ports and one of the major ports in the world, is trialling a system where 100 per cent of their containers will be X-rayed. In fact, the Americans are considering doing the same thing. Some time ago, parliament approved arrangements whereby all vessels coming to Australia were to advise the authorities of their cargo and crew 48 hours before they arrived in port. However, only 67 per cent of the containers that arrived in Australia between 13 January 2005 and May 2005 complied with that provision. This effectively means that one-third of all ships that came to Australia during that period did not comply with the requirement, yet the government has done nothing to rectify this. Unfortunately, our corner of the world happens to be one of the worst places in the world for piracy. The greatest incidence of piracy in the world occurs in the waterways to our immediate north-west around Indonesia, Malaysia and the Strait of Malacca. As a matter of interest, two ships a week report pirate activities—that is, they were subject to piracy in the last year. Other countries have recognised this problem. The other place that rivals our corner of the world for piracy is off the coast of Africa. The response of the international community is to work with African countries to set up a coastguard for these nations so that they can deal with this threat. My question again to those on the other side is: why don’t we have a coastguard? There is only one group of people to blame for the failure to implement a properly trained and adequately resourced coastguard, and that is the government. We have again called in a bipartisan way for a coastguard, because we know from looking at overseas experience that coastguards work. No-one should underestimate the threat that maritime security poses to our country. My colleague the member for Melbourne Ports, who is not with us today, has detailed to me some of his private concerns about some of the security breaches that he has seen around the Melbourne port area. If those security breaches had been taken advantage of, major damage could have been caused. We also know that, in terms of the methods used by terrorist organisations, particularly Jemaah Islamiah, that ammonium nitrate is the weapon of choice, because it is very readily available. I am glad to see that the Minister for Transport and Regional Services has come into the chamber to discuss this matter. Just for the minister’s edification, we on this side believe that we need one coordinated department to oversee all of these security matters so that we can strengthen our security environment. I support the bill and, in particular, the second reading amendment. I urge the government to do one thing: accept the amendment that we have put forward on a bipartisan basis. We can look at the Parliamentary Joint Committee on Intelligence and Security as a model. It is a bipartisan committee that looks at national security issues and classified information, and it arrives at recommendations that it believes are in the national interest. I ask the minister to take the advice that has been provided by this side of the House in the same spirit as those members of the government on the joint intelligence committee and accept the recommendations, strengthen our national security and make our country safer. 177 11:59:00 Hall, Jill, MP 83N Shortland ALP 0 0 Ms HALL —My contribution to the debate will be very brief given that the Minister for Transport and Regional Services has arrived to sum up. I understand that there are other pressures at the moment, so I will very quickly go over the Maritime Transport and Offshore Facilities Security Amendment (Maritime Security Guards and Other Measures) Bill 2005. I will then reflect on the amendment moved by the shadow minister, which I support. This bill amends the Maritime Transport and Offshore Facilities Security Act 2003 to define the powers of maritime security guards. This bill will provide maritime guards with limited powers to request a person found within a maritime security zone to provide identification and reasons for being in the zone, to request a person found in the zone without authorisation to move out of the zone and, if that request is not complied with, to remove that person. This bill is one of a series of bills that have looked at improving maritime security. We on this side of the parliament are very supportive of improvements to maritime security. It is a matter of great importance and should be a priority for the government. The opposition also recognise that maritime security is a specialist area and needs guards that are specialists in that area. I do not believe that the Howard government has taken maritime security seriously. I believe that its approach to maritime security is flawed and these limited measures in this piece of legislation and measures in other pieces of legislation, including an amendment that went through the parliament last week, are not tight enough. The shadow minister moved an amendment in relation to the use of single voyage permits and continuing voyage permits. I have raised this issue a number of times in the parliament because I am very passionate about the use of these permits. These permits create a situation whereby foreign crews are not subject to the same level of security as Australian crews. You cannot even be assured that the papers that are being presented for those people are accurate. The government has really let the Australian people down in their monitoring of continuing voyage permits and single voyage permits. I can relate to the House, as I have on a number of occasions, my visit to one of these flags of convenience ships that have been granted a CVP and are cruising the coast of Australia. This ship sailed under a Maltese flag, it had a Greek captain and the crew were Burmese. To say that the crew were very nervous of the group that I was with when we visited the ship and that they appeared intimidated and frightened by the captain is an understatement. Those crews are not subject to the same scrutiny as our Australian crews. They do not have to have the maritime security cards that Australian crews do. They do not have to have the same cards or level of identification and security checks that Australian crews and Australian maritime workers have. I do not think it is good enough. The rules that apply for Australians should apply for foreign crews as well. The government has been very careless in its use of CVPs and SVPs, as was highlighted in the amendment moved by the shadow minister, the member for Brisbane. We on this side of the House are very aware of the fact that to a large extent this is being driven by the fact that the government is consumed with a hatred of the MUA. Rather than looking at what is best for Australia, the government, since coming to power, has been more consumed with its hatred of the MUA and trying to get rid of the MUA from the face of the Australian shipping industry. The other issue is the fact that many of these flag of convenience ships, with foreign crew who are not subject to the same scrutiny as our Australian crew, are carrying quite dangerous materials. My predecessor in this parliament was Peter Morris, who was chair of the Standing Committee on Transport, Communications and Infrastructure. He preceded the current chair, the member for Hinkler, who also is a man very committed to this area. When the committee prepared the Ships of shame report, it highlighted the issues that surround those foreign crews. A