2008-10-21 42 1 3 REPS 0 0 2008-10-21 The SPEAKER (Mr Harry Jenkins) took the chair at 2 pm and read prayers. 9687 Ministerial Arrangements 9687 14:00:00 Rudd, Kevin, MP 83T Griffith ALP Prime Minister 1 0 Mr RUDD —I inform the House that the Deputy Prime Minister will be late to question time today as she is returning from an event in Melbourne. Until her return, the Minister for Employment Participation will answer questions on her behalf. 9687 14:01:00 Questions Without Notice 9687 14:01:00 9687 Turnbull, Malcolm, MP 885 Wentworth LP Leader of the Opposition 0 Mr TURNBULL —My question is to the Prime Minister. Did the Reserve Bank recommend to the government that the deposit guarantee be unlimited? 9687 Rudd, Kevin, MP 83T Griffith ALP Prime Minister 1 Mr RUDD —The Leader of the Opposition has been out there today hyperventilating like a kid on red cordial. I say to the Leader of the Opposition in very clear cut terms: the government, in taking the decision that it announced on Sunday a week ago, did so on the advice of the Secretary of the Treasury that this was the position of the regulators, including the Reserve Bank. That is why the government acted. The government stands by its position and the decision taken. I would draw the honourable gentleman’s attention to this statement, which was made by the Reserve Bank governor today, in which he said that the announcements by the government Sunday a week ago were ‘sensible and the RBA supported them’. The Reserve Bank governor has blown the credibility of the Leader of the Opposition right out of the water. 9687 9687 14:02:00 Campbell, Jodie, MP HWC Bass ALP 1 Ms CAMPBELL —My question is to the Treasurer. Will the Treasurer update the House on the implementation of the deposits guarantee? 9687 Swan, Wayne, MP 2V5 Lilley ALP Treasurer 1 Mr SWAN —I thank the member for her question. The government is committed to protecting depositors in these uncertain times. The announcement by the Prime Minister the Sunday before last was a very important announcement in terms of not just confidence in banking but also confidence in the wider financial system. That is why we announced a comprehensive guarantee, because you have to move with speed and comprehensively. This was supported by the Treasury and by the RBA, and it was fully supported by APRA. It was fully supported by all of our regulators. At the time of the announcement, we indicated that we would be consulting with industry as well as with our international counterparts on the details of the guarantee. We have been doing that. I would just like to quote from a speech that I gave in the House last Wednesday. It was the second reading speech that I gave on the bill that was introduced. These comments seem to have been missed by the opposition in the debate and discussion that has been going on since then. This is what I said in the second reading speech: The government is consulting on the interaction between this guarantee on eligible wholesale borrowing and the guarantee on deposits. If desirable, the government will proceed with measures to clarify the intersection of these guarantees and facilitate their operation. …            …            … The government will ensure that the short-term money market remains viable and that the deposit guarantee does not provide disincentives for market participants from operating in this market. That is what I said to the House last Wednesday. The regulators are consulting with industry, as they should, to ensure that the guarantee of deposits and wholesale borrowings does not adversely affect the efficient operation of the short-term money market. As members will be aware, the deposit guarantee and the term funding guarantee applies to Australian owned banks, Australian ADI subsidiaries of foreign banks, credit unions and building societies. The deposit guarantee applies to deposits in any currency and will extend to an Australian ADI’s branch operations in another jurisdiction. We are working with our international counterparts to ensure that appropriate arrangements are in place for foreign bank branches operating in Australia. None of these are new issues, but they are ones that the government has been well aware of and has been addressing in consultation both domestically and abroad. They are important issues, so it is very important to get them right. Treasury expects to have concluded consultations shortly and to have finalised the details of the package shortly. 9688 9688 14:05:00 Turnbull, Malcolm, MP 885 Wentworth LP 0 Mr TURNBULL —My question is again addressed to the Prime Minister. Did the Prime Minister speak directly to the Reserve Bank governor concerning the deposit guarantee prior to his announcement on 12 October? 9688 Rudd, Kevin, MP 83T Griffith ALP Prime Minister 1 Mr RUDD —In the midst of a cabinet meeting, which was a meeting of the strategic planning and budget committee of the cabinet, and with members of that committee present or online, at the conclusion of a discussion of a range of options before the government, I explicitly put this question to the Secretary of the Treasury: ‘Is the position being recommended here that of the regulators?’ He answered, ‘It was, and that includes the Reserve Bank.’ HWT Robert, Stuart, MP Mr Robert —Where does the buck stop? 10000 SPEAKER, The The SPEAKER —The buck will stop for the member for Fadden outside. He is warned. 9688 9688 14:07:00 D’Ath, Yvette, MP HVN Petrie ALP 1 Mrs D’ATH —My question is to the Prime Minister. Will the Prime Minister update the House on the government’s response to the global financial crisis? 9688 Rudd, Kevin, MP 83T Griffith ALP Prime Minister 1 Mr RUDD —The government has acted responsibly both on the question of guarantees to bank depositors in Australia and guarantees for the term funding arrangements of our banks operating internationally to secure lines of credit for the Australian private sector and on what has been necessary to do for the fiscal stimulus of this economy, despite the best efforts of those opposite to talk this economy down throughout the course of this year. Opposition members interjecting— 83T Rudd, Kevin, MP Mr RUDD —I seem to remember that earlier this year the member for North Sydney was doing precisely that, followed by others in their public remarks. I say to those opposite that, at difficult and delicate times like this in the global economy and the Australian economy, confidence is important, dealing effectively with the challenges we face is important and acting responsibly in accordance with the advice the government has received is the right course of action rather than short-term politics. The Federal Reserve chairman in the United States, Chairman Bernanke, referring to the United States economy overnight, said ‘We are in a very serious slowdown in the economy which has very serious consequences for the public.’ Furthermore, Chairman Bernanke went on to call for a fiscal policy response, saying: With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate. That is what we see in governments around the world at present. Given the challenges which have occurred coming off the back of the global financial crisis and the impact which it has had on credit markets, stock markets and the real economy, growth and jobs, we have seen governments elsewhere around the world now debating what to do in terms of the fiscal policy stimulus—that is, to provide the economy and growth in jobs with a further level of support. Last Tuesday this government acted with its statement on this matter: the $10.4 billion Economic Security Strategy. Given recent developments not just in the United States but elsewhere in the global economy, and the wash-through effect which this has over time on growth and jobs in this economy, this has been a responsible course of action. I also again emphasise recent statements coming out of the People’s Republic of China about growth there slowing somewhat and the need therefore for the government to boost consumption and to support job creation. Again, I refer to the statement of the governor of the Chinese central bank on 15 October to that effect. That is why this government, mindful of what is coming down the railway tracks towards the global economy, of which we are a part, over the 12 months coming, has acted sternly and decisively on the Economic Security Strategy we have put forward to the Australian people and which has received little more than backbiting comment from those opposite as opposed to full-hearted support. In fact, the measures we have taken are of direct support not only to long-term growth and jobs in the economy but also to pensioners, carers and seniors, families, first home buyers and those needing additional trading places. Of course, we look forward in December to the acceleration of our nation-building agenda. The need for this package has been reinforced by observations that we have seen in recent times by the economic commentators and also by decisions by our own central bank. I draw the attention of honourable members to the decision not long ago to reduce interest rates by 100 basis points. All these measures are necessary—fiscal policy and monetary policy moving in the same direction—in order to ensure that this country has the greatest chance possible to continue to maintain positive growth into the future and to continue to generate jobs growth into the future as well. We have been able to act because this government is in a strong budget position. Information overnight demonstrates the strength of our position relative to a number of our peers around the world, where you see various governments in considerable difficulty on the budget front. This is why the government, in its May budget, brought about a significant budget surplus to provide us with a buffer for growth for the future, and the time to use and draw down on that budget surplus has arrived. I also say to the country and to the House how important it is to have made provision for that budget surplus earlier this year. We can deliver this $10.4 billion stimulus package to the economy while continuing to provide a budget outcome for Australia which remains comfortably in surplus. This represents decisive action on the part of the government in dealing with the challenges Australia now faces— 885 Turnbull, Malcolm, MP Mr Turnbull —It’s hype! 83T Rudd, Kevin, MP Mr RUDD —challenges which do not, may I say to the honourable gentleman who will ask the next question, add up to hype as he says. I would say to the Leader of the Opposition that the superannuation policyholders around Australia do not regard the global financial crisis as hype. The pensioners of Australia do not regard the global financial crisis as hype. Those millions of Australians who have investments directly and indirectly on Australian stock markets do not regard the global financial crisis as hype. Those concerned about the impact of the global financial crisis on long-term growth and jobs growth in this country do not regard it as hype. I believe the use of that term by the Leader of the Opposition demonstrates just how far out of touch he has come with the real concerns of Australians facing the uncertainties which come to this country off the back of this global financial crisis. 9690 9690 14:12:00 Turnbull, Malcolm, MP 885 Wentworth LP 0 Mr TURNBULL —I refer the Prime Minister to his answer to my previous question, in which he told the House that the strategic policy and budget committee of the cabinet made its decision on the deposit guarantee measures and then sought a second-hand view of the position from the Reserve Bank via the Treasury secretary, Dr Henry. How does he reconcile that with his statement on 12 October where he says, ‘The measures I have announced today are based on the advice of Australia’s economic regulators’? 9690 Rudd, Kevin, MP 83T Griffith ALP Prime Minister 1 Mr RUDD —I think the Leader of the Opposition needs to acquaint himself with the truth, which for him increasingly has all the characteristics of a foreign country. What I said before was that, when the options were put before the cabinet committee to which I have just referred, I then spoke to the Secretary to the Treasury and asked, ‘Is this the recommendation of the regulators?’ to which he said yes. It was on that basis that the government acted. I refer the honourable gentleman—in his hyperventilating state, chucking cartwheels around the House, as he has taken far too great an intake of seriously deep red cordial this morning—to a statement made by the Reserve Bank governor less than a couple of hours ago that the decisions announced by the government then ‘were sensible and the Reserve Bank of Australia supported them’. What we have here is the classic exercise of the Leader of the Opposition again walking both sides of the street. On one hand he says he supports the measures; on the other hand, he says, ‘We’re not so sure that we support the measures.’ I assume the position of the Liberal Party now is that the bank guarantee that they support is their $100,000 limit which they put out there. I would ask the Leader of the Opposition: how many and what percentage of Australian depositors would that have left high and dry? This government has acted responsibly and has acted in response to the advice provided to us through the Secretary of Treasury from the regulators, including the Reserve Bank. That is a responsible course of action. If the honourable gentleman and his party were at all serious about the question of financial guarantees, why is it that in the five years since the HIH crisis—with which the honourable gentleman may have some passing familiarity, with which the member for North Sydney, as the relevant minister, may have some familiarity, and the relevant minister for financial regulation—no action has ever been taken on a financial claims scheme, not one step of action? It was an event which occurred five years ago, when we saw the intersection of a number of institutions, including HIH, FAI and an institution called Goldman. The council of economic regulators provided you with specific advice in order to act in 2005, and the election was held at the end of 2007. We acted on the basis of that advice early in our term, and that is why this government has taken the right course of action, consistent with the regulators. The bleating on the part of those opposite now, having had five years to act on this measure, is a stark reminder of the hypocrisy which resides on the benches opposite. 9690 9690 14:16:00 Irwin, Julia, MP 83Z Fowler ALP 1 Mrs IRWIN —My question is to the Minister for Finance and Deregulation. Minister, how is the government’s economic security strategy addressing the challenges presented by the global financial crisis? Are recent criticisms of the government’s strategy accurate? 9691 Tanner, Lindsay, MP YU5 Melbourne ALP Minister for Finance and Deregulation 1 Mr TANNER —I thank the member for Fowler for her question. We have seen in recent times unprecedented turmoil on global financial markets and, as a result of that turmoil, the Australian economy faces significant threats. The Australian economy is in good shape. It is strong, but it is not immune from the threats that flow from the unprecedented turmoil on global financial markets. In response, the government has taken decisive action to guarantee bank deposits, to guarantee the wholesale borrowing by Australian banks and to inject $10 billion as a stimulus into the Australian economy. All of these actions aggregated together, along with the fall in the value of the Australian dollar and the decline in interest rates in recent times, will ensure that we keep growth and economic activity ticking along and will help to ensure that we protect Australia as much as possible from the adverse effects of the global financial crisis. It is true that the government strategy has been criticised, sadly. Unfortunately, it has been criticised by people who claim to support it; namely, the opposition. After initially saying they supported fully and absolutely the government’s strategy, the opposition have spent the last week walking away from that position, sniping at specific parts of the package and saying they would have done it all differently, without of course specifying how they might have done it differently—just that no, no, they would have done it all differently. Just a few days ago the Leader of the Opposition was alleging that the government was hyping up the international crisis. A few weeks ago he was saying that this was the gravest economic crisis globally in any of our lifetimes. Just a few days ago he was attacking the government for not foreseeing the global financial crisis when, a few weeks ago, he was suggesting that nobody could have foreseen the crisis. The Leader of the Opposition is not short of an opinion on these issues. He is not short of an opinion on most issues. In fact, if you wait for a week on any issue you will get all the available opinions on that issue across the spectrum from him. He will contradict himself several times in an effort to walk both sides of the street and to insert himself into the day’s story, whatever ‘today’s’ story might be. But there is one remarkable fact in the opposition’s response to the government’s strategy on these unprecedented circumstances. There is one part of the government’s strategy, one aspect of the position outlined by the Prime Minister, on which the opposition has been remarkably quiet, and that is the government’s intention to address the issue of excessive executive salaries, especially in the financial services sector. Apart from the odd platitude on the part of the Leader of the Opposition about leaving it up to shareholders, he has said very little about this aspect of the government’s strategy. I wonder why the Leader of the Opposition would have so little to say about the government’s intentions to pursue reform of excessive executive salaries. I think I know the answer. He is worried that we might make it retrospective. He might have to sell a few Picassos or something. I can assure the Leader of the Opposition that the government is approaching this, along with other issues, in complete seriousness. Indeed, the Prime Minister has advocated in the international forums that are pertinent to this a change to the international rules covering the capital adequacy ratios that apply to banks and financial institutions to take into account the perverse incentives that currently exist for executives in major institutions to take short-term excessive risk and be rewarded excessively for taking that risk. I look forward with great anticipation to a robust contribution from the opposition, including the Leader of the Opposition, on this issue. With any luck they might adopt a single policy and stick to it. 9692 9692 14:21:00 Turnbull, Malcolm, MP 885 Wentworth LP 0 Mr TURNBULL —My question is again to the Prime Minister. In the interests of clarifying the confusion of his previous answers, will the Prime Minister say simply and clearly whether the Reserve Bank recommended to the government that the deposit guarantee be unlimited—yes or no? 9692 Rudd, Kevin, MP 83T Griffith ALP Prime Minister 1 Mr RUDD —I do not propose adding to the earlier questions put to me. I put it in these terms again for the benefit of the honourable member: (1) this country, if we stand back from it all, was faced with being buffeted by a significant global financial storm; (2) the relevant strategic and budget committee of the cabinet met across an entire weekend; (3) the options put before us had been the subject of discussions between the financial regulators; (4) at the time that the options which were then adopted were being considered by that committee of the government, the question was explicitly put to the Secretary to the Treasury, ‘Is this the advice of the financial regulators, including the Reserve Bank?’ to which the answer was unequivocally, ‘Yes.’ That is why the government acted. The credibility of the entire position being put forward by the Leader of the Opposition is again blown completely out of the water today by the Reserve Bank governor, who says the actions by the government were sensible and the Reserve Bank of Australia supported them. The only one it seems who does not support them is the Leader of the Opposition. I presume the Leader of the Opposition is therefore wedded to his policy of $100,000 as being the appropriate limit. The Leader of the Opposition should reflect long and hard as to who would be excluded by that particular number, as well as reflecting long and hard on why in the five years after HIH no action was taken on the part of those opposite. I say to the honourable member, as he seeks again to make short-term political capital out of the long-term national economic interests of this country, that it is far better that we have people engaged in this debate in a calm and responsible manner, because the entire country, the stability of the financial system of this country and the appropriate stimulus needed for the long-term growth of this economy is of great importance to working households. I conclude my answer by saying this: none of this is hype; it is reality. We are dealing with reality here. Those opposite seem to think that those holding superannuation regard the global financial crisis as hype. That demonstrates definitively that the Leader of the Opposition has got so far out of touch on these matters, as he was last time when he said that an interest rate rise of 25 basis points, households having suffered seven interest rate rises in a row up until then, was nothing to get worried about. This demonstrates a Leader of the Opposition grossly out of touch with the real concerns out there across Australian households, as he seeks to come in here and make a short-term political point in order to advance his interests in securing a headline in tomorrow’s newspapers. I say to the Leader of the Opposition that his responsibility as a political leader in this country should be to put our national economic interests first. Instead, he puts his short-term personal political interests first. It is clear for all to see. This government stands by the action it took Sunday a week ago. It is the responsible course of action. I conclude by saying this to the honourable member: could he reflect also on the impact of the government’s decision on the actual interest rates charged by the banks concerned. Since the action taken by the government both on this deposit guarantee and on the guarantee for— 00AKI Dutton, Peter, MP Mr Dutton interjecting— 10000 SPEAKER, The The SPEAKER —The member for Dickson will withdraw. 00AKI Dutton, Peter, MP Mr Dutton —Mr Speaker, I withdraw. 83T Rudd, Kevin, MP Mr RUDD —What households across Australia are concerned about is the availability of credit and the cost of credit. The NAB came out in recent days saying: While our current cost of funds remain at a historical high, policy measures announced by the Australian Government earlier this month have started to have a positive impact on the credit market. We welcome this new development and anticipate that we will see some relief in the significantly higher premium we are currently paying for wholesale funds. There were similar remarks by the ANZ. I say to those opposite that the real concerns out there are (1) the stability of the financial system, (2) making sure that there is sufficient credit to flow by way of loans to businesses and small businesses and (3) to ensure that you provide sufficient support for this financial system in a time of global financial stress to enable our major commercial banks to provide maximum pass-through of official reductions in interest rates onto households. Those are the concerns which galvanise this side of the House—the concerns of superannuants, the concerns of households dealing with mortgages and interest rates and the concerns of pensioners trying to survive in the current climate. Those opposite are interested instead in short-term political points, and I think they stand condemned for it. 9693 Distinguished Visitors 9693 14:26:00 SPEAKER, The 10000 PO N/A 1 0 The SPEAKER —Partly prompted by the exuberance and transgression of standing order 65(b) by the present member for Cowan, I inform the House that we have in the gallery today a former member for Cowan and former minister of the Western Australian government, Graeme Edwards. On behalf of the House, I extend to him a warm welcome. Honourable members—Hear, hear! 9693 Questions Without Notice 9693 9693 14:27:00 Ripoll, Bernie, MP 83E Oxley ALP 1 Mr RIPOLL —My question is to the Minister for Trade. Can the minister outline the importance of the Australia-China relationship and the future of Australia’s trade relationship with China? 9693 Crean, Simon, MP DT4 Hotham ALP Minister for Trade 1 Mr CREAN —I thank the member for Oxley for his question. I know the keen interest that he takes in the relationship between Australia and China, in particular the trade relationship. China is Australia’s largest trading partner, and two-way trade with that country is $58 billion. So far as the relationship is concerned, this government on coming to office reappraised the approach in terms of China and decided it needed a new focus and a new vigour. The previous government had entered into discussions around a free trade agreement, but these talks had been stalled for some three years. The unfreezing of the discussions with China was fortuitous and timely because the fact is that the global financial crisis has impacted on economic growth around the world. China is no exception, but the reality is that, whilst there will be an impact on China’s growth rate, China will still have a robust and strongly growing economy. The IMF has said that from 11.9 per cent growth over the last calendar year, it expects China’s growth to be 9.7 per cent this year. So it is slowing, but it is still very strong. In fact China will continue to be one of the fastest-growing countries in the world. It is important to also understand the composition of and contributions to China’s growth. It is mostly domestically driven. In 2007 only two per cent of that close to 12 per cent was as a result of net exports. In the first nine months of this year, net exports have contributed only 1.2 per cent to China’s economic growth. So China still remains terribly important in terms of our trade equation, and that is why following the initiative of the Prime Minister in engaging his counterpart in unfreezing the free trade talks and the discussions that have flowed from that—two more rounds of discussions; another one next month—we are pleased to say that we are well on track to progressing that FTA. Also, we are pleased to be hosting here tomorrow the chairman of the National Development and Reform Commission, a very significant body in terms of the economic growth and the future development and infrastructure spend in China. The chairman, Zhang Ping, and I will be conducting more discussions on mutual cooperation, how we can advance the trade relationship and how we can together face the challenge of the global financial crisis that is confronting both economies. I am confident that we can build on this very strong relationship, but it does require engagement at the political level. This is something that Australia has engaged in in great detail, from the Prime Minister down. Many of the ministers have made visits to China. We have received many delegations from China. So I am confident this relationship will stand us in good stead. Whilst I am on my feet I might also indicate that the significance of the continuing growth, albeit slowed, in the Asian region is another significant reason the recently concluded FTA with the ASEAN region will also hold Australia in good stead. We do not know what is around the corner in terms of the impact, but I can say that we have significant cushions. Our trading relationship is an important part of that cushioning effect, and we will do what is necessary to advance the trading interests between us and China and between us and the ASEAN region. 9694 9694 14:31:00 Turnbull, Malcolm, MP 885 Wentworth LP 0 Mr TURNBULL —My question is again to the Prime Minister. I refer to the Prime Minister’s previous answers to my questions today and to his press conference on 12 October where he said in relation to the bank deposit guarantees: The measures I’ve announced today are based on the advice of Australia’s economic regulators. The measures I’ve announced today have been the product of extensive deliberation between myself, the Treasurer and other Ministers who are members of the Strategic Policy and Budget Committee of the Cabinet. Given the Minister for Finance and Deregulation is a member of that committee in his own right and given he was acting Treasurer over that weekend, how does the Prime Minister reconcile his statement and his answers today with the finance minister’s repeated comments this morning on Sky News Agenda that he was ‘not aware of the specific advice that is supposed to have been given to us by the RBA governor’? 9694 Rudd, Kevin, MP 83T Griffith ALP Prime Minister 1 Mr RUDD —Once again, the Leader of the Opposition should acquaint himself with an ancient proposition called truth. I know that is something which is increasingly foreign to his vocabulary and foreign to his behaviour. The minister for finance this morning was referring to the absence of advice before the committee that there was anything wrong with this course of action, and it is absolutely clear-cut from his statements that that is the case. Those opposite again are clutching at straws, hyperventilating on this particular matter, when out there in mainstream Australia people are dealing with the challenges of financial stability, dealing with the challenges of what happens with their mortgages, dealing with the challenges of what happens with employment and jobs. All we have from the alternative government here is an exercise in short-term partisan politics. I say to those opposite they should get real with the economic interests of this country, get behind the government’s package of support for the economy, not by half measures but by full measures, and get behind the proper measures taken by this government in response to the advice of the regulators on this guarantee and the guarantee for wholesale term funding arrangements for the banks necessary to maintain financial stability in this country. And I would say to the Leader of the Opposition: that is the deepest and most fundamental concern of every household in Australia. 9695 9695 14:34:00 Neal, Belinda, MP B36 Robertson ALP 1 Ms NEAL —My question is to the Minister for Defence. Will the minister update the House on progress in Afghanistan and recent successes achieved by the Australian troops? 9695 Fitzgibbon, Joel, MP 8K6 Hunter ALP Minister for Defence 1 Mr FITZGIBBON —I thank the member for Robertson both for her question and for her ongoing and longstanding interest in the work of the men and women of the Australian Defence Force. The last few weeks have brought increasing public discussion and, indeed, debate about the international community’s progress, or lack of progress, in our Afghanistan project. In particular, both local and international media seized on the comments of British commander Brigadier Carlton-Smith, who reportedly said that the war against the Taliban in Afghanistan was not winnable. While I certainly share Brigadier Carlton-Smith’s frustration, I do not and the government does not share his level of pessimism. It is absolutely true that the progress of the global partners in Afghanistan is at best very, very slow—and it will remain slow while ever we lack properly coordinated and resourced political, civil and military plans. Those who say that the project in Afghanistan will not be successful by military means alone are absolutely right. That is why the government, in addition to calling for more troops, has been pushing for greater coordination and resourcing; more resources for the UN’s special envoy; more training and capacity building in the Afghan national security forces; a smarter counternarcotics strategy; more economic aid and more aid workers; a greater focus on governance, including the creation and bedding down of a justice system; and, of course, a much bigger effort in addressing those very large challenges we have in Pakistan and the implications for those challenges in Afghanistan. Meanwhile, our troops in Afghanistan continue to do real and meaningful work in Oruzgan province and, indeed, beyond Oruzgan province. Our special forces are having real, strategic effect—disrupting the insurgents, destroying IED manufacturing facilities and eliminating or capturing key Taliban leaders. Indeed, since August alone our special forces have captured or eliminated four key senior Taliban leaders in Oruzgan province including, importantly, Mullah Bari Ghul, the shadow governor of the province, and Mullah Akhtar Mohammed, the well-known extremist Taliban commander. The removal of these senior Taliban leaders has significant impact on the effectiveness of the insurgents more generally. On the reconstruction side, our Reconstruction Task Force continues to build and rebuild important economic and social infrastructure. Ongoing projects include further improvements to the hospital in Tarin Kowt, the expansion of the Afghan Health Development Service Training Centre, and the rebuilding of the Ministry of Rural and Regional Development headquarters and the high school and primary schools in Tarin Kowt. Completed projects include the Sorkh Morgab Basic Health Centre and the Tarin Kowt women’s hospital wing which the governor of the Oruzgan province very recently officially opened. Of course, in the meantime our trades training school is ensuring that we build indigenous capacity so that these reconstruction efforts in the future can be undertaken by local Afghanis. Some of our reconstruction work also has important strategic effects, like the patrol base at Kudus, which has allowed our troops to dominate an area of strategic importance some 20 kilometres from our base in Tarin Kowt, or the replacement of the Highway 1 bridges, a key logistical thoroughfare which has restored the coalition line of supplies and, critically, allowed for the successful construction of the Kajaki dam project. Importantly, it is worth noting that our Combat Team Dagger was the only organisation available to do this work successfully. Why? Because they are the only reconstruction team that comes with their own very effective security—underlining the important work our infantry troops are also doing in Afghanistan. Today I can announce that today we enter a new phase in our work in Afghanistan: replacing Reconstruction Task Force 4 will be Mentoring and Reconstruction Task Force 1. Importantly, their work will be in building the capacity of the Afghan National Army. Our troops will embed themselves with Afghani battalions, sharing their skills, knowledge and know-how within the fledgling Afghani army. Building the capacity of the Afghan National Army is critical to better progress in Afghanistan. Too often our special forces and other forces are successful in securing ground only to lose that ground after we withdraw because of the inability of the Afghani security forces to hold that ground, to hold our gains. The 38 international partners in the Afghanistan project continue to face enormous challenges, but if properly resourced and if coordinated political, civil and military plans are embraced, I am absolutely confident that we can achieve relative peace and security for the people of Afghanistan and, importantly, deny extremists a safe haven and a base from which to pursue their global ideological agenda. I am sure all members of the House will join with me in paying tribute to and thanking the men and women of the Australian Defence Force for the wonderful work they are doing in Afghanistan. 9696 9696 14:40:00 Turnbull, Malcolm, MP 885 Wentworth LP 0 Mr TURNBULL —My question is addressed to the Prime Minister. Has the Governor of the Reserve Bank recommended that the government’s unlimited deposit guarantee—barely a week old—be changed so that it has a specific dollar cap? 9696 Rudd, Kevin, MP 83T Griffith ALP Prime Minister 1 Mr RUDD —As the Treasurer said when he introduced the relevant legislation in parliament last Wednesday: The government is consulting on the interaction between this guarantee— that is, that on deposits— on eligible wholesale borrowing and the guarantee on deposits. If desirable, the government will proceed with measures to clarify the intersection of these guarantees and facilitate their operation. DK6 Hockey, Joe, MP Mr Hockey —No, that’s not the question! 83T Rudd, Kevin, MP Mr RUDD —I am coming to what the honourable gentleman has asked. This was clearly outlined by the Treasurer in his introduction of the legislation last Wednesday. Therefore, from the government’s point of view, the guarantee in terms of deposits remains absolute. The question at issue is whether deposits above $1 million and beyond should have an insurance premium attached to them consistent with the insurance premiums which are relevant to term wholesale deposits, which applied to the term wholesale lending arrangements of the major commercial banks. That is entirely consistent with what the government said, through the Treasurer, in his statement to parliament last Wednesday. I would say this to the honourable gentleman: the guarantee, as it applies to all deposits, is absolute. 9V5 Pyne, Chris, MP Mr Pyne —Who’s on both sides of the street now? 10000 SPEAKER, The The SPEAKER —Order! I will walk one side of the street and take decisive action against the member for Sturt! 83T Rudd, Kevin, MP Mr RUDD —The question at issue is when, as the Treasurer foreshadowed last Wednesday, at the intersection of these two regimes, you have competitive neutrality between those two regimes for the most significant depositors—that is, north of $1 million, beyond $1 million. If you are holding a deposit in a bank of less than $1 million, which most people in this country do, that is at 99.5 per cent of depositors. And I say to the honourable gentleman: the government’s guarantee for depositors remains absolute. What we are talking about, as the Treasurer foreshadowed last Wednesday, is the intersection of the two regimes at the most upper end, and that is the subject of the discussion occurring between the regulators and the banks as we speak. Despite multiple questions from those opposite over the course of recent days, for the government in parliament to go to the detail of those commercial negotiations is not the responsible course of action until they are resolved. Once they are resolved, that will be put fully and formally and finally into the public domain. That is the right and responsible course of action. What is the alternative course of action for those opposite, who advocated a $100,000 limit? For the benefit of the honourable member, who has not bothered to tell the public this, if Liberal Party policy was implemented, 40 per cent of this nation’s total deposits would not be covered. That is Liberal Party policy. This government took a different view that all deposits of all APRA-regulated institutions in banks, building societies and credit unions should be covered. The question at issue for those who have deposits at the extreme upper end of the spectrum—north of $1 million—is whether an insurance premium should be attached to it. That is what is at issue here. But 99.5 per cent of deposits are less than $1 million. What those opposite were saying, with their $100,000 guarantee, is that 40 per cent of this nation’s deposits would get zero guarantees. That is Liberal policy; that is what they wanted to do. We have a completely different approach. Our approach was not only advised to us by the Secretary to the Treasury but also advised to us by the Secretary to the Treasury based on the consultation and advice that he had in turn received from the economic regulators. This is a clear-cut course of action for the future. Those opposite simply want to make cheap, short-term political points. I would say to the member for Wentworth, who regards this as an entire hype, to use his own terms, that the interests of working families, the interests of households, lie in responsible action by a government responding to the advice provided to it by the regulators to act appropriately to maintain the stability of our financial system to make it possible for our banks to open up lending again to the small businesses of Australia and to provide our banks with the greatest opportunity to provide maximum pass-through for the interest rate burden being faced by those struggling households out there—an interest rate burden compounded by the 10 interest rate rises in a row brought about under their regime when they were in office and, I have got to say, an interest rate regime which the honourable gentleman opposite regarded as a mere trifling matter when he derided a 25 basis point increase. This demonstrates more broadly how out of touch the member for Wentworth has become: regarding the global financial crisis as hype and regarding all these matters of the stability of the financial system as hype, and regarding the security of depositors—not just 60 per cent of deposits but the entire scheme—as necessary to the future. That is not hype either. We have acted responsibly and we stand behind the actions we have taken. 9698 9698 14:46:00 Rea, Kerry, MP HVR Bonner ALP 1 Ms REA —My question is addressed to the Attorney-General. Can the Attorney-General update the House on what the government is doing to protect and promote the rights of women, including on the international stage? 9698 McClelland, Robert, MP JK6 Barton ALP Attorney-General 1 Mr McCLELLAND —I thank the honourable member for her question. I know she has a deep commitment to removing discrimination against women. The Rudd government is strongly committed to the protection and promotion of women’s rights, both domestically and internationally. In fact, August this year marked the 25th anniversary of Australia’s ratification of the United Nations Convention on the Elimination of Discrimination Against Women, commonly known as CEDAW. In those 25 years much has been done. In particular, CEDAW provided the basis for very significant reforms, including the Sex Discrimination Act, which in 1984, some 24 years ago, made discrimination against women illegal. But it is time to do more and the Rudd government is taking another important step for the rights of Australian women. Last week, in response to a national interest analysis which I tabled, the Joint Standing Committee on Treaties recommended that Australia accede to the Optional Protocol to the Convention on the Elimination of Discrimination Against Women. I, along with the Minister for the Status of Women, have conducted wide-ranging consultations with state and territory governments and non-government organisations on the issue of Australia becoming a party to this important protocol. The responses we have received as a result of the consultations have been uniformly and overwhelmingly positive. It is high time that Australia stood up on our international human rights responsibilities. It is quite hypocritical for us to expect of other nations standards that we are not ourselves prepared to meet. Regrettably, discrimination against women in our region of the world is rife, whether in the areas of employment, educational opportunity, maternity services, social rights or, in the worst-case scenarios, of which we are well aware, the prevalence of sexual trafficking in our region. We cannot call on others to rectify those measures unless we are prepared ourselves to set an example. It is therefore our hope that, before the end of this year, the Rudd government will be able to lodge our instrument of accession to this very important protocol. Regrettably, however, the government has not been supported in this initiative by those opposite. While in government, those opposite ignored this and other important human rights instruments and effectively turned their back on the international community. Now they have submitted a dissenting report to the committee recommendation to sign up to this important protocol. It appears that the opposition still maintains its historical opposition to international human rights and, in particular and most regrettably, the rights of women. I ask those opposite to join with the government in taking this step for Australian women and for the strength of our regional and international human rights obligations. 9699 9699 14:50:00 Bishop, Julie, MP 83P Curtin LP 0 Ms JULIE BISHOP —My question is to the Treasurer. Is the Treasurer aware of any advice from the Reserve Bank governor to the secretary of his department, Dr Ken Henry, that the government should limit the deposit guarantee? 9699 Swan, Wayne, MP 2V5 Lilley ALP Treasurer 1 Mr SWAN —I thank the member for her question. As I said earlier at the press conference, and I will inform the House, the secretary of my department and the Governor of the Reserve Bank have been in discussions about the comprehensive guarantee and the level above which a fee may be charged—an insurance premium, if you like. They have been in those discussions consistent with the answer that I gave in the House last Wednesday. Of course, the shadow Treasurer did not listen to the answer last Wednesday, so she was unaware that the government then was looking at finetuning the scheme, as we should, and that is what the Treasury and the Reserve Bank are discussing as we speak and it is what the Treasury and the Reserve Bank are discussing with industry. When those consultations have finished, we will make our announcement. 9699 9699 14:51:00 Neumann, Shayne, MP HVO Blair ALP 1 Mr NEUMANN —My question is to the Minister for Foreign Affairs. What is the Australian government doing to help eliminate cluster munitions? 9699 Smith, Stephen, MP 5V5 Perth ALP Minister for Foreign Affairs 1 Mr STEPHEN SMITH —I thank the member for his question. In May this year, Australia joined 111 states at the Dublin Diplomatic Conference on Cluster Munitions to negotiate a legally binding convention to prohibit cluster munitions that cause unacceptable harm to civilians. Australia joined this process because we very strongly believed that, having seen the devastation caused by landmines throughout the world, the time had come for the international community to address the terrible, indiscriminate effects of cluster munitions. Australia, both in the months leading up to the convention in Dublin and also at the convention itself, worked very hard to achieve a treaty that not only achieved very important humanitarian objectives but also safeguarded Australia’s national and national security interests. I think it is well recognised that the new convention on cluster munitions is a significant humanitarian achievement. It prohibits cluster munitions that randomly scatter tens or hundreds of so-called submunitions that have no self-destruct capability or capacity and which pose a long-term threat to innocent civilians for years to come after hostilities have ceased. It does not, for example, apply to modern precision guided weapons with self-destruct capabilities such as the SMArt 155 anti-tank munition, which was recently acquired by the ADF. Importantly, the convention also contains provisions to assist the victims of cluster munitions, their families and also their communities by including provisions which go to the clearance of land to make land free from cluster munitions. The convention ensures that cooperation between nations through peacekeeping and other joint operations with nation-states who do not become a party to the treaty is able to continue. This so-called interoperability is very important to Australia’s long-term strategic, security, defence and peacekeeping arrangements. The government has conducted a thorough policy, legal and technical review of the convention, and I am very pleased to advise the House that Australia will sign the convention. Australia will be among the first nations to sign the convention when the treaty opens for signing in Oslo in early December this year. I think that that action by the government and by our nation is consistent with the proud record that Australia has in this area. Australia, for example, was an original signatory to the mine ban convention in 1997. Australia has been a longstanding supporter of mine action, committing $75 million over the period 2005 to 2010 to remove mines and assist victims, and this is built on the $100 million which was made available by Australia in the decade leading up to 2005. In the last financial year, 2007-08, we have provided nearly $19 million for mine action projects in Afghanistan, Cambodia, Laos, Vietnam and Iraq. Early today I was very pleased to meet with the former member for Cowan, Graham Edwards, who is in the gallery today, and with other representatives of the Australian Network to Ban Landmines to do a number of things: to advise the network on the government’s decision to commit to signing the treaty in December this year, to compliment the network on the good work that they do and also to underline Australia’s ongoing commitment to mine action. I am also pleased to indicate to the mine network and to advise the House that Australia today will make a further contribution of half a million dollars to the United Nations Mine Action Service, UNMAS, for humanitarian clearance of cluster munitions in Lebanon. This builds on the $2.5 million which Australia has already contributed to UNMAS doing the United Nations vital humanitarian work in this very important area. 9700 9700 14:55:00 Turnbull, Malcolm, MP 885 Wentworth LP 0 Mr TURNBULL —My question is to the Prime Minister. I refer to the Prime Minister’s revelation in his earlier answers that, in the course of the weekend of 11 and 12 October, he did not speak directly to any of the regulators upon whose advice he has earlier claimed to have relied. How does he reconcile that lack of direct communication with his statement to the National Press Club on 15 October: ‘They are measures which have been implemented in the closest possible coordination with our financial and economic regulators’? 9700 Rudd, Kevin, MP 83T Griffith ALP Prime Minister 1 Mr RUDD —The council of economic regulators includes the Treasury. On these matters that you have just referred to in your question, the form of communication between the government and the other regulators was through the medium of the Secretary of the Treasury, as is entirely normal. DK6 Hockey, Joe, MP Mr Hockey —Normal? 83T Rudd, Kevin, MP Mr RUDD —Furthermore, are those opposite, including the member for North Sydney, saying that they do not trust the word of the Secretary of the Treasury? DK6 Hockey, Joe, MP Mr Hockey interjecting— 10000 SPEAKER, The The SPEAKER —Order! The member for North Sydney! 83T Rudd, Kevin, MP Mr RUDD —No, this is a very important question. Are those opposite saying they do not trust the words of the Secretary of the Treasury? We on this side of the House do. The government has great trust in the Secretary of the Treasury—it is a high public office of the Commonwealth. If I as Prime Minister turn around to the Secretary of the Treasury and say, ‘Is this course of action’— DK6 Hockey, Joe, MP Mr Hockey interjecting— 83T Rudd, Kevin, MP Mr RUDD —Oh, one person’s voice? DK6 Hockey, Joe, MP Mr Hockey —Yes. 83T Rudd, Kevin, MP Mr RUDD —So the member for North Sydney says the Secretary of the Treasury’s position on this is only one voice and not to be trusted by the government. That is an extraordinary position on the part of those opposite. Can I say that the attitude of those opposite is also consistent with the previous government’s treatment of the Secretary of the Treasury. If those opposite perused the public reporting on this matter, when the current Secretary of the Treasury was serving the previous government and dared to give a public speech which went to the question of whether the Treasury was being properly consulted on such questions as water and climate change, how did the previous government deal with the then and current Secretary of the Treasury? Do you know what happened? His salary bonus was chopped because he dared to speak out. That is what happened. That is the contempt with which that government treated that high office of the Commonwealth. When I as the Prime Minister turn to the Secretary of the Treasury and ask this formal question—‘Is this the advice of the regulators including the Reserve Bank?’—and the answer is yes, I trust that advice. I assume that the member for Wentworth backs up the Manager of Opposition Business when he says, ‘That’s just one voice’—one voice in the wilderness. It just happens to be the Secretary of the Treasury. Our view is quite the reverse. I say to the member for Wentworth: you have a statement to us by the Secretary of the Treasury about the position of the regulators—that is point 1. But if there is any doubt on this matter it is an open and shut case when you have a statement today by the Governor of the Reserve Bank which says that the government’s actions were sensible and the Reserve Bank of Australia supported them. You have a clear-cut statement by the Reserve Bank governor that the bank supported the government’s actions consistent with the statement to the ministers in that committee about the attitude of the regulators to the action taken. The government’s course of action has been responsible, and again the member for Wentworth, the member for North Sydney, in a most irresponsible injection now about the Secretary of the Treasury, and the member— DK6 Hockey, Joe, MP Mr Hockey interjecting— 10000 SPEAKER, The The SPEAKER —Order! The member for North Sydney! 83T Rudd, Kevin, MP Mr RUDD —I would have thought the member for North Sydney in particular would be sensible and sensitive to the advice from regulatory institutions given his particular experience of being the regulator when HIH went bust. I seem to remember that the member in question— Opposition members interjecting— 83T Rudd, Kevin, MP Mr RUDD —Those opposite regard this as not relevant to the current debate. The recommendations which came to the previous government for a financial claims scheme came out of the HIH royal commission. An entire company goes under, the member for North Sydney was the minister for financial regulation at the time, and a certain other member of this parliament seemed to have a material engagement in those matters at the time—I will leave that to one side. But can I say to those others opposite: if we have a clear statement to us by the Secretary of the Treasury that this is the position of the regulators, and if the Governor of the Reserve Bank then confirms that is the case, then this is an open and shut case. Those opposite are simply clutching at straws; again trying to make a cheap political point. The government stands by the Secretary of the Treasury. He is a first-class officer of the Commonwealth. The government stands by the integrity of the Reserve Bank, of APRA, of ASIC and of the council of economic regulators. If those opposite were interested in the nation’s long-term economic interests, they would do so as well. 9702 9702 15:00:00 Zappia, Tony, MP HWB Makin ALP 1 Mr ZAPPIA —My question is to the Minister for the Environment, Heritage and the Arts representing the Minister for Climate Change and Water. I ask the minister: what action has the government taken to protect the health of our river systems? 