follow-up international study conducted by a previous coalition minister, Mr Sharp, and Peter Morris produced a report titled Ships, slaves and competition. Once again, that reinforced the facts about the identification of the crews on foreign ships, the conditions they live under and their position of powerlessness. That position has not changed since that period, as the crews sail around the world on the rust buckets that this government continues to issue with single voyage permits. It is not good enough. Until this government addresses that issue, it is not taking maritime security seriously. There is also the fact that the number of containers that are X-rayed is not sufficient. We do not think that is up to standard. The government needs to look at and embrace the Labor Party’s policy of establishing an Australian coastguard. I am very supportive of the amendment moved by the shadow minister in relation to a department of homeland security. We should look at enforcing procedures and laws similar to those in the US in relation to the coastguard and in Hong Kong in relation to the scrutiny of containers. I am very supportive of the amendment moved by the shadow minister. I encourage the minister to accept the amendment and include it as part of the legislation. 179 12:10:00 Truss, Warren, MP GT4 Wide Bay NATS Minister for Transport and Regional Services 1 0 Mr TRUSS —I begin by thanking the honourable members who have made a contribution to the debate on the Maritime Transport and Offshore Facilities Security Amendment (Maritime Security Guards and Other Measures) Bill 2005. Naturally the government will not be supporting the amendment but I thank the opposition for their indication of a willingness to support the substance of the bill. Honourable members have raised a number of issues and I acknowledge the work of the honourable member for Shortland’s predecessor in his Ships of shame report, which certainly highlighted areas of concern, although it needs to be acknowledged that that report did not deal so much with security issues. 83N Hall, Jill, MP Ms Hall —But there are security issues associated with the issues he raised—that is my point. GT4 Truss, Warren, MP Mr TRUSS —All right. He certainly was raising issues about the conditions on board the vessels and the quality of the vessels themselves. The opposition has, on a number of occasions in this and previous debates, endeavoured to present the view that somehow or other foreign seafarers are in some kind of privileged position regarding their rights in Australia compared with Australian crew. It is simply not true to say, as the honourable member for Shortland has suggested, that foreign seamen can wander around in secure zones at seaports in a way that Australian seamen cannot. Everyone going into a secure zone is required to have a card or be escorted. 83N Hall, Jill, MP Ms Hall —Mr Deputy Speaker, I rise on a point of order. The minister is misrepresenting what I said. At no time did I say that foreign seamen were wandering around in secured areas. I said that their presence and the lack of scrutiny of their credentials prior to their ships berthing in Australia and circumnavigating Australia was the issue rather than the issue of them walking around secured areas. 10000 McMullan, Bob (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Mr McMullan)—Order! There is no point of order. GT4 Truss, Warren, MP Mr TRUSS —That was an interesting clarification of the honourable member’s views— 10000 McMullan, Bob (The DEPUTY SPEAKER) The DEPUTY SPEAKER —I thought so too. GT4 Truss, Warren, MP Mr TRUSS —and I welcome her latest statement. The reality is that everyone going into secure areas at ports will be required to have a maritime security identification card or alternatively they will have to be accompanied by somebody who does; that will apply irrespective of their nationality. I need to also point out that vessels coming into Australia are assessed for their security risk and there are checks of those on board the vessels. The security risk assessment takes account of all the relevant information about the ship, including its cargo, irrespective of which flag it flies and that assessment is independent of the Customs cargo manifest reporting requirements. I am pleased to be able to report to the Main Committee that overseas vessels coming to Australia have been overwhelmingly compliant with those requirements. In another debate—I have not heard it in the context of this one—there were suggestions that as many as 15 per cent of ships were not complying with the law. My advice is that in the last year 100 per cent of ships have complied. There were some in the previous year—half a dozen or so—that did not and appropriate measures were taken to deal with those vessels. But the reality is that ships have been compliant with the crew reporting requirements and I think that that system, whilst it naturally took a little time to be settled into place, is now working well. The honourable member for Holt raised some questions about whether it was appropriate to give powers to maritime security guards and suggested that it would be better if there were specialised law enforcement officers at the ports. The Australian government decided to give maritime security guards the move-on powers to enable them to deal with incursions into maritime security zones promptly in facilities which are sometimes distant from the nearest police presence. The powers are balanced with safeguards to limit any capacity to abuse that power. For instance, when requesting information from a person a maritime security guard must identify himself or herself, tell the person that they are authorised to request the information and advise the person that noncompliance is an offence. It is reasonable to give maritime security guards these new powers to prevent unlawful access to maritime security zones at Australian ports, port facilities and on board ships. Their powers are limited and where more substantial action is required clearly police or other appropriately empowered people will be required to be called upon. So there is a role for police but we think that there are some responsibilities which can be effectively done by maritime security guards, and this legislation is putting in place arrangements to ensure that that kind of service can be provided in this way. The bill strengthens the maritime transport and offshore facilities act by empowering maritime security guards to respond to unauthorised incursions into maritime security zones by persons, vehicles or vessels; authorising maritime security guards to seek information from persons found in maritime security zones, while placing safeguards on the exercise of these information-seeking powers; providing an appropriate offence regime to encourage compliance with maritime security guards’ requests; and providing new arrangements for directing a regulated Australian ship to operate at a higher security level when it is in waters identified as high risk. The need for the additional powers for maritime security guards to remove unauthorised persons, vehicles and vessels from maritime security zones was identified during the government’s comprehensive assessment of Australia’s maritime security policy settings in 2004, and has been agreed by key industry leaders. Further consultation undertaken by my department with the maritime industry security companies, state and territory police, maritime unions and relevant Australian government agencies helped to refine and strengthen the framework for the move-on powers. The Senate Rural and Regional Affairs and Transport Legislation Committee has conducted an inquiry into the bill. In its report, tabled on 5 September 2005, it accepted the need for the bill and has recommended that it be passed. The regulations to accompany the bill are currently being developed in consultation with the industry, unions and security guard providers. The government looks forward to the passage of this bill to enable the maritime industry to draw upon these powers as soon as possible to enhance the safeguarding of Australian ports and ships. I thank those members who have made constructive contributions to the debate. I commend the bill to the Main Committee. 