9702 Garrett, Peter, MP HV4 Kingsford Smith ALP Minister for the Environment, Heritage and the Arts 1 Mr GARRETT —I thank the honourable member for his question and I recognise his interest in these matters. The government understands that the short- and long-term health of our river systems is a hugely critical issue and, since coming to government, Labor has set about delivering real improvements to the health of our rivers. In particular I point out to the House the $12.9 billion Water for the Future program, including $3.1 billion for environmental water purchases through the Restoring the Balance in the Murray-Darling Basin program. Already a number of substantial decisions have been taken. On 15 September we commenced a tender to purchase water from willing sellers in the Queensland— Opposition members—Page 2. HV4 Garrett, Peter, MP Mr GARRETT —and northern New South Wales areas of the Murray-Darling Basin, part of a $400 million program to purchase water entitlements in the northern section of the basin. On 20 September the Prime Minister announced an offer to buy the water entitlements of small block irrigators in the Murray-Darling Basin who agree to sell all their water entitlements to that Commonwealth. Up to $150,000 as a special payment along with transitional assistance will be made available to eligible irrigators. People can leave irrigated farming but stay on the farm and stay in their community. This measure is expected to yield up to— Opposition members—Page 3. HV4 Garrett, Peter, MP Mr GARRETT —Thank you very much for showing your ability to count, those on the opposition side. I will be coming to numbers in a minute. On 7 October the government commenced a tender to purchase water entitlements from willing sellers in the Murray-Darling Basin, providing environmental benefits to RAMSAR listed wetlands along the River Murray such as the Lower Lakes, the Coorong, the Chowilla floodplain near Renmark and the Barmah-Millewa Forest near Echuca. So the government is delivering on bringing improvements to the river systems of the Murray-Darling Basin. The question I must ask now, through you, Mr Speaker, is: what did the coalition achieve in 11 years? Now let us count what happened in 11 years. Not one single drop of water was recovered directly under the Living Murray program. I urge the opposition to count that number—not one single drop of water was recovered directly under the Living Murray program. In fact the coalition woke up late to the issue of water when the former Prime Minister announced the national water plan for security 10 months before he lost office. Opposition members—Page 4. HV4 Garrett, Peter, MP Mr GARRETT —This plan was developed in secret by Mr Howard and the now Leader of the Opposition. There was no consultation with the cabinet. There was no consultation with Treasury. There was no consultation with the National Water Commission. There was no consultation with state or territory governments. SJ4 Tuckey, Wilson, MP Mr Tuckey —Mr Speaker, a point of order going to relevance—and I hope the minister will not lose his place by my intervention: I listened carefully to the question and I assume, as is now the practice, you have a copy. There was nothing in that question that entitled this minister to start his discourse on the opposition’s policy. 10000 SPEAKER, The The SPEAKER —Order! The member for O’Connor will resume his seat. 4T4 Melham, Daryl, MP Mr Melham —You’ve got water on the brain. 10000 SPEAKER, The The SPEAKER —Order! The only water the member for Banks will be studying is a cup of tea soon. First of all, to clarify something for the edification of the member for O’Connor, I do not see the questions. I do not even see a list of the questions. 9V5 Pyne, Chris, MP Mr Pyne —The press gallery’s got them. 10000 SPEAKER, The The SPEAKER —Order! I remind the member for Sturt, as I did the member for Cowan, of standing order 65(b). He manages to interrupt nearly everything that goes on in question time—not only the answers but also the questions and the Speaker. That goes for the member for Braddon as well. The minister has been relevant. The numeracy exercise that the opposition embarked upon is something that has been going on in this place for decades. It is not really very funny. It is not very cute. It only proves, perhaps, that we are as numerate as our predecessors. I think it is just completely disruptive and really something that should be left in primary school. HV4 Garrett, Peter, MP Mr GARRETT —For those who are used to counting, may I remind the opposition that in 2001 they were in specific receipt of information from the snapshot survey by the Murray-Darling Basin Commission of the impact of environmental degradation on the Murray-Darling Basin. In 2002 they were in receipt of the report from the Australian Greenhouse Office called Living with climate change, which again showed beyond any shadow of a doubt that there were significant risks to the health of the Murray-Darling Basin, yet in all that time the opposition were not able to deliver a single drop of water to the Murray-Darling Basin. The Leader of the Opposition had two years in the water portfolio and he did not deliver any recoverable water for the Murray-Darling Basin system. The opposition had 12 years to take national leadership on water and it failed. This government in four months began to take robust and comprehensive action on bringing health back to the Murray-Darling Basin, and we will continue on that course in the interests of the nation. 9703 9703 15:07:00 Turnbull, Malcolm, MP 885 Wentworth LP 0 Mr TURNBULL —My question is addressed to the Prime Minister. Given that the Prime Minister was too busy to speak to the Reserve Bank governor himself on the deposit guarantee matter, if it turns out that the Reserve Bank governor did not, in fact, expressly recommend an unlimited deposit guarantee, will he dismiss the Secretary of the Treasury for misleading the cabinet? R36 Albanese, Anthony, MP Mr Albanese —Mr Speaker, I rise on a point of order. Standing order 100 explicitly rules out the asking of questions which are hypothetical. DK6 Hockey, Joe, MP Mr Hockey —Hypothetical? This is serious. 10000 SPEAKER, The The SPEAKER —Order! There are many questions for which a strict reading of the standing orders would mean that I would have to rule them out of order. On this occasion I am willing to allow the question. 9703 Rudd, Kevin, MP 83T Griffith ALP Prime Minister 1 Mr RUDD —In what has been a pretty interesting debate here in Reps today, can I say that that is the most irresponsible point I have heard made by the Leader of the Opposition. The world currently confronts a global financial crisis. The Secretary of the Treasury is integral to this government’s and the preceding government’s response to international economic developments. The Secretary of the Treasury and his team have been working huge hours week in and week out, seven days a week, to ensure that Australia’s response to this crisis—both in terms of the measures taken on bank guarantees and the measure taken in relation to the fiscal stimulus package—were the right ones for the nation. As Prime Minister, and as leader of the government, I use this occasion to affirm 100 per cent this government’s confidence in the Secretary of the Treasury and I would ask the Leader of the Opposition to get to his feet now and do the same. Honourable members interjecting— 10000 SPEAKER, The The SPEAKER —The House will come to order. PK6 Randall, Don, MP Mr Randall interjecting— 10000 SPEAKER, The The SPEAKER —The member for Canning will withdraw that remark. PK6 Randall, Don, MP Mr Randall —I withdraw, Mr Speaker. R36 Albanese, Anthony, MP Mr Albanese —The government will be prepared to grant leave for the opposition leader to do just that, as requested. 10000 SPEAKER, The The SPEAKER —The member for Port Adelaide has the call. 9704 9704 15:10:00 Butler, Mark, MP HWK Port Adelaide ALP 1 Mr BUTLER —My question is to the Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion. Can the Deputy Prime Minister update the House on how many schools have applied for the current round of funding for trades training centres in schools? 9704 Gillard, Julia, MP 83L Lalor ALP Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion 1 Ms GILLARD —I thank the member for Port Adelaide for his question. I did have the opportunity with him to visit Seaton High School in his electorate. We were there for the purpose of talking about trades training and talking about upgrading the facilities that those students were learning on. Of course, trades training is important to have as a pathway in secondary schools. It is important because many students want to learn through vocational education and training pathways. It is also vital if this nation is going to lift the percentage of students it retains to year 12 or equivalent. One of the most shameful legacies of the Liberal Party, after its 12 long years in government, was to leave this nation with retention rates that are low by the standards of our competitors across the world and to leave us with a situation where too many young Australians leave school, not to go into work, not to go into further training, but unfortunately to go nowhere—to go nowhere to secure a long-term future. We are determined to change that, and one of the government’s programs to change it is our major investment in trades training centres in schools—a program every secondary school in the country will be able to benefit from across the program’s 10 years. It is a program which will enable schools to get a grant of between $500,000 and $1½ million to engage in upgrading or building trades training facilities. Now, of course this program has already gone through its first round, and in that first round some $90 million was delivered to schools. A feature of that applications process was that many schools in local areas, in regional centres and in suburban areas across the country determined to come together in clusters and make joint applications, either to get a bigger facility or to get compatible facilities so that one school could specialise in one sort of trades training and a different school could specialise in a different sort of trades training, and the students from both schools could have the opportunity to move between the two schools and learn in either stream—a very practical arrangement which gives students more pathways. I am pleased to say that the second phase of our trades training program is working well. Applications closed on Friday, 17 October. This is a big round, with $310 million available for schools through this applications process. When applications closed on 17 October, we had 115 schools submit applications but, as I said, because many schools have chosen to cluster, those applications actually represent benefits to 355 schools in total. The amount that has been bid for through that application process slightly exceeds the amount available—it is $320 million in total. We have indicated to some schools that we will extend the time period for their application to allow them to confirm their bids. That small extension of time has been to 30 October. We think that this is an exciting process for the schools involved. It means that students around the country will go from learning on facilities which would have been best forgotten about in the 1950s, so old are they, and will give students the ability to learn trades skills on the equipment and in facilities which are appropriate for the 21st century. Of course, this was an area that the previous government neglected. It is part of its record of educational failure. Nothing got done to stop students around the country learning on the— 9V5 Pyne, Chris, MP Mr Pyne —Why are they clustering together? 10000 SPEAKER, The The SPEAKER —Order! The member for Sturt! 83L Gillard, Julia, MP Ms GILLARD —Of course, I get an interjection from the shadow minister, who knows nothing and does nothing, and he says, ‘Why are they clustering together?’ 9V5 Pyne, Chris, MP Mr Pyne —Because there’s not enough resources. 10000 SPEAKER, The The SPEAKER —Order! The member for Sturt! 83L Gillard, Julia, MP Ms GILLARD —They are clustering together not because the program is not there for every school. The program is there for every school. The allocation is there for every school. 9V5 Pyne, Chris, MP Mr Pyne interjecting— 10000 SPEAKER, The The SPEAKER —The member for Sturt is warned. 83L Gillard, Julia, MP Ms GILLARD —They choose to cluster together because it is a model that they think will be more effective for their students. I know the shadow minister for education thinks he knows more than everybody else, but perhaps he might think to himself that principals in schools who make decisions to work in partnership with adjacent or neighbouring schools are making those decisions for good reasons. I know a flavour of today has been that opposition members seem to think that they know better than everybody else, including the experts, but I would say to the shadow minister for education that I think principals who are making these applications know a fair bit more. On the question, of course, of making sure that we have an education revolution, Mr Speaker, you have drawn the House’s attention today to the question of numeracy and whether or not people are numerate and accurate. It is a pretty good question, because my attention has been drawn to a press release by the shadow minister for education, who has put the proposition that the on-costs for 116,000 computers are $3 billion to $4 billion. The shadow minister for education is so numerate that he thinks the on-cost for a computer is $34,482. It just goes to prove the proposition that, when it comes to matters dealing with numbers, when it comes to matters financial and when it comes to matters economic, the last thing you can ever afford to do is trust someone from the Liberal Party. 83T Rudd, Kevin, MP Mr Rudd —Mr Speaker, I ask that further questions be placed on the Notice Paper. 9705 Personal Explanations 9705 15:17:00 Tanner, Lindsay, MP YU5 Melbourne ALP Minister for Finance and Deregulation 1 0 Mr TANNER —Mr Speaker, I wish to make a personal explanation. 10000 SPEAKER, The The SPEAKER —Does the honourable member claim to have been misrepresented? YU5 Tanner, Lindsay, MP Mr TANNER —Most maliciously. 10000 SPEAKER, The The SPEAKER —Please proceed. YU5 Tanner, Lindsay, MP Mr TANNER —This morning on Channel 10 the member for North Sydney made the following claim with respect to me: ‘On television he said that he was Acting Treasurer when these decisions were made but he didn’t understand them and he had no role to play in those decisions.’ This claim was effectively reasserted by the Leader of the Opposition in a question to the Prime Minister in  the course of question time. I would just like to read you the two relevant extracts from the transcript of my interview. DK6 Hockey, Joe, MP Mr Hockey —Table the whole of the transcript. 10000 SPEAKER, The The SPEAKER —Order! The minister has the call. YU5 Tanner, Lindsay, MP Mr TANNER —Would you like me to read the whole of the transcript for you? You clearly have not read it. 10000 SPEAKER, The The SPEAKER —The minister will continue with his explanation. YU5 Tanner, Lindsay, MP Mr TANNER —Firstly, I will quote as follows: I am not aware of the specific advice that is supposed to have been given to us by the Reserve Bank governor, according to newspaper reports this morning. I am simply not aware of the basis of that. That clearly refers to the report in the Australian alleging that the Reserve Bank governor had advised the government that its actions would destabilise and distort money markets. To the best of my knowledge, no such advice has been given. I will turn to the second part of the relevant section of the transcript. The question is: Is— for the advice of the opposition, that is in the present tense— the government considering a $5 million cap on these deposits as reported today? My answer was: Not to my knowledge, and you should bear in mind that these are essentially matters for the Treasurer. I was— past tense, for those in the opposition— Acting Treasurer for the period when they were actually introduced, but typically when the Treasurer is in the saddle— and I have not been Acting Treasurer for more than a week— I don’t get directly involved in these matters on a day-to-day basis because they are his portfolio, not mine. This answer referred to a question about what is happening now, not what was happening when I was Acting Treasurer a week ago. There is a gross misrepresentation in the statement of both the member for North Sydney and the Leader of the Opposition. Honourable members interjecting— 10000 SPEAKER, The The SPEAKER —Order! The member has explained. DK6 Hockey, Joe, MP Mr Hockey —Mr Speaker, I seek leave to table the full transcript of the Minister for Finance and Deregulation from this morning. Leave not granted. 9706 15:19:00 Schultz, Alby, MP 83Q Hume LP 0 0 Mr SCHULTZ —Mr Speaker, I wish to make a personal explanation. 10000 SPEAKER, The The SPEAKER —Does the honourable member claim to have been misrepresented? 83Q Schultz, Alby, MP Mr SCHULTZ —In the worst possible way. 10000 SPEAKER, The The SPEAKER —Please proceed. 83Q Schultz, Alby, MP Mr SCHULTZ —On page 2 of today’s Australian newspaper, an article by New South Wales political reporter Imre Salusinszky contains comments sourced from a letter written by New South Wales MLC the Hon. Duncan Gay which allege that I had approached him in his previous capacity as National Party chairman to join the National Party. A simple check of my public comments about the National Party over two decades of political life quite clearly shows the allegation for what it is: arrant nonsense, simply untrue and a desperate, deliberate attempt by Mr Gay to mislead the community. 9707 15:20:00 Neville, Paul, MP KV5 Hinkler NATS 0 0 Mr NEVILLE —Mr Speaker, I wish to make a personal explanation. 10000 SPEAKER, The The SPEAKER —Does the honourable member claim to have been misrepresented? KV5 Neville, Paul, MP Mr NEVILLE —Certainly. 10000 SPEAKER, The The SPEAKER —The member may proceed. KV5 Neville, Paul, MP Mr NEVILLE —Late last evening, in the debate on the Education Legislation Amendment Bill and the Schools Assistance Bill, the member for Moreton said: It was interesting to hear the member for Hinkler outline how a school that he was connected with had deliberately targeted people with low socioeconomic status to artificially inflate the status for that school. I did not say that I knew of a school that did that, I did not talk about anyone being deliberately targeted and I did not suggest that anyone artificially inflated their figures. In fact, what I said was this—I was talking about the SES: That is a fair system. It is also an encouragement to some of the more affluent schools to take on a cross-section of less affluent kids by way of scholarships or reduced fees or whatever it might be. That enriches the profile of their school and it gives other kids the opportunity to go to good quality schools. It was none of the things it was claimed to be. 10000 SPEAKER, The The SPEAKER —The member has completed his explanation. 9707 Documents Mr ALBANESE (Grayndler —Leader of the House) 15:22:00 —Mr Speaker, I repeat the offer that I made to the Leader of the Opposition before when I offered him leave to correct the record regarding the Treasury secretary. I ask him to reflect on his remarks and comment on them during the MPI debate. He may wish to withdraw the suggestion that he made against the Treasury secretary. 10000 SPEAKER, The The SPEAKER —The Leader of the House will get to his presentations. R36 Albanese, Anthony, MP Mr ALBANESE —Documents are presented as listed in the schedule circulated to honourable members. Details of the documents will be recorded in the Votes and Proceedings. 9707 Ministerial Statements 9707 9707 15:23:00 Garrett, Peter, MP HV4 Kingsford Smith ALP Minister for the Environment, Heritage and the Arts 1 0 Mr GARRETT —by leave—On Friday 3 October I announced the government’s intention to introduce a resale royalty right by 1 July 2009. This is a landmark and genuinely historic moment for the more than 20,000 Australian visual artists. This government recognises and values the work of our artists; we are committed to enlarging the creative opportunities for artists to contribute to our economy, community and identity. The decision to introduce a resale royalty right for visual artists has been a long time coming. The introduction of a resale royalty was discussed as early as 1997 in the Aboriginal and Torres Strait Islander Commission (ATSIC) National Aboriginal and Torres Strait Islander Cultural Industry Strategy. In 1998 the Australian Institute of Aboriginal and Torres Strait Islander Studies report Our culture, our future: report on Australian Indigenous cultural and intellectual property called for a resale royalty right to be recognised. In 2002 Rupert Myer, respected arts patron, philanthropist and the current chair of the National Gallery of Australia, in his report on the Contemporary Visual Arts and Craft Inquiry, recommended the Commonwealth government introduce a resale royalty scheme. Further, in 2003 Professor David Throsby and Virginia Hollister conducted a study for the Australia Council for the Arts which found, despite being highly trained, visual artists to be among the most poorly remunerated of all artists. Labor Party policy reflected these findings, including through the introduction of private members’ bills by Senator Kate Lundy in 2004 and the member for Fraser, Bob McMullan, in 2006. But it is not until today that the government in this House has committed to introducing stand-alone legislation to implement such a scheme. It has taken a while but we got there in the end. This government is proud of its efforts to put the arts centrestage. We have never shied away from openly advocating the critical role of the arts and artists in our society nor the significant contribution they make. At the last election we enunciated a detailed and comprehensive set of arts policies which included introducing a resale royalty scheme. These election commitments were welcomed by the sector as a firm commitment to encouraging, innervating and supporting this country’s cultural life. In fact, at the time the only dissenting voice on resale royalty and supporting artists generally came from the former Treasurer, the member for Higgins. The Australian visual arts market throws up its fair share of big news and big money. Recognising there are always movements in any market, it is clear that over time we have seen a general appreciation in value of the secondary art market in Australia. However, in most of these cases, the artist will receive nothing, having sold the work for a substantially smaller figure earlier on in their career. A resale royalty right for visual artists will help redress this imbalance by entitling artists to a portion of the proceeds from the resale of their works. By enshrining in law the right of artists and their heirs to receive a benefit from the secondary sale of their work, this government is helping to build an environment where the talent and creativity of visual artists receives greater reward and recognition. In the last 20 years the value of auction art sales in Australia has climbed dramatically, including an incredible jump of nearly 70 per cent in 2007 alone. Sadly, local artists have not shared in the benefits of this frenetic activity. Clifford Possum Tjapaltjarri’s spectacular painting Warlugulong is a well-known example of how sharply a work of art can appreciate in value. Originally sold for just $1,200 in 1977, it was resold for $36,000 in 1996 and was eventually purchased at auction last year for a staggering $2.4 million—the highest price ever paid for a work of art by an Indigenous artist. The introduction of a resale royalty right for Australian visual artists is an important acknowledgement of the contribution artists make to our country’s cultural landscape and that they deserve the opportunity to share fairly in the increasing value of their work. In Australia, regrettably, we have been slow to recognise the right of artists to derive an ongoing benefit from their work. It is the case that many visual artists subsist on meagre incomes and, whilst the ongoing connection between artists and their work is recognised in Australia and around the world through moral rights legislation, the introduction of a resale royalty right will give visual artists an economic interest in their work as well. This important right puts them on the same footing as writers and composers, who are able to earn income from their work on an ongoing basis through copyright. It is important to note that the scheme we will introduce has been informed by an extensive series of discussions and consultations with the sector which included artists, art market professionals and the auction houses. The government recognises that it is vitally important we get the balance right, and this scheme achieves that. It also achieves the certainty the sector requires for a sustainable and profitable industry for both artists and sellers. It brings fairness to the visual arts sector so that artists can enjoy the fruits of their success. Under the Australian Resale Royalty Scheme, artists will receive a royalty payment of five per cent of the sale price each time their work is resold through an auction house, a commercial gallery or an art dealer for $1,000 or more. The simple five per cent flat royalty rate will make the scheme easy to understand and administer and the threshold price of $1,000 will benefit a high proportion of artists represented in the secondary market while making the scheme cost effective to manage. The Resale Royalty Scheme will cover many kinds of artworks: paintings on canvas; bark paintings; wood carvings; sculptures; textiles like batik; weavings and basketry; prints like linocuts, etchings or screen prints; and many other ways that artists work today. The scheme will also recognise joint creation of art works, a very important feature for artists who paint canvases together in Indigenous communities. It means that, if two or more artists work together to paint a canvas or to carve a sculpture, for instance, and this joint work is acknowledged, they can all share in the royalties from future resales. Just as single artists can pass on their right to their estate, joint artists will be able to pass on their right to their own heirs. This resale royalty right will apply to works by living artists and for a period of 70 years after an artist’s death, with the right being passed on to the beneficiaries of artists’ wills, including Indigenous communities and charities. This puts it in line with current copyright arrangements for other creators like authors. Through international reciprocity arrangements, Australian artists will also be able to benefit from resales of their work in other countries with a resale royalty scheme, including in the European Union. At present a resale royalty right operates in over 50 countries, from European Union nations, to South American countries, like Brazil, Bolivia and Paraguay, and a number of African nations, including Algeria, Ivory Coast and Morocco. In the United Kingdom, the introduction of a resale royalty has been a success. In Australia, the royalty will be collected by a collecting organisation that will be responsible for keeping track of who was owed a royalty from which sale and then making the payments. That will be conducted in a cost-effective manner to maximise benefits to artists. In the last budget the government provided $1.5 million over three years to support the costs of establishing the Resale Royalty Scheme, including monitoring collection and distribution of the royalty revenue. The scheme’s great virtue is that it is clear and straightforward in terms of how the right applies. The collecting organisation will have the capacity to make sure it is able to deliver a scheme which is accountable, which is well understood and which delivers to artists the benefit they deserve. The government will appoint the collecting organisation following a competitive tender process. We have chosen design specifications for the scheme to reflect the particular characteristics of the Australian art market. Importantly, the scheme balances two sets of interests: on the one hand, it recognises the unique characteristics of the Australian art market and provides certainty; while on the other hand, it ensures the opportunity for artists to benefit from the future success of their work. To provide certainty for the market, the resale royalty right will only apply to resales where the seller has acquired the work of art after the scheme takes effect. This arrangement will allow businesses in the Australian art market to adjust to this change in their operating environment, ensuring a smooth transition to the scheme. While the right will apply to all visual artists, I make no secret of the fact that one of the government’s motives in introducing this scheme was the very real benefits it will bring to Indigenous artists and their communities. I announced the government’s intention to introduce a resale royalty right in Alice Springs at the Papunya Tula Gallery. Australia’s Indigenous arts movement is one of the most significant artistic movements of the 20th century. Contemporary Aboriginal art continues to evolve and to challenge. It is dynamic, it is diverse and it is informed by strong culture. It is this strength that underpins its success, at home and across the world. Incredibly, the Emily Kame Kngwarreye exhibition which toured Japan earlier this year even surpassed the attendance records previously held by an Andy Warhol exhibition. The government recognises the important cultural and economic contribution made by the visual arts and crafts sector, particularly to Indigenous communities. We are committed to strengthening opportunities for Indigenous visual artists practicing across Australia as well as the wider visual arts community. We have already put in place measures to strengthen Indigenous art practice by investing additional funding in Aboriginal art centres—some $7.6 million over four years. We are also determined that the Indigenous Visual Arts Commercial Code of Conduct be finalised as a priority. Additionally and critically, there will be regulatory benefits for Indigenous artists through improved transparency and record keeping in the market. This will result in greater tracking of sales on the secondary market. This is important, because poor or sometimes a complete lack of record keeping was highlighted as a barrier to ethical commerce in the recent Senate inquiry into the Indigenous visual art sector. To give an example of how the scheme will work in practice, let us say that in July 2009, after the proposed resale royalty right legislation has come into effect, a gallery owner negotiates with an Indigenous art centre the outright purchase of a range of works. One canvas is purchased for $10,000. The gallery owner then puts the work up for sale at exhibition several months later in December 2009 and the canvas is purchased by an investor for $16,000. Under the government’s resale royalty right, a royalty payment to the artist of $800, less a small administration fee, is triggered as the gallery owner acquired the work following the introduction of the resale royalty right. The campaign for a resale royalty right has featured prominently in this country for decades as artists and those concerned with issues of fairness and adequate remuneration have attempted to be heard. On this basis alone, the introduction of a scheme is an incredibly significant moment for Australia’s visual artists. Those creators who toil with paintbrush, clay, glasswork or photographic negative, often times for very little reward but spurred on by their ambition, will now have a fair share in any future success their work achieves. By giving artists a fair go, this government is laying the foundation for future creative success for Australia and for Australian artists. I ask leave of the House to move a motion to allow the member for Moncrieff to speak for 13½ minutes. Leave granted. HV4 Garrett, Peter, MP Mr GARRETT —by leave—I move: That so much of the standing orders be suspended as would prevent the member for Moncrieff speaking for a period not exceeding 13½ minutes. Question agreed to. 9711 15:37:00 Ciobo, Steven, MP 00AN0 Moncrieff LP 0 0 Mr CIOBO —I welcome the opportunity to contribute to the debate about the Rudd government’s commitment to the arts and, in this particular case, the government’s commitment to visual artists. The notion of introducing resale royalties in Australia has been discussed periodically for some 20 years now. I certainly look forward to the government releasing the full details of their proposal so the debate in these times can be a fully informed one. I join with the minister in recognising the work of Aboriginal artists. Today the arts and cultural sectors in Australia are recognised worldwide for our exemplary Australian visual, performing and literary artists and art companies. It is estimated that cultural industries contribute around 3.3 per cent of Australia’s domestic production, worth almost $38 billion a year. At the 2001 census, more than 270,000 Australians were listed as being employed in cultural industries. The coalition recognises that Australian arts and culture are characterised by a rich diversity of art forms practised across the breadth of this vast country. We support the arts and are determined to ensure that all regions of Australia are able to benefit from the cultural and economic benefits of a strong and secure arts sector. Australia’s Indigenous art is becoming increasingly renowned around the world for its quality and its unique style. Importantly, Indigenous art generates employment and cultural activity, as well as significant economic opportunity in Indigenous communities. Functioning art centres contribute to a healthy community as these centres play a crucial role in broader family and community social support. They are generally owned and controlled by Indigenous people and facilitate the production of art by Indigenous people. In many remote communities art centres provide a major source of self-generated income, as well as providing an important platform for cultural maintenance and education. The Indigenous art industry includes some major success stories such as Papunya Tula artists in Kintore in Central Australia. This Aboriginal owned enterprise is built around the successful art practice of around 150 artists, attracting substantial national and international interest. From humble beginnings in the 1970s, the company is now fully self-sufficient with a gallery in Alice Springs and generating enough profits to support specific community projects such as dialysis facilities, a community swimming pool and the construction of a new arts centre building. The coalition is committed to supporting Indigenous art and culture by ensuring real economic and social benefits for the sector, its sustainability and its future needs. As the speech of the Minister for the Environment, Heritage and the Arts today highlighted, once again the Rudd government is all too interested in symbolism without a care for actually delivering meaningful outcomes to Australia’s visual artists. We speak today on the government’s proposed resale royalty scheme for which the legislation that will govern the proposed scheme is yet to be released, even as a draft. Of course, the minister is happy to refer the House to those in the arts sector who may support the scheme on the details available thus far, but he has ignored those concerns that do exist about this proposal. The coalition is committed to better outcomes for Australia’s visual artists and has a strong track record in delivering for them. In the 2006-07 budget, the then coalition government delivered a $6 million package over four years to provide meaningful targeted assistance to visual artists, regardless of whether their work reached the secondary market. This package included $500,000 per annum for a training package to help visual artists enhance their engagement with the commercial arts market and $1 million per annum to strengthen the Indigenous visual arts industry in regional and remote communities. This funding was designed to provide direct benefits to Australian artists, the support of which, of course, extended beyond just late career artists and the estates of deceased artists. The coalition delivered record levels of funding to the arts sector. Funding for the Australia Council to provide arts grants at arm’s length from government increased by more than 220 per cent since the last Labor budget in 1995-96. Last year, more than eight million Australians attended Australia Council cultural activities. As we all know too well, when it comes to Labor Party policy the devil is most certainly in the detail. The coalition will, of course, carefully examine the legislation that Labor puts forward on this proposal. The minister refers to the 2002 report by the current Chairman of the National Gallery of Australia, Rupert Myer. I note that this report was commissioned by the then coalition government. The Myer report noted that the effects that resale royalties would have on the Australian art market are unclear. The Myer report concluded that such a scheme may benefit artists in the following ways: by providing artists with a contingent income stream which is not currently available; by empowering artists by allowing them to enjoy a direct economic benefit from the success of the work; and by recognising the ongoing relationship between the artist and their work and the extent to which an artist’s reputation is linked to the physical products of their creative labour. Following the Myer report, a discussion paper on a proposed resale royalty arrangement was released by the then Department of Communications, Information Technology and the Arts. This report noted that it is often argued that implementing a resale royalty scheme would increase the income of contemporary visual artists. In the Australian context, and indeed in the context of the current proposal by the government, this is presented as being particularly important for Indigenous artists. Research presented in the report suggested that, in terms of income supplementation, resale royalty schemes bring most benefit to successful late career artists with strong reputations whose work is regularly traded and only brings limited benefits for emerging and less successful artists. I have been made aware of concerns within the arts sector at the current right of term proposals. I am advised the experiences of similar schemes overseas have shown collecting royalties for deceased artists and their estates can be more difficult to track, creating an unnecessary administrative burden on art resellers and collecting agencies. I understand the United Kingdom scheme currently applies to living artists only. I look forward to the government’s response to these concerns. The government has not yet clarified whether the royalty will apply to the hammer price achieved at auction or whether premiums and taxes applied to art resales will be included in the sale price subject to the royalty. I am advised that similar schemes in the United Kingdom and Europe apply a maximum threshold of €12,500 for any single work each time it is sold. The intention of this cap is to prevent high-value artworks being sold offshore. The government has not clarified why it has not adopted such a cap nor has it acknowledged the implications of such a decision. There exists some uncertainty about which transactions will be encompassed by the government’s scheme. Will electronic intermediaries be treated differently from traditional resellers in determining whether a transaction is a public or a private one? Would, for example, eBay be treated as an auction house in the same way as Sotheby’s or Bonhams and Goodman. The government is yet to answer these questions. Ignoring the concerns which exist in the sector will not serve the minister well. Indeed, doing so will only foster an alternative, black market for artwork sales in Australia or a resulting offshore market, both of which will disadvantage visual artists, art collectors and art resellers alike. Certainly an alternative private art market in Australia would raise additional issues surrounding artwork title and insurance and only serve to destabilise the Australian arts sector and our national collecting institutions. I have committed to consulting widely with the industry before the coalition concludes a position on the government’s proposal, and I look forward to meeting with visual artists and their representatives as well as art resellers and collectors and the intermediaries. While I await the opportunity to view to draft legislation on the government’s proposed scheme, I am pleased to commit the coalition to ensuring the welfare of our visual artists, having taken all the matters I have raised today and others fully into account. 9713 Matters of Public Importance 9713 10000 SPEAKER, The The SPEAKER —I have received a letter from the honourable member for Wentworth proposing that a definite matter of public importance be submitted to the House for discussion, namely: The failure of the Government to act in an economically responsible manner, by taking major economic decisions without regard to the recommendations of key financial regulators. 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— 9713 15:46:00 Turnbull, Malcolm, MP 885 Wentworth LP Leader of the Opposition 0 0 Mr TURNBULL —On 29 February 2008 the Prime Minister said: Trust is the key currency of politics, and unless you can be trusted to honour that to which you’ve committed to do, then, I’ve got to say, you’re not going to obtain the enduring respect of the Australian people. The Australian people today are bewildered by the recent announcements of the government and the uncertainty that has been created by their bungling and mishandling of them. We have been told today, on the front page of the Australian newspaper, that the Reserve Bank has warned the government about the problems arising from an unlimited guarantee on bank deposits. We know that an unlimited guarantee is unusual. Deposit guarantees of this kind, historically—and indeed around the world—have had a cap on them. They have a cap in the United States, they have a cap in the United Kingdom and it is proposed to have a $20,000 cap here in Australia. But, apparently, on the weekend of 11 and 12 October, the strategic policy and budget committee of cabinet met and decided that there should be an unlimited deposit guarantee, and that was announced. The Prime Minister has gone to great pains to stress that this policy was taken on the advice of the Reserve Bank. He said that it was based on the advice of the bank. He said that on the day. On 15 October he said, ‘These measures have been implemented in the closest possible coordination with our financial and economic regulators.’ He said that again and again in talking about the importance of acting on the advice of our regulators. On 14 October in question time he said: ... we will act in accordance with the regulator’s advice in this difficult time rather than take short-term, populist positions in order to secure a headline. The people of Australia were given the very clear impression, the unequivocal impression, firstly that the government was in close and direct contact with the regulators, the most important of which in this context was the Reserve Bank and, secondly, that the policy, the measure, being proposed and which has now been incorporated in law through an act of parliament passed through both houses, had the support, so the Prime Minister said, of the Reserve Bank. It has become clear in the course of question time today that on that weekend there were in fact no discussions directly between ministers and the Reserve Bank of Australia. We heard the Minister for Finance and Deregulation earlier today, who is a member of the committee, saying he was not aware of the advice of the Reserve Bank. I noticed his attempt to explain himself and he quoted somewhat from his transcript with Sky News earlier today. In one section, he said: Oppositions routinely accuse governments of misleading parliament and a lot of the time it is stretching the truth to suggest that that is the case. Not being aware of what the Reserve Bank Governor is supposed to have said to the government, if anything— and it goes on to say: I note there are newspaper reports where there is no direct material from the Reserve Bank Governor. He says that he is not aware of what the Reserve Bank governor is supposed to have said. So how did the government become aware of this? How did the Prime Minister become aware of this? What the Prime Minister has said—and he said it twice in question time—is that at the end of the meeting when they had gone through the options and reached their conclusion, he put a question to the Secretary of the Treasury, Dr Henry. The question was: is the position being recommended here—in other words, the unlimited deposit guarantee—that of the regulators? He said that Dr Henry said: ‘It was, and that includes the Reserve Bank.’ So the Prime Minister has said unequivocally twice in question time that the position being recommended was the position of the Reserve Bank and that that advice had apparently been given to the Secretary of the Treasury, who passed it on to the Prime Minister. We on this side of the House have the utmost respect for both the competence and the integrity of Dr Henry. That is why we would not throw him to the wolves and use him as a human shield in the way the Prime Minister has done. Let us be very clear about the analysis of this. If the Reserve Bank governor did not recommend an unlimited guarantee on deposits to the Secretary to the Treasury, the Secretary to the Treasury could not have said that the position being recommended was that of the Reserve Bank. I think that is plain enough. If that had been the case—if he had misrepresented the position of the Reserve Bank—that would obviously be a very serious matter. We do not imagine for one minute that Dr Henry misled the cabinet committee. We do not imagine for one minute that there was any misleading being done in the course of these events other than by the Prime Minister, Mr Rudd. The fact of the matter is that he has set out to create an impression that he is acting totally in accordance with the advice of the Reserve Bank. He hid behind the skirts of the Reserve Bank and, when the front page of the Australian revealed that that was not right, he then sought to verbal the Secretary to the Treasury. Dr Henry deserves better than that. But what has happened to him today is that he has been verballed by the Prime Minister and put in the position where, if the Governor of the Reserve Bank did not recommend an unlimited cap on deposits—and it is plain enough from his speech today that he has the gravest of reservations about an unlimited deposit guarantee; you do not need to rely on the front page of the Australian to see that—one of two outcomes must be right. Either Dr Henry misrepresented the Reserve Bank’s position to the cabinet committee or the Prime Minister is misrepresenting what Dr Henry said to the cabinet committee. I can assure you that on our side of the House we have no doubt what the actual factual outcome is. There has been a betrayal of trust. Do we imagine that there are any Australians today who thought prior to question time today that the Prime Minister had made these momentous decisions without speaking directly to the regulators themselves? Only today we had the Minister for Finance and Deregulation on Sky News saying: Throughout the international financial crisis, the Government has been in very regular contact, almost constant contact, with the key regulators including the Reserve Bank and we have paid a lot of attention to the advice we have received from the regulators. Yet it is plain enough that on that crucial weekend they paid no attention to the Reserve Bank other than, allegedly, at second hand via Dr Henry. I am sure that Glenn Stevens was available to take a call. I am sure Dr Laker at APRA was available to take a call. But, no, the Prime Minister was too busy to talk to them as he planned his unlimited guarantee. We have talked about in this House on many occasions the moral hazard problems of deposit guarantees, and they exist whatever the level of the guarantee. We took an unlimited guarantee on trust because we believed the government was acting on the express advice of the Reserve Bank of Australia, the agency and regulator responsible for the systemic stability of our whole financial system. If you have an unlimited guarantee, it means that a deposit of any size—it could be $100 million; it could be $1 billion—with the smallest guaranteed institution in Australia, such as a credit union, will have a higher credit rating than a deposit with any other financial institution, such as a foreign bank branch that is not covered, a large corporation or a cash management trust. It is no wonder that the announcement of this unlimited guarantee has caused so much difficulty. If we are to believe the Prime Minister that the Reserve Bank recommended an unlimited guarantee on that weekend, why is it that only a matter of days, not weeks, later the Reserve Bank governor is saying to the government: ‘You’ve got to change it. You’ve got to install a cap.’ Why would you pass this bill through the House and through the Senate? It may have received royal assent today. I am not familiar with that detail. Perhaps the Treasurer can tell us. It may now be the law of the land. Why would the government take it through both houses of parliament if it was going to turn around and amend it, if it was seriously considering doing that? The fact is that in the second reading speech the Treasurer said quite expressly and very clearly that it was proposed to review it in three years with the intent of having a cap after three years. Indeed, when the shadow Treasurer and I recommended there be a $100,000 cap because we thought $20,000 was too low, we also said it should be reviewed in three years by the Productivity Commission. We know that confidence in this economy in these difficult times is absolutely vital. Trust and confidence are co-extensive, and the public has put enormous trust in the Prime Minister. It has taken him on trust. These are extraordinary measures that he has announced. Yet what we are seeing is an indignation, a resistance—a petulance—when confronted with the most basic questions. We have a proposal to grant guarantees to the wholesale funding of banks. The Prime Minister, in the course of one of his answers, made it quite clear that he did not understand the distinction at all between deposits with banks which have priority under the Banking Act and the other sources of funding for banks, in particular their wholesale term funding. The government is proposing to offer guarantees there, and they will be the subject of a fee. This could involve the Commonwealth taking on hundreds of billions of dollars of contingent liabilities. The taxpayers of Australia could be on the hook for an enormous amount of money. Those term funding obligations do not have priority under the Banking Act—they are, if you like, right at the top of the risk profile of a bank, other than for its capital. The most protected are the deposits; after that are the other liabilities; and then there is the capital. So if a bank were to fail, the wholesale term funding that we are talking about providing Commonwealth guarantees for would be at far more risk than deposits. That is the scheme of the Banking Act, and has been so for many years. The government is proposing that this not be the subject of legislation, so the parliament will have no say in how those fees may be set. Of course, we saw the bizarre, if somewhat hilarious, example of the Treasurer who did not understand the difference between a BBB credit and an AA credit. When asked a very simple question by the shadow Treasurer as to whether you charge a higher fee for a BBB bank than for a AA bank, and prompted by the finance minister, ‘Just say yes,’ he either didn’t hear him or was too vain to accept the prompt and so gave another bumbling response. But, as I said, this momentous step is apparently not going to be the subject of legislation. Consider the absurdity of the government’s position: it is proposing to have the Commonwealth take on its book hundreds of billions of dollars of contingent liabilities without legislation and yet it knows that were one of those guarantees to be called it could not be paid out without an appropriation bill being passed through the parliament. What a ridiculous— (Time expired) 9716 16:01:00 Swan, Wayne, MP 2V5 Lilley ALP Treasurer 1 0 Mr SWAN —We just saw on display in the House, and the Australian people have just seen, how reckless and slippery the Leader of the Opposition is—how he will say anything and do anything for personal political power. We saw his personal alternative energy policy on display here today: he is powered by his own sense of self-satisfaction—and God forbid anyone who gets in his way. That has been the history of his political life, as those opposite will certainly learn as time goes on. People on this side of the House are very familiar with the member for Wentworth. They know that slippery barrister talk is no substitute for a sense of public policy and it is no substitute for committed values and a commitment to the national interest; there is only commitment there to the personal interest. What we saw today is a leader of the opposition who is out of touch and out of control. Times like this do actually demand responsibility from political leaders. Yet what we saw today was an act of recklessness from a political leader who will say anything or do anything for political power. We have become reasonably familiar with that through the member for Wentworth’s political career and his time outside parliament. We have also become familiar with it over the past 12 months. It was only some months ago that he was attacking the Reserve Bank and also attacking the Treasury secretary, but he has already forgotten that because he simply moves on, day after day, hoping that people will forget what he did the week before and the week before that. But to do all this at a time of international financial turmoil shows just how reckless the Leader of the Opposition is. To do this in the worst financial conditions since the Great Depression shows that he will say and do anything for political power. That proves how unfit the member for Wentworth is for the high offices of Leader of the Opposition and alternative Prime Minister of this country. Dr Henry, the Secretary to the Treasury, is one of Australia’s highest and most respected public servants. In the history of this country, he is one of our most pre-eminent public servants. He has served all sides of politics. He worked with the member for Higgins, might I say, for 12 years, and that is certainly a substantial achievement. He has proved he can work with both sides of politics and is therefore held in the highest regard, not just by those familiar with political life but by those out in the business community. He is also known for his commitment to a decent set of values when it comes to issues as important as conservation. So what does the Leader of the Opposition do in this House today? He irresponsibly asks the Prime Minister the question: ‘Will he sack the Secretary of the Treasury?’ That is exactly what he said. He has attempted to crabwalk away from that, using slippery barrister talk in his remarks here earlier— E3L Morrison, Scott, MP Mr Morrison interjecting— 10000 Burke, Anna (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Ms AE Burke)—Order! E3L Morrison, Scott, MP Mr Morrison interjecting— 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —Order! The member for Cook is warned! 2V5 Swan, Wayne, MP Mr SWAN —but nothing will substitute for a full apology on the floor of this parliament from the Leader of the Opposition to Dr Henry and to the Australian people. That is what is absolutely demanded by his reckless behaviour in question time today, so the Leader of the Opposition has still got time. At some time in the next 24 hours he ought to come into this House and apologise for his behaviour in question time. This is just the latest evidence of reckless behaviour that we have seen through the past few weeks. There was the extraordinary discussion the Leader of the Opposition had on Insiders on Sunday. He went on that program and said: ‘The global financial crisis is just all being hyped up. Don’t worry about it. It’s no massive challenge for the globe or the country. It’s all been hyped up by Kevin Rudd.’ That demonstrates something very fundamental about the Leader of the Opposition. Firstly, it demonstrates how out of touch he is. He does not understand the impact of that on superannuation and what that means to the lifestyles of retirees. He does not fundamentally understand the impact of that on the profitability of small business. He does not understand any of those things if he thinks that the global financial crisis is hyped up. It proves he is absolutely out of touch with what is happening to average Australian families and businesses. But, perhaps even more importantly, he has demonstrated he does not understand the magnitude of the challenge Australians are facing in the middle of this global financial crisis by coming into the House and questioning the deposit guarantee. This deposit guarantee is very important to confidence, and that is why we made it comprehensive. We made it comprehensive because there was a need to assure everyone that their deposits were safe. Of course, he made the remark before that there should be a cap—$20,000 or $100,000. A cap will not work in these circumstances, and that just proves that he does not understand what we are doing. We are in the middle of a global financial crisis and under the proposal of the Leader of the Opposition 40 per cent of the deposits in the banking system would not be covered. That is the proposition that he is putting to the Australian people. That is absolutely irresponsible, absolutely reckless and shows that he does not have an understanding of the fundamental challenge the nation faces in the circumstances that we are in. The bank guarantee is very important to confidence, very important to assure all Australians that the financial system is stable. And he comes into this House raising questions about it, quoting an inaccurate report on the front page of the Australian, irresponsibly blowing it up before he had heard from the Governor of the Reserve Bank. He was prepared to do that because he will say anything and he will do anything for his personal political power. The Governor of the Reserve Bank has stated the situation in his speech today. He has made it very, very clear that the Reserve Bank supports the position of the government. Might I just add that, as the Treasurer, I have been meeting regularly with the Council of Financial Regulators—something my predecessor rarely ever did. I have been meeting with them because the times have demanded it and the times have been like this all year, just as we stated in the budget. E3L Morrison, Scott, MP Mr Morrison interjecting— 10000 Burke, Anna (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Ms AE Burke)—The member for Cook has been warned. He has one more chance. 2V5 Swan, Wayne, MP Mr SWAN —But he simply does not understand the magnitude of the challenge. That is why he blunders in here, recklessly, with these propositions and then throws into the middle of that a proposal to the Prime Minister: ‘Would you sack the Treasury Secretary.’ How irresponsible! How reckless to throw that into the middle of a situation where we do actually have a global financial crisis, where what we absolutely need is confidence across the board and where the Australian people are looking for unity. He had the gall to claim that he was looking for bipartisanship, and when we brought out our package he said he would support it. There were statements, all on the record, in the days following of bipartisan support. But they all disappeared, because it was just phoney—phoney like the rest of his approaches in this House because there are no core values. The Leader of the Opposition does not actually believe in anything other than himself. That explains his progress through the political system. It explains his attempt to join the Labor Party. It explains the fact that he led the Republican Movement and now he has become a monarchist. Can you believe that? Somebody who led the Republican Movement is now a monarchist. He has no core values, because what he is really on about is personal political power. That is all that matters to him. But what matters to us on this side of the House is the national interest. I will tell you why the guarantee is so important. What we have seen in recent days have been very substantial interest rate cuts from a number of banks who have all cited this guarantee as a very significant influence in their decision to reduce interest rates for households and businesses and the rural sector. But of course if you are so out of touch, you just think that interest rate rises were overdramatised, as the Leader of the Opposition has said on a number of occasions. He does not actually live like ordinary people live; he does not actually understand that an interest rate rise of 25 basis points or a cut of 25 basis points or a cut of 80 basis points is really important to households and really important to business. That is because, once again, he does not understand. He does not understand how important the guarantee is to bringing down rates, to putting confidence back into the system, to getting behind Australian households, to getting behind Australian businesses. Of course, all he can do is to walk into this House with more slippery barrister talk, nitpicking and so on, but no substantial policy. But on Sunday his alternative policy was on display on the Insiders. So he wants a cap of $100,000 on bank deposits. That leaves 40 per cent of all deposits out of the system. I could not think of anything more reckless than that. But, of course, the Leader of the Opposition thinks he knows all. He is unconcerned. He is moving on to his next nitpick somewhere, to construct his next phoney argument to somehow resuscitate himself before his colleagues. But we take these things seriously. That was demonstrated massively this morning at his press conference when he said— FU4 Robb, Andrew, MP Mr Robb interjecting— 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The member for Goldstein is warned! 2V5 Swan, Wayne, MP Mr SWAN —‘If you look round the world, deposit guarantees of this type all have caps. As far as I am aware they are in the order of 100, 200 and so on and so on. They all have them.’ Wrong! Absolutely, categorically wrong. Comprehensive guarantees in Ireland, Germany and Denmark—all comprehensive, unlimited guarantees. but he is not up there. 885 Turnbull, Malcolm, MP Mr Turnbull interjecting— 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —Order! 2V5 Swan, Wayne, MP Mr SWAN —There we go! We should set him an exam about what is happening around the world. He is such a clever boy. He wants to amuse us all; he’s such a clever boy! The problem is he does not actually have the values, and because he does not have the values, he does not have the commitment, he does not have the dedication. Now of course he is at odds with the Governor of the Reserve Bank again. What the governor said today does not seem to matter to him. This is what the governor said today: Steps in these directions, in the context of what other countries were doing, were sensible and the RBA supported them. He somehow thinks he knows more than that. I have read the speech and it is very important. 885 Turnbull, Malcolm, MP Mr Turnbull interjecting— 10000 Burke, Anna (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Ms AE Burke)—Order! The Leader of the Opposition had his turn; he was heard in silence. 2V5 Swan, Wayne, MP Mr SWAN —It is very important that you do not walk into this House and once again question either the Reserve Bank or the Treasurer, because what we really need in this country is a degree of unity and commonality of purpose in these times of challenge. That is what we thought we had when we brought the package down. It is why we gave briefings to the opposition, briefings the likes of which the previous opposition never, ever received. I received one briefing in three years from the previous government, and I venture to say that my predecessors barely got that. We will take them into our confidence but not when they are behaving as recklessly as they are now—prepared to say anything and prepared to do anything to score a political point, but it is not even for the Liberal Party; it is just all for Malcolm. All of those backbenchers over there, as they get dispirited as time goes on, will understand what Malcolm is doing up the front: he is not there representing the Liberal Party, he is not there representing them, he is there looking after himself. That is what it is all about. It is all about Malcolm. As I said in the House the other day, it reminds me of the old Mark Twain saying: ‘All you need in life is ignorance and confidence.’ And the Leader of the Opposition has got plenty of both—plenty of ignorance and plenty of confidence. But he has got one choice left. He can retrieve this situation, at least for the day. He can come back into the House straight after this debate and apologise to the Secretary of the Treasury for his reckless behaviour. Opposition members interjecting— 2V5 Swan, Wayne, MP Mr SWAN —Come in here and apologise. Be man enough to say you have got it wrong. He can reaffirm his full support for the Treasury. If he does not, he must resign. (Time expired) 9720 16:16:00 Bishop, Julie, MP 83P Curtin LP 0 0 Ms JULIE BISHOP —The Treasurer’s shallow and unconvincing performance today was only matched by the Prime Minister’s shallow and unconvincing performance in question time today when the Prime Minister was so unconvincing that he objected with such outrage at every question put to him and not once did he give a direct answer to a direct question. He equivocated, he ducked, he weaved. The Australian people are none the wiser about the advice that the government received from the Reserve Bank on the question of an unlimited guarantee for bank deposits. After a series of questions today to the Prime Minister and to the Treasurer, the Australian public are none the wiser about this significant issue and the specific advice given to the government by the Reserve Bank. There is a lot at stake here. There are billions of dollars of taxpayers’ funds at stake here. The government has been warned of the distortions that are now occurring in the market and the Prime Minister should be very clear, very concise and honest and give the utmost clarity around the circumstances that gave rise to this unprecedented decision to provide an unlimited bank guarantee for deposits. The Prime Minister had led the Australian public to believe that this significant announcement, this announcement on an unlimited government guarantee for deposits, was on the advice—the unequivocal, express advice—of the Reserve Bank. In fact, prior to question time today, the Prime Minister has literally clothed himself in the advice of the Reserve Bank. At his press conference on Sunday, 12 October, where he announced this unlimited bank guarantee, the Prime Minister said: The measures I’ve announced today are based on the advice of Australia’s economic regulators. He said: The measures I’ve announced today have been the product of extensive deliberation between myself, the Treasurer and other Ministers who are members of the Strategic Policy and Budget Committee of the Cabinet. But, on the following days, he has said it to an even greater extent. He said on the Sixty Minutes program that evening: The decision was based on the advice from our regulators. He went on to say: … our advice as the Government comes from the regulators. In question time on 13 October, in response to a question from me about the whole bank guarantee package, the Prime Minister said: … this measure has been recommended to the government by the Australian regulators—the Reserve Bank, the Prudential Regulation Authority and the Treasurer. He went on to say to the Press Club on 15 October: Again we took this decisive action in close consultation with the regulators. In his address to business last Friday, he said: This brings us to the dramatic decisions of recent days, those announced by myself on Sunday and through close collaboration again with the regulators and the Treasurer on the phone from Washington, and also with the other members of the strategic policy and budget committee of the Cabinet. The judgment we took, based on the advice of the regulators … So it is fair enough that the Australian people and the coalition should take the Prime Minister on trust in relation to the probity and the integrity of this decision on an unlimited bank guarantee. We accepted the statements and the assurances that the Prime Minister and cabinet were in close and regular and, indeed, as the finance minister said today, constant contact with the regulators throughout this international financial crisis. Today, however, we read on the front page of the Australian that that is not in fact what occurred. This is what was reported in the Australian: The Government ignored the RBA’s strongly voiced concerns about the impact of an unlimited guarantee scheme in its rush to announce a guarantee of all deposits in Australian deposit-taking institutions on October 12. The report went on to say: The Government faces severe embarrassment that its emergency measures are now creating new problems, given that it refused to heed RBA advice at the time. Given that that statement appeared on the front page of the Australian newspaper, you would have expected that the Prime Minister would come into this parliament and explain to the parliament the confusion that has arisen in the mind of the Australian newspaper. How could the Australian newspaper get it wrong? The Prime Minister should come in and explain to the Australian people. When parliament opened at two o’clock today, we had no statement in explanation, no clarification from the Prime Minister. Never mind that the markets are in uproar about this. Never mind that the Australian public are totally confused about whether or not the Prime Minister acted on the specific advice of the Reserve Bank. We heard not a word from the Prime Minister. However, in answer to the first question today from the Leader of the Opposition during question time, the Prime Minister said for the first time that, in fact, neither he nor any member of the strategic policy unit, nor anyone present on that day, actually spoke to the Reserve Bank. This is incredible. For the first time the Australian public was told that, in fact, neither the Prime Minister nor the Treasurer, who was in Washington, nor the Acting Treasurer—the Minister for Finance and Deregulation—spoke to the Reserve Bank. What happened to the constant contact, daily advice and collaboration with the Reserve Bank on the very day that the government met to make one of the most significant decisions of the life of the government—in fact, probably the only decision that the government has made? They did not contact the Reserve Bank; they did not seek the advice of the Reserve Bank; they did not get any written advice; they did not pick up the phone and speak to the governor, Glenn Stevens. The Reserve Bank is the regulator responsible for the systemic stability of the financial sector. This decision goes to the very heart of the systemic stability of the financial sector. The Reserve Bank is the regulator that the government should heed on this issue above all others. And yet the very regulator whose job it is to advise the government on precisely this issue is ignored. On the one issue that they should consult the Reserve Bank on above all others, they do not—they ignore it in the rush to get the photo opportunity and the cameras into the cabinet room. The Prime Minister does not roll his sleeves up; he pushes them up above his elbows. He puts Ken Henry on one side and Treasury officials on the other to get the photo opportunity. They do not have the time to pick up the telephone and ask the Reserve Bank its opinion. It seems that Kevin Rudd can ring every world leader on a constant basis. How many times has he been on the phone to Dominique Strauss-Kahn over the last few weeks? How many times has he been on the phone to Gordon Brown? He is on the phone to George Bush. He is ringing up Hank Paulson. But he does not ring the Governor of the Reserve Bank of Australia on the day that the government makes an unprecedented decision that puts at risk billions of dollars of taxpayer funds. What happened when the Prime Minister finally admitted today that he had not spoken to the Reserve Bank governor? Once his deception to the Australian people was revealed he did what has become standard practice for this Prime Minister. He hung someone else out to dry. He placed the Secretary of the Treasury squarely in the frame. Can you believe this? The Prime Minister has now said that, after the decision was made and they had had Swanny on the phone, the only question that was asked in a cabinet meeting specifically called on a Sunday to address this question of an unlimited bank guarantee was directed at the Secretary of the Treasury. According to the Prime Minister at 2.05 in question time today, he asked Dr Henry: ‘Is the position being recommended here that of the regulators?’ He answered, ‘It was, and that includes the Reserve Bank.’ That is the extent of the inquiry made by the Prime Minister about one of the most significant decisions that this government has made and one of the most important decisions that would impact on the stability and the confidence in the financial markets. Then the Prime Minister forgot the answer that he gave, because it was asked again about this unprecedented decision that the government had made. This time, at 2.21, in answer to another question from the Leader of the Opposition, the Prime Minister’s answer was: … at the time that the options which were then adopted were being considered by that committee of the government, the question was explicitly put to the Secretary to the Treasury, ‘Is this the advice of the financial regulators, including the Reserve Bank?’ to which the answer was unequivocally, ‘Yes.’ That is all that Dr Henry— (Time expired) 9722 16:27:00 Ripoll, Bernie, MP 83E Oxley ALP 1 0 Mr RIPOLL —If there is one thing that you can always guarantee about the opposition, living in denial, is that they will without exception walk both sides of the street. They will act for themselves, in their own interests, before the interests of the Australian community. They did it when they were in government and they continue to do it now that they are in opposition. They have learnt no lessons from their defeat at the last election. It is all about them and their politics; it is never about the public good or the national interest. We had 12 long years of that. That is exactly what this trumped up matter of public importance put forward today is all about. It is a weak and directionless attempt to smear the government, but instead what it does is create fear and doubt in the community, in the markets and in the banking sector. They are a weak opposition, divided in their own ranks. They are out of touch. They are out of control. They are walking both sides of the street. They say on the one hand that they support Labor’s necessary and vital Economic Security Strategy, which is taking strong, clear and decisive action to fight the global financial crisis, while at the same time the Leader of the Opposition and the opposition themselves do everything they can to undermine the economic strategy that we put forward. Our Economic Security Strategy will deliver at a time of great need for ordinary Australians, pensioners and families. This is something which the opposition actually find really funny because, you see, it does not even factor in their thinking that you could possibly put forward an Economic Security Strategy that actually deals with the real economy—that is, people: families and pensioners. They are not in the game of delivering for ordinary Australians, they are not in the game of delivering for first home buyers and they are certainly not in the game of bringing on vital infrastructure spending that supports the real economy and people’s jobs and livelihoods. That is left up to us. That is why we have been elected and that is the job we are going to do. In comparison, this is an opposition that does not know where it stands and that walks both sides of the street on economic policy, infrastructure policy, health policy and education policy. In fact, on any policy you will find opposition members walk on both sides of the street. Except for one. In fact the only policy which this opposition very clearly still stands for unambiguously and defends every single day is Work Choices. It is the only policy that opposition members are truly committed to retaining. Suddenly they go silent, because suddenly it dawns on them that that is exactly right. The only policy they unanimously, unambiguously defend in this place day in, day out is Work Choices. When it comes to every other policy, they all have separate views—whether it is the Leader of the National Party, whether it is the Leader of the Opposition or whether it is the backbenchers sniping from the back about their own views, they are all divided except for on one policy: Work Choices. That is, tragically for all Australians, an example of how walking on both sides of the street actually does some real harm; significant harm to the confidence of our economy and the confidence ordinary people have in what we are trying to do as a nation, as a country and as a parliament—that is what it should be—not just as a government. The Leader of the Opposition, Malcolm Turnbull, has got it horribly wrong. He has got it wrong on the economics, he has got it wrong on the action needed, and he has got it wrong on what his role is in maintaining confidence and restoring confidence in the Australian economy. Again, he is just out of touch—he only thinks of himself; he does not understand what ordinary people need—and he is out of control, because he only thinks of what he needs to do to survive. He talks the economy down when all other leaders around the world are working together. That actually should be part of the responsibility and job of the Leader of the Opposition, but he does not do that. The central theme of the contribution the Leader of the Opposition made during the MPI debate today was he is right and everyone else is wrong—he is smarter than everyone else; everyone else should just get out of the way and let him get on with the business of what he thinks is his right and duty. He has got very little right at all, and I will come back to that point in a minute. What is very clear is that we are facing a global economic slowdown and that will impact on Australia. The shadow minister thinks his only role is to flap his gums in this debate, but he offers no contribution. The only thing that he has actually got half right is that there is an economic slowdown and it will impact on Australia. I will come back to that because the Leader of the Opposition did make a specific comment on it. It is clear that we now have a recession in the US, and we also face the possibility of a recession in Europe. The global financial system is experiencing its most significant upheaval in living memory. What does the Leader of the Opposition say in his rhetoric? He says that it is all just hyped up—this is somehow a hyped-up myth; this is somehow not correct. It does not matter where you turn, you can go through a whole list of world leaders and economic experts who all agree on this. In one way or another, they all say the same thing: we are facing a global financial crisis not seen possibly in history, possibly in the last hundred years but certainly since World War II. Australia is not immune from these developments, and that is the tragedy of this. But we are in a much better position to weather the storm than most other countries. Australians actually understand this. They are a bit smarter and more sophisticated than the opposition would give them credit for. Australians do understand this. They do not expect that their leaders in this country actually tell them that it is all just hyped up. They do not expect that they would actually work against government efforts to deliver key public policies and an Economic Security Strategy that will help them. Our May budget forecast that problems abroad would slow the Australian economy and impact on employment, and we have taken steps which were reflected in a carefully structured, carefully measured and conservative budget where we protected the surplus. We did that, very importantly, because we suspected, while we did not know its size or the impact it would have, the crisis that was before us. That is why we have been able to do this. The good news for Australia is that we are in a better position than most other countries because over a long period of time Labor governments have better regulated this country and made those tough decisions. We are the ones who set up the superannuation structures which give Australia a unique position in the world in terms of national savings. It has always been Labor governments which have put in place the sort of governance arrangements, often argued against by the conservatives, that are now delivering that somewhat better position compared to others around the globe. Our package does a number of things. It is clear, strong, decisive action introducing a $10.4 billion Economic Security Strategy that will strengthen Australia’s economy and will support Australian households during this global financial crisis. We needed to act. People expected us to act, and that is what we have done. But what the opposition do not understand is that people expect them to act as well—they actually expect them to act responsibly and they expect the Leader of the Opposition to act responsibly as well. He almost feigned that for a brief moment. For just a brief moment he came in and almost acted responsibly by saying that he would support Labor’s package. But since then he has spent his time, every breath he draws, undermining it, white-anting it and destroying the confidence that the Australian public has in what their government are doing to make sure that we can weather the storm before us. We are doing that not just in terms of the $10.4 billion package; we are doing it in terms of first home buyers and we are doing it in terms of infrastructure. We have always said that we are the party of nation building, and we are true to that commitment. We are not just committing the funds and the institutions that will deliver on this but also committing to bring those forward. Just for moment let us compare that to the utter hypocrisy of the Leader of the Opposition and the opposition. When they were in government, we saw policy made on the run on a daily basis. There was no consultation with the community or anyone else. They operated directly against departmental advice, removing anyone who disagreed with them and silencing dissent. They spent any amount of money on a political outcome rather than a judgement. There is example after example of a do anything, say anything, spend anything reckless government—they were reckless when they were in government and they continue to be in opposition. The tragedy is that their single-minded mission to destroy the surplus has been a trick. Malcolm Turnbull has become the Australian Harry Houdini. Not only does he walk both sides of the street; he actually does a bit of a sleight of hand with both hands. With the left hand he steals the surplus and with the right he steals it all over again. If he had a third hand, he would try to steal the surplus three times, which would have left the Australian government and the Australian public— (Time expired) 9725 16:37:00 Truss, Warren, MP GT4 Wide Bay NATS Leader of the Nationals 0 0 Mr TRUSS —What we have seen over the last couple of days is the obvious fact that this government has no capacity to manage an economy. Whether they be in good times or bad, Labor inevitably fail when it comes to economic management. Like every other Labor government around Australia and like its predecessors, this Labor government cannot manage an economy in good times or in bad. Today we have seen the extraordinary situation of the Prime Minister’s pathetic attempt to explain away the Reserve Bank’s concerns about the government’s guarantee on bank deposits. When the government announced its stimulus package they verballed the Reserve Bank. The government said they had the Reserve Bank’s support for the package in its detail, including the fact that the package was uncapped. They claimed that this had the support of the Reserve Bank and the regulators, but it is apparent from what we have seen in today’s Australian that that was not true. That was never true. Indeed, the Reserve Bank has made it clear that their clear advice was ignored by the government. When they made this decision, in their mad rush to announce a guarantee for all deposits in Australia on 12 October, they completely ignored the concerns of the Reserve Bank. And when this came out into the open today, did the Prime Minister take it on the chin? Did the Prime Minister acknowledge that he had misled the Australian people? After asking the people to trust him and assuring the Australian people that he wanted to take them into his confidence, we found that he had not told them the truth. He told them that the regulators approved this package when clearly they did not. Now, when it has come into the open today, what did the Prime Minister do? He blamed the staff. He did not blame the butler this time but a person no less senior than the Secretary of the Treasury. It was the fault of the Secretary of the Treasury for misleading and giving wrong advice to the government. It was the Secretary of the Treasury who misled the government and who provided advice which was incorrect. And as the government dithered and stammered their way through question time today it has become abundantly clear that this was an attempt to blame a senior respected public servant for the fact that the spin doctors had overstated the case and made claims which simply were not true. So what we have now is the Rudd Labor government not willing to take responsibility for their own actions and seeking to defame a respected public servant and suggest that he gave them advice which few people will really believe he ever did. The reality is that he knew what the problems were. The government was determined to seek to trump the opposition. They had, after all, rejected and ridiculed the idea of caps on guarantees. A few days earlier they had rejected and ridiculed the idea of guarantees at all. But bit by bit they had been forced to follow the guidance of the Leader of the Opposition—the policy advice provided by this side of the House—and come kicking and screaming to the reality of what had to be done. Now, during the dithering and stammering from the Prime Minister today what has come out quite obviously is that the government is about to do another backflip. There will be a cap on the level of the guarantee. It may be $1 million; it may be a little more than that. Above that you will have to pay a fee if you want to have the privilege of this guarantee. That is not what the Prime Minister announced when he released this stimulus package. This has been invented since that time. It is quite clear that the public believed the government when they said that there would be a guarantee on deposits, and many people have taken their deposits out of one institution and put them into one that the government said would be guaranteed. But now there is going to be a limit on that guarantee. What sort of compensation is the government going to pay to those people who were actually foolish enough to believe them when they said the guarantee would be unlimited now that it is clear that it is not going to be guaranteed? This whole package was always very poorly designed. Labor even bungled the guarantee. Many billions of dollars are invested in funds that do not have the privilege of the access to this guarantee. The nation’s biggest mortgage fund, the $2.9 billion Challenger Howard Mortgage Fund, complained today that there has been a run on their deposits because they do not have the guarantee that is available to even quite small building societies. There are many other organisations, like the solicitors investment mortgage companies and other organisations, which provide very worthwhile financial services. They do not have this guarantee. The government bungled it. And now they have also bungled the maximum amounts that are to be guaranteed. (Time expired) 9726 16:42:00 Sidebottom, Sid, MP 849 Braddon ALP 1 0 Mr SIDEBOTTOM —Clearly the mob opposite have shown their true colours today, and I want to remind the people of Australia in general, and my electorate of Braddon, exactly what the opposition are and what they have demonstrated clearly today. Firstly, they are pretenders. They pretend that they support this package but they do not. It is as clear as that. 00AMV Hunt, Gregory, MP Mr Hunt interjecting— 849 Sidebottom, Sid, MP Mr SIDEBOTTOM —And there is a great pretender at the table right now. Secondly, the opposition are nonbelievers. What is happening globally is all hype, according to the Leader of the Opposition. They do not believe and they pretend they do. Thirdly, the opposition are irrelevant. This is what hurts them more than anything. They are irrelevant in the crafting of a bipartisan solution to the crises we now face. 00AMV Hunt, Gregory, MP Mr Hunt interjecting— 849 Sidebottom, Sid, MP Mr SIDEBOTTOM —And the member at the table is more irrelevant than most. Fourthly, the opposition are in denial. This follows from the other three points. They cannot accept the verdict of 24 November 2007, that we have a mandate to govern and they do not. Get used to it! Fifthly, the opposition are desperate. Their desperation today was demonstrated by what they do best—and that is, play the man. Today they played the man when the Leader of the Opposition called for the resignation of Don Henry, the Secretary of the Treasury. If they want to make the man the main game they should go and play somewhere else. Finally, they are hypocrites. And the biggest hypocrite is at the table right now. 00AMV Hunt, Gregory, MP Mr Hunt —Mr Deputy Speaker, on a point of order: I am sure that the member did not mean to defame the leader of the ACF and I am sure he will correct the record. 10000 Scott, Bruce (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. BC Scott)—The member for Flinders does not have a point of order. 849 Sidebottom, Sid, MP Mr SIDEBOTTOM —Ken Henry! Finally, they are hypocrites. GT4 Truss, Warren, MP Mr Truss —Mr Deputy Speaker, on a point of order: the honourable member referred to members on this side as hypocrites, and I think that that is inappropriate language and that he should withdraw it. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The member for Braddon did use the word ‘hypocrite’ describing, in general, the opposition. I would ask that he assist the House by withdrawing that reference. 849 Sidebottom, Sid, MP Mr SIDEBOTTOM —I withdraw the reference to the hypocrites. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —No, the member for Braddon will withdraw. 849 Sidebottom, Sid, MP Mr SIDEBOTTOM —I withdraw. Where were they when they took over the Mersey hospital and when they did the Murray-Darling Basin and the Northern Territory interventions? Where was the funding for those? Where did the Australian people see the Treasury’s figures for these interventions? There was none at all. That is why some would be drawn to use the word ‘hypocrites’ when we deal with the mob opposite. What we have done responsibly, sensibly and in a considered approach is to try and deal with the financial situation as it exists today and to take a pre-emptive step to try and deal with it in the future. We began this in the 2008 budget, and with the wise use of a surplus built on savings we made sensible tax cuts and considered expenditure on costed commitments. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —Order! The time for the matter of public importance has expired. 9727 Bills R3089 9727 Debate resumed from 24 September, on motion by Mr Brendan O’Connor: That this bill be now read a second time. 9727 16:46:00 Southcott, Dr Andrew, MP TK6 Boothby LP 0 0 Dr SOUTHCOTT —The Social Security Legislation Amendment (Employment Services Reform) Bill 2008 enables the government’s new employment services, which will run from 1 July next year to 1 July 2012. Some of the changes in this bill are minor, but there are major changes to the compliance framework. The Job Network was introduced by the former coalition government in 1998. Since it was brought in to replace the ailing Commonwealth Employment Service, unemployment has dropped from 8.1 per cent in May 1998 to a 33-year low of 3.97 per cent in February this year. While sound economic management and an environment of economic growth certainly played a major role, ultimately the reduction in unemployment was facilitated by an employment services system that had a focus on employment and reiterated the mutual responsibility of the job seeker to actively engage with the system supporting them. By having a firm but fair compliance regime that commits job seekers to actively seeking employment and engaging in activities that can help improve employment prospects, the former government discouraged welfare dependency. As I have said previously, the Liberal and National parties support some of the elements of the government’s proposed new system. For example, the blending of the employment programs is something that we would have done had we been re-elected; we think it is a good idea. We think that the concept of employment brokers and the $41 million innovation fund panel are both sensible reforms to the new employment services. In the minister’s foreword to the discussion paper entitled The future of employment services in Australia, the Minister for Employment Participation states: The Job Network is no longer suited to a labour market characterised by lower unemployment, widespread skill shortages and a growing proportion of job seekers who are highly disadvantaged and long-term unemployed. This has been the government’s rationale for some of their changes to employment services—that the Job Network ‘is no longer suited to a labour market characterised by lower unemployment’—and it is hard to think of a document which has become out of date more quickly than this one. The new universal employment services model was designed at a time when the labour market was still strong. The work on this was done in February 2008, when we had the lowest unemployment in a generation. But now, six months later, we have had speculation in the media at the weekend that an additional 200,000 Australians may lose their jobs within the next 12 months. It has taken Australia the last six years to reduce unemployment by 200,000, yet in the space of one single year that achievement is set to be undone. The Liberal and National parties cannot support the new ‘no show, no pay’ system which has been proposed by the government. We believe it will undermine the successful inroads the previous government made into long-term unemployment and welfare dependency. We are also concerned about the discretion which will be given under this legislation to the departmental secretary to undermine these hard-won reforms to welfare. Since the unemployment benefit was first introduced in 1945, Australians have had an expectation that those receiving benefits would be required to look for and accept work. It was the Chifley government that first introduced laws which said that if a job seeker were not taking reasonable steps to obtain employment then they would lose their benefit for between two and 12 weeks. Since then, the notion of mutual obligation has had broad community support, and it is consistent with our own values. Unemployment benefits are designed as a temporary measure to help the unemployed when they require it, but with the right to receive this assistance comes a responsibility to do the right thing and look for work. Many groups were critical of the previous Howard government’s approach to welfare reform, but this approach was important in breaking the cycle of welfare dependency and reducing the numbers of long-term unemployed. Under the latest round of Welfare to Work changes, according to the Department of Education, Employment and Workplace Relations’ Labour market and related payments: a monthly profile, the number of long-term unemployed fell from 205,212 people in June 2006 to 146,533 by August 2008. This represents a drop of almost 30 per cent in just over two years, which makes it more surprising that the Labor Party has decided to introduce a much softer set of sanctions for those who do not attend Work for the Dole training or even a job interview. In the future, for those on Newstart, parenting payment or youth allowance with activity requirements, Labor will introduce a ‘no show, no pay’ system which involves the loss of one day’s benefit for those who do not turn up. To demonstrate how much of a departure this is for Labor, we should look at what they did when they were last in office. Under Paul Keating’s Working Nation, not attending a job interview would see a job seeker’s payment suspended for between two and six weeks. Under Labor’s proposed new change, a job seeker who does not attend a job interview will lose just one day’s payment—$42.98 for someone on the single rate of the Newstart allowance. It will be possible to not turn up to six job interviews in a six-month period before a Centrelink review is triggered. The Labor Party have defended the ‘no show, no pay’ concept by saying it is more work-like, but see what happens at your workplace if you start regularly not turning up to work without an excuse. It is unlikely you would simply be docked a day’s pay. The problem with weakening the compliance regime is that it will be much less effective in changing behaviour for the positive. It will become a toothless tiger. At present, the most common reasons for an eight-week suspension of benefits are failing to attend an interview with your employment services provider, failing to comply with an activity agreement or failing to attend Work for the Dole. These will all be treated much more leniently under Labor’s proposed new scheme. Looking internationally, countries similar to ours have recognised the importance of a strong compliance regime. In their July 2008 green paper on welfare reform, the British Labour government emphasised the importance of a stronger sanctions regime and, in fact, proposed losing a week’s benefit for missing a job review or appointment and escalating the sanctions for failures after that. In the United States, it was Bill Clinton who declared ‘an end to welfare as we know it’ and supported welfare reform which has dramatically reduced the numbers on American social security rolls. When the former Howard government introduced the Welfare to Work reforms in 2006, they were designed to reduce welfare dependency, establishing a patent link between receiving income support and actively seeking employment or, failing this, contributing back to the society that supports you. It was recognised at the time that there were still far too many long-term unemployed who appeared destined to remain on welfare indefinitely. Providing an opportunity for job seekers to gain skills and training through a mutual obligation activity helps with their employability and reintroduces them to a work-like environment. By tackling welfare dependency head on, we can break the cycle of welfare dependency by keeping job seekers on track and job ready. Mutual obligation is crucial to help break this cycle of welfare dependency. Not only does this help reduce the cost of welfare on society as a whole but it also assists in reducing the significant human cost of welfare dependency and intergenerational unemployment. Mutual obligation activities, such as Work for the Dole, help to make job seekers job ready. These activities can provide training and skills for job seekers, boosting their confidence. However, these requirements to participate were never intended to punish job seekers who did the right thing. Job seekers were entitled to miss three appointments over a 12-month period without a valid excuse before they would incur a financial penalty. If a job seeker had a legitimate reason for missing an appointment, they would not have a participation failure recorded. They would then be referred to Centrelink, who would determine whether there were in fact any additional factors that may have prevented a job seeker from participating. The Labour market and related payments report published monthly by the Department of Education, Employment and Workplace Relations shows a strong decrease in the overall numbers of long-term unemployed. In August 2008, there was a 14.4 per cent decrease in the number of long-term unemployed job seekers in receipt of either Newstart or youth allowance over the preceding 12 months. In human terms, that is 24,574 fewer long-term unemployed in the space of one year. That is an achievement the former coalition government is happy to take credit for. In meeting the objectives of reducing welfare dependency and reducing the numbers of long-term unemployed, the employment services system was working; it was effective. The compliance system was working; it was effective. Our Welfare to Work reforms helped to discourage the long-term unemployed from languishing on the dole queue and have provided the encouragement needed to improve their situation. Labor’s new changes will herald the return of the dole bludger. In striking a balance between engagement and sanction, the government have got the balance wrong. As a result, the compliance regime will be much less effective. Going into the future, we will see, sadly, increased numbers of long-term unemployed if the Labor government have their system for employment services passed by this parliament intact. This new system is farcical, providing no incentive for people to do the right thing. It will undoubtedly result in an increase in noncompliance as some people decide that losing a day’s welfare—$42.98 for a single person on Newstart—is worth a day at the beach or that it is financially more beneficial doing three hours work in the cash economy at the local pub or babysitting. These changes proposed by the government do not encourage people to do the right thing. People who are in receipt of welfare have an obligation to the wider community that supports them. They have a moral obligation to look for work and, if they are unable to find work, they should contribute to the society that supports them. The coalition will be opposing this bill and moving amendments during the consideration in detail stage. These amendments have been circulated in my name. By weakening the compliance regime, we are likely to see an increase in intergenerational unemployment, where children follow their parents onto the dole queue. A strong compliance regime is about tough love but it helps people get out of the poverty trap. The Rudd government need to rethink their lenient approach, which will encourage high levels of welfare dependency and sadly see the numbers of long-term unemployed continue to rise again. 9730 17:01:00 Butler, Mark, MP HWK Port Adelaide ALP 1 0 Mr BUTLER —It is a pleasure to follow a fellow South Australian member of this House. It is well known that the member for Boothby is a clever and thoughtful member of the House of Representatives. I can only conclude that he had that particular speech and contribution forced upon him because it is well known that he is capable of something much better and much more thoughtful than that backward-looking, fairly base contribution to this very complex area of public policy. It was replete with dog-whistle politic terms such as ‘dole bludger’ and ‘tough love’. As a fellow South Australian I certainly expected something more thoughtful and clever than that. The Social Security Legislation Amendment (Employment Services Reform) Bill 2008 is yet another example of our fundamentally different approach to the opposition’s approach to the world of work and to creating a meaningful productivity and participation agenda for the future of Australia. You see that different approach reflected in a range of policy areas that interlink. Firstly, it is reflected in the education revolution. We want to make sure that our kids grow up as well-rounded citizens and are equipped with the range of skills they are going to need for jobs in the future—maths and science skills and basic numeracy and literacy skills. You see it also in this government’s realisation that it has a role in lifting labour participation. The need for that role is nowhere more evident than in women’s labour participation, an area that stalled for years under the previous government. Under the previous government the percentage rate for participation got stuck in the high 50s. The rate was well below OECD averages, in spite of 17 years of significant economic and employment growth. The rate for women at child-bearing ages was especially low by OECD standards. It was 10 per cent below the labour participation rates for women in the UK and Canada and 15 per cent below the labour participation rates for women in Scandinavia, yet nothing was done by the previous government. We know that, without family-friendly policies, the market does impose a glass ceiling on women’s participation. That is why this government—interlinking with all the other different elements of our productivity and participation agenda—has begun to look at paid maternity leave options, has increased benefits for families who require child care for their under-five-year-olds while attending work, has expanded the number of childcare places and has lifted the childcare tax rebate. This government is also looking seriously, for the first time in a dozen years in this country, at the work-life balance and what government measures are needed to improve the capacity of families to balance different aspects of their lives. You see profound differences between the industrial relations policies of the government and those of the opposition. This government is committed to implementing its Forward with Fairness policy, a policy that was clearly articulated to the Australian people before the last election and that is in absolute contrast to the position that was adopted by the opposition before the 2004 election. This, of course, is a debate for another day—a debate that we on this side of the House very much look forward to engaging in. You see it also in the area of vocational training. This is perhaps the greatest supply-side failure of the previous government in the labour market. It is not as if we did not see the skills shortage locomotive coming some years back. One estimate says that Australia in 2016 will be short some one-quarter of a million vocationally trained qualified workers. The previous government, instead of developing a meaningful and practical response to this challenge, engaged in petty ideological squabbles with state governments. It worried more about where young people were trained than how many were trained and with what skills. Our approach is fundamentally different to that. The 2008 budget delivered on election promises from the Labor Party last year. It is delivering $1.9 billion over five years and 630,000 new VET places for Australian people. That already very significant number was increased in last week’s Economic Security Strategy to 700,000 places over five years, amounting to a commitment of over $2 billion over that time. Importantly, in that security strategy there was an injection of an extra $187 million in 2008-09, or 56,000 extra VET places, totalling 113,000 VET places funded by this year’s budget. That builds on the huge demand that has already been shown to be out there in the six months since the April 2008 announcement of our Productivity Places Program. Already 50,000 Australians are enrolled in that program. A very pleasing statistic is that some 1,000 participants referred by employment service providers have already obtained jobs after graduating from the Productivity Places Program. For today’s purposes, you also see the fundamental difference in the important job of helping Australians get off welfare and get back to work. This is familiar territory for Labor—as the member for Boothby helpfully outlined—stretching back to the Chifley government. Mutual obligation in a meaningful sense was introduced by the Labor Party during the Hawke and Keating governments. It was the Labor Party that introduced an end to unconditional welfare entitlements. It was the Labor Party that introduced a meaningful requirement for recipients to actively seek work, enshrining it in the 1991 Social Security Act. And it was the Labor Party that developed a sophisticated mutual obligation concept that was enshrined in the 1994 Working Nation program, putting a stronger obligation on participants to accept a reasonable job offer and increasing penalties for failing to meet various obligations. In stark contrast to the case management approach of Working Nation, particularly seen in the jobs compact for the long-term unemployed, the Howard government’s version of mutual obligation was harsh and ultimately counterproductive. The Howard government’s approach was punitive, even where circumstances might not necessarily warrant punishment. The Howard government’s approach showed a lack of balance between reward and punishment to promote participation. Ultimately, the Howard government’s approach led to a displacement of the problem to the welfare sector and the charitable sector. In particular, I draw the attention of the House to the impact of the eight-week suspension of payments after three strikes. Presumably, the introduction of that measure was intended to increase compliance. If that was the case, that aspect of the Howard government’s program was an abject failure. Penalties doubled from 2006-07 to 2007-08 across Australia. In my electorate of Port Adelaide, penalties more than tripled, the most obvious evidence of noncompliance with the system. Compliance plummeted after the introduction of a one-size-fits-all suspension system by the previous government. Suspension saw the recipient not only lose money but also disengage from the participation system. There was, bizarrely, no participation obligation during the period of suspension. In the minister’s employment services review, the government received countless submissions detailing the arbitrary impact of the previous government system. The previous government’s focus on compliance without support ignored the characteristics of job seekers today, and this was a feature of many submissions to the employment services review, and I would like to draw the House’s attention to a couple of those. The Australian Council of Social Services drew the government’s attention to these facts: Although the skills required by employers have risen, most jobless people on working age income support payments have a Year 12 education or less. A growing proportion has not experienced stable employment for a year or more. For example, over 150,000 people have received Newstart Allowance for more than two years. That is why our government matches a new compliance system with a meaningful approach to vocational training, particularly for the long-term unemployed. The Brotherhood of St Laurence said: Demand for low-skilled labour has declined both in Australia and overseas. This is evident from the data that shows that nearly three-quarters of new jobs in the period 1990–2003 were taken up by university graduates. Only one in eight of the jobs went to job seekers without post-school qualifications … Again this stresses the degree to which the characteristics or the demographics of employment services recipients have changed in recent years. The impact on those who had payments suspended was also a feature of a number of submissions received by the government. The National Welfare Rights Network told us: The relationship between this penalty— the eight-week suspension— and major dislocation, including homelessness, relationship breakdown, increased mental stress, illness, violence and crime is both categorical and direct. Homelessness Australia reported on some research undertaken by the University of New South Wales which found: … 30 per cent of people who underwent an 8 week “breach” lost their accommodation or were forced to move to less appropriate housing. The legacy of the Howard government in getting people back to work is best reflected in the statistics for the long-term unemployed. As we know, there was over the last 10 or so years very significant employment growth in the Australian economy on the back of the resources boom. But, if we look at the figures for those who were unemployed for more than five years, we see that between 1999 and today—the peak period of the resources boom—those numbers have increased from 74,000 back in 1999 to over 110,000 today, or, more relevantly perhaps, from one in 10 persons unemployed for over five years in 1999 to almost one in four now. It is not as if the previous government was not warned about the consequences of the compliance system it introduced. The former shadow minister, Senator Wong, now responsible for other policy areas, made a number of speeches predicting that exactly what has come to pass would come to pass. I have read those speeches, and I pay tribute to her for keeping these issues in the public domain and ensuring that, on coming to government, the Labor Party undertook the employment services review and is now seeking to introduce the reforms that it is. Australia’s unemployed and the Australian economy more generally need a new approach, and that is what we are getting from Minister O’Connor: a new, $3.9 billion employment services program to start on 1 July next year—a system that will be responsive to today’s circumstances of lower unemployment, very deep skill shortages and a pool of unemployed characterised by disadvantage and high needs such as we have not seen many years. After an intensive period of consultation with the community, the government is introducing a new compliance regime, a regime that is set out in this bill. The regime will apply to all job seekers with participation requirements in receipt of Newstart and youth allowance, parenting payment and special benefit including parents. The new compliance regime restores balance to the system. It remains based squarely on the philosophy of mutual obligation, a concept supported by the Labor Party for many years, but it is a system recognising two realities. Firstly, it recognises that individual circumstances in this area do vary; and, secondly, it keeps front of mind that the goal of the system is to increase participation, not punish for punishment’s sake. In contrast to the previous government’s one-size-fits-all approach in this area this bill calibrates the system’s response to, firstly, the seriousness of the offence and, secondly, the willingness of the person to return to activity or participation immediately. This bill retains the eight-week suspension for refusing a suitable job offer or for a series of missed appointments or activities but it recognises a series of lesser offences not recognised in the previous regime with a much more immediate and much better calibrated response. The first one is the no-show no-pay failure, which treats the recipient effectively as if they were employed. If you miss a day’s activity, for example, Work for the Dole, then you lose a day’s pay. This is an immediate penalty in contrast to the delayed response in the old regime. Secondly, there is a similar system in missing appointments such as with employment service providers. For those whose payments are suspended for eight weeks due to a serious failure, incentives are built in to encourage redemption and improvement in their behaviour. To avoid the nation’s government continuing to simply shift cases of severe disadvantage to our already overstretched charity sector, more meaningful financial hardship provisions are built into this bill. While retaining the concept of mutual obligation at the core of our social security system, this bill introduces a 21st-century compliance regime to complement the training and participation opportunities presented through the Productivity Places Program. The current compliance system introduced by the previous government is broken. The statistics bear that out. This bill presents the solution and I commend the bill to the House. 9734 17:16:00 Tuckey, Wilson, MP SJ4 O’Connor LP 0 0 Mr TUCKEY —The member for Port Adelaide chose to commence his presentation to this parliament with some derogatory comments about the previous speaker. Might I say, from one who has been here a long time, when you learn to make a speech without reading every word of it you will have the opportunity to give advice to others. It seems to be now a pattern within this parliament that even every answer to a question is pre-scripted and some of the jokes that are included are as flat as the floor in this parliament. The reality is— 8T4 Ferguson, Laurie, MP Mr Laurie Ferguson interjecting— SJ4 Tuckey, Wilson, MP Mr TUCKEY —The parliamentary secretary interjects that it is the status of the questions. I am a great watcher of questions and when I hear question after question after question asked for a simple response of factual matters which the minister concerned should know and understand as part of his job and there is total obfuscation one can only put one reason on that: either they are ashamed of the figures and the reaction thereto or in fact they do not know—they did not ask. In fact, it is the case with this particular measure, the Social Security Legislation Amendment (Employment Services Reform) Bill 2008, that after months of doing nothing the Rudd government is starting to do a few things. I think Australia would be better off if it stopped doing anything, if it went back to doing nothing. The evidence is that its recent and dramatic responses, while seeming okay in principle, have holes all over them, which of course are being demonstrated by forensic questions from the opposition. Here again we have an initiative based primarily on fixing something that ain’t broke. The old system addressing unemployment, which was totally bureaucratic, was clearly not working and there were one million people out of work. The economic circumstances inherited by the Howard government were such that there was no work for them. When one sets out to address unemployment issues and the administration thereof, the first thing is to get your economy right so that people have a choice of jobs and no reason to be unemployed. It is a fact that at this time that circumstance still applies, certainly in my electorate. While I understand the need for skilled operators in many areas, take the case of Cooperative Bulk Handling in my electorate, which regularly takes on seasonal workers for the receival of grain at their numerous loading points, the ‘bins’ as we know them. They take people who are not experienced in that work. The training is provided by the employer and probably takes a few hours—they learn to operate certain equipment and away they go. It used to be part-time work for university students, who do not seem to be available or interested these days. But as I found out in talking to the executive of Cooperative Bulk Handling the other day, they are still desperately looking for people who will turn up. I had a similar call from a hotelier known to me. From my recollection he wanted people to turn up to service his bedrooms and to work behind the bar. I know that there is a bureaucracy now that demands the right to give all these people a certificate—to do what? Make a bed as they should be doing at home? Or, for instance, to work behind the bar? On my experience of 30 years the people attended and said, ‘I’ve never done this job before,’ and you would say, ‘Okay’—and this was the simple response under the award at that time—‘you have the opportunity to work for x weeks as green labour’, which paid a salary three-quarters, I think it was, of the full salary. Of course, let me remind the previous speaker—if he were around to listen—that when he talks about female participation, when I entered the hotel industry in 1956 in Western Australia women got paid the same wage as men. That was a unique circumstance at the time. We never, ever wanted to discriminate between one and the other because we made our judgements on their skills at doing the job. They usually learnt their job in a week or so and as soon as they showed some competence they went up onto full pay or the otherwise prevailing limit—but anybody who took the limit was clearly unsuitable. There are now all these jobs that you have to get a certificate for when the training period can be a matter of hours. The ‘skills’ in those days required people to be capable of adding up because the cash registers that were available were the press-down type. Today, as anyone would experience going into a hotel and asking how much the round of drinks delivered cost, the bar operative has to go back and press the relevant buttons on the till to find out how much they are going to charge you. If you are drinking with a group and you spend a fair bit of time there, you walk out with a pocketful of small change because they cannot even work out how to handle that at the same time. That is when they have a certificate, so what is the good of that? What have we achieved with this argument of skills when skills are something that can be successfully achieved on the job? All of the people who worked for me behind the bar frequently had no secondary education to speak of at all—but they could add up. They did so in their head and were able to present a customer with a round of drinks of any variety and tell them how much on the spot. When they got back to the till, they knew how to handle that. Here we are with all these job opportunities and we have the member for Port Adelaide telling us how sympathetic we have to be for people who presently have been unable to find the jobs that are offering. If this legislation passes, we are going to weaken the penalties that apply to people who do not try to get or do not want a job. Much employment is very simple and, while one can constantly talk up skills, one of the major demands I know of is for semiskilled people or people who are prepared to learn basic tasks associated with many opportunities in employment. These days even someone who would apply to one of my farmers wanting machinery operators—people to drive headers and that—can be trained very quickly because things are computerised. The other day it was brought to my attention by an employer, who was desperate for staff and willing to train them on the job, that a person turned up and said to him—he repeated this story to me—‘I’m here because I have to be here. I do not want the job. The job will mean that, after tax and all the other things that other, committed people pay, I will be literally no better off financially than I am on unemployment benefits. You can employ me if you like but, let me tell you, you won’t like me when I get the job.’ He at least was honest; a lot of others turn up in that circumstance and the next day have a bad back. They manage to injure themselves in the first week and then become another burden on society because, of course, they will be supported by insurance policies paid for by the general public. But this fellow left. He went back to Centrelink and said, ‘I attended.’ I do not think this employer rang up and put him in. They are too frustrated and too busy because they have to interview someone else. That is an example that is ever recurring. Why should there be sensitivity to that individual? Why should the member for Port Adelaide say, ‘You can’t call them dole bludgers’? That is what this bloke was, and there is a legion of those left. I think these matters need to be understood. When there were a million unemployed and people were desperately seeking work, there was a requirement for compassion. In the present work environment, anybody can get a job. What are we doing? We are talking about bringing South Sea islanders in to pick fruit—I am not critical of this—yet we are talking about changing the regime of how unemployed people are dealt with if and when they refuse the job as a fruit picker. I wrote down that the member for Port Adelaide talked about ‘calibrating the system’s response’. If you are fit, able and within a reasonable distance of jobs, why do you need to be calibrated? What is the purpose of a Job Network operator calibrating someone who does not want to work? Why should Australian taxpayers and all those people who up until recently were referred to in this House as ‘mortgage stressed’ and ‘both having to be employed just to meet their commitments to a home mortgage’ pay tax to support a person who does not want to work? There was the tragic case of a family with seven children who received over $700 a week in welfare benefits and their children were breaking into premises to get food. Why? When the authorities checked out that house they found there was not one scrap of food in it. What is the score? Why are we here wanting to fix something that ain’t broke and wanting somehow to prove that that is a positive response from a new government? All of the people I know desperately want workers. They do not mind what workers’ employment backgrounds are as long as they turn up. I have watched it. I have also watched our side of politics do what I think were very stupid things. I still have in my pocket a licence that allows me to drive a heavy truck. I used to have one that allowed me to drive a road train. I did that in the years before I got a letter in the mail to say I was no longer entitled to drive a road train—not because I had forgotten how to do it but because I was not doing it consistently. Next they will be writing to people with pushbikes saying, ‘You haven’t ridden a pushbike for a few years; you’d better go to be retrained before you get on one.’ And you wonder why there is a shortage of seasonal workers. One contacted me and said, ‘For three months every year I was employed driving a heavy truck.’ He was driving a heavy truck—a highly skilled operator who for other parts of the year, as is common in my electorate, took other seasonal work. He knew exactly what his job was with three different employers every year, and one of those jobs was to drive a truck, delivering grain to the silo or carting super back from the works. Now they have taken his licence off him—that was done when we were in office—because he only worked three months a year. It was going to cost him $2,000 to go back and be retrained. For what? When you talk about skills, I can take you out in the country and introduce you to people who are highly skilled—welders with all sorts of equipment they have picked up during their lives—and many of them are forbidden to go onto many workplaces today because they have not been trained. Then, of course, we had the Deputy Prime Minister telling us about her great training achievements. The member for Port Adelaide told us there are 50,000 people enrolled in training places. He might have told us how many of them are in their fourth or fifth training place so that they can avoid going to work, because I know of people in that category. There is a fundamental rule in all of this, and that is that this parliament has a responsibility to protect the people who go to work. As for dual households, I have heard all the arguments saying, ‘I’m a single parent and therefore I have special problems.’ My children both work and have exactly the same problems, because they are both at work during the day. They are taxed heavily and they get nothing by way of welfare. The reality is that those people have rights. The average Australian taxpayer has rights and this parliament has the responsibility to see that people for whom work is available and who are physically able are in work. If they are not physically able, they should be on a disability pension. They should not be on unemployment, necessarily. Profitable businesses have closed in my electorate because they could not get anybody to work in them. That is the circumstance. Try and get an Australian to work in a meatworks these days. Under the silly rules we operate under—and we were no better—you have to bring in foreign workers on 457 visas and pay them more than the award that is applicable to the Australian workers. You can imagine how the Aussie workers feel about that! That is how silly these issues are when we come to employment. But, if there is unemployment, I can name two meatworks in my electorate that will put on another shift when those people turn up, and they will train them. When you see a meat chain in operation, the skills can be very, very basic. You stand in one place—it is not the happiest of work—and you are likely to put a single cut in an animal carcass as it passes by. Why, then, do we have to get to a situation that makes it easier for people to avoid work? That is the proposal within this legislation. You have heard the previous speakers and you have heard the second reading speech. I am astounded, nevertheless, that they made something of the fact—and the member for Port Adelaide repeated it—that the proportion of people on unemployment benefits who have been unemployed for more than five years has increased. Of course it has. The unemployment numbers have dropped from seven, eight or nine per cent to four per cent, so of course that proportion will be greater. But I find the figures astounding because they are inconsistent with those provided to me that relate to the changes since the introduction of the measures that are now to be changed. In 2006 there were 105,000 long-term unemployed and by 2008 there were 146,000. If you want to start being selective about the number of people unemployed for more than five years, there is no reason in Australia today for a person to be unemployed. There is work available in different categories, but it will not necessarily be in whatever category they choose. This place should not be changing this legislation. The other legislation is working. If you are going to do as I explained and walk into employment interviews and make sure you are not given the job, if you do not turn up or if you toss a coin and say, ‘It’s a beautiful day—I can go to the beach and it’ll cost me 42 bucks,’ that is a judgement issue. But when you know that you should be out there seeking work or you are going to lose eight weeks pay, that is a different judgement issue altogether—and that is what this legislation proposes. But again, if it ain’t broke, why fix it? If it is compassion for people who will not go out and look for a job when they are available on every street corner, why should we be changing the legislation? If it is going to cost working Australians more tax—those working families whom we never hear about anymore—and it must cost them more with all this calibration, the additional interviews et cetera, or if it will deny them benefits because the surplus is all gone, then is that fair? Is it fair that we, the Parliament of Australia, support legislation because the government wants to be seen to be doing something where change is not necessary? These are the criticisms I have of this legislation. We do not need it. It weakens the discipline on people who wish to be supported by the taxpayer to go and find work. It is a tragedy, because the other solution is to dramatically lower the payments they get, which makes work more attractive. I do not agree with that. If a person is genuinely out of work, they should get fair compensation. (Time expired) 9738 17:37:00 Hayes, Chris, MP ECV Werriwa ALP 1 0 Mr HAYES —If we are serious about getting people into jobs, we should be seriously looking at the system that underpins Job Search, which, quite frankly, is the mechanism to assist people to help secure employment. It is obviously our aim and objective to help those who are disadvantaged by assisting them, where we can, into gainful, paid employment. If we are serious about getting people into work, we need to actually have an effective compliance regime in order to encourage people to look for work. Regrettably, sometimes people do need to be led. I do not think we need to make any apology for saying that there must be certain incentives to encourage people to undertake their part of the mutual obligation package, and that is taking all possible steps to seek gainful employment. The reality is that the former government presided over what was a rather harsh and counterproductive compliance regime that certainly penalised harshly when people did not comply. As a matter of fact, if one failed to comply on a third occasion under their regime, this would eventuate in one not receiving welfare payments for eight weeks. Under the eight-week regime, when a non-compliance penalty was triggered, a job seeker was not required to have any further contact with the employment service provider or Centrelink for that whole period. So, if someone was going to be in breach, what occurred then was that they would think there was no point doing anything else and that they may as well just sit back and do nothing. That is precisely what the Social Security Legislation Amendment (Employment Services Reform) Bill 2008 is designed to address. It is that ‘do nothing’ approach that the minister has sought to change in a constructive way to get the focus back on what we should be doing for job seekers—and that is helping them into gainful employment. Therefore, I say that the current system is inadequate as a deterrent. It is certainly in its early stages too harsh on noncompliance and the penalties are too late. Under the current arrangements, the job seeker, as I said, could miss a fortnight’s participation before any action was taken at all. If noncompliance is going to be addressed in any way, we simply cannot have a situation where up to a fortnight goes missing before action is taken. What we are trying to do through this legislation is bring about some real, mutual accountability. We know what our accountability is from a government’s perspective, and that is to take all possible steps to assist people to find employment. But we are also trying to instil in the job seeker the obligation that they must take all reasonable steps to comply and, in so doing, to find a suitable job. When you think about it, if a job seeker fails to turn up to a job interview or something else that has been mandated under the Job Network scheme, nothing happens. On the next occasion that that same person fails to turn up, nothing happens. That person could then be complying and doing everything else but, if something occurs within that period of 12 months and they then miss a third job interview, that job seeker then incurs the eight-week penalty. It certainly does not equate with the mutual obligation I was speaking about. It does not draw the job seeker’s attention on the first two occasions to the fact that not turning up is pretty serious. It does not do that. It simply waits for the final trigger to occur and then down comes the guillotine—‘You will now incur an eight-week penalty and you will go off welfare payments for that period.’ If you listened to what the former speaker had to say—and I did labour through that speech—you would have heard him say that he did not think we needed to change anything in the current system. He thought it was fair and that people should be punished if they do not turn up and that this is what drives people into employment. That sort of stuff fails to equate with the fact that in the last two years these penalties have been in operation, 2006-07 and 2007-08, there has been a doubling in the number of people who have received eight-week penalties. Sure, this legislation has really meted out the punishment and, sure, there has been a doubling in the number of people who have incurred such punishment under the legislation, but what is not clear is: has this actually contributed to putting people into employment? The last speaker also indicated that there has been a significant reduction in unemployment over recent years, and that is quite true. It is pretty clear to me that what has led to that is a resources led economic recovery, particularly in some states, that has significantly increased employment opportunities. That is not necessarily right across the board, however. I can indicate to the House that in my own electorate of Werriwa at the moment the rate for youth unemployment still stands at 23 per cent. There is a mining boom out there. There is a resource led recovery taking place in Western Australia and Queensland. But 23 per cent of the young people in my electorate have tried unsuccessfully to gain employment. That is the real figure. That is the real world. That is what we should be working on. We should be encouraging and assisting these people into proper employment. We should not do that to simply reduce the unemployment numbers but to give them what a job gives to people: a sense of self worth and a sense of genuine commitment. Hopefully, that in turn will lead to value adding for our community generally. We know that the compliance system has done nothing to reduce unemployment. Despite the doubling of the numbers that has occurred in the last couple of years, there has been no improvement in the attendance at Job Network interviews, there has been no improvement in the attendance rate at customised assistance and we know that this eight-week penalty does not act as an incentive to get people into employment. What we have been told, and this is from the Welfare Rights Network, is that the relationship between the eight-week non-payment penalty and major dislocation, including homelessness, relationship breakdown, increased mental stress, illness, violence and crime, is both categorical and direct. That is borne out when we consider the people who we are applying this mandatory provision to. Research conducted by the University of New South Wales Social Policy Research Centre has found that up to 20 per cent of people who underwent an eight-week breach lost their accommodation or were forced to move to less appropriate housing. We are not talking about people of means—people who are in the circumstances of being able to move or simply weather an eight-week break. Let us get this straight for this House: we are talking about the people who are least able to move and least able to find employment at the moment—hence they are on the programs that they are. We must appreciate the reality of that. In terms of my own locality, Werriwa, not all that long ago I held a homeless seminar. What I sought to do was to bring together the homeless service providers, a number of charities, some churches and the New South Wales Police. I also brought along a number of kids that I have met from time to time who live on the streets in Campbelltown, Liverpool et cetera. It was a significant exercise to bring those people together. While we have this mining boom and while we have a significant number of jobs being generated in the resource based industries, there is a level of disadvantage that operates in our communities. I know it for a fact. In addition to the people I mentioned, I also invited on that occasion the local media. They were not there to simply take pictures of an event. Rather, they too have a responsibility, in my opinion, to not only carry a story but be part of the solutions, not covering things up. As a consequence, they have stayed consistently on this campaign to address the levels of disadvantage throughout the Campbelltown, Camden and Liverpool areas. While going through that exercise, I learnt a number of things. Firstly, of those people who persistently struggle to find employment, the figures show that 15 per cent of job seekers who get that eight-week penalty have a mental illness, while five per cent have an unstable housing situation. What we are doing is adding to their problems. The three strikes and you are out policy for welfare dependency is quite frankly penalising the most vulnerable in our society. There cannot be a punishment just for punishment’s sake. There has to be something that is an incentive. That is what this legislation is about: providing a positive incentive. If you fail to turn up and fulfil your obligations, as opposed to waiving the first occasion or the second occasion and bringing the axe down on the third occasion, your payments are held back until you re-enter the system. People understand that. It is like ‘no work, no pay’; it is ‘no show, no payment’. If someone is on the network and has given undertakings, including attending various job interviews, and they fail to turn up and do not have a reason, those people’s payments will be suspended until they live up to their obligations. That is a fair system. People out there understand that. They do not understand a system that says ‘three strikes and you’re out’ regardless of when and where those strikes occur over any 12-month period; a system that penalises people eight weeks of their payment. The financial impact of all this is great. Two weeks ago, I spent a morning in a soup kitchen that operates in Liverpool. I know that we do not talk about soup kitchens today, but let me tell you: they are real. I spent a number of hours out there with Pastor Gino Zucchi. He runs the Church of the Crossroads—called that, of course, because it is located at a crossroads. For a lot of people, this is their only real meal a day. I spoke with a lot of people who rode pushbikes to get there. I spoke to people who had travelled from as far away as Fairfield to get there. This is a community thing. These people are not going for the free meal. They are going there for other reasons, such as the social interaction. Pastor Gino Zucchi’s program has people who can actually help people find jobs, work through the system, make contacts and write letters for employment. It is certainly more than just a soup kitchen. Just before I came down here—I should have prepared a bit earlier, I think—I asked Pastor Zucchi what he thought about the passage of this particular legislation. He said: ‘It would be ideal to have clients still participating in programs that enable them to find the appropriate employment because that is the real aim: to get people in employment—not a punishment regime. The reality is that it is often dependants and housing arrangements that suffer.’ What Pastor Zucchi said is precisely what the University of New South Wales and the research I quoted earlier said. People who are at the sharp end and who are out there working with disadvantaged people—trying to get them into employment and to give them a life and a future not only for them but for their families—know what the reality of this is. We are trying to have people comply. We are absolutely single-minded in that the compliance regime must be fair, decent and reasonable. I would invite members here to apply this sort of standard when considering this legislation as if it were applying to our own kids out there. Those 23 per cent of people all have parents, and hopefully their parents care for them. We are genuinely trying to give those people a future. To have a regime that is simply penalty based for the sake of being penalty based does not put people into employment. A mining boom and all those things will take care of one area of our workforce and we certainly like to see all efforts going to increasing employment opportunities. But under this particular piece of legislation we are targeting those levels of disadvantage in our community and those people who are struggling. We do need to take the view of caring as if the people we are talking about were our own kids. We would want our own kids to be treated with fairness and decency and not to be subjected to something that is so punishment based that it becomes incomprehensible. I also took the opportunity to have a talk to the Executive Officer of Macarthur Diversity Services, Karin Vasquez, who informed me they are very concerned that their organisation has many clients who have been repeatedly non-compliant. They see those people within their organisation as having severe barriers to work. She said: ‘Centrelink asking people why they are not complying is an important and necessary policy shift. For example, one of our clients is able to work in many respects, however an intellectual developmental delay affects his ability to comply.’ This is something I really was not aware of. Until today I was not aware that Centrelink does not go out and ask people why they have not complied because, under this act, Centrelink is not required to. Unfortunately the three triggers are the magical things that trigger noncompliance and penalty. This one-size-fits-all approach is hardly a pathway to employment. It is penalty first, and opportunity is hopefully somewhere down the track. The idea of Centrelink having discretion to sit down and go through these compliance regimes is an added bonus. That was certainly in the mind of the Executive Officer of Macarthur Diversity Services. This is a significant piece of legislation and I commend the bill to the House. (Time expired) Debate (on motion by Mr Price) adjourned. 9742 Bills R3089 9742 Bills R3070 9742 Bills R3066 9742 Bills R3077 9742 Bills R3076 9742 9742 17:57:00 Price, Roger, MP QI4 Chifley ALP 1 0 Mr PRICE —by leave—I move: That the bills be referred to the Main Committee for further consideration. I indicate that the Chief Opposition Whip, the honourable member for Fairfax, supports this motion. Question agreed to. 9742 Bills R3057 Cognate bill: 9742 Bills R3093 9742 Debate resumed from 20 October, on motion by Ms Gillard: That this bill be now read a second time. 9742 17:58:00 Irwin, Julia, MP 83Z Fowler ALP 1 0 Mrs IRWIN —The Education Legislation Amendment Bill 2008 and the Schools Assistance Bill 2008 have been presented as delivering Labor’s promised education revolution. Together with computers in schools, trades training centres and the educational tax refund, they represent significant improvements to parts of our nation’s education systems. These are welcome measures but they are hardly a revolution. The Schools Assistance Bill sets out the priorities of the government through the national partnership payments as improving the quality of teaching, raising outcomes in disadvantaged school communities and delivering a new era of transparency to guide parents, teachers and policymakers in making the best decisions. But in line with the commitments given before the 2007 election, the existing distribution of funds between private and public schools will remain in place until 2012. In her second reading speech, the Minister for Education said: If this country is to succeed in the 21st century we need a schooling system which delivers excellence and equity for every child in Australia. She went on to say: This is only possible if the community is confident that governments are applying the same principles of excellence and equity to all Australian schools, regardless of their location or the sector of which they are a part. But we will have to wait four more years before we make a start on addressing the issue of equity in all Australian schools. Over the 12 years of the Howard government, we saw the share of Commonwealth school funding going to public schools drop from 43 per cent to 35 per cent. Real Commonwealth grants to public schools grew by 68 per cent, while grants to private schools grew by 137 per cent. There is nothing in this legislation which would redress that imbalance and, indeed, there is no guarantee that the funding gap will not widen over the next four years for which the Howard government’s program is to be locked in. We will still have SES funding and indexation. In fact, we can expect to see annual grants to private schools increase by a further three per cent while grants to public schools fall by two per cent over that four-year period, something that the minister describes as applying ‘the same principles of quality and accountability, excellence and equity that have shaped our national reform agenda’. It seems to me that the national reform agenda has been put on hold for four years, and the real education revolution is a long, long way off—that is, unless we take those parts of the bill which provide for the five activities that are essential to achieving transparency in Australian schooling. These are national testing, national outcome reporting, the provision and publication of individual school information, and reporting to parents. These activities are to be central to the national education agreement to be negotiated with the states and finalised later this year. The suggestion is that poorer performing schools, which it is assumed are in socially and economically disadvantaged communities, will receive additional resources to improve their performance—that is, to achieve greater equity and outcomes for students in those areas. But the Prime Minister added his own suggestion: that if some schools are not performing this encourages parents to, as he colourfully put it, ‘walk with their feet; that’s exactly what the system is designed to do’. We need to ask if that is the real agenda. Is it to conduct testing and national outcome reporting in order to identify areas of need and allocate additional resources to those areas? I would think that would be a sensible agenda and would mark a return to needs based funding. Or is it to promote a competitive education system where parents in a position to make choices about their children’s schooling may select from a smorgasbord of educational offerings? I have to ask: where is the equity and social inclusion in that proposal? And where does that line up with the reported comments of the minister that ‘we are on about the performance and quality of every school’. It is not hard to see why there is some confusion about the so-called education revolution. On the one hand we have with this legislation measures which set in concrete for four years a private school funding formula which is no different from the Howard model and will provide an even greater proportion of Commonwealth funding to private schools. Until we see the dollar commitment for assistance to disadvantaged schools, we can only guess at how effective this assistance can be. At its first caucus meeting after winning government last year, Labor members were urged to visit schools in their electorate. As a member who keeps close contact with many, many schools in my electorate, I felt this special visit was hardly necessary. But, as I visit schools today, particularly staffrooms, I hear some grave concerns from teachers in disadvantaged schools. While it might be popular to speak of teacher unions fighting yesterday’s battles, unlike so many commentators, these teachers see the problems facing students and schools every working day of their lives. When we hear of improving teacher quality, it is rarely about providing a proper level of resources. And when we hear objections from teachers to national testing and outcome reporting, we should bear in mind that those objections come from firsthand experience of the unfair nature of our education system. I am sure that, if we had a truly fair and equitable education system, there would be no objection to national testing and outcome reporting. But the system is not fair and, until it is, it will not be fair to the dedicated teachers working in our disadvantaged schools to attempt to report on outcomes for each school. Let me give just one way in which the results from testing can be distorted in disadvantaged schools. In New South Wales, students in primary schools can be classified as ‘intellectually moderate’ or ‘IM’. A number of schools—and these are generally larger primary schools—have special programs and classes for IM students, and IM students are generally exempted from testing unless a parent requests their child be included. In smaller schools, however, students who could be classified as IM may remain in mainstream classes and, as such, they are required to be tested unless a parent requests that they be exempt. In some disadvantaged schools, these numbers can be as high as one in five students. You can appreciate how the results for a school can be distorted if the lowest performing fifth of students is not included in test results. While it has been suggested that any comparison between schools will use socioeconomic factors to attempt to compare like with like, there are differences between schools drawing from similar populations. I am very concerned that we will finish up with a system of classification by postcode. A great many factors, including the one I have just mentioned, can influence the outcomes, which have nothing to do with the standard of teaching in the school. While I am on the subject of teaching standards, there are a few things I would like to add to the debate, which to date appears completely one-sided. It has been said that we should judge teachers the same way that we judge lion tamers. If they come out of the cage alive they have been successful. The same could be said for school principals and others in school leadership roles. As you would be aware, Madam Deputy Speaker Bird, the harshest critics of teachers and principals are students and other teachers. What is surprising is that so many teachers survive for 30 or more years in a system which takes a high toll on those not up to the demands of the profession. So, before any government embarks on an education revolution, it would be wise to consult the collective wisdom of classroom teachers and school principals rather than dismissing so-called left-wing teacher unions, as members opposite and many media commentators do so often. We would do better to respect their experience and their great dedication. We may speak of an education revolution, but we are a long way from bringing true equity, excellence and social inclusion into our education system. Unless the measures to be announced following the negotiations with the states for a national education agreement bring a massive allocation of resources to disadvantaged schools, our education system will become more unequal and the great hopes for education driving a successful Australian nation into the 21st century will be proved definitely to be more of a slogan than a reality. 9744 18:10:00 Andrews, Kevin, MP HK5 Menzies LP 0 0 Mr ANDREWS —In the early 1990s the then Labor government operated a new schools policy. Orwellian in name, this policy effectively discouraged the establishment of new schools. It was repealed by the Howard government, leading to the establishment of many new schools which exist today. Indeed, many of these schools can be found in the outer suburbs and in the regional areas of Australia. By 2007, 33.6 per cent of students attended non-government schools in Australia, and the proportion of students in independent schools in years 11 and 12 is even higher. The disdain for independent schools has surfaced in Labor Party policy frequently. Remember Mark Latham’s hit list of the wealthiest schools targeted for funding cuts? Under the plans of Mr Latham and Jenny Macklin, 67 schools would have seen their funds cut and another 111 would have had their funds frozen. Mr Rudd subsequently repudiated this proposal in his election commitments last year, saying that funds would be maintained for the 2009 to 2012 period, with a review of subsequent arrangements. No school would lose a dollar was Mr Rudd’s claim. During the campaign, the Labor candidate for Eden-Monaro, Mike Kelly, revived the spectre of a hit list but was slapped down by Mr Rudd. But much of the Left remains antithetical to non-government education, as I shall illustrate. The President of the Australian Secondary Principals Association, Andrew Blair, argued recently that non-government schools would have to cap their fees to qualify for federal funding or have their subsidies removed. Mr Blair proposed three tiers of funding: first, government schools, which receive all funds from the government; second, government supported schools, which receive some government and some parental funding; and, third, independent schools, which receive no government funding. If this proposal were implemented it would return us to the days before the Menzies government introduced state aid for non-government schools. Worse, it would impose a new level of government control over the hundreds of independent schools that could not afford to operate on fees from parents alone. They would be required to abide by government policy on issues like accountability and curriculum and cap their fees. Mr Blair quotes other activists, including Chris Bonnor, who describes the current system as ‘stupid’. Supported by groups such as the Australian Education Union, this is a campaign to slash expenditure on the education of many young Australians and to introduce left-wing controls over most non-government schools in this nation. Given Labor’s history on these matters, Australians are entitled to be suspicious about their current intentions. The Schools Assistance Bill 2008 and the Education Legislation Amendment Bill 2008, which we are currently debating, raise these suspicions. The Schools Assistance Bill mandates as a condition of funding that all Catholic and independent schools implement the new national curriculum and make public data about school performance, including all sources of funding. This has a number of problems. First, the requirement of adherence to a national curriculum puts at risk the uniqueness of many schools such as Steiner schools, Montessori schools and special needs schools. It also risks the International Baccalaureate and the Cambridge international exams. This requirement is being introduced in this bill despite the fact that the national curriculum will not be finalised until some time in 2009. Worse, the requirement that all funding sources be disclosed and revealed fuels the campaign to remove funding from independent schools. That campaign, I submit to the House, is misleading. The proponents claim that Australia is at the bottom of the funding table compared to other OECD countries, but when both public and private funding is combined we are about average among OECD countries. They also ignore the huge savings to the taxpayer because parents sacrifice other expenditure for their children’s education—and, remember, one in three children who are in school in Australia are now in independent schools. The cost of educating a child in government schools in 2005-06 was, on average, $11,243. The cost to government of educating children in non-government schools in the same period was just $6,268. So, on average, the cost to government to educate a child in a government school in Australia was $11,243 compared to just $6,268—about half—to educate a child in an independent or non-government school. What this represents is a saving of billions of dollars each year because of the financial sacrifice that hundreds of thousands of parents throughout this country make. It is a laudable objective to increase schools funding, but it should not be undertaken in the misleading and divisive manner being advocated by the Australian Education Union and its supporters. It is for these reasons that I commend to the House the amendments which have been moved by the shadow minister. 9746 18:16:00 Saffin, Janelle, MP HVY Page ALP 1 0 Ms SAFFIN —The Schools Assistance Bill 2008 and the Education Legislation Amendment Bill 2008 are complementary, hence the two being dealt with together. My comments will canvass both, sometimes discretely and sometimes fused. The Schools Assistance Bill will appropriate an estimated $28 billion in funding for the non-government schools sector for 2009 to 2012. The bill maintains the current SES funding and indexation arrangements consistent with meeting the Rudd Labor government’s election commitments of 2007. It also contains two other key reforms consistent with Labor’s national priorities. The first key reform is additional funding for all non-government schools where 80 per cent or more of the students are Indigenous and for non-government schools in remote and very remote areas where 50 per cent or more of the students are Indigenous. Previously, there was no such guaranteed funding to the maximum level. This bill will provide an additional $5.4 million to the eligible schools. It also brings together several components of funding for schools with Indigenous students which were previously scattered across a range of programs through the Indigenous Education (Targeted Assistance) Act 2000. I understand that, in addition to allocating extra dollars, the new bill will also reduce reporting and red tape. I had a local example of this with a school that contacted me. Even though they were reporting on the same students and the same issues, they had to do two lots of reporting, state and federal, which created an enormous amount of work. When they had asked previously—some time ago—whether that could be coalesced, the answer was no. That is why it is important that we have the COAG process that is being undertaken because that allows issues like that to be worked through in COAG and be subject to reform. The government’s enhanced COAG process and activities enable agreements to take place on issues like that, so that those real problems at a local level can be resolved. The bill brings together the Indigenous funding guarantee and the Indigenous supplementary assistance, which will provide an estimated $239 million over four years. Also, for the first time, it will be indexed at the same rate as other recurrent school funding. It is estimated the increase from indexation will be an additional $24.5 million, which is a significant amount. The second key reform is the new reporting requirements for non-government schools. This brings in a new framework in transparency in Australian schooling. Transparency is only ever a good thing, especially where our children and their education are concerned. The reporting requirements will be consistent with transparency measures for government schools and will help to enable proper understanding of how all schools perform. I know that, at first, when transparency requirements are being introduced there is often a debate within the particular communities that are affected and sometimes there is some discomfort as well. But transparency is always in the public interest and it is therefore always in the interests of our children. The activities that will yield the information necessary to meet the transparency test are in the following areas. The first is national testing—and, again, testing is one of those issues that is always debated quite heatedly and strongly, and sometimes there is discomfort about it, but it is in the interests of our children. The other areas are national outcome reporting, the provision and publication of individual school information, and reporting to parents. What this means is that there will be some common data sets around record handling and what needs to be recorded, as this determines what is reported. The key issue is that all schools, government and non-government, need to be included. Non-government schools have not previously been included in the overall reporting framework. The minister, in her second reading speech, in particular underscored the importance of education that is reflected in the Rudd Labor government’s education policies—notably in our overarching policy framework with the education revolution. I know sometimes we bring personal stories and experience of ourselves and others to the debates in this place, and this one is no exception. I owe a lot to education. I have a view that is shaped and informed by that experience. Earlier in my life I was in an educationally disadvantaged situation, leaving school at 13 and not really having any high schooling to speak of. But it was broadened by later engagement in the education sector with my teacher training; being involved in educational politics in the New South Wales Teachers Federation; in the New South Wales TAFE TA; working part time; part-time lecturing; community adult education; serving on boards; and teaching young people with disabilities and in sporting areas and working in refugee camps in conflict zones. The education experience I have had goes beyond the schools, whether they be private or public. That shapes what I think and what I feel and some of the passion that I have around education. It is a right, and it is a right for all. I know that in the Rudd Labor government’s education revolution and in our framework that principle underpins a lot of what we do. It certainly underpins my approach to my engagement with the education area. Minister Gillard also said: Education is central to the future of our society. Indeed it is on many levels, and the comments I have just made attest to that. There is a whole range of indicators around education, including, if we just look at child health and the level of education of mothers, the more educated the mothers are, the healthier the children are. That is one of the best arguments for education. I am probably straying from the bill a little bit, but I just wanted to make some points about education in general. Minister Gillard also went on to say: It is a central part of building a stronger, fairer Australia, ready to meet future challenges and able to make the most of its talents and resources. This is precisely what our education revolution is about—ideas. Ideas do matter, ideas are important, they shape our society, but these ideas are backed up by action, and that is a powerful combination, particularly in the area of education. Without a solid education system, we cannot have a stronger, fairer Australia. As we say, education is a great leveller, or should be, and it is needed to ensure Australia stays strong to meet the future challenges that are upon us: the many skills shortages in the workforce and climate change, among others. Some initiatives of our education revolution, which is central to what we do with legislation, include the new computers, which are already in schools. I have been able to get around the schools and see some of those and it is certainly very pleasing to see them being rolled out. The new trades training centres are on their way. There is the education tax refund, which is very welcome indeed. And then there is the 15 hours for four-year-olds at preschool. That will be rolled out over coming years and I know that is being assiduously worked on by the Parliamentary Secretary for Early Childhood Education and Child Care, the member for Bennelong, who is in the chamber at the moment. There is a commitment to parents for their children’s education needs of $4.4 billion, and that has been available since July. A number of key reform initiatives are being pursued as well through the COAG process, and they are driven by the government as collaborative and cooperative reform. COAG has agreed to a number of national targets in this area. Some of them will be met through the national education agreement, an agreement among governments in Australia that the minister says will set the terms of funding and accountability for schooling over the next four years. The minister further says in her second reading speech—and it is a really important point that I wish to reiterate here—that Commonwealth funding for government schools does not require specific legislation. I would like to note here that I agree that government schools are also in need. That is a constant; it is not a new thing. All schools are constantly in need with changes that come in within the school environments—and public schools certainly are in need of enhanced funding. In 2007, during the election campaign, I signed what was called the pledge in company with teachers and their Teachers Federation representatives. It was outside Grafton High School and I was saying that I would support and advocate for such funds. The key amount the teachers were saying was around $2.9 billion. I know there has been some work done by the unions to quantify that and I am still ploughing through some of those documents on education, where we should be aiming for brevity. I know that every time we get a document to read, it is like the books I can see in front of me, so I am still ploughing through it. But what I would like to say is that it is actually the states that have provided the core funding of government schools. I note that here and I noted it at the time. Unless there is a change then that will continue. The states have their obligations to fill as well in this regard to ensure that that funding is there. When there are some schools in need, who feel they are missing out, it can and does have an impact on morale, and that is one of the things we always have to be mindful of when we are having debates like the one we are having in this House on these bills. I have said to parents, teachers and students that there is no longer a debate to be had about government and non-government, public and private within an either/or framework. The debate that never took place—it is a debate that never took place under the previous government, one of the many left unattended—is the debate on how to ensure the following things: equity for students; excellence in teaching; strong support for teachers; and the same or similar resources for all in schools, in education communities, with some particular attention to our regional and rural and isolated students. I also had the privilege throughout these debates to have met with the association. The previous government’s approach to education, from what I can gauge—and some of that was directly as a member of a university council—was that there was more attention paid to or obsession with the so-called governance, which had little substance and no leadership in it, than with educational outcomes. For the first time, under this bill non-government schools will have a legal obligation to participate in the five key reporting activities in a transparent, clearly marked framework, along with government schools. The outcome, of course, is better information for schools, for the school communities, for the parents and for the families, and improved educational outcomes is always the ultimate goal. All Australian students will be included, for the first time, and it is paramount to have that inclusiveness. Previously, the school funding legislation, which did not focus on the educational outcomes but on about 20 separate requirements in terms of regulation, monitoring and red tape, caused an excessive level of that regulation, monitoring and red tape. I alluded to my situation at the beginning of my contribution. What I would like to say in general about education is that education was able to give me a life that was richer and more meaningful, and I know it can do that for all young people. In my concluding remarks I would like to compliment and commend the teachers in my local schools and their respective parents and citizens associations and other interested citizens, who in my seat of Page put an enormous amount of work into local schools and education, as indeed do teachers, beyond their regular working hours. I know that they would welcome some of the reforms in these bills. I would like to commend the bills to the House. 