10000 McMullan, Bob (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Mr McMullan)—The original question was that this bill be now read a second time. To this the honourable member for Brisbane has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question. Question agreed to. Original question agreed to. Bill read a second time. Ordered that the bill be reported to the House without amendment. 181 MOTIONS Debate resumed from 11 September, on motion by Mr Lloyd: That the House: recognises that local government is part of the governance of Australia, serving communities through locally elected councils; values the rich diversity of councils around Australia, reflecting the varied communities they serve; acknowledges the role of local government in governance, advocacy, the provision of infrastructure, service delivery, planning, community development and regulation; acknowledges the importance of cooperating with and consulting with local government on the priorities of their local communities; acknowledges the significant Australian Government funding that is provided to local government to spend on locally determined priorities, such as roads and other local government services; and commends local government elected officials who give their time to serve their communities. upon which Mr Albanese moved by way of amendment: That paragraph (1) be omitted and the following paragraph substituted: “(1) supports a referendum to extend constitutional recognition to local government in recognition of the essential role it plays in the governance of Australia.”. 181 12:18:00 Burke, Anna, MP 83S Chisholm ALP 0 0 Ms BURKE —I welcome the motion before the chamber today and the amendment that has been moved by the opposition. I was privileged to be part of producing the rather lengthy report that forms the basis of the motion before the parliament today. It is long overdue; the report was tabled in October 2003. I suppose it is a case of better late than never. While the motion before the chamber does mirror what is in the report’s recommendations, it does not go far enough. It certainly does not recognise the complete value that local government adds to our community. When doing the report we adopted, I suppose, a pragmatic view that, yes, constitutional recognition by way of referendum was preferable but, as it was not really within our power as parliamentarians to deliver that, what we could deliver was the motion before parliament today. Local government often feels like the third wheel: ignored by everybody. As one witness in Perth put it most aptly, ‘Local government is the shag on the rock overlooked by everybody.’ We got him to repeat it again because we thought getting that into Hansard was pretty cute. It really did sum it up. Out there in the land of government services, local government was seen as just rates, roads and rubbish. Of course, they are far more than that. One of the difficulties of dealing with this report and going across the country—and you only need to look at the number of submissions we received—was that I think the vast majority of local government councils at the time of the report, and there were 721, put in submissions. We made a valiant effort to meet with as many of them as we possibly could. I can attest to that because I kept getting on planes that kept getting smaller, and the pilots kept looking younger. We endeavoured to meet with those people out there—the people who have a lot of that face-to-face interface with their communities in delivering services. A big difficulty is: what is local government? What does it actually deliver? Each local government is so incredibly different. You only need to look at the size of the geographical area that some local governments cover. In Perth, some are as big as Victoria and some, like Peppermint Grove, are literally one block. The inconsistencies in the size of areas represented by local governments makes it difficult to actually regulate what they do. Some councils are responsible for airports, some councils are responsible for ports, some councils are responsible for transport and some councils are responsible for sewerage. Other councils have gone into massive service delivery. In my neck of the woods, my two major councils both have retirement villages and nursing homes. They own them, run them and provide the services. In Victoria, councils have taken on a great deal of aged care servicing, so nowadays it is viewed as council’s responsibility. They are actually getting funding from the Commonwealth to provide that service. They are the service deliverer. But they are now seen by the community as the people responsible for that. If something falls over, the council gets blamed. This really is iniquitous because they are just providing the service model. One of the difficulties was actually going around and saying to local governments: ‘What is your job? What should you do?’ Fundamentally, they kept saying, ‘We need to do whatever the community asks.’ That is all well and good if you can fund it and support it. One of the great difficulties is that rates can keep going up and people can keep getting hurt by them. Councils can look for other revenue bases like fines and fees. I can certainly attest that both of the councils in my neck of the woods are getting in a lot of fines—and I am paying the majority of them! So we are out there subsidising the other method of creating revenue for these councils, but it is unsustainable. There needs to be a far more sustainable basis of funding for these local governments so they can provide the vital services their communities demand. But local councils also need to get to the stage of saying, ‘No, this is not our responsibility.’ Just because the state or the federal government puts out a funding model and says, ‘Look, you can tender for this,’ should it be the responsibility of local government to apply for those funding dollars? What happens is that a lot of those funding dollars are offered on the basis of a two-year program. At the end of two years the program is over and there is no more funding, but the local community says, ‘No, that service must continue.’ So what does local government do? It picks up and continues funding that and has to find a revenue base to do that. It is unsustainable. So a lot more recognition has to go into what the role of local government is. During the inquiry we decided that that was virtually impossible for us to quantify and answer, but we did conclude in the final chapter of this report that a way forward was to have a sensible discussion and for all levels of government to ask: ‘What are our basic roles and responsibilities? Where is there overlap?’ It has been estimated by an academic who provided research into the report that about $20 billion is wasted in duplication through the three levels of government. We can have the debate about whether we are overgoverned and whether we should get rid of a tier of government, although that is probably a long way off. But, at the same time, there is massive duplication. If you have someone who comes into your electorate office and says, ‘I’m looking for assistance with child care,’ you can actually go to three levels of government to find them that assistance with child care. If someone comes and looks for assistance with aged care, you can again go to three levels. A lot of it is duplication. A lot of it is waste. We need to finetune that—we need to sit down and actually work that out. We recommended that the council of ministers come together with an appropriate representative from local government. One of the difficulties in this report was finding out who actually speaks on behalf of local government. Their peak bodies would say, ‘We can only come if we’ve had a motion; we don’t really speak on behalf of them.’ But getting representation for what is now 700 local government authorities to come and actually provide a voice is virtually impossible. A greater sense of who is speaking on behalf of these groups needs to be achieved within local governments so that they can come with a clear voice. The Australian Local Government Association do a good job, but they are limited again in what they can say on behalf of local government. So we need to ascertain who speaks on their behalf. Towards the end of the report which forms the basis of the motion today—in chapter 7, which we titled ‘The way forward’—there is a good quote from an official from DOTARS. He said: The FAGs act is really structured on the basis that local government is a creature of the states. It does not provide a direct relationship in that sense ... To move away from that requires the Commonwealth to take a quite different view of local government, its relationship with it and its governance. That is a debate which really has only just started—it is probably a starting point which the committee’s report will provide some guidance to government on. Yes, it has, and this report does go some way to doing that, but the first step is for the federal government to recognise local government—to say, ‘Yes, local government is a valid part of the governance within our country,’ to give it credence and to then sit down at the table and talk to local government, because the federal government requires a great deal of service delivery through local government. A lot of the reports, submissions and information provided to the hearings were very complimentary of the Roads to Recovery program. When we first started out on this adventure, the member for O’Connor was the minister and he moved that we go down the track of doing this report—and I commend him for it. At the time it was probably a bit of a political swipe at the states, because it was about cost shifting from the states to local government, but we discovered that cost shifting is not just from state government but also from the federal government. There is also a bit of cost shifting back from local government onto both state and federal levels, but it is virtually impossible to quantify that. As the CEO from one of the councils that fall under my area said: ‘Cost shifting happens. Let’s draw a line in the sand. Let’s not worry about trying to redress it. Let’s move on. Let’s work out how we can go forward in a better model of funding, with a better system of distribution of grants to local government so we no longer have this cost-shifting problem. Let’s not have this blame game or this situation where, at the end of the day, the ratepayers are picking up the tab because the only way local government has of finding the shortfall is to increase people’s rates.’ There has been a great deal of discussion from the Prime Minister recently about opening up land and ensuring that more land is available for first home owners to purchase homes. In those discussions, the impact that would have on existing infrastructure has not been looked at. It does not look at any of these massive growth corridors. The member for Holt can testify to this probably much better than I can, because my suburb is very well settled, but there was no thought of how you would deal with the services in this urban sprawl—the water problems, the road problems and the sewerage problems. If you build a new suburb, you have to build a new school, child-care facilities and things like that, and the impost falls to local government. There has been no discussion about how local government could pick up those things. The federal government—in its talk, which was a beat-up rather than about taking responsibility for interest rates—had not looked at its responsibility to and its relationship with local government. It is local government that will bear the brunt and, at the end of the day, it will be the ratepayers. I can tell you from various discussions that developers do not want to pick up these costs. It is the ratepayers who will bear them. It is also about our environment and our way of life. In previous Labor governments there were ministers who were passionate about urban sprawl and good design. People such as Brian Howe and Tom Uren did some great work, but that has all gone by the bye. We never see that any more. We never talk about good urban planning, good design and good development; we just have political grabs that suit the purpose of the day. But we need to think about these things. Federal government needs to have a much better relationship with local government so it can put these things in place. Certainly, environmental issues fall very heavily on local government—for example, water conservation. One of the great difficulties that was discussed throughout this report was the system of FAGs and the distribution of funding from the Commonwealth via the Grants Commission to the states. There was a lot of confusion about how it worked, who monitored it and who supported it. The report says that we should go back to basics and reassess how that money is distributed, because some councils have a great revenue base and some rely solely on their FAGs. We need to redress that and to work it out. At the hearings, one councillor from the Maroondah City Council put it this way: At the moment each municipality plays the game of ‘trying to maximise your grant’ at the expense of other councils playing the same game in a scenario where none of them fully understand the rules of that game. This is a recipe for a waste of effort and perennial frustration. And that came through time and time again: the complete, perennial frustration about how grants worked, how they were allocated and who worked it out. The federal government, by recognising local government in this way, now has the responsibility for going back and assessing how those grants are delivered, who actually is responsible for them and how they all work. Some councils are missing out and other councils are doing well. When you have the Brisbane City Council in the same funding pool as a tiny regional council in Queensland, competing for the same set of funds and not knowing what the rules of engagement are, it is very complicated. And it is those smaller councils that are obviously missing out. At the same time, one of the greatest frustrations I have is representing a suburban electorate—where the majority of people live. Often my constituents are very frustrated that there is no such