9749 18:33:00 Hall, Jill, MP 83N Shortland ALP 1 0 Ms HALL —It gives me great pleasure to rise tonight in this cognate debate to speak on the Schools Assistance Bill 2008. At the outset of my contribution to this debate I would like to emphasise the enormous contribution that is made to the education of students throughout Australia by both the public and the private sector. In the Shortland electorate over 80 per cent of students attend public schools and as such it is imperative that those children have equal access to quality education. This is the first tranche of legislation that will ensure that all students throughout Australia have a quality education. This is about setting a high benchmark, a benchmark that will ensure equality of education and equality of opportunity for all students in Australia. The bill defines a major change in Commonwealth funding for schools as the current act and previous acts provided funding for both government and non-government schools. In the future, Commonwealth funding for government schools will be negotiated through the national education agreement, which is currently being negotiated between the Commonwealth and the states through COAG. This bill addresses the funding of non-government schools for 2009-12. It is part of the government’s overall agenda for delivering a quality education revolution to all schools. It will continue the current socioeconomic status funding, the SES funding, and indexation arrangements for non-government schools for 2009-12, meeting the government’s election commitment. Part of that commitment is that no school will receive a lower level of funding. Today the students of Budgewoi Public School visited this parliament and saw firsthand how it operates. The students in that school come from a less advantaged area than some other students in Australia and the funding arrangements that will be put in place by the Rudd government will ensure that those students obtain a quality education. They asked some very insightful questions about the operation of this parliament and they demonstrated an outstanding knowledge of government. As I mentioned, the majority of students in the Shortland electorate attend government schools. The 19 per cent of students who attend non-government schools mainly attend Catholic diocese schools. Those schools need to receive the security of funding that is provided through this bill. In addition to the Catholic schools in the Shortland electorate there is one other non-government school, the Belmont Christian College, which provides a fine education to the students who attend that school. The secret to education is that it must provide opportunity. Education is the key to a successful life. Education is the key to a career, the key to success and the key to choice in life. If a young child is denied equal education opportunities when they first go to primary school and is unable to read or has poor numeracy skills, that will impact on their whole life. It will impact upon their choice of job and of where they live—it will impact on every aspect of their life. The simple fact is that, if they do not have those basic skills, they will not have the same opportunities that others enjoy from the knowledge gained at school. One of the key aspects of the Rudd government’s legislative program for schools in Australia is to ensure that all students have that opportunity. The students from Blacksmiths Public School, who will be visiting parliament later this week, will benefit from the education policies that the Rudd government is putting in place. When the first round of computers were provided to high schools in the Shortland electorate, all schools—government and non-government—bar one obtained computers, which means that the students at those schools now have the opportunity to embrace information technology and access the wide range of information that computer technology provides, simply because of the policies of the Rudd government. The trade training centres will also provide young students with the skills that they need when they leave school to take up apprenticeships and will assist them to move seamlessly from school to the workforce. Many of the election commitments delivered in the 2008 budget were part of our education revolution. That includes the trade training centres that I just spoke about. The digital education revolution, as I have already pointed out, has put computers in high schools in Shortland. And the COAG reform framework means that for the first time governments in Australia will agree to a single set of objectives, outcomes and outputs resulting in educational priorities and reform directions for the education system. This legislation will include requirements for non-government schools to meet certain objectives and provide certain information. That will provide parents with clear information about the performance of their children and their children’s school, comparative information about performances, and performance data about schools and school systems. This is a whole new approach to education. I must also inform the House that the Education Legislation Amendment Bill 2008 is a continuation of appropriations for 2009 to 2012 for a range of targeted programs and projects under the Indigenous Education (Targeted Assistance) Act 2000. It provides appropriations for supplementary assistance to preschools and vocational education and training providers of Indigenous education. This is very important because one aspect of Indigenous education is the very low retention rate. Indigenous students do not have the same educational outcomes as non-Indigenous students. As I pointed out in my earlier comments, this affects the choices that they have in life. The Rudd government and Minister Gillard are not prepared to let this situation continue. We can see the problems and we intend to act to resolve those problems to give Indigenous students the same sort of educational outcomes that other students have. This legislation will give students who attend schools in Shortland the same sort of educational outcomes as students who live in Wentworth, the Leader of the Opposition’s electorate. I believe that, no matter where a student goes to school, they should have exactly the same opportunities as students in other areas. I notice the shadow minister for early childhood education, childcare, women and youth, who is at the table, shaking her head in disagreement with my comment. I say to the shadow minister: I am committed to ensuring that all students have equality of education. I think that she should get on board, stop shaking her head and say, ‘Yes, I think that no matter where a student goes to school, whether in the non-government or the government sector, they should most definitely have the same opportunities in life as students in my electorate.’ The legislation will ensure the security of funding for non-government schools. It delivers on the Rudd government election commitments, as will other legislation that will soon be before the House, including legislation for the national education agreements that will fund government schools. I commend the legislation to the House. 9751 18:44:00 Sullivan, Jon, MP HVS Longman ALP 1 0 Mr SULLIVAN —I rise very proudly to support these two government bills: the Schools Assistance Bill 2008 and the Education Legislation Amendment Bill 2008. These are both fine bills which, as the previous member speaking in this debate said, go a long way towards delivering on our election commitments. The debate on these bills has been quite lengthy and there have been a number of eloquent speeches made. I probably will not be troubling the timekeeper too much this evening. For those who might turn to my speech to read it, I commend to them the eloquent contribution of the member for Port Adelaide, Mr Butler, who spoke yesterday I believe. It is quite serendipitous that I should follow the member for Shortland in this debate as she and I attended the same primary school at the same time, which is almost the Nambour State High School example again except that Nambour State High School seems— 83L Gillard, Julia, MP Ms Gillard —Who’s older and who’s younger? HVS Sullivan, Jon, MP Mr SULLIVAN —I am not telling. 83N Hall, Jill, MP Ms Hall —And it was an excellent public school at that. HVS Sullivan, Jon, MP Mr SULLIVAN —It was, and we both did fairly well. Nambour State High School seems to have been a little more successful than Macksville Public School in terms of the eventual outcomes for their students. As I read it, these two bills do not do much of anything that should have caused the length of debate that we have had. The Education Legislation Amendment Bill really only transfers appropriations from one area of legislation to another. It contains no reduction—in fact I believe there is a little additional spending that is attached to this. These nearly $780 million worth of measures are designed to improve the educational outcomes for Indigenous Australians. The education gaps that have been outlined in the parliament are inexcusable in modern Australian society. This is not the fault of the previous government alone but, I guess, the collective fault of all the governments that have preceded it, including some that, for a short period of that time, were Labor governments. We as a parliament and we as a government should be as one as we set out to remove those gaps. I note that there are some additional measures for Indigenous education included in the Schools Assistance Bill. The Schools Assistance Bill simply provides exactly what we said we would provide for non-government schools. The same piece of legislation removes funding for state government schools which is still the subject of an agreement to be finalised later this year with the state governments. This is a funding regime for non-government schools. I want to quote a couple of sentences from the contribution of the member for Swan. He said:  ... Commonwealth funding for non-government schools remains essentially unchanged He also said: ... 67 per cent, or $6.4 billion, of Commonwealth funding for schools will be provided to non-government schools. He went on to say—about something that we said we would do during the election campaign: The government has also retained the socioeconomic status—SES—funding regime ... So what is the problem? This government is putting in place for the next four years what was in place for the previous four years. We are maintaining the existing SES funding and the indexation that goes with it. What has been happening here over the last couple of days as this legislation has been debated is a real concerted effort of dog-whistling. The opposition we see in the parliament these days is more interested in developing a narrative that says, ‘The government is doing this but we think that they are going to do this.’ The reality is that we are not. In the parliament earlier today we had the member for Hinkler rise and make a personal explanation. He read to the parliament again some of his contribution to this debate. I would like to, for the third time, read a particular paragraph into the record simply because I think it deserves to be there and it tells the story. The member for Hinkler said: It is also an encouragement to some of the more affluent schools to take on a cross-section of less affluent kids by way of scholarships or reduced fees or whatever it might be. That enriches the profile of their school and it gives other kids the opportunity— and this is my emphasis— to go to good quality schools. That is what the member for Hinkler said: the SES system gives poor kids the opportunity to go to private schools which are good quality schools. Whatever he might say about having support for the state school education system as well as the private school education system is wiped away in that one sentence. I believe very strongly that state schools provide an education product easily the equivalent of the majority of private schools. Some of the private schools of course are uber wealthy and they have the capacity to provide resources that are not available to the state schools. But for a member of this parliament to stand up in here and make the comment that only by going to a non-government school will a child from a less affluent family receive a good education I think is disgraceful. 00AMU Mirabella, Sophie, MP Mrs Mirabella —That’s not what he said. HVS Sullivan, Jon, MP Mr SULLIVAN —I take the interjection from the member for Indi. That is what he said. He said: That enriches the profile of their school and it gives other kids the opportunity to go to good quality schools. Those are his words not mine. 00AMU Mirabella, Sophie, MP Mrs Mirabella —It’s all part of your class warfare. You’re just trying to create division. HVS Sullivan, Jon, MP Mr SULLIVAN —It is not my class warfare, Member for Indi; it is his class warfare. I am not standing here in class warfare. I went to a private school at high school. I have been in both the state and the private system. I support both. I have wonderful schools in my electorate, both private schools—whether they be Catholic or not—and state schools, and they do a wonderful job. The teachers in those schools do the equivalent—not better—job of the teachers in the public schools, and the students in my area are benefiting from that. I want to say a couple of quick things about schools in my area. I am pleased that the minister is in the House as I can report that the schools in my electorate are very pleased with the computers that they have received. These schools include Caboolture State High School and Caboolture Christian School, which is a low-fee non-government school. The Edmund Rice Flexible Learning Centre at Deception Bay have received computers to help them with the children they are trying to teach who have not been able to be accommodated by the mainstream schools. Northpine Christian College has also received computers. I am particularly proud of the effort that was put in by the Caboolture State High School, the Tullawong State High School and the Morayfield State High School, who formed a cluster to get one of the trade training centres. The parents in my area are very grateful for the tax refund regime, which they are starting to gather their receipts for in terms of next year’s taxation. I do not want to stand here and try to make the point that the opposition—the former government—did not fund schools. I have had the opportunity to go to a number of school events in the last 12 months to acknowledge federal government funding that the schools received as a consequence of the previous government—North Lakes State College, Caboolture State School, Narangba Primary, Narangba Valley State School and Grace Lutheran College. And next Sunday I will have the opportunity to represent the minister at the opening of the high school component of St Eugene’s, a school in my electorate where the federal government has contributed a little over $1 million. But can I say that there have been varying degrees of priority afforded to education. I go back to a document produced in 1988 by the then Queensland state government. I believe at that time Mike Ahern was the Premier. That document, to give it its full title, was Quality Queensland, building on strength: a vision and strategy for achievement and was prepared by the Queensland government. In that document they decided that the Queensland education system was sufficient to prepare students for the jobs that were available to them after they left school. That kind of inferior policy is rife in business dominated, conservative-thinking governments who see the future generations as fodder only for the profit mechanisms of their masters. People who are going to schools today should be fed the aspiration that they can take on jobs that have not been invented yet, not that they should do their schooling with a view to ending up in the jobs that are available today. As former Prime Minister Keating said once when talking to students, the job that he took when he first left school did not exist anymore. That is the way things are changing. The education revolution is about Australia’s future, but it is also about people’s futures—individuals’ futures. We need to train and inspire our children to take on these other roles. I am a little disconcerted at the concentration that has been evident in recent years on trades training, both at school and postsecondary. I think that we need to concentrate a little more, particular in the area where I come from, on conditioning our children to the idea that they may seek to do something beyond a trade course or a certificate course if that is their desire. I have had a lot to say in other forums about the need for a full university campus on the north side of Brisbane to serve Brisbane north and the Moreton Bay region. We have an excellent campus of QUT operating at Caboolture, and I am in no way critical of the work done by the administrative or academic staff there; they do a first-class job. The students achieve first-class results as well and I do not wish to diminish the workers in that university or the students in any way, but there is a limited range of opportunities available for students there. Neither of my own children were able to study a university course locally and it is quite difficult for people from our area to access universities elsewhere. I propose to say no more than that this evening other than to say that these bills, whilst they are remarkable in the amount of attention they give to the areas that are affected, really do nothing more than that. They are not making any radical changes in terms of the funding for non-government schools—it is steady as she goes. In terms of assisting our Aboriginal students to close the gap in educational outcomes, this legislation is continuing with those processes and adding to them. I commend both bills to the House. 9754 18:56:00 Ripoll, Bernie, MP 83E Oxley ALP 1 0 Mr RIPOLL —I just want to make a few short comments to put my views and my support for the Education Legislation Amendment Bill 2008 and the Schools Assistance Bill 2008 on the public record. I want to acknowledge, first, the hard and dedicated work that has been put in by a whole range of people, from the school communities, the department, the teachers and the unions through to the minister, who is ultimately responsible for these bills. I would just like to put on the record that there is a genuine desire and a genuine commitment by the Rudd government and by Labor to move forward on education. The debate of old is just that—old—and I think a bit tired. The debate I am talking about is the one we hear from time to time in this place—the class warfare debate, where it is about one school versus another school or about who gets how much funding. These are simplistic debates that do not provide a real basis for saying that we are trying to improve the lot of all our kids in the education system, regardless of their school, regardless of the area, regardless of their background and regardless of the particular funding mechanism which provides for their education. I think that ought to be the basis on which all of us in this place can have a common goal. If we talk about shared values and we talk about what is important, this issue would have to be one of the most important things of all: the way in which we provide a strong, solid basis to a fair system, which means that any young person going to any school in Australia has access to a bare minimum standard—a quality standard. That means that they will have an opportunity and a chance at life and education beyond the old hackneyed debates—the tired old debates—between people who keep raising excuses about why you cannot change the system or how you should leave the system in one particular way, to suit their own political ideologies. For me that is wrong. And I am talking about anyone on any side. I am not going to point a finger in one particular direction. I just think we ought to be a little bit more focused on the betterment of all schools. When we talk about schools I think there is a disconnect. We tend to talk about the school and forget the primary goal of the school, and that is to educate young people. For me, it should not be a matter of having to make a critical decision of which school will end up being the one that provides that opportunity. It should be a decision for parents to make based on the quality of education and, depending on the area in which they live, which school can provide that education for their child. The reality for most parents is that they just do not get a choice. It really is the school in their local region that is the sole provider. There are plenty of examples, whether it is in remote areas, rural areas, or regional areas—wherever it might be. In some areas there are more choices than in others, and again we will hear plenty of debate about all those issues, but the core value comes back to the same principle: what is the role that government should play in ensuring that there is a decent level and standard of education in this country? I certainly strongly believe that these bills are part of that process. I firmly and strongly believe that we are keeping our election promises and moving to meet the commitments we made to the Australian people in the 2007 election with these bills. It is something we have acted on very quickly and of which I am very proud. Kevin Rudd and Labor talked about and put in place a new standard. We have called it the education revolution, and we are in the process of making that revolution happen. We are doing it through a range of mechanisms: by providing more real funding than has ever been provided in the past, by providing more computers than have ever been provided before, by ensuring that teachers are recognised for the work they do and for the part they play, by working very hard to bridge the gap between those schools which have the fewest advantages and those with the most advantages and by saying, ‘We need to bring people up to a minimum standard; we need to make sure that there is a standard out in the community that is acceptable to everybody.’ We want to make sure that we bridge the gap between the highest performing students and the lowest performing students. We want to make sure that the things that we provide through our policies and through legislation are a fair reflection of how we deliver on all of those election commitments. I believe that that is what we are doing. The simplistic and tired old debates of government versus non-government should now be falling on deaf ears; they no longer should apply. Over a period of time, that is the goal; that is what we are aiming for and driving for. That is not what should be the basis of debate tonight. The bills that we have before us do a number of things, and neither is hugely controversial or a major departure from Common-wealth funding arrangements for schools. The Schools Assistance Bill will provide for continued funding arrangements for non-government schools, and future Commonwealth funding for government schools will be provided through the national education agreement, which is currently being negotiated through the Council of Australian Governments. We are not only providing for and continuing the funding with a view to reviewing those arrangements in the future but also working very closely with other governments in Australia and partnering with them to make sure that we deliver on our promises and do the best that we can for the Australian school system. This bill also fulfils the government’s commitment to retain the current system of general recurrent funding for non-government schools, the socioeconomic status or SES funding system, over the next four years. There are some minor modifications, and there will be a routine revision of the SES funding scores for the next four years. There will be no school that will receive less funding because of any reassessment of the SES score, so we have set a baseline guarantee that schools will not lose out. There are no losers in this. This is not about creating losers; this is about creating winners and making sure that funding is there for schools that need that funding. The bill also provides additional funding for non-government schools that have significant numbers of Indigenous students, and this is something that I think needs to be put on the record and clearly stated. There is a massive gap in Australia between lower performing schools and higher performing schools and also, particularly in remote and rural areas, with Indigenous students. We need to do something significant that will deliver real results to increase the number of Indigenous students who do better, who have better access and more opportunities and who become less reliant on government and more reliant on themselves through a better education. That is an important fact to consider, and part of this package that we present will go to that cause. This bill will make the maximum rate of general recurrent funding automatically apply to non-government schools in remote and very remote areas that have 50 per cent Indigenous enrolments or more. I think this is a great commitment that we are making to ensure that Indigenous students get a hand-up and some fair access. The bill also provides funding for capital grants and continues funding for existing targeted programs. These include short-term emergency assistance, education in country areas, teaching English to new arrivals, literacy, numeracy and special learning needs. The bill also provides for students with disabilities. As I said before, the funding for Indigenous students is a very important part of these bills, and the aim of the Indigenous supplementary assistance, the ISA, is to reduce the reporting and red tape for schools and provide them with increased flexibility to focus more on the educational achievement of their students and less on the administrative and red-tape provisions. This funding will be increased by $18.1 million over the next four years and will be provided through a guarantee. Together the ISA—the Indigenous supplementary assistance—and the Indigenous funding guarantee will provide $239 million over four years for the education of Indigenous students in non-government schools. There are a number of specific conditions for Commonwealth funding for schools which I think are important to note and which schools need to be aware of. Schools are basically required to act in six key areas. One is participation in national student assessments. I think we need to ensure that right across the country students are performing to a standard. You need a way to measure it, and I think a key component of that is not just the measurement but what you do with it afterwards. I am quite excited about the prospect of using this to assist schools to make sure they have access to the sorts of resources they need. Schools will also need to participate in national reporting on the outcomes of schooling within their school and in providing individual school performance reports to the minister so that the minister is in a position to be able to make a number of assessments about school performances. Schools will also need to provide plain-language reports to parents so that parents have a better comprehension and a better understanding of the way that their child is performing not only against their peers within the school environment but also on a national and collegiate basis as well. Schools will also need to provide publicly available information about their performance and be part of an implementation of the national curriculum. These are all key parts in ensuring that, while government, through legislation and funding, plays its role in ensuring that we move forward on these issues, schools also play their role. In the end, these bills represent a follow-through on our commitment to schools and the education revolution. They will ensure that we move forward in providing the best possible opportunities and outcomes for every single student in this country. No longer should the debate be about one school versus another school; it should be about making sure that every single student has the opportunities that they need. I commend the bills to the House. 9756 19:08:00 Gillard, Julia, MP 83L Lalor ALP Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion 1 0 Ms GILLARD —in reply—I thank the member for Oxley and all other members who have spoken in this debate on the Schools Assistance Bill 2008 and the Education Legislation Amendment Bill 2008. I particularly thank the member for Oxley for his personal assistance to me during the course of the debate. The Rudd Labor government is committed to creating an education revolution. Our aim is to establish this country as one of the most highly educated and skilled nations in the world. Education not only drives productivity but also empowers individuals to reach their full potential and helps overcome disadvantage. The government has made substantial progress towards these aims with the 2008-09 budget delivering $19.3 billion in investments in education, cementing the government’s commitment to trade training centres, new digital technology and a national curriculum. The Schools Assistance Bill 2008 adds further significant investment to school education, whilst the Education Legislation Amendment Bill 2008 extends the Indigenous Education (Targeted Assistance) Act 2000 so that the government can continue to make supplementary investments to contribute towards closing the gaps between the outcomes for Indigenous and non-Indigenous Australians. I thank everyone who has spoken on this debate, from both sides of the House, for their participation and I note that the debate has been thorough and wide ranging. I think that the commitment of members to speaking in this debate reflects the central role that schooling plays in our nation and, consequently, the priority that members of this House—indeed of this parliament overall—attach to it. I will respond to the claims that have been made during this debate and reiterate why these bills presented together are an essential building block in our reform agenda. In doing so, I would also underline to the House the urgency of passing them. Schools and students need this legislation to pass before the end of 2008. Without the legislation, the Australian government is unable to make recurrent payments to non-government schools and systems for the school year beginning in January 2009. I cannot imagine that any member of the House would want non-government schools to start the next school year in a situation of uncertainty. The Rudd Labor government promised certainty and stability in school funding. We cannot leave these schools, students and families in a position of not knowing what might happen just because it might suit the opposition, or indeed other political parties in the Senate, to seek to delay passage of the bill. As the Independent Schools Council of Australia among others have recognised, it is urgent and imperative that this bill is passed in a timely way and that the various stakeholders work together constructively to pass it. They are wise words which should be considered by all members of this House and certainly by all members of the Senate. Scrutiny and transparency should, of course, always be respected in the parliamentary process, but delay for the sake of political point-scoring should not be a feature of that process. The Schools Assistance Bill will appropriate an estimated $28 billion in Commonwealth funding for non-government schools over 2009-12, including supplementary assistance for Indigenous students, and will implement the government’s commitment to provide stability and certainty of funding. A further $779 million is estimated to be appropriated under the Indigenous Education (Targeted Assistance) Act 2000 through the Education Legislation Amendment Bill 2008. These bills have been introduced in parallel with the development of new financial arrangements being negotiated between the Commonwealth, state and territory governments through the Council of Australian Governments. They will be reflected in the national education agreement that we will complete later this year. The COAG reform framework means that for the first time all governments in Australia will agree to a single set of objectives, outcomes, outputs and targets—and, hence, educational priorities and reform directions—for the school system. The Australian government considers that the COAG reform agenda must deliver real change in three core areas: it must raise the quality of teaching in our schools; it must help ensure all students benefit from schooling through strategies based on high expectations of attainment, education and transitions for every student, especially in disadvantaged school communities; and it must improve transparency and accountability of schools and school systems at all levels. These two bills are an essential step in delivering that change. Before the 2007 election, we committed to improving transparency in Australian schooling through national testing, easy to understand reports for parents and public reporting on the performance of schools. A central feature of funding arrangements for 2009 to 2012 is therefore a simpler, stronger performance information and reporting framework for non-government schools which will be consistent with the conditions required of government schools under the national education agreement. This transparency framework will apply equally and consistently to non-government and government schools. The requirements in this bill focus strongly on five features that are central to good reporting to parents, the community and government: national testing, national reports on the outcomes of schooling, provision of individual school information, reports to parents and publication of information by schools. This bill contains provisions to ensure that non-government schools receiving Commonwealth funding will provide a range of information in readily accessible formats which enable fair and transparent reporting. These are needed in order to give parents information about how their child and their school are doing to support them in making the right choice of school and in order to guide resources and policy decision making towards the greatest possible effectiveness and improvement. Transparency about the income received from different sources is of obvious importance in understanding the effectiveness of individual schools and in treating all schools, government and non-government, consistently. There have been claims that the bill will require schools to publicly disclose every individual item of income. In fact, the bill makes it possible for income to be reported consistently by source in a way that will be compatible with the existing regulatory requirements to report to the department through a financial questionnaire. We are committed to reducing the regulatory burden on schools and we will examine, through the regulations and guidelines for this act, how we can ensure that the provision of information about income can be as efficient as possible. 9V5 Pyne, Chris, MP Mr Pyne interjecting— 83L Gillard, Julia, MP Ms GILLARD —The shadow minister for education is inquiring of me by way of interjection whether we will commit to not publishing it. The government is committed to transparency. We believe that transparency is important. The same transparency framework will apply to non-government schools and government schools. Opposition members interjecting— 83L Gillard, Julia, MP Ms GILLARD —It is interesting that interjections are coming from the Liberal Party, which at one point used to proudly say that it believed in transparency. Clearly, now it believes that secrecy should be associated with education. But we will not allow critics of transparency to obscure the purposes of our reforms. Only by understanding the total amount of funds at the disposal of individual schools is it possible to understand the relationship between resourcing and educational outcomes. The opposition have claimed in this debate that the income of a school is irrelevant to understanding its performance. I find this claim nonsensical. If we are to identify accurately where the greatest educational need across the Australian community is located and encourage excellence in every school, we need a basis for fair, consistent and accurate analysis of how different schools are doing. This bill includes performance reporting at individual school level. The government has repeatedly stated that such reporting will not take the form of simplistic league tables. Instead, any public reporting would show how schools are doing compared to other like schools that share the same student characteristics. States and school systems are currently working with the Australian government to examine which forms of data are relevant to understanding the performance of schools, given their overall circumstances and the students that they serve. A particular emphasis on Indigenous students will feature in performance data to guide improvements in closing the educational gap between Indigenous and non-Indigenous children. Implementation of greater transparency will be supported by the recent agreement by the Council of Australian Governments to the establishment of a new national education authority, the Australian Curriculum Assessment and Reporting Authority. That will bring together for the first time the functions of curriculum, assessment and reporting at the national level. The new national curriculum will provide a clear and explicit agreement on the curriculum essentials that all young Australians should have access to, regardless of their socioeconomic background or the location of their school. In this bill, the government is not requiring detailed adherence to a rigid, line-by-line program of curriculum study. Instead, it is making clear that the national curriculum, once agreed and completed, will be compulsory. Consideration will be given to whether some existing curricula meet the requirements laid down by the new curriculum framework. What is not open for negotiation is the idea that a world-class curriculum will be an optional extra for schools that are receiving significant public funds. The national curriculum will not be a straightjacket for schools. It will provide for flexibility and scope to allow schools and teachers to implement its content and achievement standards in appropriate ways at the local and school level. It should not interfere with the ability of independent schools to continue to offer local curriculum arrangements within the requirements of the curriculum essentials of the national curriculum. A further erroneous claim in relation to the bill has been made. That claim is that it enables the minister to in some way capriciously withhold money from a school that has an unqualified audit report. I indicate for the benefit of the House— 9V5 Pyne, Chris, MP Mr Pyne —Qualified. 83L Gillard, Julia, MP Ms GILLARD —As I understood the opposition’s claims—and I have its second reading— 9V5 Pyne, Chris, MP Mr Pyne —Qualified for reasons other than financial viability. 83L Gillard, Julia, MP Ms GILLARD —Right. I have the second reading amendment. I can clarify this for the shadow minister at the table. According to his second reading amendment—which has been foreshadowed and circulated and which will be moved later in the debate—he is apparently concerned about a: hidden agenda evidenced by: (a)   granting greater power to the Minister to delay or end funding to non-government schools because of an audit qualified for non-financial reasons; Can I provide to him the explanation for the provision in the bill. The explanation is simply this: it is possible for an auditor to submit an unqualified report—that is, unqualified directly in the sense of an auditor’s qualification—that still expresses concerns about the financial viability of the school. The auditor may report that the school’s accounts provide a fair and true representation of the school’s finances; however, without qualifying their opinion, the auditor may also express concerns about the school body’s viability such as where it is highly dependent on the continued goodwill of its financiers in which funds have been borrowed on better-than-commercial terms. It is in relation to that kind of matter that the provision is being sought—a probity provision, something related to appropriate and proper use of government funds and something the shadow minister is obviously confused about. The Schools Assistance Bill will make important changes for Indigenous students in non-government schools. Non-government schools where 80 per cent or more of the students are Indigenous and non-government schools in very remote areas where 50 per cent or more of the students are Indigenous will receive maximum funding. This additional funding will enable Indigenous students to receive a higher level of support and to achieve better educational outcomes—something I trust every member of the House is able to support. Bringing supplementary Indigenous education funding into the Schools Assistance Bill and streamlining the administrative arrangements that support that funding will reduce the administrative burden and increase flexibility for providers so that they can get on with the vital job that we want them to do: closing the gap between Indigenous and non-Indigenous Australians. We trust that the impact on Indigenous Australians will be positive; 2,157 Indigenous students in non-government schools will attract maximum funding under the bill. COAG agreed that as a national priority we must aim to halve the gap in literacy and numeracy outcomes over the next decade and halve the year 12 attainment gap between Indigenous and non-Indigenous Australians by 2020. This will not be achieved unless we create the conditions for schools to do things differently to meet these targets. The Education Legislation Amendment Bill extends the Indigenous Education (Targeted Assistance) Act 2000, which also enhances the government’s ability to create the right conditions for change. In summarising the debate I also note that, under the Schools Assistance Bill, most approved authorities will be better off financially but, importantly, no approved authority will be worse off. Independent schools can decide on the best way to support their students. Where schools are in a cluster association with each school contributing resources, they will not be prevented by this legislation from continuing this arrangement in the future. The legislation ensures that states pass the funding to approved authorities in a timely manner. The legislation makes no changes to the SES funding model used to calculate the allocations to the non-government sector. Indexation is also calculated in the same way as for the previous quadrennium. One change is the discontinuation of establishment grants, and this has been referred to during the debate. Establishment grants were introduced in 2001 as part of the socioeconomic status funding arrangements for non-government schools. The additional funding was provided to allay independent non-government school concerns about establishing new schools with funding levels based on their SES scores in competition with Catholic systemic schools, which at the time were not funded in the same way as the rest of the sector. When in 2005 Catholic systemic schools became part of the SES funding arrangements, the rationale for establishment grants continuing was weakened. A survey of the non-government schools sector undertaken as part of the evaluation of the Establishment Grants Program showed that school operators did not base decisions about opening up a new school on the availability of establishment grants funding. For example, the following quote is typical of the views expressed during the evaluation: The grant is too small to influence such a major decision as opening a new school. 9V5 Pyne, Chris, MP Mr Pyne —Rubbish! 83L Gillard, Julia, MP Ms GILLARD —That is a quote from a person involved in the process, not from me. I would also like to correct the assertion that this government was responsible for the demise of the Investing in Our Schools program. The previous Prime Minister, Mr John Howard, made it clear that the last round of funding was the final round. We need to build in our schools a culture of high expectations for students and teachers. This culture must also be matched by effective transparency and accountability mechanisms that meet the needs of parents, policymakers and the broader community. The Schools Assistance Bill 2008 and the Education Legislation Amendment Bill 2008 are critical elements in this national agenda, and I commend the bills to the House. Question agreed to. Bill read a second time. Message from the Governor-General recommending appropriation announced. 9761 Ms GILLARD (Lalor —Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion) 19:29:00 —by leave—I move: That this bill be now read a third time. Question agreed to. Bill read a third time. 9761 Bills R3093 9761 Debate resumed from 24 September, on motion by Ms Gillard: That this bill be now read a second time. 9761 19:29:00 Pyne, Chris, MP 9V5 Sturt LP 0 0 Mr PYNE —I do not wish to delay the House at great length. I have given my speech in the second reading debate on the Schools Assistance Bill 2008 and have outlined the opposition’s reasons for their concerns with respect to the entire bill. There will be a consideration in detail period where the opposition will move three amendments at eight o’clock, but at this point of the debate I would like to move the second reading amendment standing in my name. I move: That all words after “That” be omitted with a view to substituting the following words: “while not declining to give the bill a second reading, the House: reaffirms its commitment to providing genuine choice in education opportunities for parents and students through both  government and non-government schooling; notes that the Government committed to continuing the socio-economic status  (SES) model of funding for non-government schools until 2012 and that, while this bill fulfils that commitment, it contains a hidden agenda evidenced by: granting greater power to the Minister to delay or end funding to non-government schools because of an audit qualified for non-financial reasons; requiring adherence to a national curriculum without flexibility that puts at risk the uniqueness of Steiner, Montessori, International Baccalaureate, University of Cambridge International Examinations and special needs schools; and forcing non-government schools to comply with a requirement to inform the Minister of every funding source to a school or an associated body that can be published—information which is both superfluous to the operation of the SES model, and is the Trojan Horse from which opponents of the SES model will head a campaign to remove it through the 2010 review; and condemns the Government for ceasing funding for new non-government schools establishment grants, and urges the Government to reconsider this Budget decision to ensure that parents, particularly in new communities, across Australia will be able to access choice in their children’s education”. 10000 Andrews, Kevin (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. KJ Andrews)—Is the amendment seconded? 00AMM Hartsuyker, Luke, MP Mr Hartsuyker —I second the amendment and reserve my right to speak. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The original question was that this bill be now read a second time. To this the honourable member for Sturt 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. There being more than one voice calling for a division, in accordance with standing order 133 the division is deferred until after 8 pm. Debate adjourned. 9762 Bills R3081 Cognate bill: 9762 Bills R3082 9762 Debate resumed from 25 September, on motion by Mr Albanese: That this bill be now read a second time. 9762 19:33:00 Truss, Warren, MP GT4 Wide Bay NATS Leader of the Nationals 0 0 Mr TRUSS —The Interstate Road Transport Charge Amendment Bill (No. 2) 2008 amends the Interstate Road Transport Charge Act 1985. These amendments permit the making of regulations to apply new registration charges to the five per cent of heavy vehicles registered under the Australian government’s Federal Interstate Registration Scheme, or FIRS. These new charges were agreed to by the Commonwealth, state and territory transport ministers at the Australian Transport Council meeting on 29 February 2008. The states and territories have already implemented the charge schedule on heavy vehicles under their registration systems. Consequently 95 per cent of Australia’s heavy vehicle fleet are already operating under the revised registration schedule. The Interstate Road Transport Charge Amendment Bill (No. 2) 2008 also updates some definitions contained in the Interstate Road Transport Act 1985 and establishes a disallowable charge-setting mechanism based on regulation that will stipulate the table of charges or an annual adjustment process. The FIRS provides an alternative to state based registration for heavy vehicles weighing more than 4.5 tonnes and is designed to provide uniform charges and operating conditions for heavy vehicles that carry interstate goods exclusively. Currently slightly more than 21,000 heavy vehicles in Australia are registered under the FIRS. In the case of the ACT, trucks locally registered are subject to the Road Transport Charges (Australian Capital Territory) Act 1993. This act applies charges that are calculated on the same basis as trucks registered under the FIRS. In the ACT there are 2,549 trucks locally registered, of which 91 per cent are rigid. This means the vast majority of ACT-registered truck owners will see their registration fees go down if the ACT is able to apply the new charges agreed to by the Australian Transport Council. Moreover, in spite of the limited application of the FIRS to Australia’s heavy vehicle fleet, the coalition recognises that not only does it promote regulatory consistency for vehicles solely involved in interstate operations but also it is a scheme that provides some competition and discipline in the heavy vehicle industry. When an earlier bill on this issue was presented to this place, I raised a range of concerns. Earlier this year, members may recall, we debated the Interstate Road Transport Charge Amendment Bill, which sought to implement these registration charges. The previous bill contained some provisions which were unacceptable to the opposition parties, and the bill was defeated in the Senate. One provision was the requirement that the Commonwealth must apply the schedule of charges for registration of heavy vehicles as agreed to by the Australian Transport Council. This provision in the previous legislation meant the Commonwealth lost its discretion to determine its own charges upon federally registered trucks and hence the freedom to impose competitive pressure and discipline on state heavy vehicle fees. The opposition believes that competitive pressure is essential to encourage efficiencies and a rational state based charge-setting regime. In addition, the existence of an alternative registration scheme can be used to place pressure on the states to deliver commitments to uniform transport regulations or in other areas. The opposition acknowledges that the government has recognised this flaw in the previous legislation and has removed it from the bill. The previous legislation also included an annual adjustment component. This annual adjustment mechanism was to be based on a road expenditure formula. The problem with this proposal was that the formula is a particularly expensive one for the trucking industry to wear. It is common knowledge that costs associated with road construction and maintenance, such as steel, concrete and asphalt, are skyrocketing. In other words, the automatic adjustment component locked in an annual increase likely to be well above the CPI. An arbitrary formula of this nature was not acceptable to the opposition. The opposition recognises the pressure under which the heavy vehicle sector is operating. Since the election of the Rudd government, the daily life of the average Australian has got tougher, with rising fuel and other costs and now an economic downturn. These stresses are falling particularly hard on those who daily haul the essentials of life to supermarkets and keep our industry moving. There are many very small operators in the trucking industry. Many one-man businesses, many families are heavily mortgaged to maintain their transport businesses. They can ill afford increased costs, in particular locked-in increased costs year by year. The opposition is pleased that the government has also responded to this concern. We note that in the Interstate Road Transport Charge Amendment Bill (No. 2) 2008, subsection 5(3), the charge adjustment process will be determined by a separate disallowable instrument. The offending section, which provided charges to be determined by an automatic adjustment process, has not been included in this bill. The opposition will always be uncomfortable with an indexing process that removes from parliamentary scrutiny annual tax increases. The opposition would like to point out that the revised registration charge that is now being levied across almost all of Australia’s heavy vehicle fleet will ultimately generate an extra $88 million per annum to the coffers of the states and territories. The opposition expects that the states and territories will use this extra money appropriately. That is, they will spend the money on their roads. It is essential that Australia’s truckies see a return on this charge. We expect the Rudd government to use its self-proclaimed good offices with its state colleagues to ensure that this occurs. The coalition serves notice that it will not support any future increases in registration fees unless there is clear evidence that the states are spending this extra money on roads and services for the trucking industry. It is quite clear that over the years the states have been reluctant to expend additional funds on key facilities for the trucking industry. That must stop. If the states expect the Commonwealth to agree to increased registration fees then they must deliver something for the money they are receiving. With this qualifier, the opposition acknowledges that the government has responded to many of our concerns regarding this legislation. The opposition will of course carefully scrutinise any new charge-setting regulations and we will oppose them should they contain an automatic indexation provision. On these understandings, we will not oppose this bill. I turn now to the Road Charges Legislation Repeal and Amendment Bill 2008. This bill does two things. It repeals the Road Transport Charges (Australian Capital Territory) Act 1993 so that the ACT may set its own heavy vehicle charges. The opposition believes that the ACT should be free to make such decisions and we support this element of the legislation. As I mentioned in my earlier remarks, this change will actually result in lower registration fees for most trucks in the ACT. The second part of the bill relates to a different issue and amends the Fuel Tax Act 2006 to implement a road user charge rate of 21c a litre from 1 January 2009. The road user charge is levied on the basis that the costs arising from the industry’s use of the road system should be recovered. Both the trucking industry and the opposition accept this principle. What is important is that the amount is seen to be fair and that it is spent on roads. Motorists and the trucking industry currently pay 38.143c a litre in tax for every litre of fuel they purchase. However, the trucking industry may claim a partial rebate under the Fuel Tax Act 2006. This act sets a road user charge for the heavy vehicle sector which is intended to recover the cost attributable to the industry’s use of the road system. Trucking operators receive a rebate through the tax system of the difference between the fuel tax they pay at the pump and the road user charge. The road user charge is currently 19.633c per litre. The rebate is therefore 18.510c per litre. Should the road user charge be set at 21c per litre, the rebate would be 17.143c per litre. That increase would be the result of a decision by the Australian transport ministers on 29 February 2008 to support the National Transport Commission’s fourth heavy vehicle charges determination, a set of charges levied upon the heavy vehicle industry based on the principle of cost recovery. The government has also attempted to implement this tax increase before. Members may recall, in March of this year, when introducing the Interstate Road Transport Charge Amendment Bill 2008, the Minister for Infrastructure, Transport, Regional Development and Local Government flagged the intention of the government to implement the new heavy vehicle determination and increase the road user charge from 1 January 2009. He also stated that the road user charge was to be indexed annually to the same road construction formula that was to apply to the registration charges. The coalition is concerned that this is an attempt by the Rudd government to reintroduce the indexation of fuel excise. I am sure many remember that the Keating government introduced the indexation of fuel excise and that that index was abolished by the coalition government in 2001. Our position on this matter has not changed. We remain opposed to fuel excise indexation. That is why, with regard to the road user charge, the opposition in the other place disallowed relevant regulation made under the Fuel Tax Act 2006 on 14 May this year which would have effectively introduced fuel excise indexation principles to the road transport sector. In this bill the government has removed the link to indexation. The Road Charges Legislation Repeal and Amendment Bill would repeal section 43-10(5) of the Fuel Tax Act 2006 and add a new subsection which would set the road user charge at 21c per litre and enable the government to make regulations at another time that may prescribe a method for indexing the road user charge. This of course is a disallowable instrument. The opposition acknowledge that the government has made this change. We believe it to be a constructive improvement. The industry, however, remains concerned about the manner in which the National Transport Commission develops the road user charge. Its consultative processes appear flawed and it refused to disclose to the trucking industry much of the data and the modelling it used to develop the charge. I will come back to this point a little later. The opposition is also concerned that the government has linked these bills to the implementation of its announced $70 million four-year Heavy Vehicle Safety and Productivity Package. The opposition calls on the government to stop this tactic of blackmail. Threatening to block the $70 million package—inadequate as it is—should these bills not be passed is grubby politics and harms the safety of those who work on our roads. It suggests that the government is more interested in collecting taxes than it is in industry productivity and safety. Governments collect huge revenue from taxes on motorists and the transport industry. More of that money should be allocated for roads. New tax increases are not required—there is more than enough money already collected from the trucking industry to be able to fund this $70 million package and, indeed, to do more. We all recognise that it is important to do more to improve the road infrastructure network, to ensure the safety of truck operators and other motorists on the roads but also to ensure that these vital networks to drive a strong Australian economy are efficient and reliable. Secondly, there are no performance benchmarks in this package. There is nothing, for example, that stipulates how many roadside facilities will be built, or where. How can truck operators be sure they will actually get the benefits being traded for these cost increases? Likewise, the government has not linked the new charges to obligations on the states to deliver on their promises to harmonise transport regulations. What is the government doing about the appalling failure of the states to eliminate cross-border rule changes which so impede the development of an efficient and cost-effective national road transport system? Labor said when elected to office, delivering wall-to-wall Labor governments around Australia, that it would fix interstate inconsistencies and state differences. In transport reform, the Rudd government has failed dismally, and it is now allowing another opportunity to deliver on reform to pass. To my mind, the key weakness of these bills is that they do not address the fundamental problems of regulatory reform. They do not take the opportunity to improve efficiency and to put pressure on the states to deliver on their oft-repeated promises to deliver consistency in road transport regulations. This problem, as I have discussed before and will again, is that the states have failed to implement nationally consistent transport regulations. There are many examples, but a pressing and urgent one is the heavy vehicle driver fatigue reforms which were agreed to by the Australian Transport Council in February 2007. These laws are designed to provide a national standard for managing heavy vehicle driver fatigue. They are based on a national template approved by the Australian Transport Council last year. The states agreed to these measures, but now they are failing to deliver them. The trucking industry, which reluctantly accepted the new laws, is not getting the uniformity or the new infrastructure it was promised. But that has not stopped the states, or many of the states, from proceeding with implementing the laws. The states and territories have responsibility for the regulation of heavy vehicles in their jurisdictions. They have to pass the required heavy vehicle fatigue management laws and implement them—and that is where the problems begin. Let us look at some of the bizarre anomalies. Firstly, despite the promises, the laws are not being implemented nationally. New South Wales, Victoria, Queensland and South Australia commenced implementation of the new laws on 29 September. Tasmania and the Northern Territory plan to implement them later. The Australian Capital Territory and Western Australia are not implementing them at all. Secondly, there are differences in the transitional arrangements. For Queensland, New South Wales and South Australia, drivers who operated under the previous basic regulated hours of 12 hours driving plus two hours extra work have six months from 29 September to move to the new standard of 12 hours work in total. But not so in Victoria. In that state there are no transitional arrangements for drivers on standard hours. As of 29 September, drivers in Victoria on standard hours are only able to work 12 hours a day. What is more, this arrangement will apply to interstate drivers coming in from New South Wales and South Australia. So if they drive from Victoria into South Australia they get an extra two hours, but not if they go from South Australia into Victoria. This is an example of the utter ridiculousness of these regulations. Another example is the different treatments of short rest breaks. Under section 47 of the model law, a driver working standard hours must take a short break after 5¼ hours of work. A driver may make a defence against a breach of this provision if there was no suitable place to be found for a rest and the driver found a rest stop within 45 minutes. In New South Wales or Victoria this is not a defence. This is in spite of the fact that a recent audit of 12,700 kilometres of Australia’s major highways found that the states and territories have largely failed to meet the National Transport Commission guidelines regarding the provision of rest stops. As I have said before in this place, surely New South Wales and Victoria can be more flexible, especially since they have not provided adequate rest stops. How can a government reasonably pass laws requiring trucks to stop at rest areas that do not exist? Another baffling difference is the treatment of employers should their drivers be breached under the heavy vehicle fatigue management laws. In New South Wales, Queensland and South Australia, if an employer can satisfy a court that they have taken reasonable steps to ensure that their drivers do not break the laws, they have a defence. This means a court will not necessarily attribute liability to the employer in the case of a breach by one of their employees. In Victoria, no such defence is available to the employer. Let us look at the work diary. Under section 56, a truck driver engaged in standard hours only has to carry a work diary if he or she drives more than 100 kilometres from their home base or has done so in the last 28 days. So remembering that heavy vehicle driver fatigue laws apply to trucks with a gross vehicle mass of over 12 tonnes, the driver of a large removal truck working a regular day delivering furniture around a regional centre should not have to worry about filling out a work diary. In Victoria and South Australia, drivers on standard hours who work within 100 kilometres of their base do not have to fill out a work diary. This is consistent with the national model legislation. In Queensland the distance is 200 kilometres before a driver must fill in a work diary. In New South Wales, the state government has insisted that all heavy drivers fill out a work diary even for local work. However, New South Wales has now issued a last-minute exemption so that drivers undertaking work within 100 kilometres do not need a diary. Those who are primary producers must fill out a diary only if they work more than 160 kilometres from their base. So in New South Wales we have the extraordinary fact that there are inconsistencies within the state between drivers performing the same task, let alone between states. I previously mentioned other baffling inconsistencies in the treatment by the states of national road freight. For example, Western Australia, South Australia and Queensland have designated road train routes and make it possible for trucks to pull highly efficient B-triples across the state. B-triples are highly efficient vehicle combinations, up to 30 per cent more productive than B-doubles. They also help to get trucks off our roads since two B-triples is equivalent to five semitrailers. Unfortunately, New South Wales refuses to open up its road system to those vehicles in spite of a COAG decision in 2006 that the states and territories would establish a B-triple network. New South Wales simply refuses to recognise B-triples as a legitimate vehicle combination able to operate on road train routes. Victoria only allows strictly limited B-triple use between Broadmeadows and Geelong, and then only for the trucks moving car components for the Ford motor company. These odd policy decisions by New South Wales and Victoria mean that B-triple freight movements cannot take place on a national basis. This is despite the fact that the road freight task is expected to nearly double by 2020. There are other anomalies too. One is the glacial rate of take-up by some states of common higher mass limits for trucks with road friendly suspension. As far back as 1999 the states and territories agreed with the Commonwealth that Australia should develop approved routes for trucks with road friendly suspension. This is an important reform, promising to generate freight efficiencies worth hundreds of millions of dollars and place Australia in the forefront of the world in pioneering and applying new developments in pavement friendly technologies. According to the reform, an approved road network for trucks fitted with state-of-the-art suspension systems would roll out as specific roads and bridges were protected. Now, after nearly 10 years, Victoria, Western Australia, South Australia and the Northern Territory and increasing areas of Queensland have developed an extensive approved road network for these types of trucks. But where is New South Wales? New South Wales has been blocking this initiative ever since it started, imposing unique and difficult regulations that effectively make it impossible for vehicles to qualify. New South Wales continues to refuse to publish its high mass limit network and open up in a transparent way its approval processes to drive on it. Another inefficient agony in our so-called national road freight system is the different treatment of widths of loads. For example, states cannot agree to a harmonised approach to minor overwidth roads, such as occurs with hay bales. Drought and even average seasonal variations in Australia generate large amounts of hay movement across state borders. However, in New South Wales rigid semitrailers and B-doubles may be loaded to a width of 2.83 metres only, but next door in Victoria these trucks can be loaded to three metres. Beware the farmer in Victoria who dares to load his truck with hay as wide as legally possible who then drives into New South Wales. I conclude with the bizarre treatment of indivisible and divisible loads. If you are a truckie carrying an indivisible load—that is, a load that cannot be physically broken down, like a piece of binding machinery—states will allow you oversized access with conditions. If you are unfortunate enough to carry a divisible load, such as plasterboard, you must stack it to a narrow width of 2.5 metres only. This forces the load to be stacked higher, decreasing roll stability. A rational mind would tell you that if divisible loads were allowed some flexibility, a safer and more efficient truck would be on the road. I continue to call upon the Rudd Labor government to deal with these frustrating and expensive anomalies in Australia’s transport sector. I state the obvious: Australia is a nation and is a national economy. It is time that the regulatory environment for Australia recognised this fact. The government needs to take this matter seriously and deliver on its rhetoric that it will be able to work effectively with the states to deliver nationally consistent laws. Is it any wonder that the truck industry is angry about increased charges being imposed upon it when it is not getting its share of the bargain delivered? The trucking industry is prepared to pay its own way, but it expects to get a fair deal and that has not been happening. The opposition has proposed a series of amendments to the Road Charges Legislation Repeal and Amendment Bill 2008. These amendments will address a number of concerns we have regarding the government’s approach to the charge-setting regime on the heavy vehicle industry. The first is to ensure that indexation of charges is not re-introduced by stealth. The second is the management of such charges in the future and the implementation of arrangements which will guarantee the transparency of the road-user-charge price-setting mechanism. The third is the issue of heavy vehicle rest areas and the need to put in place a performance guarantee that ensures at least 50 new rest areas are built every year on the national road network. The fourth responds to the matter I have just discussed—the absurd and contradictory state based transport regulations, which must be reformed. Our support for this bill will be conditional on the acceptance of these amendments. Debate adjourned. 9768 Bills R3093 9768 Debate resumed. 10000 Scott, Bruce (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. BC Scott)—In accordance with standing order 133, I shall now proceed to put the question on the motion moved earlier today by the honourable member for Sturt on which a division was called for and deferred in accordance with standing orders. No further debate is allowed. Question put: That the words proposed to be omitted (Mr Pyne’s amendment) stand part of the question. 20:05:00 The House divided.     (The Deputy Speaker—Hon. BC Scott) 73 Adams, D.G.H. Bevis, A.R. Bidgood, J. Bird, S. Bradbury, D.J. Burke, A.E. Burke, A.S. Butler, M.C. Byrne, A.M. Campbell, J. Champion, N. Clare, J.D. Collins, J.M. Combet, G. Crean, S.F. D’Ath, Y.M. Debus, B. 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. Gray, G. Grierson, S.J. Griffin, A.P. Hale, D.F. Hall, J.G. * Hayes, C.P. * Irwin, J. Jackson, S.M. Kerr, D.J.C. King, C.F. Livermore, K.F. Marles, R.D. McClelland, R.B. McKew, M. McMullan, R.F. Melham, D. Murphy, J. Neal, B.J. Neumann, S.K. O’Connor, B.P. Oakeshott, R.J.M. Owens, J. Parke, M. Perrett, G.D. Plibersek, T. Price, L.R.S. Raguse, B.B. Rea, K.M. Ripoll, B.F. Rishworth, A.L. Roxon, N.L. Saffin, J.A. Shorten, W.R. Sidebottom, S. Smith, S.F. Snowdon, W.E. Sullivan, J. Symon, M. Tanner, L. Thomson, C. Thomson, K.J. Trevor, C. Turnour, J.P. Zappia, A. 55 Abbott, A.J. Andrews, K.J. Bailey, F.E. Baldwin, R.C. Billson, B.F. Bishop, B.K. Bishop, J.I. Briggs, J.E. Broadbent, R. Chester, D. Ciobo, S.M. Costello, P.H. Coulton, M. Farmer, P.F. Forrest, J.A. Georgiou, P. Haase, B.W. Hartsuyker, L. Hawke, A. Hawker, D.P.M. Hull, K.E. * Hunt, G.A. Irons, S.J. Jensen, D. Johnson, M.A. * Keenan, M. Laming, A. Ley, S.P. Lindsay, P.J. Marino, N.B. Markus, L.E. May, M.A. Mirabella, S. Morrison, S.J. Moylan, J.E. Neville, P.C. Pearce, C.J. Pyne, C. Ramsey, R. Randall, D.J. Robb, A. Robert, S.R. Ruddock, P.M. Schultz, A. Secker, P.D. Simpkins, L. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Truss, W.E. Tuckey, C.W. Vale, D.S. Washer, M.J. Wood, J. * denotes teller Question agreed to. Original question agreed to. Bill read a second time. Message from the Governor-General recommending appropriation announced. 9769 Bill—by leave—taken as a whole. 9769 20:11:00 Pyne, Chris, MP 9V5 Sturt LP 0 0 Mr PYNE —by leave—I move opposition amendments (1) to (3): (1)    Clause 15, page 20 (lines 4-8), omit paragraph (c), substitute:               (c)    if a law of the Commonwealth or a State requires the body or authority to be audited - the relevant audit expresses concern about the financial viability of the body or authority. (2)    Clause 22, page 25 (lines 3-11), omit the clause. (3)    Clause 24, page 26 (lines 5-16), omit subclause (1), substitute:          (1)    A funding agreement must require the relevant authority for the non-government school, or other non-government body, to ensure that a report (or reports), of a kind (or kinds) required by the Minister, is given to the Minister in relation to programs of financial assistance provided under this Act, so far as they relate to the relevant authority. It is not the intention of the opposition to unnecessarily delay the passage of this bill through the Senate. Nor is it our intention to stop the bill from having its effect from 1 January, but it certainly is our intention to hold fast to these three amendments, which will improve an otherwise flawed bill. We would hope that the government would seriously consider adopting the three amendments that the opposition has moved. They deal with proposed sections 15, 22 and 24 of the bill. I will start with section 24, which relates to funding disclosure. The bill marks a very considered change from the policy of the previous government with respect to funding disclosure. The Minister for Education pointed out quite correctly in the debate that the financial statements required by non-government schools at the moment do require a certain level of funding disclosure. They are made available to the minister, and therefore the department, as part of the records of the school and they do go some way towards providing quite detailed financial information. This bill, however, which requires the disclosure of all funding sources from the school or any body associated with the school, would allow for the publication of that information. This is a critical change and is the hidden agenda contained in this bill. We all know that the minister and most members of the Labor Party privately oppose the socioeconomic status model of funding for non-government schools. They are on the record opposing it. They opposed it as recently as 2004, when they introduced their own new policy, which was the national resource index. They oppose the SES model because they do not in their heart of hearts really support government funding for non-government schools. During the previous government, the information that was available to the government about the funding sources of non-government schools was never published. Under this government, that information would be published—the minister confirmed that in the second reading debate. It neatly ties in with the review being planned for 2010 of the SES model for non-government schools. Blind Freddy could tell you that the government, and its fellow travellers in the Australian Education Union and elsewhere amongst the left-wing ideologues who have opposed the SES model, will use this information about non-government schools to mount a case and an argument against the SES model—to throw the model out and replace it with a national resource index. Non-government schools should be very, very afraid of this information being in the hands of the Labor Party. They had nothing to fear from us, but the hidden agenda in the Labor Party’s bill is to take the SES model apart. The member for Throsby alluded to it. Julia Irwin, the member for Fowler, alluded to it in her speech. So our most important amendment is to remove the funding disclosure requirement for publication contained in this bill. Secondly, the bill contains a mandated national curriculum. The opposition support a national curriculum but we do not support what this bill requires, which is an inflexible, mandated national curriculum which puts at risk the Steiner, Montessori, International Baccalaureate, special needs schools which care for those people who have special needs and other schools that have a unique curriculum. How does the curriculum of those unique schools fit into the mandated, inflexible national curriculum that is tied to funding contained in this bill? That has not been cleared up by the government in this debate and it should strike fear into the hearts of the principals and governing bodies of those kinds of unique schools. Finally, this bill allows the minister to delay or stop funding to a school that has received a qualified audit on grounds other than financial viability. That is a change in this bill that has never been seen before under the previous government. If an auditor qualifies an audit for governance reasons that have nothing to do with financial viability, it puts the power in the hands of the minister to delay or reject funding for that school. That is a new and far-reaching power which the opposition says should be removed from this bill. For that reason, I call on the government to support the amendments that the opposition has moved. 9771 20:17:00 Gillard, Julia, MP 83L Lalor ALP Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion 1 0 Ms GILLARD —I rise to oppose the amendments moved by the shadow minister for education. I would have to say that when the show The X Files was on TV, I was a fan of it. The difference between me and the shadow minister for education is that he is suffering a delusion that he is in it. He is seeing conspiracy theories everywhere, spun out of the air, and hidden agendas. That is what these amendments are directed to—not the facts and not anything that is about a child’s education but, rather, a conspiracy theory. Why is the shadow minister engaged in a conspiracy theory? Well, better for the shadow minister from the Liberal Party to be engaged in a conspiracy theory about the future than to try and defend the shameful legacy that the Howard government left to this nation in education: declining standards against our competitors, as revealed by international testing; no national curriculum; no transparency; no action on teacher quality; and children not learning with the learning tools of the 21st century like computers. It is a shameful record and I can understand why the shadow minister for education is trying to weave a conspiracy theory out of thin air to try and cover up that legacy of neglect, decline and decay that characterised the Liberal Party in government. Let us just look at the facts as opposed to the shadow minister’s conspiracy theory. The facts are simply these: the government are committed to a new era of transparency. Yes, it will include transparency about funding sources; and, as the government have made absolutely clear, every condition we put on non-government schools we will also apply to government schools. The same transparency framework will apply. This will enable people to understand across the nation for the first time what is happening in Australian schools. We understand that the Liberal Party was a complete failure when it comes to transparency. Apparently that record of failure has now morphed into a policy position of opposition. We believe in being honest with the Australian people. We will ensure that there is a transparency framework which applies equally to government and non-government schools. On the question of the national curriculum, yes, the Liberal Party members should be hanging their heads in shame because of their lack of action on the national curriculum. Of course for the Liberal Party the curriculum was never about the quality of a child’s learning; it was all about whether or not they could get their name in the headlines of the newspapers. It was all about whether or not they could parade their credentials in the history wars to other Liberal Party members. Their intervention in curriculum debates was all about themselves and all about the political positioning of the Liberal Party. The one thing it was never about was the quality of education in Australian schools. 9V5 Pyne, Chris, MP Mr Pyne —You put Stuart Macintyre in charge of the history curriculum. 83L Gillard, Julia, MP Ms GILLARD —The shadow minister is interjecting about the history curriculum now. Perhaps he wants to explain to the Australian people why, after 12 long years and a rainforest worth of broadsheet newspaper columns about the history wars, the record of the Liberal Party in government is that 50 per cent of children in secondary schools do not learn any history. That was your legacy. All of those articles in the Australian newspaper and all of the history wars nonsense they went on about was all ‘look at me’ politics—it was all about the Liberal Party and nothing to do with the quality of kids’ education. We will have a national curriculum. It will have local flexibility, and of course in giving local flexibility we will be working with those who offer curriculum like the International Baccalaureate. Finally, the provision about accounts is one that the shadow minister is trying to create a fear campaign about. It is a simple provision, a probity provision. If accounts are qualified then of course a minister would have a look, and that is what the act provides. These are very simple provisions. Of course he will be there beating the fear drum. No-one in the sector should believe him. This is about cheap and petty politics to cover up 12 years of neglect. Question put: That the amendments (Mr Pyne’s) be agreed to. 20:26:00 The House divided.     (The Deputy Speaker—Hon. BC Scott) 57 Abbott, A.J. Andrews, K.J. Bailey, F.E. Baldwin, R.C. Billson, B.F. Bishop, B.K. Bishop, J.I. Briggs, J.E. Broadbent, R. Chester, D. Ciobo, S.M. Costello, P.H. Coulton, M. Dutton, P.C. Farmer, P.F. Forrest, J.A. Georgiou, P. Haase, B.W. Hartsuyker, L. Hawke, A. Hawker, D.P.M. Hull, K.E. * Hunt, G.A. Irons, S.J. Jensen, D. Johnson, M.A. * Keenan, M. Laming, A. Ley, S.P. Lindsay, P.J. Marino, N.B. Markus, L.E. May, M.A. Mirabella, S. Morrison, S.J. Moylan, J.E. Nelson, B.J. Neville, P.C. Pearce, C.J. Pyne, C. Ramsey, R. Randall, D.J. Robb, A. Robert, S.R. Ruddock, P.M. Schultz, A. Secker, P.D. Simpkins, L. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Truss, W.E. Tuckey, C.W. Vale, D.S. Washer, M.J. Wood, J. Adams, D.G.H. Bevis, A.R. Bidgood, J. Bird, S. Bradbury, D.J. Burke, A.E. Burke, A.S. Butler, M.C. Byrne, A.M. Campbell, J. Champion, N. Clare, J.D. Collins, J.M. Combet, G. Crean, S.F. D’Ath, Y.M. Debus, B. 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. Gray, G. Grierson, S.J. Griffin, A.P. Hale, D.F. Hall, J.G. * Hayes, C.P. * Irwin, J. Jackson, S.M. Kerr, D.J.C. King, C.F. Livermore, K.F. Marles, R.D. McClelland, R.B. McKew, M. McMullan, R.F. Melham, D. Murphy, J. Neal, B.J. Neumann, S.K. O’Connor, B.P. Oakeshott, R.J.M. Owens, J. Parke, M. Perrett, G.D. Plibersek, T. Price, L.R.S. Raguse, B.B. Rea, K.M. Ripoll, B.F. Rishworth, A.L. Roxon, N.L. Saffin, J.A. Shorten, W.R. Sidebottom, S. Smith, S.F. Snowdon, W.E. Sullivan, J. Symon, M. Tanner, L. Thomson, C. Thomson, K.J. Trevor, C. Turnour, J.P. Zappia, A. * denotes teller Question negatived. Bill agreed to. 9773 Ms GILLARD (Lalor —Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion) 20:30:00 —by leave—I move: That this bill be now read a third time. Question agreed to. Bill read a third time. 9773 Adjournment 10000 Scott, Bruce (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. BC Scott)—Order! It being 8.30 pm, I propose the question: That the House do now adjourn. 9773 9773 20:31:00 May, Margaret, MP 83B McPherson LP 0 0 Mrs MAY —Recently I was honoured to attend the official unveiling ceremony, dedication and commemorative service of the Rotary Kokoda Memorial Wall in Cascade Gardens, Broadbeach. The Kokoda memorial at Cascade Gardens has been created to help visitors to Cascade Gardens appreciate the courage and determination of the men who fought on the Kokoda Track and in PNG during World War II. The memorial was unveiled on the occasion of the 66th anniversary of the first shots fired by the 39th Australian Infantry Battalion and the Papuan Infantry Battalion against the leading elements of the 144th Regiment, South Seas Force, of the Imperial Japanese Army in their advance towards Port Moresby, signalling the commencement of the World War II Kokoda Track campaign, fought between July and November 1942. The Kokoda memorial wall was commenced in 2003 with concept plans drawn up by Gold Coast City Council under the guidance of Rotarian George Friend, who had conceived the idea in 2001. In 2005 local artist and resident of McPherson David Yardley was commissioned by the Rotary Club of Broadwater Southport to develop the design and construct the wall. From concept to a complete set of plans, David has told the story of Kokoda through sculptured images on the face of a slightly curved memorial wall in the shape of the Kokoda Track. These images are based on the famous photos taken by wartime photographers and correspondents Damien Parer and George Silk and are imposed on seven panels. The top edge of the design follows the line of the track over the Owen Stanley Range, the central mountain range running through PNG. Each of the seven three-dimensional panels tells part of the story of the World War II Kokoda campaign. Panel 1 tells of the arrival of the first troops at Port Moresby in early 1942 and their deployment to fight on the Kokoda Track, beginning their journey at the Golden Staircase, the entry to the jungle. Panel 2 depicts Imita Ridge, the first major geographical obstacle of the Kokoda Track. The saw-toothed top edge of the wall is an exact replica of the torturous terrain which defines the track as one of the most difficult walking trails in the world. Panel 3 tells of the fuzzy wuzzy angels. Australian soldiers are to this day indebted to the courage, commitment and resolve of the Papuan people in their role of carrying supplies and evacuating the wounded on the Kokoda Track. Panel 4 shows the village of Menari. Troops, carriers and the wounded are depicted in chaos receiving supplies and refreshments from the Salvation Army. Panel 5 shows a wounded man being assisted by his mates at a graveside as well as troops moving forward from the midpoint of the Kokoda Track to the next battle. The inscribed words ‘courage’, ‘endurance’, ‘mateship’ and ‘sacrifice’ help define us as a nation and are also engraved on the four granite monoliths at the Isurava Memorial in PNG. Panel 6 is dedicated to the Papuan Infantry Battalion, who fought alongside the Australians, as well as commandoes, coastwatchers and those who undertook the aerial resupply of ammunition and other supplies. Panel 7 depicts the Battle of Isurava, the site of some of the most intense fighting in the Kokoda Track campaign. It illustrates the determination, raw courage, commitment and selflessness so often displayed by soldiers on the Kokoda Track. This final panel details the initial withdrawal and the victorious return to reoccupy the village and ultimately expel the invaders from the beaches of Buna and Gona. The rear of the wall will be inscribed in bronze with a dedication to all who fought in and supported the campaign and also offers details of the significant points, villages and battles along the track. Construction of the wall was begun in April 2007 by David in his West Burleigh studio and was completed in July 2008. The Kokoda memorial wall is 23 metres long and five metres tall at its highest point. The largest panel weighs approximately five tonnes. David is an extremely talented industrial artist, and the detail of his work is a moving tribute to the heroes of the Kokoda Track. Funding for the design of the memorial wall and the sculpting of the panels was raised through the Rotary Club of Broadwater Southport with the generous support, contributions and assistance of numerous sponsors and individual donations. I am proud to say that, through the commemorations program in 2007, the former coalition government granted $32,000 towards construction of the Rotary Kokoda Memorial Wall in Cascade Gardens, Broadbeach. I commend all those involved in the construction of this Kokoda memorial: David Yardley, Gold Coast City Council and the Rotary Club of Broadwater Southport. 9774 9774 20:36:00 Trevor, Chris, MP HVU Flynn ALP 1 0 Mr TREVOR —Tonight I want to speak on the McGrath Foundation and recent announcements made by the Rudd Labor government, including one made on 13 October 2008. Jane McGrath co-founded the McGrath Foundation with her cricketing husband, Glenn, after her initial recovery from breast cancer in 2002. In 2005 the foundation was relaunched with the focus firmly placed on raising funds to provide breast care nurses in rural and regional areas across Australia while at the same time promoting the importance of being breast aware to younger women. There are currently eight McGrath breast cancer nurses in areas reaching as far as Bundaberg—some areas of which, namely Moore Park and surrounding areas, are in my electorate of Flynn—Perth, Albury-Wodonga and Bega. In 2008, the Australian government pledged $12 million to the McGrath Foundation to fund 30 breast care nurses across Australia over the next four years. On 13 October 2008, the McGrath Foundation and the federal government announced that this funding would be used to place specialist breast care nurses in 44 communities across Australia, with the majority of these communities in rural and regional areas. Breast care nurses are fundamental for women recovering from breast cancer. Breast care nurses are specially trained nurses who act as patient advocates, coordinating care for women with breast cancer, their families and carers. People wanting to show their support for the McGrath Foundation can make a donation to the foundation. The Rudd Labor government is making considerable new investments to help Australian women and the health sector combat this disease. To support women with breast cancer the Rudd Labor government has committed $31 million in funding for external breast prostheses for women who have had a mastectomy as a result of breast cancer and support for integrated cancer care facilities and research. The Rudd Labor government is also providing $2.5 million to help fund a research study with the National Breast Cancer Foundation to gather vital data from up to 100,000 women, which may help to reduce the impact of breast cancer in Australia. In May this year, the government was pleased to include Tykerb on the Pharmaceutical Benefits Scheme to assist women with advanced breast cancer. As well, the government provides more than 90 per cent of the funding of the National Breast and Ovarian Cancer Centre—a world-leading centre fostering an evidence based approach to the diagnosis, treatment and support of women with or at risk of breast cancer. The breast care nurse initiative, the locations for which were announced on 13 October 2008, is another weapon in the fight against the disease. This announcement by Minister Nicola Roxon was made with Glenn McGrath and the McGrath Foundation, with the minister paying tribute to Jane McGrath and her tireless efforts on behalf of all women with breast cancer. The nurses are being placed in areas that need them most and in locations where access to a full-time breast care nurse is not currently available. Eighty-nine per cent of these nurses will be located in rural and regional areas, including one in my home town of Gladstone, in my electorate of Flynn. My mother would be very proud of this announcement as she is a breast cancer survivor and Gladstone resident herself. I thank Minister Roxon, Glenn McGrath and the McGrath Foundation for agreeing to place a breast care nurse in Gladstone. It is fantastic news for my community. I thank Glenn McGrath for the opportunity to meet him. He is a fine, outstanding man both on and off the field, and it was an honour to meet him at the launch of the announcement on 13 October 2008. 9775 9775 20:40:00 Hunt, Gregory, MP 00AMV Flinders LP 0 0 Mr HUNT —I rise this evening to make it absolutely clear that the assets of Warley Hospital on Phillip Island belong to the people of Phillip Island. They were intended—beginning in 1923—to be used for the people of Phillip Island for their health care, for their aged care and for their general wellbeing. These assets are now being liquidated, and the assets must stay on Phillip Island. It is a clear position. It is a categorical position. It is a position I have put without equivocation to Aged and Community Care Victoria. I want to address this question in three brief phases. Firstly, the history of Warley Hospital dates back to a period when those requiring medical attention had to be taken by boat to Hastings or endure a five-hour journey to Melbourne by horse and cart. Against that background, in 1923 Mr and Mrs WE Thompson agreed to purchase the property then known as Buena Vista if the other island residents would fit it out as a hospital. That occurred, and Warley Hospital was opened on 8 December 1923. It is a hospital that has contributed enormously to the people of Phillip Island—to their health, to their wellbeing and, above all else, to their sense of security and community. Sadly—and this brings me to my second point—Warley Hospital was closed at the end of January this year. The aged-care component was closed only some short months ago. This was an avoidable closure. There was a $2½ million guarantee by the previous government, which was put in place prior to the election. I believe it was not just an election promise but a guarantee which should have been honoured. It is a matter of shame and disgrace that the minister, Nicola Roxon, breached that guarantee to the people of Phillip Island, failed to visit the people of Phillip Island and left that island with no emergency service as a consequence. Having said that, it is now time to deal with the future. What I say is this: the assets that were part of the hospital’s legacy have been passed under treaty to the Bush Nursing Association and from them now into the hands of Aged and Community Care Victoria. Aged and Community Care Victoria is run by good people. They did not seek these assets. They recognise that there is a debt of somewhere in the vicinity of $2 million to be paid. If that debt is not liquidated, we will see an erosion of the remaining assets with an interest loss of about $25,000 per month. That debt does have to be paid off and therefore the assets have to be treated in a way such that their long-term health is preserved. Against that background, on the three occasions I have now spoken to Aged and Community Care Victoria—to one of their representatives, Bill Forward, and in addition to their CEO, Gerard Mansour—I am convinced they have the best interests of the island at heart and that they are committed to the retention of all of these assets. The remainder is likely to be over $2 million once the debts have been discharged. But that money, as I have said to them, must stay on Phillip Island. It must be applied to the health needs and the aged-care needs of the island. It was raised by Phillip Islanders. It was the result of thousands of hours of community work to create a health service and to maintain and preserve that health service. And now, having been the victim of government negligence, it would be a tragedy if the community’s assets were sequestered and taken away. I believe that Aged and Community Care Victoria will do the right thing. I have made it absolutely clear to them that they must do the right thing. These assets must be used on the island, for the islanders and they must be used for health and aged care. The other point which I have also suggested to the CEO is a very clear one. It is that perhaps rather than trying to administer the funds, Aged and Community Care Victoria could designate an advisory board or indeed pass the assets to a formal trustees board. At the end of the day, the assets came from the work of Phillip Islanders and they need to remain on Phillip Island. Nothing less will be acceptable. Anything other than that will be fought bitterly and strongly by the people of Phillip Island, who created the magnificent Warley Hospital, whose loss we now mourn greatly. 9776 9776 20:45:00 Thomson, Craig, MP HVZ Dobell ALP 1 0 Mr CRAIG THOMSON —It was my pleasure 2½ weeks ago to launch the Central Coast Business Enterprise Centre at its new location in the Tuggerah Business Park on the Central Coast. The Rudd government is committed to small business. Small business creates much of the prosperity on the Central Coast—my area—and throughout the country. There are over three-quarters of a million small businesses employing nearly four million people around Australia. There are a further 1.2 million non-employing small businesses. On the Central Coast, a large proportion of businesses are small businesses. In fact, there are more than 8,000 employing small businesses and 11,500 non-employing small businesses, comprising about 96.3 per cent of the business community, on the Central Coast. Small business is the heart and soul—the engine room—of the Central Coast economy. It is something that this government is very concerned about. It makes sure that it has policies that are small business friendly. One of the reasons that the Central Coast Business Enterprise Centre was able to move to its new location is because at the last election I was very proud to be with the then opposition spokesperson for small business, who is now the Minister for Small Business, Independent Contractors and the Service Economy, when we made an election commitment of $250,000 a year for the next four years to make sure that small business on the Central Coast had a place that they could go to—a small business advisory service, a one-stop shop for small businesses on the Central Coast. This is vital for the economy of the Central Coast, given, as I said, that over 96.3 per cent of businesses on the Central Coast are small businesses. We have higher than average unemployment in my area. It is close to 7.3 per cent. Thirty per cent of people in my area have to commute to Sydney to find employment. Those who are employed on the Central Coast are usually employed by small businesses. This promise that the Rudd government made at the last election, one that we fully funded in the last budget, is one that will help small business on the Central Coast. In fact, the Central Coast Business Enterprise Centre had never received a cent from federal governments until the Rudd government honoured the commitments that it made at the last election. They had never received a cent even though they have a tremendous track record in relation to assisting small business on the Central Coast. In the last seven years, 20,000 businesses have been assisted by the Business Enterprise Centre. This has been a massive help to the economy of the Central Coast. What the Central Coast Business Enterprise Centre does is provide services such as business planning, access to legal and accounting services, information and guidance on loans and banking products, development of simple marketing plans, guidance on leasing, advice on government regulation compliance for all tiers of government and mentoring for new businesses. These are vital services that, if you are starting a small business, you need help with. For many small businesses, that first step is very important, and simple advice on what to do next is something that they often lack. That can cause them to fail. I was able 2½ weeks ago to speak to a number of the business mentors who assist small businesses on the Central Coast. These small business mentors are people who have had vast experience in businesses but who are now often retired and are able to give back to small business because they know the importance that it plays in the economy of the Central Coast. They know that people on the Central Coast look to small business to provide employment, opportunity and a future for the Central Coast. The Rudd government cares about small business. The best thing that a government can do for small business is to make sure that it eases the burden of regulation that often bogs down businesses as they try to compete and try to get set up. One of the things that this government has done is to review over 27 separate bits of regulation so that it is a lot easier for a business to get going and to compete. I was proud to be there at the launch of the Business Enterprise Centre on the Central Coast. Small business plays a vital role in our economy. Everyone who is involved in small business should be proud of the job that they are doing. 9778 9778 20:50:00 Irons, Steve, MP HYM Swan LP 0 0 Mr IRONS —I am going to talk to the House about the issue of poverty. Most people associate poverty with being a global issue somewhat removed from day-to-day life in Australia. However, poverty is an issue that we must acknowledge at a global and a domestic level. Globally, new estimates by the World Bank show that about 1.4 billion people live below the international poverty line of US$1.25 per day, which is equivalent to over one-fourth of the developing world’s population. The Australian people have always felt a strong moral obligation to help reduce international poverty. In 2005 when John Howard went to New York for the Millennium Development Goals Summit, he announced that aid levels would increase to around 0.35 per cent of GNI by 2010. I was pleased to note that the Labor government has matched this commitment and has said that aid will grow to 0.5 per cent by 2015. However, we can and must do more. One of the ways that Australia can assist is by helping countries to embrace GM technology. Trials in India have shown an outstanding potential for the integration of genetically modified crops. Genetically modified crops increase yields for farmers, are more resistant to pests and diseases and are more resilient in drought conditions. Higher crop yields provide more income to farmers to give their families a better quality of life. An increased supply of food on local markets will put downward pressure on prices, making food more available. People may object to GM crops on ethical grounds but it is difficult to object on moral and financial grounds. Rigorous trials must take place to ensure the safety of the crops. This is an area that the Australian government can contribute to and it is an effective method of eradicating poverty. Reducing poverty in our nation must be a priority of the Parliament of Australia. Peter Saunders of the University of New South Wales suggests: Poverty is a cause of considerable community concern, but the term is now rarely used in government circles in Australia. As a consequence, developing strategies and programs that address the causes and consequences of poverty are not on the policy agenda. In addition to bringing the language of poverty into Australian politics, we must develop an index which measures this policy. Only then can we judge the performance of governments in reducing poverty. At the moment, the methods used are not endorsed by governments. The method we have been using is the poverty lines approach, a relative measure of poverty. Poverty lines are income levels designated for various types of income units. They are based on a benchmark income of $62.70 set in the September quarter of 1973. The Melbourne Institute of Applied Economic and Social Research has updated the poverty line for Australia to the March quarter of 2008. Inclusive of housing costs, the poverty line is a single income of $710.14 per week for a family comprising two adults and two dependent children. The index is based on estimates of the household disposable income and population provided by the ABS. Because the index is based on estimates, the poverty lines themselves are estimates. The logic is dated and it is rarely referred to in parliament. It is clearly time for a new poverty indicator that accurately reflects the cost of living in modern Australia. Governments do not like talking about this indicator, because most benefit payments fall below the poverty line. Poverty is also a problem in my electorate of Swan. In my electorate, the 2001 statistics of the National Centre for Social and Economic Modelling indicated that a total of 10,604 people, or 9.4 per cent of the people in my electorate, were in poverty. There is clearly a problem in my electorate. To address this we need to consider the underlying causes of poverty in Australia. The link between employment status and poverty is well established. This is why the Howard government strongly targeted employment generation as its key method of poverty alleviation. The Howard government’s Welfare to Work program was also designed with this in mind. Other causes of poverty in my electorate include the housing affordability crisis. The unacceptably high waiting list for public housing in Western Australia—over 17,000 households—accompanied by a shortage of affordable rental accommodation has meant that people have been left with nowhere to live. This is real poverty. Disability is also associated with poverty, and the disabled face difficulties in starting their own businesses, as they have to sacrifice all benefits immediately when applying to the New Enterprise Incentive Scheme. Low educational attainment is associated with poverty as well. We need to have a headline poverty indicator that takes this into account so we can judge the performance of governments in reducing poverty. In conclusion, poverty is an issue relevant to Australians at a global and a domestic level. I would like to take this opportunity to recognise the efforts of groups such as Micah and all groups in Australia that aim to reduce worldwide poverty. I also thank all the small-scale community groups in my electorate that help people who certainly suffer from poverty. 