thing as a ‘burbs’ grant. There are rural and regional grants that go on out there, and sometimes my constituents get very annoyed that they pay all these rates for all these things but are never recognised as living in an area of need. And sometimes there are areas of need within those suburbs that need to be recognised. Certainly, one of the difficulties is, as I said, quantifying what local government does. One of my local councils run a very effective small business incubator. It is a model that other councils recognise and look at. But is that the role of local government? They have decided that it is. There was a void there that state and federal governments were not filling. They run this very successful small business incubator that has now produced some great small businesses in our area which have been able to move out into their own premises. We need to go back to basics and say, ‘What is it that the levels of government do?’ so that we are not having this duplication and this constant moving about on where to go and what to do. As one of the other councils put it, councils are also stepping back from accepting infrastructure grants because they also need to determine what their roles and responsibilities are. I will quote again the Mayor of the Bega Valley Shire Council. He said: We basically said as a council, ‘It is fine to get the funding for some new infrastructure—a new toilet block or a new boardwalk or whatever—being matched fifty-fifty, but do we really need that or are we better using that $100,000 or $200,000, or whatever the matching figure is, to do something that the community really needs, like fixing the roads or upgrading some old timber bridges?’ We made a conscious decision to reduce the matching grant funding and use it for only stuff we really need rather than stuff that looks nice and maybe has a nice community feel. And that is one of the hard decisions that local government needs to come to. I always say to councils in my electorate that they have a much harder job than I have. They do it part time, they get paid nothing and they are generally the ones abused at local functions—whereas we can swan around and get away without facing that absolute abuse. Most people know who their local councillor is, because when the rubbish has not been picked up they are the person who gets the blame. They are the ones that really take it on the chin. I think councils need to decide what their main game is, instead of accepting funding that they cannot use or that they accept and then need to continue. I commend the motion and the amendment moved by the opposition to the chamber. (Time expired) 185 12:33:00 Tuckey, Wilson, MP SJ4 O’Connor LP 1 0 Mr TUCKEY —This is an important statement but, I must say, one that lacks the sorts of initiatives I would have appreciated as a result of the inquiry, the so-called Hawker committee, that the member for Chisholm spoke about at some length. I congratulate her and the members of that committee on their diligence in taking that inquiry upon themselves and reporting as they did to government. The greatest deficiency, not in their efforts but in the report, is that local government did not make a case for the clearly defined responsibilities and services they thought they would be best placed to provide to the Australian community, and whence the financial resources to do those tasks might come. Notwithstanding that an intergovernmental agreement has been reached, as recommended by the committee, it seems to be a fairly fluffy arrangement from my perspective. The minister advises us that the agreement addresses cost shifting by obtaining in-principle agreement from governments that, when a responsibility is devolved to local government, local government is consulted and the financial and other impacts on local government are taken into account. There is nothing wrong with that. For instance, when state governments pass legislation that says that health surveyors will go out and monitor some new piece of state legislation, that can be costed, presumably, if we are lucky. The reality is of course that cost shifting has evolved simply by default. State governments in particular have had a habit of just not doing things. There has been debate in this chamber about it. I note that the member for Lalor this morning put a case that the Australian government should have total responsibility for health services. I wonder how that might change the fact that, of my 50 local authorities, 90 per cent are obliged to have a very significant budget commitment to keeping a doctor in town. We say that local government has moved on from roads, rates and rubbish, but that was the fundamental responsibility that was accepted when people said that local government was a creature of the states. They evolved as service organisations of great width and had primarily only one source of money: the rates they levied on their ratepayers. Then of course they got moneys from state governments in certain areas, and the minister’s speech gave us clear evidence of the volatility of those sorts of grants. They go up by 80 per cent and then crash by 60 per cent; how a local authority can budget in those circumstances, I do not know. By comparison, the Whitlam government—and let me give credit to them—introduced the FAG Scheme, as we know it. I had the privilege, I guess, of being a state grants commissioner during my 16 years in local government prior to coming to this place. I was one of the first grants commissioners. Careful consideration is constitutionally necessary when the Australian government makes an allocation of funding. The Commonwealth Grants Commission decides how the money will be distributed to each state under the formula, and then a state grants commissioner decides how it will be granted to each local authority. When it came to R2R we as a government quite wisely went around that system and created a formula, and we have distributed the funds accordingly. Local government consistently reports to me. I did a stint as a local government minister when I commissioned the report and everybody said how pleased they were with the simplicity of managing those funds. That was as important to them as the money itself. Many complained about the complexity involved in servicing state grants for roads. I think that one councillor said to me that they had two full-time staff doing the paperwork relevant to state grants for roads and, in fact, they had nobody specifically allocated to dealing with R2R. Historically, the Commonwealth has also managed to load responsibilities onto local government not so much by default but by generosity. We have some wonderful schemes. We might give a sports operator a three-year funding package or some other package, at the end of which we say: ‘There you are. You have had your money.’ By this time the community has got to like this particular service, whatever it might be, and so it devolves to local government to continue its operation. Whereas state governments have cost-shifted to local government by default—and I do not see anything in this new intergovernmental agreement that prevents that—the Australian government sometimes, by generosity, has done the same thing. This thing is going nowhere. Let me say at this point in time, for practical reasons: I do not support the opposition amendment proposing that we have another referendum on constitutional recognition of local government. I always thought the question was meaningless anyway. They virtually told local government that they exist, and I do not think that is the question. There is an established precedent now, and the minister’s speech has a mass of references to the amount of funding that is distributed directly to local government by the Australian government and spasmodically by state governments. The reality is that that is what local government needs. It gets very little constitutional recognition but it has always put its faith in that, when in fact what it needs is money and a clearly defined intergovernmental agreement that identifies the services that local government should provide—in my view, to the exclusion of other providers. Historically, and in most parts of the world, local government is the provider of local education services, local health services and, I might add, local police services. In my life in local government in Western Australia, for almost the entire period, country local government operated the vehicle licensing system. We issued the licences, we kept the money for our roads and we were obliged to employ a traffic inspector. I have to say, social life in country towns was a lot more comfortable in that period, depending a bit on the attitude of the council. Our attitude was that the man was there to control traffic, not to collect fines. We would go for months without the reporting of a prosecution. The town of Carnarvon was somewhat isolated. It was a bit different to my electorate now, where one shire adjoins another, but the reality was that the traffic inspector’s job was to make sure, under the observation of the elected councillors, that the flow of traffic and the behaviour of drivers were of a satisfactory level. Were one to check the accident crash statistics or the death statistics when that system prevailed, in a positive sense, they were probably quite as good as they would be today with three or four police constables carrying on in the way that they are obliged to do to make sure that they get their total prosecutions each week. Those sorts of things are typically the responsibility of local government in many parts of the world. What is wrong with an intergovernmental agreement clarifying what you look after? If you are paying 70 per cent of the costs of keeping a doctor in town, why not pick up 100 per cent of the responsibility and then be recognised in the funding packages that come from the Commonwealth or the others so that you do it? I make the point using a local example in Western Australia. We have a very large state government hospital called Sir Charles Gairdner Hospital. I do not see that as a responsibility of the City of Nedlands in which it is located. What I am talking about are local hospitals, local schools and local policing problems. I think that local government should have the responsibility in those areas. As minister I told them so. They certainly did not ask for and they certainly did not get the sorts of recommendations that consequently came out of the committee of inquiry, the Hawker committee. We have all this triplication by the three arms of government. The question is: who would do it better? There is a very interesting situation in a geographically large state like Western Australia: very few people in Western Australia—it does not matter who is the political party in power—vote for the minister for health, the minister for education or the minister for policing, but they know who the shire president or the mayor is and they certainly know how to take revenge on them if they think certain services are not up to an acceptable standard or are not being delivered in the fashion they would prefer. I think this parliament and all governments, whether state or federal, should have an intergovernmental agreement that says: ‘This is my territory. This is what I am responsible for.’ Once that territory is defined, I think there are huge opportunities for local government to be able to do that. 83N Hall, Jill, MP Ms Hall —I would like to ask the member a question, if I could. Could the member tell me whether or not he would support as a better working model a system that was basically stronger with, instead of the three levels of government, the Commonwealth and then stronger regional bodies? SJ4 Tuckey, Wilson, MP Mr TUCKEY —I accept that question and I think I probably would be supportive of the impossible. We have got to remember that the states—or the colonies, as they were—created the federal government and they wrote pretty precise rules. I do not believe that is achievable, as I am concerned about the achievability of constitutional recognition. I would say, ‘Why bother?’ It is an expensive business. Money is the strength of power. There is no limitation on the two Big Brothers of government, if you like, getting together and saying, ‘We think town X would better run its own hospital.’ We used to have hospital boards in my electorate. But let them run it through local government and, instead of talking all the time about how we want to make local government bodies bigger—and I think there are difficulties with that—give them more jobs to do. I said that to one shire clerk or chief executive, whatever he was, in one country town, and he said, ‘I don’t know if we could manage the hospital.’ I asked, ‘How many staff have you got?’ And he said, ‘Sixty.’ I asked, ‘And how many staff has the hospital got?’ And he said, ‘Forty.’ I said: ‘So where is the problem? Your payroll system and everything can deal with that. And, if your councillors or whoever can interview and appoint a chief executive, why can’t they do the same thing with a director of nursing, for instance?’ I am just putting this forward. It is theoretical. I welcome the minister’s statement, but it does not say much. I welcome the report and I have criticised publicly—I wrote letters—local government for not putting their hand up during that inquiry to say, ‘You tell us what we are and give us some responsibilities that around the world local government does very well, and make sure that the funds that are shared by the Australian government in particular be available in a measurable way.’ As I said, there will always be a role for state governments in running major hospitals. But they will not send doctors out to the bush, because they cannot get a Medicare number, so why not let the local government do that and let probably this parliament make funding arrangements that would assist them in that process? Then they can make some regional arrangements if they like; they do so to some degree in other areas. I think local government is wasted. It does not have funding certainty. It needs both responsibility and funding certainty. (Time expired) 188 12:48:00 Hall, Jill, MP 83N Shortland ALP 0 0 Ms HALL —I would have to agree with the last statements that the member for O’Connor made in relation to funding and certainty. I think that they are big issues for local government. Like the member for O’Connor, I have history in working for local government: I was on Lake Macquarie City Council for a term, for four years, and I experienced many of the problems that have been raised in this debate on the minister’s statement. Before I get to the bulk of my contribution to this debate, I would just like to home in on the health issues. The member for O’Connor spoke about some of the initiatives that local councils have taken in the area of health. The House of Representatives Standing Committee on Health and Ageing, of which I am a member, were in Western Australia earlier this year and we had councils come along and give evidence to the committee. They detailed for us how they had built houses for doctors, dentists and physiotherapists, how they  were supplying them with cars and how they were giving them a guaranteed base income just in case they did not manage to earn the required amount. I was very impressed with the initiatives of these councils; I thought they showed a true dedication to their community. But that also raised some questions in my mind as to why local governments are having the cost of providing health care shifted to them when this is actually a federal government responsibility. The federal government should ensure that these towns—the people who live in these towns, these local government areas—have access to health services that they need. Local government is a very important level of government. People do not realise and respect the contribution that local government makes to the functioning of our nation. It is the level of government that is closest to the people, it is the level of government that is most accessible to the people and it is the level of government that deals with the everyday basic issues that make people’s lives bearable. The member for O’Connor mentioned the three Rs: roads, rates and rubbish. Yes, they have always been the core responsibility of local government. But over the years it has really diversified. Throughout the country you will find that in different states the responsibilities of local government are very different. Quite often local governments are asked to perform these duties and provide these services with inadequate funding. Yes, the main source of income is rates, along with financial assistance grants—which, I might add, have steadily declined as a percentage of the budget since 1996. At that time, 0.9 per cent of FAGs were provided by the Commonwealth; in 2007 it will be a bit over 0.7 per cent, and by 2010, if it continues to go this way, it will be 0.5 per cent. Both federal and state governments—I do not want to leave the states out in my contribution—need to make bigger contributions to local government. They need to recognise the importance of local government and the issues that it deals with on a daily basis. Whilst I was sitting here I quickly jotted down a few of the issues that local governments have to deal with. More and more, welfare is becoming a role of local government. My colleague the member for Holt, in Victoria, noted that local government in that area provides aged care, myriad health services and myriad other welfare type activities. I think it is even a direct provider—correct me if I am wrong—of home and community services. That is very different from New South Wales. In New South Wales local governments are still responsible for providing services for youth and elderly people. All councils support and promote sport and sporting activities; they ensure that there are proper playing fields and that there is access to those playing fields for young people. They are constantly providing facilities in the community for the use of community members: halls, public toilets, you name it—the little things that people tend not to think about. And of course there are libraries. Libraries are one of the real responsibilities. They are very important within the communities that we all represent here in parliament. I should quickly mention initiatives that have been taken in both the local government areas that fall within the Shortland electorate—Wyong shire and Lake Macquarie. They have programs where parents can come along and read to their babies. This is creating a love of books and learning that will follow those children through life. I am sure that also happens in other areas. The role of planning the kind of community that we live in falls to local government. For example, the decision about whether a certain area will be developed, whether an aged-care facility will be built or whether there will be sufficient parks belongs with local government. They are planning issues. In the electorate I represent in this parliament, those planning issues are often the subject of a lot of focus within the community because there is a tension between development and the protection of the environment. That is something that local government has to evaluate and study. Once those studies are completed, they have to be put out for community consultation and, when they come back to the council, it makes a decision as to whether or not a particular development will go ahead. That has an enormous impact on the lives of the people living in that community. Recently within my local government area there has been a move towards urban consolidation, so the height level of buildings has been increased from four to six storeys along the waterfront areas of Lake Macquarie. There was concern within the community, and after due process, including consultations, the local government had to make a decision about the type of development that would be permitted. My speech today is not critical of local government; rather it puts on the table the kinds of issues that local government has to contend with. A very sensitive development proposal came across both councils, and the councils rejected that because it was going to lead to wholesale clearing of pristine bushland. As Sydney and Newcastle are very much joined together, it was felt that some green areas were needed, so both councils rejected this development and the developer took the councils to the Land and Environment Court. That is another issue for councils because, when they make these decisions, quite often they are subject to legal action. The councils were successful in their bid to reject that development. All the time, local government is dealing with the tension between development and the need to protect the environment. Councils always need to be very mindful that, if their decision is rejected and the developer takes them to court and they lose, it will cost the ratepayers a lot of money. It is a very important role of local government. Both Wyong Shire and Lake Macquarie are high growth areas. Wyong Shire has had a number of issues associated with water and infrastructure. The councils grapple with those issues. Lake Macquarie City Council has always had responsibility for Lake Macquarie, which is the largest salt water lake in the Southern Hemisphere. Over the years there have been problems with siltation as a result of the development around the lake, as well as a number of other problems—once again, tension between development and the environment. I think that the approach that has been adopted there, where an agreement was reached between the state government, the local council and relevant departments to fund remediation work in Lake Macquarie, could be used as a model for levels of government working together. Generally speaking, at the local government level those people involved are interested in working with federal and state governments and forming an ongoing partnership with them and with local communities. Unfortunately, when it comes to both the Commonwealth and the state, there tends to be a blame game—the silo mentality. I encourage the minister to look at really working in partnership with local councils—not moving a motion like this, which I think is really an attempt to have a go at the states, but truly acknowledging the role that local government plays and the benefit to Australia as a whole of working with local government. I would like to acknowledge the success of the Lake Macquarie