9779 9779 20:55:00 Owens, Julie, MP E09 Parramatta ALP 1 0 Ms OWENS —Some 24,500 pensioners, people with disabilities and carers, and around 12,000 working families will benefit from the Rudd government’s Economic Security Strategy in coming months. There is no doubt that for many there is a sense of relief. Families and pensioners of all kinds have been coming under increasing pressure not just this year but over several years. I remember pensioners coming up to me after each of the last two Costello budgets to tell me that there was nothing in it for them in spite of their need for relief. For many families, back-to-back interest rate rises over seven years have pushed them to the limit. For others, rising rents as a consequence of interest rate rises have caused considerable hardship, as have several years of rising costs of groceries, petrol and child care. In the May budget the Rudd government acted to relieve pressure. In the face of high inflation, we cut spending, built a surplus and provided relief as best we could without pushing up inflation and interest rates. We delivered tax cuts and increases to childcare rebates, and we increased the utilities allowance in March from $107.20 per year to $500 per year and extended it to carers for the first time. We paid bonuses to carers and pensioners. We also committed to a program of nation building, an investment in the productive capacity of the economy—a strategy that would build our economy without pushing up inflation. But since then there has been a significant change in circumstances that demands a different approach. There has been rapid, unforeseen change in the state of the global economy, resulting from the credit crisis that emerged in the United States and flowed rapidly across the world. The time frame for the deterioration of the global economy is illustrated by the response of our Reserve Bank. It was only back in March that the Reserve Bank increased official interest rates by 25 basis points and was talking about inflation and tightening fiscal policy to rein in inflation from an overheated economy with severe capacity constraints. Just six months later, on 2 September, the bank acted to reduce interest rates by half a per cent—the first reduction in seven years. In response to the global credit crunch, the Rudd government moved quickly. We cracked down on short selling, committed a $4 billion fund for mortgage backed securities to strengthen non-bank lenders and guaranteed bank deposits and foreign borrowings. All of that was about freeing up liquidity and ensuring that our banks were competitive against foreign banks which had the backing of their governments. It was not due to any weakness in our own banks. In recent weeks—and it is recent weeks, not months—the international crisis has moved from the money market to the broader economy, bringing real slowdowns in economies around the world. It became clear that governments needed to stimulate their economies to avoid a hard slowdown. The Reserve Bank of Australia acted again to reduce interest rates by one per cent, and the Rudd government moved to use the surplus to bolster the slowing economy. The surplus that we worked so hard to build now came into its own, and it will be used to do what it was intended to do: balance out the highs and the lows. Growth is still projected at over two per cent. Revisions will be released shortly and will no doubt reflect trends in the growth projections of our major trading partners. But those of us down in the streets and homes of our electorates know that the growth is not uniform and that there are some who have been doing it tough for several years. Affected by the rising prices of groceries and petrol, people were wearing the effects of inflation but not receiving the direct benefit of the boom in mining and commodities. When it became apparent that the government needed to inject a stimulus package into the economy, the Rudd government took decisive action through a $10 billion economic security package to strengthen the Australian economy during the global financial crisis, and it was those who have been doing it tough who were first on the list. The $10 billion economic security package delivers a down payment to four million pensioners of all kinds, including seniors, veterans and partners, people with disabilities, carers and self-funded retirees with Commonwealth seniors cards, who will all receive lump sum payments of $1,400 per single and $2,100 per couple. That is very good news for the more than 25,000 pensioners in my electorate of Parramatta. The package also gives a hand to working families. Over 12,000 families in Parramatta that receive family tax benefit part A will receive payments of $1,000 per eligible child. We are responding to the potential for a further slowdown in the housing market by stimulating residential construction by increasing the first home owners grants from $7,000 to $14,000 and, for those building a home, from $7,000 to $21,000. This will apply to all contracts entered into by 30 June 2009. The Rudd government is also responding to a potential slowdown in the labour market by investing in an additional 56,000 training places this financial year. The Rudd government’s economic security package is a comprehensive package and an appropriate and decisive response to the unforeseen and rapid changes in world economic circumstances. I am grateful that, as part of that appropriate action, we have been able to boost incomes for pensioners, carers, working families and businesses in my electorate. 10000 SPEAKER, The The SPEAKER —Order! It being 9 pm, the debate is interrupted. 9781 21:00:00 House adjourned at 9.00 pm 9781 Notices The following notices were given: 83E Ripoll, Bernie, MP Mr Ripoll to move— That the House: notes that: chronic disease is one of the country’s most critical health challenges; more than 50 per cent of the Australian population already suffers from a chronic or long term condition of some form; and the rise of these diseases poses both a major risk to the long term health of millions of Australians and a frontline economic challenge; and supports: the Government’s continued commitment to preventative health strategies and closing the gap in indigenous life expectancy; initiatives to support the role of the primary care system on our local communities; and the increased role the private sector currently plays in delivering health and medical services. 009LP Windsor, Antony, MP Mr Windsor to present a bill for an act to make provisions for dealing with the threat posed by climate change. (Climate Change Protection Bill) 2008-10-21 The DEPUTY SPEAKER (Hon. DS Vale) took the chair at 4 pm. 9782 Constituency Statements 9782 9782 16:00:00 Irons, Steve, MP HYM Swan LP 0 0 Mr IRONS —Last Saturday I had the pleasure of attending the Ascot Racecourse in my electorate of Swan at the invitation of the Perth Racing committee for the opening day of the spring racing carnival. There are two racecourses in my electorate and the Ascot is considered to be the summer track and Belmont the winter track. Both come under the auspices of Perth Racing. Both these racecourses are on the edge of the Swan River, which provides an idyllic backdrop to the excitement and carnival atmosphere of race day. I was invited to have lunch with the committee and was surprised to see former AFL star Robert ‘Dipper’ DiPierdomenico in attendance as well. Dipper managed to remind everyone at lunch that he was still a legend. After the lunch, I joined some friends of mine from South Perth Junior Football Club on the fence near the finishing post and joined in the celebratory mood of the day. The Western Australian Turf Club was established in 1852 and is now known as Perth Racing. The Ascot course is situated eight kilometres east of the Perth CBD and her committee buildings and grandstand look as majestic now as they did at the turn of the century. Between the two courses there are 92 race meetings per year, more than any other club in Australia. And this year the stakes have been increased to a record $37.3 million. The WATC rebranded itself in 2004 to align itself more closely with the younger generation—and, looking around at the crowd on Saturday, it seems to have worked. The rebranding is not the only initiative the WATC has pioneered in recent years. The club has exported its race product to Singapore and Malaysia, where it expects to turn over $100 million in the coming year. The racing industry has an important role to play in the local community. When I was campaigning for the seat of Swan in the surrounding area of Ascot last year, many people I met had links with the club. Numerous people were employed by the club itself. In fact, the horse industry is one of the biggest industry employers in Australia. Veterinarians, jockeys, trainers, reins persons, farriers, track attendants, catering staff, livestock transporters, farmers, grain growers and steel makers are just a few of the professionals associated with this industry. The industry therefore generates a significant amount of income for the Western Australian government. In fact, in 2007 the WA government pocketed $61.3 million in turnover tax alone. Other locals speak passionately and at length about their love for the sport of horseracing and countless more utilise the club as a social facility. Finally, the industry also makes a significant contribution to the tourism industry in WA and deserves much credit. The Railway Stakes could go to $5 million in the next four years, making it a world icon event as part of the Festival of Perth Racing. This depends on whether the new Barnett Liberal government continues with the agreement made in principle by the previous government. I would suggest that extra funding is required for the whole industry. A reduction in the tax on TAB earnings would be welcomed by the industry as well. The racecourse faces some challenges in the future. However, I am sure that, under the expert guidance of the racing committee, they are well placed to meet these challenges. The WA Turf Club is impressively and innovatively taking racing forward into the future— (Time expired) 9783 9783 16:03:00 Raguse, Brett, MP HVQ Forde ALP 1 0 Mr RAGUSE —Today I rise to bring to the attention of the House that it is National Carers Week. Most of us as members are aware of this and we are wearing little icons to suggest that we need to understand and think about carers. Carers Week is a time to reflect on the importance of carers. Carers play a vital role in the community and often make personal and financial sacrifices. It is very fitting that I have the opportunity to speak briefly today about carers as part of the House of Representatives Standing Committee on Family, Community, Housing and Youth that is currently inquiring into carers and their role in the community. I think it will be good for us as a government and certainly for all of us as members to understand much more about the situations that carers find themselves in every day and the long-term caring responsibilities that people have. Recognising this through this inquiry will, I think, also allow us to make better decisions on legislation. I would like to give a bit of background about carers and some of the things that they have do. We understand ‘carers’ very broadly as people who are caring for other people, whether because of disabilities, age and infirmity or a whole range of situations. There are parents caring for children and children who are taking on care responsibilities for parents. National Carers Week is dedicated to recognising their work. Early last week the government announced immediate financial relief for carer payment and allowance recipients, which is certainly going to go a long way towards fixing or sorting out some of the interim problems that people are experiencing. In Queensland there will be over 106,000 recipients of these payments. In my own electorate of Forde, over 5,000 carers will be in receipt of such a payment. I want to quickly touch on a particular group of carers, and that is the young people who are caring for parents and other older Australians. Around 350,000 young people provide care to another person. More than 20,000 of them are primary caregivers. More than 170,000 young carers are under the age of 18, and the average age of that group is 12 to 13, so it is quite a serious problem for young people who are in that situation. They have to juggle their study, work and caring responsibilities. Compared with their peers, young carers have a lot more on their mind. The government has provided $27 million to help boost respite for Australia’s young carers and for carers of young people with severe or profound disability. Part of this will go towards helping them complete their secondary studies. I want to talk very briefly about constituents in my electorate—those who have come to my attention who do it really, really tough. In particular, I want to mention Graham Popple. Since before I was a member, he has spoken to me on many occasions about his particular caring arrangements with his family and his wife. He would certainly welcome this payment but he has also welcomed the Commonwealth carer respite centres that are now supporting carers. In closing, I would also like to mention my own sister and our family situation. Kim Raguse is a family carer. She does it at great expense, privately and personally. I would like to commend everyone who is a carer. 9784 9784 16:06:00 Lindsay, Peter, MP HK6 Herbert LP 0 0 Mr LINDSAY —Last week ABC Radio National cut eight highly topical programs, including, significantly, the Religion Report. I can tell you that many people in Townsville are very angry about that. The Religion Report has been an important and sensible forum for intellectual debate about the role of religion in contemporary times. It has charted the rise of militant Islam around the globe while also providing relevant and insightful critiques of developments within the Christian and other churches in Australia and overseas. Most recently, the presenter, Stephen Crittenden, bought Dr Anthony Burke and Dr Merv Bendle to national prominence regarding the debate on new terrorism studies in Australian academia. Several years ago, the Religion Report broke the national story about then Governor-General Peter Hollingworth’s earlier alleged mishandling of abuse claims in the Anglican Church. The ABC must be called to account for the rash and damaging decision to dumb down Radio National and allow the rise of what Ross Babbage calls ‘militant secularism’ to further infiltrate Australia’s national broadcaster. As Toni Hassan, a former ABC journalist, said in the Canberra Times this week: ... there’s no doubt that religion is a terribly important (if little-reported) part of life, lying behind so much of the news we regard as “political” or “diplomatic” or “social”. Where else in prime-time radio or television have you been able to hear the people who matter quizzed about their interpretations of Judaism, Christianity or Islam and the way in which they plan to act on those interpretations? Some of these people will be happy about the decision to axe the program. They didn’t welcome its scrutiny. The argument that budgetary constraints have motivated this decision simply does not wash. The Religion Report has been covering local and global developments in religious based conflict in recent years and no doubt this has contributed to its downfall. This axing is an indictment of the ABC and a further demonstration of the extreme Left at work there. As well-known media commentator Errol Simper noted in his column yesterday: The fact is that religion remains a mainstream Australian preoccupation ... It’s one thing to say you don’t have much time for religion. It’s quite another to say religion doesn’t matter. What the ABC is saying by axing its flagship religion program is effectively that religion does not matter. Clearly, ABC management is out of step with the views and concerns of mainstream Australia. It is failing to live up to the corporation’s charter, which, in section 1, states that it is charged with broadcasting programs that contribute to a sense of national identity and inform, entertain and reflect the cultural diversity of the Australian community. The Religion Report has carried out this function with distinction for many years. I urge the ABC and particularly the director of ABC Radio, Sue Howard, to rethink this short-sighted and ill-considered decision. 9784 9784 16:09:00 Neumann, Shayne, MP HVO Blair ALP 1 0 Mr NEUMANN —On 11 October 2008 I had the privilege and pleasure of being present at the Lights on the Hill Trucking Memorial Annual Memorial Day at Lake Apex at Gatton. Lights on the Hill is a non-profit organisation. The memorial wall is to recognise and represent those in the trucking and coach driving industry who have passed away in a truck or coach accident or by other means and for passengers who have passed away in those accidents. I want to commend the committee who run the Lights on the Hill group, particularly Kathy White, the founder and organiser for the memorial, and her husband, Garry, who have been working in the truck driving industry for over 30 years and who have lost many friends along the way. The day had the support of the local council, and I commend the Lockyer Valley Regional Council and Mayor Steve Jones. There were representatives from all levels of government present there. The name, curiously enough, comes from the Slim Dusty trucking song Lights on the Hill and Slim was a patron of the group. Joy McKean, Anne Kirkpatrick, John ‘The Ferret’ Moran and Travis Sinclair are all patrons. The committee exists to raise awareness of road safety for all in the transport industry and to help families who have gone through the difficult process of losing a loved one. It poured rain on the day, but they stood there in their many hundreds to honour those people who had lost their lives in the last 12 months. Sadly, dozens of people were added to the wall that day. Truckies and their families make great sacrifices to benefit all of us. We are an island geographically but not financially, as we have witnessed in the last few weeks. Those who cart our produce along those lonely roads face tiredness and often hunger and separation from family and friends, and they do it for their families. They do it because they want the best for their families. They do it because they love their communities. They love their country, and their sacrifice is not unlike those who serve in the military on behalf of us. Theirs is a true communitarian spirit and we must always fight and agitate for greater safety on our roads. One death on the roads is one death too many. I pay tribute to Kathy White and Garry and the committee and I honour them and I honour those people who stood there in the pouring rain to remember those whom they had lost in the last 12 months. It is a tribute to the Lockyer Valley, to Kathy and Garry and to all those present that day. 9785 9785 16:12:00 Dutton, Peter, MP 00AKI Dickson LP 0 0 Mr DUTTON —I rise today in this parliament to pay tribute to the late Dulcie Turnbull, OAM. Sadly, Dulcie passed away on 14 October 2008 and she will be sadly missed by all that knew her, in particular of course her surviving husband and four children as well as the 11 grandchildren and a great-granddaughter. Dulcie Turnbull was a councillor with the Brisbane City Council. She was first elected to the ward of Toombul in 1976 and she retired from the Brisbane City Council in 1988, having served as part of Sallyanne Atkinson’s civic cabinet from 1985-88. It is very hard for me to express more eloquently the contribution to life that Dulcie Turnbull made than the words that have been expressed by her husband, Noel Turnbull, the accredited Courier-Mail journalist, in yesterday’s Courier-Mail. In there he discussed the contribution not only that she had made to life in and around her ward of Toombul, but to Brisbane more generally. Over the last six or seven years, or even beyond that, I have had the great pleasure of working with Noel and Dulcie. They have been wonderful people who have contributed over a lifetime to the Liberal Party. They have been active members of the Samford branch, and before that they had been active in many ways in the Liberal Party. I pay tribute to the work Dulcie did during her full life. Dulcie was a person who was able to offer sage advice but she was also a person who was able, with the benefit of her experience, to add a great deal to campaigning not just in the federal seat in the last three elections but also before that. Sadly, she was diagnosed early in 2005 with thyroid cancer and a secondary tumour in the spine, then early in 2007 with breast cancer. By February this year, as Noel writes, the cancer had moved to the brain. She had set herself targets, and family and friends marvelled at her resistance as she hosted many visitors and even managed to ride a horse at Easter. But her condition deteriorated recently. Her children, David, Debra, Kaye and Peter, and not just their spouses but her grandchildren and great-granddaughter, as well as Noel, will deeply miss Dulcie. She was the matriarch of the family. She was a person for whom they felt a great deal of pride and respect, and rightly so. She was a person that should be remembered as having made a great contribution to our society in a number of ways. She was accomplished in small business. She will be sadly missed by all in the Liberal family, and, most importantly, our sympathies go out to her family at this time. (Time expired) 9786 9786 16:15:00 Perrett, Graham, MP HVP Moreton ALP 1 0 Mr PERRETT —I rise to update the House on progress to establish a Chinese-Australian war memorial in my electorate. The memorial will honour the past and present involvement of Chinese-Australians serving in the Australian defence forces. This week I will write to Chinese leaders and Chinese community groups in my electorate to seek nominees for a steering committee to oversee this timely project. The steering committee will help raise funds and engage with local RSLs, local schools, the Chinese community and the broader electorate. The committee will also seek input into the design of the memorial—for example, this might take the form of a design competition in my local schools. There is already strong support for the memorial and for its location at the Sunnybank RSL, in Gager Street. I inspected the RSL with the president, Robert Lippiatt, recently. I am committed to setting up this memorial because I believe the stories of the Chinese diaspora at war for Australia need to be told. In fact, it has been claimed that there were more Chinese-Australians serving in our armed forces during the great wars than any other minority group in Australia. Chinese-Australians made significant contributions during the Boer War, the First and Second World Wars, the conflict in Malaya, the Korean War, the Vietnam War and other conflicts. I have spoken before in this place about the heroics of World War I veteran and Chinese-Australian citizen Private William Edward Sing, better known as Billy Sing, and a great Queenslander. He was known to his fellow diggers as ‘The Assassin’. Billy was a sniper with the Australian 5th Light Horse Regiment and is conservatively credited with more than 150 kills in Gallipoli. His story is told in Gallipoli Sniper, by John Hamilton. Another Chinese-Australian war hero is Sergeant Jack Wong Sue, who served behind enemy lines in Borneo as a member of the Z Special Unit during World War II. His biography is called Blood on Borneo. I understand that Jack Wong Sue had to overcome some discrimination to even join the Royal Australian Air Force; however, his fluency in the Malay and Chinese languages made him a perfect candidate for allied intelligence and jungle warfare. His elite unit conducted surveillance and sabotage and helped train around 6,000 Borneo residents in resistance, which laid the groundwork for the successful allied invasion of Borneo in 1945. Many other Australian-Chinese have served in the armed forces, and their stories should be told and their sacrifices commemorated. The students in my electorate need to hear about Mr Lee, who was the first Australian of Chinese background to join the RAAF; Roy Goone, who commanded the 83rd Squadron in 1943; the many, many Chinese-Australian women, including Phillis Anguey, who served as nurses; and the many more stories that will be unearthed. The memorial at the Sunnybank RSL will honour these and many other Chinese-Australians and ensure that we tell their stories for ever and ever. 9787 9787 16:18:00 Hartsuyker, Luke, MP 00AMM Cowper NATS 0 0 Mr HARTSUYKER —I rise in this parliament to speak on the issue of Kempsey District Hospital. Kempsey hospital is a good hospital. It has dedicated staff, but it is under-resourced and the buildings are years out of date. Services at Kempsey hospital have been eroded year after year. But people who live in regional areas have a right to quality services where they live; they should not have to drive hours to find appropriate medical treatment. It is essential that Kempsey hospital be upgraded. The community of the Macleay Valley desperately needs a new hospital. A master plan has been developed for a new hospital for Kempsey, but the new wing dates back to the sixties—let alone the older buildings in the complex. The Kempsey District Hospital Action Group has been working tirelessly to convince the New South Wales state government of the need for a redeveloped hospital at Kempsey, but to this point the government has ignored those requests. I wish to table a petition from the community of Kempsey having in excess of 4,400 signatures and calling on the federal government to provide funding under the national health and hospital fund to assist in the redevelopment of Kempsey hospital. Kempsey hospital has been abandoned by the New South Wales government. The people of the Macleay Valley deserve better. The petition has been supported widely throughout the community. The new Mayor of Kempsey, John Bowell, who was a tireless campaigner for an improved hospital, is a keen supporter. Sue Gorman and Liz Campbell, from the Kempsey and District Chamber of Commerce and Industry, have supported the petition. Bob Ryan, of the South West Rocks District Chamber of Commerce and Industry, supports the petition, as does the wider Macleay Valley business community. Allan Snowsill collected signatures throughout the area, visiting outlying centres such as Bellbrook and Willawarrin, and he collected signatures at the Kempsey RSL. Margaret Campbell, from the Kempsey and District Ratepayers and Residents Association, has been very committed in supporting an upgrade of the hospital, as has Barbara Cooper. The support throughout the community has been tremendous. I would also like to recognise the efforts of the state member for Oxley and Leader of the Nationals, Mr Andrew Stoner, who has been lobbying the New South Wales state government year in, year out but to date without success. The New South Wales state government will not even admit there is a problem with Kempsey hospital, let alone address the very urgent need for 21st century facilities to support the staff and the community of the Macleay Valley. I call on the New South Wales government to get behind the people of the Macleay Valley. I call on the federal government to support the petition and to provide funds available under the national health and hospital fund for a new Kempsey District Hospital to take it into the next century. The petition read as follows— To the Honourable the Speaker and Members of the House of Representatives: This petition of certain citizens of Australia draws the attention of the House of Representatives to the erosion of health services and state of disrepair at Kempsey District Hospital. We therefore ask the House to commit funds from the Australian Government’s $10 billion Health and Hospital Fund, so the hospital can be upgraded in accordance with the masterplan which has been provided to the NSW Health Minister. from 4,422 citizens Petition received. 9788 9788 16:21:00 Marles, Richard, MP HWQ Corio ALP 1 0 Mr MARLES —I rise to congratulate Deakin University on its recent award success in the fields of automotive engineering and education exporting to international markets. Deakin University is Geelong’s university. It began in Geelong, its administrative headquarters are in Geelong and two of its Victorian campuses are located in Geelong. These campuses currently cater for over 5,000 on-campus students, with courses in the fields of law, engineering, information technology, business, education, nursing, architecture, teaching, science and now medicine, with the Prime Minister having opened the new Deakin medical school in May of this year. The university also continues to grow, with the new Alfred Deakin Institute, based at the Geelong waterfront campus, scheduled to open next year. The institute will contain an interdisciplinary teaching and research centre covering globalisation, public policy, governance, international relations, political science and communication. I, along with the Parliamentary Secretary for Pacific Island Affairs, had the opportunity to visit this facility last Friday. Based on this first visit, my first impression is that the institute will be another valuable resource for Geelong’s education sector. The academic expertise that Deakin University has long held in globalisation and international relations is matched by its ability to project its capabilities into the international educational system. In 2007-08 Deakin increased its international student recruitment by 9.4 per cent, compared to the national average of 2.7 per cent. This achievement was in part based on a prolonged strategic engagement in India, centred on the establishment of a university office in that country. Indeed, 2008 has been a very good year for Deakin-Indian relations, with the university having increased its Indian student intake by 29 per cent this year, while also pulling off a major coup by attracting one of the world’s largest software companies, Satyam, to establish a research institute on its Waurn Ponds campus that will cater for around 2,000 researchers. For these achievements, as well as others, Deakin two weeks ago was awarded a Governor of Victoria Export Award by the Victorian Governor, Professor David de Kretser. As a result, the university now automatically progresses as an entrant into the 2008 Australian Export Awards, to be announced in December. I wish them well in that pursuit. For its part, the Deakin University engineering and information technology department has also been performing on the world stage, having been one of two recipients of a recently announced Ford Global Challenge scholarship, valued at $30,000. The department received the award for its work in designing a Ford Model T for the 21st century, with its final design being described by the motor company as ‘pushing the boundaries and delivering an alternative transportation concept for tomorrow’. I congratulate all of Deakin University on these recent successes. They are indicative of a university meeting the challenges of the 21st century, and its tireless work and diligence continues to benefit the greater Geelong region. 9789 9789 16:24:00 Hawker, David, MP 8H4 Wannon LP 0 0 Mr HAWKER —Today I want to draw to the attention of all members a service that is going to be held at Mount Dandenong on Saturday. Organised by the Mount Dandenong historical society, whom I commend heartily for what they are doing, it will commemorate the 70th anniversary of the disastrous crash on Mount Dandenong of the ANA Kyeema airliner. I will be joined at this service on this very special occasion by my colleagues the two federal local members, the member for Casey and the member for La Trobe. We will commemorate the disaster when the Kyeema, a Douglas DC2 which was fully booked and, with its crew, had 18 people aboard, flew from Adelaide, ran into cloud and, because radio navigation was not available at the time, ploughed into Mount Dandenong, with everyone being killed instantly. Included amongst its passengers were three prominent vignerons from South Australia and also a member of the federal parliament, the then member for Wakefield, and a former minister who was a cousin of mine, the Hon. Charles Hawker, hence my very keen interest in the commemoration of the 70th anniversary. The tragedy of it all is that, as has been shown by a proper investigation carried out later by Macarthur Job, who was with the then Department of Civil Aviation, or DCA, this could have been avoided. Of course it caused considerable embarrassment all throughout the government and indeed Australia because at that point it was the worst air crash Australia had ever experienced in peacetime. It is unfortunate that it happened but it has since led to a much higher level of air safety and, most importantly, the establishment of a reputation that I feel Australia can feel proud of. The other part of my keen interest in this is that, in commemoration of my relation, Charles Hawker, a scholarship has been set up by his family. It is a scholarship available for tertiary students which is by far one of the most generous privately funded scholarships available. I have been involved in the presentation of it in the last few years. Most importantly, it commemorates this very significant event. I commend the Mount Dandenong historical society for again hosting a special commemoration of this occasion. I know that many people will attend locally and from South Australia, many being relatives of those who were aboard the Kyeema at the time. I think it stands as a reminder of the importance of governments getting on with the job given that the government at the time knew they could have done something before this tragedy ever occurred. (Time expired) 9789 9789 16:27:00 Hall, Jill, MP 83N Shortland ALP 1 0 Ms HALL —This month we remember women who have suffered from breast cancer. We look at the research that has taken place in the area of breast cancer treatment and we consider what we can do to address this serious illness. It is also known as Pink Ribbon month. I know that last week in Parliament House we had a breakfast to commemorate Breast Cancer Week. Soon all throughout the electorates of each and every member here in this chamber there will be morning teas and events being held to remember those people who have suffered from breast cancer, to get information out to the community so that we can pre-empt the diagnosis of breast cancer and to inform women about the signs that they need to look for when they are examining their breasts and the actions that they need to take. It is a time when we remind women that they need to have regular mammograms and we try to raise funds for vital research in this area. On Tuesday, 27 October I will be holding a morning tea at Gwandalan Bowling Club in conjunction with the Gwandalan Lionesses. The Gwandalan Lionesses have already undertaken a very innovative fundraising exercise for breast cancer research. They have given some of their money to the Cancer Council and some to the Jane McGrath Foundation, as I understand. The women of the Gwandalan Lionesses have also put together a very tasteful calendar. In this calendar they have very little clothing on. It is unique. They are selling the calendar for $10, and the Lionesses have been overwhelmed by the demand for it. I went to the launch of the sale of the calendar and I was very impressed by the support within the community for the calendar. On Friday, 30 October I will be having a morning tea at the Gateshead Windale Bowling Club. Once again, we will have excellent speakers there. Professor Forbes will be addressing the meeting, along with other experts in the field of breast cancer. A similar situation will happen at Gwandalan with experts on breast cancer addressing the morning tea. These are outstanding events and I am sure that the community will get behind them and support them. VK6 Vale, Danna, MP Mrs Vale —Order! In accordance with standing order 193 the time for constituency statements has concluded. 9790 Bills R3087 Cognate bill: 9790 Bills R3086 9790 Debate resumed from 16 October, on motion by Ms Plibersek: That this bill be now read a second time. upon which Mr Morrison moved by way of amendment: That all words after “That” be omitted with a view to substituting the following words: “while not declining to give this bill a second reading, the House calls on the Government to make such amendments to the National Rental Affordability Scheme as would: provide for incentives to be given on a sliding scale to take account of the different development and land costs in different locations; provide for successful applicants to transfer their tax offsets on a once only basis to project financiers in return for a lower cost of funds, including providing such tax offsets to not for profit entities for this purpose; require that State and Territory governments match the incentives provided by the Commonwealth under the Scheme; extend project eligibility criteria to include conversions to affordable housing from existing residential stock, particularly where such projects involve substantial redevelopment to provide for specific needs groups such as aged or disabled accommodation; extend the upper level income limits for tenant income eligibility criteria by 30 per cent in each band to ensure greater access for key workers and those seeking to save to buy their first homes; provide ‘as of right’ eligibility for the Federal Government’s solar panel rebate and solar hot water rebate schemes; and extend the establishment phase criteria that approximately 20 per cent of incentives be available for projects of not less than 20 dwellings, to the entire Scheme”. 9791 16:31:00 Hall, Jill, MP 83N Shortland ALP 1 0 Ms HALL —I seek indulgence for the member for Braddon to make a statement. Once he concludes his contribution in the debate in the House, he will come and ask the permission of the committee to resume his contribution to this debate at a later time. 9791 16:32:00 Combet, Greg, MP YW6 Charlton ALP Parliamentary Secretary for Defence Procurement 1 0 Mr COMBET —I rise to speak on the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008. These bills will set the framework for Labor’s National Rental Affordability Scheme, which is a scheme designed to address the acute shortage of affordable rental properties in the Australian housing market. The scheme is a key plank in Labor’s $2.2 billion plan to combat the housing affordability crisis that many working families and older Australians are currently facing. The last time the parliament sat, I was very pleased to have spoken on the bills giving effect to Labor’s First Home Saver Accounts. During my speech on that occasion I noted to parliament a number of trends that underlined the problem that many home owners and renters were currently experiencing in the housing market. Firstly, we have seen declining rates of home ownership, with fewer first home buyers over the last decade. In the past week the government has announced an enhancement to the first home owners grant scheme, partly in an endeavour to improve the opportunity for first home buyers to buy either an existing or a new dwelling. The second trend that has been evident for some time is that Australia has had a declining availability of rental properties, especially affordable rental properties. Thirdly, there has been a decline in the availability of social housing. And, finally, there has been a declining availability of affordable housing more generally throughout the market. I would like to concentrate today on the situation facing those renting, given, obviously, that rental affordability is the subject of the bills before the House. However, firstly I would like to outline some statistics that show how hard and unaffordable it has become for some people to enter the housing market. Official statistics show that it has never been harder for first home buyers to purchase a home in Australia. The hard truth is that, to enter the market with an average priced house, young families now need a six-figure income. In 1996 at the start of the Howard government, the average house cost was about four times annual wages, but at the end of the Howard government period it was no less than 7½ times the annual wage. Many factors have contributed to that outcome. A typical first home buyer now spends about a third of their income on mortgage repayments. This compares to a figure in 1996 of less than $2 in every $10 earned being spent on mortgage repayments. That is quite a significant increase in the proportion of income spent on mortgages. That is a function of increased house prices and also interest rate movements. Not surprisingly, given these statistics, the proportion of homes being bought by first home owners has declined from 21.8 per cent in June 1996 to 17.1 per cent today. These facts are especially relevant to the bills before us today because the inaccessibility of the housing market to first home buyers has increased the number of people who are renting and who are active in the rental housing market. This in turn has driven up demand and the cost of renting. In my electorate of Charlton, the vacancy rate in rental housing is still less than two per cent, so it is an extremely tight marketplace. Recent research by the National Centre for Social and Economic Modelling has found that 1.1 million low- and moderate-income families around Australia are under housing stress. These families are typically in the bottom 40 per cent of all earners in Australia and are paying more than 30 per cent of their income on housing costs. That is, 220,000 more families are experiencing housing stress now than in 2004, just four years ago. That figure of 220,000 includes 70,000 renters. It is also a big problem for older Australians who are already under some severe cost-of-living pressures. Nationally, the number of older people in low-income rental households is expected to more than double from 195,000 at present to 419,000 by 2026. I should make a correction to the statistic I mentioned a moment ago: it is about 700,000 renters in 1.1 million low- and moderate-income families who are experiencing housing stress. Rental vacancies in the Newcastle and Lake Macquarie region, where my electorate is located, are now below two per cent. In fact, this is so throughout the region, including in my electorate. The member for Shortland, who is in the chamber with me today, has a neighbouring electorate and her constituents would experience exactly the same problems. To put it into perspective, a rental vacancy level of three per cent is considered to be a tight market with a very high level of demand. So when you are in a marketplace with vacancy rates of less than two per cent, it is virtually impossible for many people to find housing, and it is little wonder that there is extra demand on the social welfare organisations in the region related to housing availability. In my electorate of Charlton, the 2006 census found that nearly 3,000 renting families, or nearly 40 per cent of all renting families in the electorate, were spending over 30 per cent of their income just to pay the rent, and nearly 10 per cent of that figure is made up of older Australians. Not too long ago I held a housing affordability forum for seniors in the southern part of my electorate, in Morisset. The intensity of concern about this issue amongst the community is extremely sobering indeed and it is why public policy action is urgently needed to address this problem. Despite all of these trends emerging over the previous decade, there was little action and little public policy initiative by the Howard government to address these issues. In fact, when you have a look at it, you see there was no policy response of any consequence at all. However, a Labor government is not going to stand back and do nothing about these circumstances. The government will work very hard to address the housing affordability crisis. We have a particular concern, represented by the values of the Labor Party for more than a century, for people in lower- and middle-income areas who are experiencing stresses such as this. At the last election Labor set out a comprehensive plan for housing. It held a housing affordability summit while in opposition, drawing together many parties who have an interest in the housing market to try and come up with some solutions. Upon winning the election, Labor dedicated a Minister for Housing to get to work on government solutions to the affordability problems. As a government, we are committed to a coordinated approach to housing policy to increase the supply of affordable housing so that all Australians have a decent place to live. This is why the government delivered a $2.2 billion housing affordability package in the May budget. That package included the following: firstly, the $512 million Housing Affordability Fund to lower the cost of building new homes, with an emphasis on proposals to improve the supply of entry-level housing; secondly, the $150 million A Place to Call Home initiative to build hundreds of new homes for the homeless across the country; thirdly, the $1.2 billion investment in new first home savers accounts, which will help hundreds of thousands of potential first home buyers to save a bigger deposit through a superannuation style, low-tax savings account; and, fourthly, the National Rental Affordability Scheme, which is the subject of the bills before us today. In addition to this, the Prime Minister and the Treasurer, in their recent announcement of the government’s Economic Security Strategy, have outlined an increase in the first home owner grant, as I noted a few moments ago. Under that initiative, first home buyers who purchase established homes will have their grant doubled from $7,000 to $14,000, and first home buyers who purchase a newly constructed home will receive an extra $14,000, taking their grant to $21,000. That boost came into effect on 14 October, and all contracts entered into by 30 June 2009 will be eligible for that new assistance—and I know already from inquiries to my electorate office that this is a popular initiative. It tips the scales for some young home buyers in particular who are wishing to enter the housing market, to make it affordable for them to become first home buyers. I would now like to turn to some of the detail of the bills that are before us today. As outlined by the Minister for Housing at the introduction of the bills, the Rudd government’s National Rental Affordability Scheme will create up to 50,000 new rental properties across Australia. The scheme is a supply-side initiative, as rental affordability pressures are being driven by a poor supply of affordable rental properties. That is, the intention of this scheme is to stimulate investment in the development of more affordable housing for the rental market. The scheme will be initially allocated $623 million in its first four years. It will operate by providing incentives to participants to build new dwellings for renting to low- and moderate-income households at a rate of 20 per cent below market rent. The incentive is made up of a Commonwealth contribution of $6,000 per dwelling per year for 10 years and a state or territory contribution in the form of direct financial support or an in-kind contribution to the value of $2,000 per year for 10 years. That is an $8,000 incentive for investors. The incentive can be provided in the form of a refundable tax offset or payment. The details of the scheme will be contained within regulations which are currently being drafted by the Office of Legislative Drafting and Publishing. It is desirable for this administrative detail to be contained within the regulations, as it will allow greater flexibility to address changing circumstances and conditions in the rental market. That is, the administrative arrangements for this scheme must be flexible enough to be able to reflect changing conditions in the rental market. As outlined by the minister, the bills also will make amendments to the Income Tax Assessment Act 1997 to provide for the refundable tax offset and to ensure that state and territory contributions to entities participating in the scheme are non-assessable and non-exempt income for tax purposes. The bills also ensure that there are no capital gains tax consequences as a result of the incentives paid under the scheme. The minister has also undertaken to release the regulations as soon as they are drafted—which will be very important as they will provide some further detail on the operation of the scheme to potential investors. If the scheme is successful and market demand is strong enough, the government will seek to create a further 50,000 properties from 2012. The minister has also committed to a review of the scheme in its early years in order to ensure that it is delivering the desired results, and changes would be made if they were needed. In addition to this and in recognition of the rental problems faced by older Australians, which I outlined earlier, the government has made Aged and Community Services Australia a partnership facilitator for the scheme. This will help ensure that the voice of senior Australian citizens and pensioners, in particular, is being heard in the policy deliberations and that the scheme delivers affordable housing suitable for older Australians. I am very hopeful that this scheme will prove to be a huge success, because it is badly needed within the rental market to alleviate the pressures that I was describing earlier. I encourage businesses within the Newcastle and Hunter region to consider investments of this kind that will be not only rewarding from an investment standpoint but also offer a significant social benefit to the community. I was speaking with one of the property investors in the region recently at another event that I convened in my electorate about this scheme. He has taken a particular interest in it and has indicated to me that the type of incentive that the scheme will provide is sufficient, in his view, to affect the calculus of the investment decisions that developers such as him will make in looking at investment in accommodation that could qualify under the scheme for this assistance. It is very important to have that feedback from at least one developer in the local region, a developer who believes that investment decisions by his firm could well be influenced in the direction of providing affordable rental housing in the region. I will be monitoring that closely because making sure that this scheme works on the ground is critical to its success. I have sat, in other circumstances, as a director of a significant bank that is a large home lender, and on many different occasions I have looked at how investment can be made in affordable rental housing. Without structured incentives such as this scheme provides, it is often very difficult to ensure that the best return is going to be achieved on behalf of those who have placed their trust in the directors of an investing organisation. So we will be watching very closely how the scheme works and making adjustments to it if it is necessary to ensure the success of the proposal. Addressing the housing affordability crisis means addressing a social and economic problem that has been ignored for far too long. There is nothing more basic to a family than being able to have a roof over their heads that is safe, secure and affordable. Without affordable housing, people do not have a place from which to go to work, to send their kids to school, to establish themselves in a community, to build their financial security, to achieve the self-esteem that derives from working or to have much-needed stability for their families. Insecure households, without secure and affordable housing, typically experience serious social problems. There is another important reason why it is desirable that this scheme works to its maximum. For older people in particular, in the later phases of their life, the last thing that they need is to experience the insecurity of not being able to afford their housing. It is a very important social and economic goal for this country that those on fixed incomes, such as pensioners, have affordable housing that offers them the security that is necessary and which they deserve after having contributed to society throughout their working lives. For us as a government, that is a goal that is extremely important to pursue—the security of people in the later stages of their lives so that they do not have to worry about the affordability of their housing and the security of their home. By encouraging low rent and affordable housing, Labor’s National Rental Affordability Scheme will go some way to providing much-needed housing relief for many working families and older Australians. I would also like to take the opportunity to thank the Minister for Housing, the member for Sydney, who made a visit to my electorate in the not-too-distant past to discuss these issues with seniors in my community and to hear their views about how such a scheme could be structured. People were very pleased to have the ability to exchange their views with the minister about these issues. Given the acute housing problems experienced in the electorate, I was certainly pleased that many of my constituents were able to take up that opportunity. It was a pretty packed forum. I am also pleased that I am part of a Labor government that, after a decade of neglect of this area of public policy, is acting on these issues and is demonstrating its commitment to the values that the Labor Party has long held to help people in these circumstances. But I think that all of us are aware that we need to make these schemes work. There is much work that needs to be done and that is why I, along with my colleagues, intend to continue working closely within the government and with the minister to make sure that the scheme does work and that we do deliver solutions to the housing affordability problems that are being experienced not just in my electorate but in many others around the country. 