City Council in winning an award for Over 55 and Understood. Both local government areas have fairly elderly populations. The Shortland electorate has a high proportion of people over the age of 55. In this project, businesses met with the council to look at ways of recognising the significant contribution of older people and at how businesses can work with older people, embracing them not as a burden to their communities but as an opportunity. They looked at how older people’s contributions could be used as an opportunity and how businesses could link into the opportunity that having an elderly population could provide. This is an important motion, as is the amendment. I support the amendment moved by the member for Grayndler. One of the biggest problems I as a councillor found was that the bureaucracy and the elected body were nearly one. I believe that if local government were to become a true level of government then it would have a different approach. The bureaucracy and the elected body would be separate and there would be proper recognition of the role of local government and the contribution that local government makes to Australia. The question I asked the member for O’Connor really reflects my own position on that matter. I think that Australia would benefit greatly by having stronger regional bodies and a stronger role for local government. (Time expired)  Debate (on motion by Mr Hartsuyker) adjourned. 191 13:04:00 Main Committee adjourned at 1.04 pm 148 Answers to Questions on Notice 148 148 3072 148 McClelland, Robert, MP JK6 Barton ALP 0 Mr McClelland asked the Minister for Defence, in writing, on 16 February 2006: Has his (a) office and (b) department undertaken research into the average time taken by Defence Force Recruiting Centres to consider and approve applications by men and women to enlist in the armed services; if so, what does that research indicate. 148 Nelson, Dr Brendan, MP RW5 Bradfield LP Minister for Defence 1 Dr Nelson —The answer to the honourable member’s question is as follows: No. According to research undertaken by Defence, the average length of time taken to consider and approve applications was 31 weeks and is now 30 weeks. 148 148 3824 148 Katter, Bob, MP HX4 Kennedy IND 0 Mr Katter asked the Minister for Agriculture, Fisheries and Forestry, in writing, on 8 August 2006: Is he aware of the hardship caused by the tax treatment of those canefarmers who have applied for the re-establishment grant component under the Sugar Industry Reform Programme 2004, opting to stay on the land in an alternative industry; What will he do to alleviate the tax burden on canefarmers exiting the industry through the re-establishment grant; For what reason has the Government decided to tax the re-establishment grant. 148 McGauran, Peter, MP XH4 Gippsland NATS Minister for Agriculture, Fisheries and Forestry 1 Mr McGauran —The answer to the honourable member’s question is as follows: Unlike other exit programmes administered by the Australian Government, such as Farm Help, the re-establishment grant component of the Sugar Industry Reform Programme 2004 provides assistance to those farmers who may not wish to sell their farm but would still like to exit the sugar industry. As a result, cane growers are also able to access the grant, albeit on a taxable basis, if they exit the sugar industry either by leasing their land or diversifying into another agricultural operation. This is not possible under other exit programmes. Cane growers who sell their farm and leave agriculture altogether can apply for a tax free grant. This is the same treatment that applies to farmers who exit agriculture altogether under the Farm Help programme. However, re-establishment grants for the sugar industry operate with the most flexible assets test of any similar arrangement and provide the highest grant payment of $100,000 compared with $50,000 under the Farm Help programme. Cane growers who sell their farm and leave agriculture altogether can apply for a tax free grant, consistent with the provisions of other exit programmes such as Farm Help. The fact that growers who exit the sugar industry by diversification into another agricultural operation or by leasing their farm can also obtain assistance, albeit on a taxable basis, is a significant additional benefit compared to those farmers who exit other agricultural industries under similar programmes. Re-establishment grants for the sugar industry also operate with the most flexible assets test, and the highest grant payment, of any similar arrangement. The Government is not in a position to provide additional concessions under the programme. Cane growers who sell their farm and leave agriculture altogether can apply for a tax free grant, consistent with the provisions of other exit programmes such as Farm Help. However, the re-establishment grant component of the Sugar Industry Reform Programme 2004 also recognises the importance of helping farmers to move to another agricultural operation and still qualify for a grant. Providing a taxable grant in these cases maintains the objective of the programme and also provides additional assistance for those farmers in the most severe financial difficulties to establish themselves outside the sugar industry. This is consistent with the treatment of grants to individual farmers under other schemes, which are normally taxable unless specified otherwise under relevant legislation. The provision of tax free grants to farmers who exit agriculture altogether also recognises that they are highly unlikely to return to the sugar industry, as may occur with many who exit through leasing or diversification. 149 149 3864 149 McClelland, Robert, MP JK6 Barton ALP 0 Mr McClelland asked the Treasurer, in writing, on 9 August 2006: Is it the case that an employee is unable to pursue superannuation entitlements against a company in liquidation as a result of the Australian Securities and Investments Commission’s determination that such an employee is not the creditor for the purposes of such recovery, but rather the debtor is the Australian Taxation Office; if so, will the Government consider amending or reforming this area of the law. 149 Costello, Peter, MP CT4 Higgins LP Treasurer 1 Mr Costello —The answer to the honourable member’s question is as follows: When a company is being liquidated because it is insolvent, proofs of debt are lodged with the liquidator and the task of determining who is a creditor falls to the liquidator of the company, not the Australian Securities and Investments Commission. A liquidator may accept or reject a proof of debt, in whole or in part. A creditor dissatisfied with a decision by a liquidator to reject all or part of a claim may appeal to a court. Ultimately the question of who is a creditor is a question of fact and law to be determined by a court. Where superannuation contributions are owed to an employee, the employee can lodge a proof of debt for the unpaid contributions. Where the Australian Taxation Office (ATO) has determined the employer has a superannuation guarantee charge (SGC) liability, the ATO can also lodge a proof of debt in respect of that SGC liability. The Government has announced that it proposes to clarify the status and priority of the SGC in insolvency. Amendments will ensure that SGC attracts the highest priority, along with wages and superannuation, that employee entitlements enjoy under the law. It is expected that the Government will be releasing draft amendments for public comment later in 2006.