9795 16:50:00 Marino, Nola, MP HWP Forrest LP 0 0 Ms MARINO —I rise to speak to the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008 and in particular, to support the amendment that my coalition colleague the member for Cook has proposed. The government aims in part with this scheme to address the issue of housing affordability in Australia by addressing the chronic shortage of affordable rental housing. It proposes to establish a new asset class to attract institutional investors and not-for-profit organisations to enter into a 10-year contract to build 100-lot rental accommodation that attracts a rental rate 20 per cent lower than the current rental market. For this investment outlay, a tax offset will be available to institutional investors of a $6,000 rebate, together with a state government payment of $2,000 cash or in kind, making a total tax offset incentive of $8,000. This will apparently be available as an $8,000 cash payment to not-for--profit organisations. I would ask: will local government be considered as ‘not for profit’? This $620 million scheme aims to provide incentives over four years for the development of 50,000 new, affordable rental accommodation units to rent to low-income earners at 20 per cent below market rates. Although the financial prospectus was drafted with the assistance of social workers, it does not address the significant undersupply of new homes across Australia, which is the dominant influence on housing prices and rental affordability. I believe there are design flaws with this system because it should have been designed to meet the demand. For what is supposed to be national legislation, the bill again is very eastern-states centric. In the next three years it is predicted that there will be an undersupply of housing of over 200,000 homes across the country. The incentive to build 50,000 homes over four years will not alone relieve the pressure on housing affordability in this country. How can one compare rental demand shortages in Port Hedland and Karratha in northern Western Australia with the public housing shortage in Manjimup or indeed Walpole, the southern most town in my electorate of Forrest, or compare shortages and prices in Sydney with a place like Harvey in my electorate? And how can these areas have the same incentive payment when one compares the price differential of housing construction in New South Wales with the costs of construction in Tasmania? The demand in metropolitan and outer metropolitan areas compared to regional areas across Australia therefore needs a sliding scale to take into account the variations in construction costs in all areas. The incentives are below levels which would attract investors. Any new asset class would need to yield a minimum of five per cent and would need to be nine per cent to be competitive. I am advised that other estimates put this as high as 15 per cent. The assumed passing yield under these bills for the National Rental Affordability Scheme is just 4½ per cent. This would not attract institutional investors. The $8,000 tax offset or cash rebate as a fixed dollar amount is not sufficient for investors in high-cost areas. Therefore I believe the value of the incentives should be more closely aligned to the value of projects and forecast rents. There should be a sliding scale available for high-cost, in-demand areas in metropolitan and outer metro areas on the one hand, as well as a provision for an incentive for construction of rental accommodation in regional areas where the additional costs of transport and construction of housing can be quite prohibitive. I agree with my coalition colleagues that state and territory governments should match the tax rebate amount of $6,000 or indeed whatever sliding scale may be finally implemented to improve the value of the incentive. After all, state and territory governments will be the beneficiaries of windfalls in stamp duty and GST revenue from these new rental accommodation projects. From a commercial perspective, the current incentive structures will only see viable projects emerge from the urban fringe and smaller cities, instead of sustained, widespread growth in all areas, including my electorate of Forrest in regional Western Australia. Investors will have to borrow to build and structure their borrowings over, potentially, a 10-year period. Therefore they will not be attracted to the more expensive construction areas of regional Western Australia, like some of those in my electorate. There is also no provision for the 100 accommodation dwellings to be split and built over different areas. This could provide added incentive for an investor to provide low-cost rental accommodation over several regional areas. The penalties that will be imposed on developers and investors under this proposed legislation if properties are sold within a 10-year period is also a disincentive to attract large-scale institutional investors. As the current rental market differs not only from state to state but also by location, I also have to ask: who will decide what the current market rental value in any one area is? Just as there is a variance in the national rental market, so should there be a sliding scale within this scheme. But we should also maintain access to capital for homebuyers, and I welcome the government announcement to increase the First Home Owner Grant to $21,000 for new housing. However, we have yet to see the detail confirming whether the $21,000 will be available for both first home buyers who are building their own home as well as first home buyers who will be purchasing their home from a spec builder. I also contend that tenant eligibility criteria should provide a pathway to homeownership; otherwise, renters under this scheme will remain on welfare and rental assistance for longer than is perhaps necessary. Also the income threshold should be raised for those trying to save to get into private housing. This scheme should not just be a proxy state housing scheme offering to bail out the majority of state Labor governments. This scheme should provide renters with a pathway to homeownership. Many community groups who look to house people with special needs may well be attracted to such a scheme on face value. It indicates that they could develop housing for disabled people or even housing for the aged. But this activity is apparently precluded from this scheme. I note that housing projects that have already commenced construction will be eligible to be included in this scheme. Therefore this scheme will fund projects already in the pipeline, which means that fewer new totally affordable houses and rental stock will be added to the forward projections. Essentially, these bills may relieve the pressure on state governments as a result of their undersupply of public housing. Another flaw with this scheme is that it does not assist state governments in providing an increase in the supply of affordable housing for their key workers, such as health and education workers, or provide an incentive for these workers to take up employment positions in regional communities. The proposed eligible salary levels are below those of our essential key workers and here, again, this most deserving group of skilled workers will be excluded from eligibility under these bills. I support my colleague’s proposed amendment to this bill. The Age newspaper on 15 March reported recent data from the Real Estate Institute of Australia showing the average family could no longer afford the average home mortgage. Close to half the average family’s post-tax income, or 37.4 per cent of gross medium family income—and the affordability figure is regarded as 30 per cent—is now required to pay the mortgage. This is the worst result in the 22 years since the survey began. In fact I was recently told by a local office of the WA Department of Housing and Works that supply public housing in Western Australia that it was acceptable for applicants to pay up to 60 per cent of their Centrelink pension in the private rental market. This is simply unacceptable. The cost of rental accommodation in Australian cities and several regional centres is very high, such as the coastal sea-change/life-change areas in my electorate in Busselton, Dunsborough, Yallingup and Margaret River. The main reason for this is an undersupply of rental accommodation that has been caused by declining building approvals and dwelling starts and, in WA, the failure of the state Labor government to release land. ABS figures have confirmed that there is a trend to fewer residential dwellings being commenced. Rising interest rates have also seen fewer investors enter the housing market, which has further reduced the supply of rental accommodation available. The coalition certainly supports efforts to increase the supply of dwellings for both homeownership and rental accommodation available. However, the best way to ensure that housing becomes and remains affordable is creating a strong economy, with more jobs—and not more unemployment as this government forecasts—and increasing real incomes, as well as continued investment in the housing sector and adequate releases of land. One thing for sure is that rents will continue to increase if government gets this economy wrong. According to WA Business News on 28 August 2008, a survey found demand for WA rental properties was among the highest nationally, with 37 per cent of property managers stating there was a shortfall of more than 10 per cent of total stock. WA had the highest proportion of managers reporting rent increases during the past six months, with one-fifth of those surveyed raising rents by more than 21 per cent. Most respondents said rents were likely to increase by up to 10 per cent over the next six months, while 23 per cent indicated rents were likely to remain flat. Half of those surveyed in WA took fewer than seven days to lease a vacant property, while 45 per cent took more than one week—slightly higher than the national average. Local Bunbury real estate company LJ Hooker advised that rental demand is currently a lot higher than it was five years ago. The last two Christmas periods had high demands, but at Christmas three years ago there were zero rentals available, and this year is looking to be the same. A few years ago, percentage rate returns were 10 per cent of house values. A house valued at $200,000 would attract a rental of $200 per week. But the price of that $200,000 rental house has now reached $300, and rentals of $250 to $300 per week are very hard to find. Potential renters present themselves every day, picking up the booklet of rentals available, but rentals usually only last a week before they are snapped up. Likewise, another local Bunbury agent, Raine & Horne, advised of a large influx of workers to the area, such as engineers and tradespeople, who have been attracted to the area due to the large expansion projects of various mining companies, which have seen the rental market spiral. These workers are willing to pay premium rentals for properties in and around the CBD. These prices are much higher than the locals can afford or are willing to pay. These people are coming from all over the world for these mining expansion jobs and are paying prices above Raine & Horne’s listed prices for fully furnished CBD accommodation. CBD rentals have risen over $110 per week over the last eight months. However, there are still rental properties available in the outer CBD suburbs of South Bunbury, Usher, Australind et cetera, which are priced very competitively. In contrast, these property rental prices have only increased $30 to $50 over the same period of eight months. The reason for this is that people purchasing investment properties are paying more. When interest rates were higher, the repayments on properties were higher, which required a greater rental yield. For this reason, with falling interest rates and declining rental demand, there should be a plateau or decrease over the next few years. Despite this, the cost of housing is still increasing as a proportion of average yearly earnings. Wages have actually grown less than have rental and housing prices, which have seen more of the family’s income going into housing. Reserve Bank figures for July 2008 indicated that Bunbury suffered the highest percentage of missed mortgage payments in the state and was the only region in WA to have home loan arrear rates at 0.7 per cent—greater than the national average of 0.55 per cent. Three months ago, Bunbury was ranked 20th in the state for missed mortgage payments. I agree with my coalition colleague the member for Cook that amendments are required to make the scheme more flexible and more attractive to private sector investment. At the present time there has been little take-up from private institutional investors such as superannuation funds, because the rates of return offer little incentive to enter the scheme. It would be more attractive to the not-for-profit organisations that look to provide community housing for low-income earners or special needs accommodation. Budget estimates indicated that the vast majority of incentives would be paid out in tax offsets to private sector investors. However, if more not-for-profit organisations take up the scheme, the $6,000 incentive will have to be paid out in cash to charitable sectors. Estimates may then have to be revised if more funding is required, as the majority of incentives are likely to be provided in direct grants to the not-for-profit sector rather than as tax offsets, due to the expected poor take-up by private sector investors. Limited land supply due to restrictive land-release policies of state and local government planning is one of the main reasons for rising housing costs. State planning policies, combined with government taxes, fees, excessive infrastructure levies, charges and compliance costs, not only have added to the cost of new housing—they now represent a quarter to a third of the cost of a new house-and-land package—but have also contributed to the strangled supply of land. This must be the biggest issue impacting on land supply, housing affordability and rentals across the country—essentially it is how land is being supplied to the market. If the Labor government is serious in wanting to relieve the housing affordability crisis in Australia, it should be engaging with local government to assist with the provision of basic infrastructure and services to unlock land supply right across the nation. This scheme, over the short and medium term, must be accompanied by major long-term reforms that address the key underlying causes to house price inflation. The previous state Labor government in Western Australia was too slow in releasing land for housing supply, and that ultimately drove up house prices and rents. I welcome the recently established new Liberal-National state government alliance in Western Australia, which recognises the need to provide the necessary infrastructure and to release land in a timely manner that will result in more housing units in cost-effective areas. It is the state governments that will benefit from this scheme by way of stamp duties and GST revenue, derived from projects that will go ahead as a result of the scheme. I believe, therefore, that it is appropriate that the state governments should match the Commonwealth’s contribution to the scheme and that this should be as a cash payment rather than as in-kind support. However, it would be more beneficial to provide a sliding scale incentive to better reflect differences in each of the housing markets. This would better affect the investment in housing projects in certain areas, be they metropolitan or regional. There is a lot of uncertainty about this scheme; therefore, the take-up is also uncertain. The government’s National Rental Affordability Scheme, coupled with its proposal for the First Home Saver Accounts program, is a seriously inadequate response to the housing affordability crisis, given that money deposited in these accounts cannot be accessed for five years from commencement. Agreements have not been negotiated with financial organisations that may offer these accounts. Administration costs have not been calculated, and the timeline for their introduction has blown out by three months. In fact, to my knowledge, no financial institution has yet put up its hand to say it will offer the accounts or what administrative charges will be charged on such accounts. Construction costs in Western Australia appear to be higher than in other states or in the territories. I understand that the cost of constructing an aged care unit in the eastern states is approximately $180 per square metre, whereas the cost in WA is apparently $239. The waiting list for public housing has blown out to many years in WA under the state Labor government. For example, staff at the Department of Housing and Works office in Bunbury, which covers the south-west areas of Yarloop, Bunbury, Eaton, Australind, Dalyellup, Collie, Donnybrook, Harvey, Brunswick, Capel and Boyanup, are currently attending to applications for one-bedroom public housing that date back to 2004—that is, they are only attending to those people who applied four years ago. If you applied for a two-bedroom house, lucky you if you applied in 2002, because that is the date for which they are now processing applications for two-bedroom houses. It would be better if you had applied for a three-bedroom house, because they are now processing applicants who applied only three years ago, in 2005. Similar and indeed longer waiting periods are being experienced all over the south-west in areas such as Busselton, Margaret River, Nannup, Bridgetown, Manjimup and Greenbushes. In my electorate of Forrest, there are over 6,200 people receiving rental assistance from Centrelink. According to the West Australian on Wednesday, 24 September 2008, the waiting list for state houses in Western Australia blew out to almost 18,000 West Australians who were in the queue for public housing at the end of August 2008. The number of applications on the list had surged by almost 40 per cent in less than three years. Quite simply, there has not been enough Labor state government investment in public housing stock and infrastructure, and the onus has been put on residential developers in the south-west to provide the one in 8 public houses in any new estate, such as Dalyellup in my electorate. As Shane Nichols from the Australian Financial Review reported on Wednesday, 3 September, price increases on blocks of land have escalated because developers now have to pay for the infrastructure that goes with housing estates. The full cost of all services is passed on at the start from the developer to the home buyer, a factor that is driving up costs for developers and home buyers alike. Add to this the release of land, exacerbated by the delays in obtaining extraction licences for fill materials for building pads. Building costs have escalated. Take steel, for example: the price of steel has risen by 30 per cent in the last six months. Add to this the price of fuel for transport costs to the site. They all add to time delay and rising costs. I believe the amendment proposed by the coalition should be supported to improve the proposed legislation under these bills. I support the amendment moved by the member for Cook. 9800 17:08:00 Sidebottom, Sid, MP 849 Braddon ALP 1 0 Mr SIDEBOTTOM —by leave—When I was speaking last time on the National Rental Affordability Scheme Bill 2008 and associated legislation, I was talking about the current rental market in Tasmania in relation to average income. I mentioned that the median weekly family income in Tasmania was $1,032, compared with $1,171 in Australia generally. Unfortunately, the figures are lower in my electorate of Braddon, where the socioeconomic status is lower than in any other major Tasmanian centre—for example, Launceston, in the north, and Hobart, in the south. The average rental price for a three-bedroom house on the north-west coast is $200 or above, which, given the figures that I have just cited and have cited previously, is about 50 per cent of an average individual’s weekly income for many people. On the north-west coast of Tasmania there are currently 5,583 renting households. Of these, 2,035—that is, 36.4 per cent—are currently experiencing rental stress, struggling to afford to pay their weekly rental costs. We know that the main factor currently driving up rental prices is a shortage of available properties, attested to by nearly every member who has spoken in this place on this important legislation. In fact, vacancy rates are at or below two per cent in all Australian capital cities. With this in mind, I am so excited about this new Rental Affordability Scheme. We need to build and make available more properties in order to make renting and indeed home purchasing more affordable again. I acknowledge that we are not going to solve the problem overnight, but we are definitely moving in the right direction, and in this I would like to congratulate the minister responsible for this legislation, the Minister for Housing, Tanya Plibersek. This scheme alone will not fix housing affordability in Australia, but it is a component of the government’s $2.2 billion housing affordability package, which also includes our $512 million Housing Affordability Fund and the First Home Saver Account. The Housing Affordability Fund will help bring down the cost of newly built homes for many Australians, along with our recently announced increases in the home owner grant scheme, while our First Home Saver Accounts program will help young Australians in particular save for their first home. I want to spend a bit of time talking about the first home saver accounts, because I believe they are a key in solving our country’s current housing and rental crisis by redirecting our current focus from short-term spending to medium- and long-term saving. The first home saver accounts will provide a simple, tax effective way for Australians to save for their first home to buy and then live in, through a combination of low taxes and government contributions. In the way the account is set up, the government will contribute 17 per cent on the first $5,000 that an individual contributes each year. So when we break that down in real terms, for the first $5,000 a person contributes to the account, the government will chip in $850. We recognise that $5,000 is quite an amount of money to have to save, but we are trying to encourage people to get serious about their savings if they want to own their own home and be part of what has been the traditional Aussie dream. Also, $5,000 is not the maximum contribution that can be made to an account each year. There is, in fact, no limit. For the record, account holders contribute from their after-tax salary and earnings and are then taxed at 15 per cent, which is equivalent to superannuation. All government contributions will be tax free. The accounts will be open for all those aged 18 to 65 and are capped at $75,000, which in turn is indexed. Young people working part time, for example, are able to start off by putting as little as $20 a week away into their first home saver account—an amount that they may barely notice, at least for some. They can then increase these contributions when they gain full-time employment or start earning a bit more. When we talk about first home saver accounts, it is clear that they are exactly that—aimed at saving for a first home. The accounts are locked in for a minimum of four years, with a minimum $1,000 required to be contributed in each of these years in order to receive the full government incentive. So it is a savings plan for now and in the future, and it is taxed at a lower rate than would otherwise be for such income. This measure I believe is a very responsible policy by our government because we want to turn around the current trend of short-term spending and really get our next generation focused on long-term saving. And the bigger the deposit our kids can save, then the lower their mortgage repayments are going to be in the future. The first home saver accounts are individual accounts, so cannot be shared. However, if two individuals in a relationship open individual accounts, they can then combine them once the time to purchase a home presents itself. Another advantage is that, if a couple were to spilt up, there is no issue in dividing up account funds. So this is meant to be an incentive, an encouragement, not a disincentive. In the case where an account holder marries or moves in with their de facto, who already owns a house in which they live, the person is able to either contribute the funds from their account to this pre-existing mortgage or, alternatively, move the full amount of this account into their superannuation. I reiterate that alternatively they can move the full amount of their account into their superannuation. None of the government contributions or interest earned is lost if these account funds are moved to superannuation. This is really an inclusive incentive for people to save. The account provisions are also aimed at purchasing a first home in which to live, so people who may previously have purchased an investment property are still eligible to open a first home saver account. However, penalties will apply if a person withdraws these funds and then does not use them to purchase a home. Again, this is a perfectly logical and responsible policy in my mind because these accounts are solely for the purpose of helping Australians to purchase their first home by encouraging medium- to long-term savings. These accounts will also operate in addition to the first home owners grant. This grant has been in operation in Tasmania since 2000 and was a one-off grant of up to $7,000, depending on eligibility. That has now, again depending on eligibility, risen to $14,000. Having a first home saver account will not affect a person’s eligibility to receive the first home owners grant—again, another incentive. The Treasury estimates that about $6.5 billion will be held in first home saver accounts after four years. Currently in Australia the purchase cost of the average home is 7.5 times a person’s average wage. This has risen from about four times the average wage a decade ago. Rising interest rates have also made repayments more expensive. In my electorate of Braddon, the average house price has risen from $50,000 to $80,000 a decade ago—that may not seem a lot—to more than $250,000 these days, which, compared to many other places in Australia, must seem like a dream, but everything is relative. This makes it very difficult for an average-income earner, say in their mid 20s, to pay rent and also to save for a deposit on their own home. Because of these current high rental costs and high mortgage costs, I think many young people in my electorate have fallen into the short-term spending mindset. They simply live week to week to get the bills paid, pay the rent and feed and clothe themselves and their children, if they have any, and very little is left over. I believe this legislation and the first home saver account will turn this mindset around—or at least attempt to—because young people will be encouraged to start saving from when they turn 18. So when they first start their apprenticeship or in their first year out of uni, or even when they are just working casually or part time, they can start putting just a small amount away each week which will then accrue interest and attract a government contribution each year. They cannot touch this money while they save, so the temptation to use it to buy that new car or take a holiday is eliminated. This is the short-term spending culture we want to change. There is nothing wrong with spending but you need to be able to afford what you spend your money on and hopefully there is an incentive to save into the future. In addition to building up these deposits, the accounts will also encourage a habit of saving which hopefully will last a lifetime. So if they cannot touch it, then without really even thinking about it, once they are ready to make a deposit on their first home, say, eight or 10 years later—and I know that seems a long time when you are young and it is a long time to hold your breath— HM5 Georgiou, Petro, MP Mr Georgiou —It’s a long time when you’re old too. 849 Sidebottom, Sid, MP Mr SIDEBOTTOM —It is indeed. They will have a substantial little kitty to rely on. I think that is where many youngsters in my electorate have been caught out. They move out of home and into the rental market in their 20s. They are paying these big rents, or relatively big rents, while also paying more for their petrol and groceries, so consequently they are not making many or any savings. Then they get to their late 20s and suddenly realise they cannot afford to purchase their own home. I believe the first home saver account will help turn this around. The second major innovation of the first home saver account is that family members are able to contribute as well. This is a key feature of the accounts, as all parents and grandparents would like to see their children realise the great Aussie dream to buy their own home. So if you are now a walking ATM for your children you will be able to continue to be a walking ATM and contribute to their savings accounts. So if a young person’s parents or grandparents were to contribute, say, $100 as an 18th or 21st birthday present, the government will also give them $17, which is not a bad present from Uncle Kevin and the government. These accounts will initiate a major mindset shift back into long-term saving which will then flow onto future generations. If we can get our younger generation to get saving right now and subsequently pay off a mortgage during their lifetime then this financial security will be passed onto their children and then their children’s children after that. Finally, both the National Rental Affordability Scheme and the first home saver accounts—in addition to the first home owner grant, which we have recently increased—are fantastic, practical initiatives of the Rudd government. We are not just talking about our country’s current housing crisis; we are getting in there and doing something about it. I commend this legislation to the House. And for the record I thank Deputy Speaker Vale before you, Mr Deputy Speaker Georganas, for helping me out earlier today when I was supposed to be in the chair and opening the Main Committee. 9803 17:22:00 Moylan, Judi, MP 4V5 Pearce LP 0 0 Mrs MOYLAN —I rise to speak on the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008. I think that I would like to start with a quote from Julian Disney from the University of New South Wales because for many years he has been a fairly lonely voice, may I say, calling for something to be done about the housing crisis in Australia. In a paper that he put out commenting on this scheme he said: Lack of affordable housing strikes at the heart of our lives, our communities, and Australia’s future prosperity. It impoverishes people, erodes families, destroys jobs, weakens the economy, and damages the environment. He went on to say: Problems of unaffordable housing have worsened alarmingly during the last 10–15 years— and I think I have been listening to him talking about this for about that length of time. He has been supported by other organisations like Shelter and ACOSS. Many other organisations have also been heard, but they have not been really listened to. Professor Disney went on to say that these problems have been known about over that period and he continues: average house prices relative to household income have almost doubled average monthly payments on new loans have risen by more than 50 per cent the proportion of first homebuyers has fallen by about 20 per cent the proportion of low-rent homes has fallen by at least 15 per cent opportunities to rent public housing have fallen by at least 30 per cent. These are really very disturbing figures. The government purports that the design of the National Rental Affordability Scheme will encourage large-scale investment in new affordable housing stock by the provision of tax offsets and direct cash incentives for the development of new housing stock or new dwelling stock providing it is let to eligible tenants and at a benchmark rental over the 10-year life of the scheme. My concern is that, at the time of preparing this speech, the income test applying to the scheme is not specified, the market rate of rent remains undefined—that is, the benchmarked rate—and the legislation is silent on who the eligible investors will be, apart from the specified institutional investors. These are the key elements that go to the heart of this legislation and the possibility of it providing the 50,000 affordable rental dwellings that it promises to deliver. Fifty thousand is the stated number of dwellings that the scheme should deliver, all things being equal. I think that this is an optimistic view—and I think others share that view—if the scheme is fully subscribed to. The setting of the market rate of rent will form the basis for the rental being charged by developers opting in to the scheme. To qualify, rentals must be set at 20 per cent under market value. This alone could determine the level of interest in investing in the scheme. We had a Senate inquiry into housing affordability, which looked at this scheme. There were some very good contributions to the Senate inquiry. One of the people who had a bit to say was Ms Kakas from the Property Council of Australia. I hope I have pronounced the surname correctly; it sounds like it might be Greek. I might need the help of my colleague in the chamber the member for Kooyong. Ms Kakas made a good contribution—very constructive. She said: ... we have the opportunity, if the National Rental Affordability Scheme is properly designed, to bring some maturity and some changes into the marketplace to bring superannuation, developers, trusts and new ways of bringing products to market and to keep investors in place. But she went on to say: I think not having the detail certainly adds a level of constraint and speculation which keeps our development people as a whole putting their toe over the sidelines, saying, ‘We’d like to participate and we think this has real potential but we really need to see how it is going to work on the ground and whether or not there is some feasibility and flexibility there to allow for innovation to occur.’ I think these are real concerns. I do not want to be a wet blanket. I raised the matter of the housing crisis in this place immediately following the 2004 election, so I have long felt that more needs to be done. I applaud the Minister for Housing for taking this initiative but I think that it needs much more detail if we are going to be able to fully subscribe to it and even touch the side of what has become an immense problem in this country. Without knowing the income test that is to apply to this scheme, we have no idea whether it will cover many of the service sector people working in regions, in particular where housing is expensive due to rapidly expanding workforces. The country town of Boddington, in the electorate of Pearce, is one such case. The goldmine has reopened, and the resulting population explosion has greatly increased property values and rentals, with severe shortages driving up costs. Indeed, the local government has spoken to me a number of times about this. They wanted to open up new land but the state Labor government—at that time—had done nothing to fund infrastructure services to the town. It was very difficult to develop land without the basic services of power and water supply and sewerage. The hands of local government were very much tied in that case—as I have noted is the case in many parts of my electorate, in the outlying country towns within an hour or an hour and a half of the city. Despite the lack of critical detail as we debate the merit of the passage of this legislation through this House, measures which hold the promise of increasing housing stock for the rental market, it is a very welcome start. It is important, though, for us to understand that the serious state of housing availability and affordability in many cities and towns in Australia has come about largely due to the serious dereliction of duty of state and territory administrations under Labor governments primarily. It has been reported that there is a shortfall of some 30,000 houses in the public housing sector alone, and in most areas it has been difficult to rent housing in the private sector even if you can afford rents of $500 or $600 a week. Some people in big cities have had to agree—and this is very recent—to pay six months rent upfront plus a bond to agents just to get to the front of a long list of applicants, and sometimes there are 30 or so applicants for one dwelling. This has left many families and individuals living in temporary accommodation, hiring caravans, living in cars or on the streets or, as I said, moving from one household to another. It is a very unsatisfactory situation, especially for families with children. Many people are experiencing a high level of rental affordability stress. It is little wonder that we have reportedly over 100,000 homeless people in Australia. The shortage of both private and public housing is having a serious impact across the community, including on young single students and young families. But the situation is particularly dire for those on low and fixed incomes, such as pensioners—disability pensioners in particular—veterans and those who have little opportunity to increase their income stream. Those who rely on private rentals, which are scarce, expensive and continue to increase, are under particular stress. There are many reasons for the housing shortage and the high prices, which are out of the reach of many people. They can be resolved with proper management and with political will. I want to acknowledge the constructive work done by the Real Estate Institute of Australia in outlining some of the speed humps slowing development and I acknowledge REIA’s endeavours to make recommendations on the way forward. Again, they have been a bit of a lonely voice in the wilderness. I think they have been coming to see me in this place for at least 10 years—that I can recall—over problems with housing shortages. They, along with many others, valiantly worked for several years to highlight the growing housing crisis. Poor planning has resulted in many Australians forgoing the dream of owning their own home or finding affordable, reliable rental accommodation. The coalition government supported greater land supply and was joined by the Residential Development Council in calling for the adjustment of public policy settings. The deliberate restrictions on the release of land for new housing by state governments have been one of the key drivers of spiralling home costs in recent years. In 2006, RDC Executive Director Ross Elliott identified three things driving the decline in housing affordability. Firstly, deliberate restrictions on the release of land for urban growth have forced up raw land prices faster now than in almost any period in living history. Secondly, not only is the land too expensive but new developments are now heavily taxed to the point where these taxes, charges and levies are adding up to $200,000 in costs for a new house and land. Mr Elliott said the third problem was a dysfunctional system of development assessment, which was adding unnecessarily to development costs, adding to needless delays and inflating the price of developed stock. Try getting your applications through some local government authorities—and this is not what Mr Elliott said but is my experience and my understanding. Many local governments are underfunded and understaffed. I know for a fact that it can take 12 weeks to get an acknowledgement that a letter of inquiry has been received by local government, and then no answers are forthcoming on the development questions. In my view there needs to be a federal, state and local government strategy to do something about supply, to remove unnecessary roadblocks and delays in the development approval process and to work to bring down government taxes and charges on real estate transactions for home owners and rental accommodation developers. As I said before, I spoke in this House in 2004 about the high cost of government taxes and charges on each real estate transaction, highlighting the fact that the increase in the stamp duty revenue of the states since 1998 has been 120 per cent, with Sydney a whopping 171 per cent and Western Australia 110 per cent. The Productivity Commission found that: … for a home buyer required to provide 10% of the purchase price for a deposit— this is for an average priced property— a stamp duty of 5% increases the deposit gap by 50%. Meeting this extra upfront cost might require first home buyers to delay their entry to the market … The Urban Development Institute of Australia in 2006 found that the ‘increases in government fees and charges as well as the add-on cost to development land amounted to 21 per cent to 34.8 per cent of the cost of homeownership’. These are some of the problems that have made it much harder for those on low incomes to manage to pay increasing rentals in the private sector and to find housing in the public sector. National figures from the Australian government housing data set in June 2006 showed that more than one-third of Commonwealth rent assistance recipients paid more than 30 per cent of their income on rent, after CRA was factored in. This situation has been exacerbated due to little progress by the state governments in maintaining adequate stocks of public rental properties, with unacceptably long waiting lists for public housing. For example, there were reportedly 16,000 families on Homeswest waiting lists in May this year in Western Australia—16,000 waiting for public housing. And this was at a time when the West Australian government, a Labor government, was selling off prime public housing sites, leaving properties derelict and not spending adequate amounts of money on renovating existing stock and certainly not putting very much money into the development of new stock. Sadly, this measure, which seeks to attract private investment, is not actually going to provide for this particular section of the market. These are people who sometimes have chronic problems in meeting their rental payments and who have other social difficulties that would not make this kind of housing an attractive proposition to very many in the private sector, I postulate. We still have an obligation to take care of this group. And I am very concerned—deeply concerned—about the lack of affordable and suitable housing for people who have a disability, particularly those with a mental disability. In the past people with certain kinds of disability were institutionalised but they are now put out into the community and often these are the people who most struggle to find appropriate and affordable housing. Often they form the bulk of the people who today live on the streets. In a wealthy country like Australia, despite the financial woes of the world, it is totally unacceptable that we neglect so badly this sector of our population. We ought to be ashamed at what is happening to this low-income group in our community. It is just a disgrace. So there are 16,000 people on Homeswest waiting lists in Western Australia and I would expect that the figures are similar in other states. Although it is pleasing to see that many key stakeholders, such as the Master Builders Association and the Housing Industry Association, to name two, were considered in the development of this legislation and while the $622.6 million is a welcome injection of funds into the rental housing sector to address the significant undersupply of new dwellings, it is, as I said, unlikely to be able to fill the gap. Somebody forecast that we need an increase of more than 200,000 new dwellings by 2009-10. So this is like a drop in the ocean. As I said, it is a welcome drop in the ocean but it is a drop in the ocean. I know that the states have been a party to this agreement and that they are making a contribution, but it is nowhere near the contribution that they should be making given the dereliction of duty that we have seen, especially over the past decade. I think much more could be expected of state governments in this respect. There are some definite positives but there are some problems with this. I know that our shadow minister has put forward an amendment to the legislation and, in the interests of a bipartisan approach to what is a very serious problem in this country, that amendment ought to be considered and there ought to be greater clarification of some of the points that are causing concern in those investor groups that might help us to solve the housing rental availability and affordability problems in this country. One of the other problems that I see with this legislation, I note in the little time I have left, is that, if a development is designed to convert existing residential stock in an established urban area to affordable housing stock based on a new design and layout that caters for specific disability groups or the ageing, that project should be worthy of consideration; however, I think we will find that such projects are excluded under this scheme. That is disappointing because, as I said, these people are amongst some of the neediest within our community with regard to public housing. There are a number of other issues, probably too numerous to go through now in the time that I have available. But one other point is that this scheme does apply to existing housing stock where it meets the criteria, and it does apply to renovations. Again, that will prevent us from providing those 50,000 new dwelling units that we need just to begin to touch the sides of what is a huge gap in affordable and appropriate rental accommodation in this country. As I said, our shadow minister has identified some of these problems and put forward an amendment and, while we support this legislation, it would be good to see that amendment accepted. 10000 Georganas, Steve (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Mr S Georganas)—Just before I give the call to the member for Shortland, can I say to the member for Pearce that the pronunciation of the surname Kakas was perfect, as I am sure that the member for Kooyong, who was here earlier, would agree. 9807 17:42:00 Hall, Jill, MP 83N Shortland ALP 1 0 Ms HALL —I greatly respect the member for Pearce and I find that I agree with her on a number of things, but I have to take issue on part of her contribution because an absolutely unacceptable shortage of housing exists throughout Australia, and that was allowed to bloom under the previous government. With regard to public housing, I was a state member of parliament when the Howard government came to power and one of the first acts of the Howard government was to reduce the money that went to the states. That had a flow-on effect in the amount of public housing that was available in each state. Overnight, the waiting lists for public housing doubled. Whilst I acknowledge that we do need more public housing in our states, I have to say very respectfully that that public housing shortfall was not a problem that you could direct and say was a state problem; it was a problem that did, to a large extent, come from the then federal government. I found it very pleasing that the Rudd government made it a priority to have a Minister for Housing, something that the previous government did not do. The simple fact that the Rudd government has a high-profile minister as the Minister for Housing shows that we are committed to addressing the crisis in housing in this country. Be it affordable rents, be it home ownership, be it the fact that we need to help first home buyers to purchase a home, be it any area of housing, the Rudd government recognises the importance of housing and what it means when there are not enough houses available for the citizens of Australia. That can be seen by the fact that one of the first acts of the Rudd government was to look at homelessness, which demonstrated that one of the major causes of homelessness is the fact that there are not enough houses available. This is one tier of the Rudd government’s approach to affordable housing. Initially, there was a three-pronged approach which was the Housing Affordability Fund, the establishment of the first home saver account and the National Rental Affordability Scheme Bill 2008, which we are debating in the House today. Another great boost to first home buyers is the increase in the first home owners grant announced in the package last week. First home owners will now be able to get a grant of $14,000, or $21,000 if they are purchasing a new home. This will also encourage our housing industry to pick up in this time of economic insecurity. The National Rental Affordability Scheme is designed to encourage large scale investment in affordable housing for people who are struggling to find rental accommodation. The NRAS offers tax and cash incentives to providers of new dwellings on the condition that they are rented to low- and moderate-income households at 20 per cent below market rates. The NRAS is established in this bill. This bill amends the Income Tax Assessment Act 1997 to enable entities participating in the NRAS to claim a refundable tax offset in their annual tax return or through lodgment of an application by not-for-profit entities who would not ordinarily lodge a tax return. In addition, the bill amends the ITAA 1997 to ensure that state and territory contributions to entities participating in the NRAS, whether in cash or in kind, are nonassessable and exempt for taxation purposes and to ensure that there are no capital gains tax consequences from the receipt of the incentives under the scheme. This is just one demonstration of the Rudd government’s commitment to solving the shortage of rental accommodation in Australia. The NRAS commenced on 1 July 2008. These amendments apply to income tax assessments for the 2008-09 income year and later years. The incentives comprise Commonwealth contributions in the form of a refundable tax offset or payment to the value of $6,000 per dwelling per year and a state or territory contribution in the form of direct financial assistance of an in-kind contribution to the value of at least $2,000 per dwelling per year. The incentive will be provided for a period of 10 years to complying participants and will be indexed in line with the rental component of the consumer price index. The Rudd government did not think of this in making a spur-of-the-moment decision on an approach to looking at addressing the shortage of housing and affordable rental accommodation. Rather, this policy was developed in consultation with industry, those people who provide housing, and with those people who actually need to access affordable housing. What that says to me is that the Rudd government is engaging, consulting and then developing policies that will address the needs of the people of Australia. What enables the government to do this is the fact that it is consulting with all groups in the community. The National Rental Affordability Scheme Bill 2008 will provide new principal legislation relating to the Australian government’s new National Rental Affordability Scheme. The cost of this scheme’s package is estimated to be $622.6 million over four years. The scheme will have a positive impact on low- to moderate- income families’ ability to rent a dwelling that is part of the National Rental Affordability Scheme at a rental rate 20 per cent below the market rate. It will have a very positive effect on rural and regional areas where incentives to support and build housing are not as strong as those in other areas. I need to share with the House one story in particular that shows just how bad this rental accommodation crisis is. As a federal member of parliament, I do not have the same amount of contact as a state member would have with constituents who are looking for housing or rental accommodation. But I have to tell the House that over the last three to four years there has been an ever-increasing number of constituents coming to my office seeking assistance to find housing. An elderly lady in her 80s living within the electorate had a husband who was in the early stages of developing dementia. He threw her out of the house and locked her out. We contacted the department of housing but, because she was on the lease of her current house, we were unable to secure emergency accommodation for her. What this elderly lady had to do was move from one house to another house and then to another house, each night sleeping on the sofa of a different relative or friend. In the end it became too much for her. Here was a woman who was still facing actual physical danger but she returned to the situation that she had escaped from simply because she had no other options. I must correct the record here. She and her husband had purchased their house from the department of housing so she was an owner of that house. Because she was an owner of that house, she was unable to get rental accommodation through the department of housing. She felt uncomfortable going to a refuge. In the end she was forced to return home. I believe that is a very sad story, one that shows the inadequacy of the current system. In Lake Macquarie the availability of rental accommodation is less than two per cent, as has already been stated by the member for Charlton—and three per cent is what is thought to be a tight market. If you are a young family looking for accommodation or if you are a single person that has no rental record, your ability to find a house is next to none. I had a family of six come to my office saying that they were unable to find accommodation and they were forced to pitch a tent and live in it for some three to six months. I could tell you story after story after story about the way this housing shortage has impacted on the residents of the Shortland electorate. The Shortland electorate, I might add, has a very high level of homeownership and a very elderly population but still, even with that high level of home ownership, there is this incredible shortage of rental accommodation for those people that need it. And, if you move to the Central Coast part of the Shortland electorate, the shortage is even greater, exacerbating the difficulty of finding accommodation in that area. We had the Howard government sitting on their hands for 12 long years. We had the Howard government ripping money out of funds to the states for housing. We had the Howard government not even bothering to have a housing minister. Because of their inaction, because of the simple fact that they were not prepared to face up to their responsibilities and ensure all Australians had the option of having decent accommodation, this enormous crisis in housing developed in Australia. This bill will provide new principal legislation relating to the Australian government’s National Rental Affordability Scheme. Its object, of course, is to increase the supply of affordable rental dwellings, something that the previous government totally ignored. At the same time it will look at reducing the cost for low- and moderate-income households. The rental accommodation that is available in the Shortland electorate—and in other electorates it is even worse—is well beyond people’s ability to pay. The scheme will encourage large-scale investment in affordable rental housing by offering an incentive to providers of new dwellings on the condition that they are rented to people who are finding it hard to obtain rental accommodation at the moment—that is, people on low and moderate incomes, people who are really struggling. This rental accommodation will be provided at 20 per cent below market rates. The incentive for providers will be in the form of a tax offset over a 10-year period. The bill also addresses a number of scenarios that may arise under the scheme. The National Rental Affordability Scheme is part of the government’s $2.2 billion affordable housing package, which will increase the supply of affordable rental homes, help people save for their first home, lower housing infrastructure costs and build new homes for the homeless. If you remember, at the commencement of my contribution to this debate, I emphasised the importance that the Rudd government has placed on solving the problem of homelessness. The scheme delivers on one of the government’s 2007 election commitments. The Council of Australian Governments agreed to implement the scheme in March 2008. The National Rental Affordability Scheme will create up to 50,000 new rental properties across Australia at a cost of $623 million in the first four years. The scheme provides incentives to participants to build new dwellings for renting to low- and moderate-income households, as I have already said. The incentive is made up of contributions from both the states and the Commonwealth, and it also has the support of the housing industry. This is good legislation. The scheme will be reviewed in its early years of implementation to test whether it is adequately focused on those who would otherwise be in rental stress, people like the elderly lady or the family of six who were living in a tent that I have told the House about in this contribution. The review will test whether there is scope for simplification or reduction in the administrative burden and whether there are evolving issues of noncompliance that need to be addressed. The review may indicate a need for improvements to the scheme. We have before us today a scheme that has been developed in consultation with all sectors of the housing industry. We have before us today legislation that has been developed to address a specific problem, and that is the shortage of affordable rental accommodation in Australia. We have before us today legislation that the government will continually review to see that it is actually meeting its objective of ensuring that there is affordable housing for all those people on low and moderate incomes, those people who are currently finding it very difficult to survive because of the proportion of their income they need to pay for rent, and those people who just cannot find accommodation and are either forced to live in unsuitable accommodation or live with friends or relatives, or find themselves homeless. This is good legislation that should be supported by all members of the House. 9811 18:01:00 Haase, Barry, MP 84T Kalgoorlie LP 0 0 Mr HAASE —It troubles me somewhat to speak this evening on the National Rental Affordability Scheme Bill 2008 and related legislation and to be forced to disagree with the honourable member for Shortland. 83N Hall, Jill, MP Ms Hall —When have you ever agreed with me? 84T Haase, Barry, MP Mr HAASE —There is a point in that, of course. 1000 Sidebottom, Sid (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Mr S Sidebottom)—Try to ignore each other. 84T Haase, Barry, MP Mr HAASE —We are told that this legislation establishes a scheme designed to encourage large-scale investment in affordable housing. It does this through tax and cash incentives to providers of new dwellings on the condition that they are rented to low- and moderate-income families at 20 per cent below market rates. The Rudd government has talked long and hard about the housing supply and the affordability crisis. Indeed, in doing that it talked up the expectations of low- and moderate-income families who look forward with bated breath to a solution. However, we have not found one. I have probably one of the greatest crises of accommodation of all time across the Pilbara region of my electorate. I know full well the problems. Recently I had a staff member in South Hedland move on from a $51,000-plus a year job. I am unable to replace that person because the person who replaces her needs to go to town and find accommodation that they can actually afford. What is available is going to cost somewhere between $850 and $2,500 a week. Do the math. It does not work. Before the last election and ever since, everybody has been looking forward to this great day when we find a solution to housing affordability. This certainly is not it. Why would somebody contemplating building a house in the Pilbara forgo at least $20,000 a year rental so as to get $8,000 a year from combined governments? It does not add up. There has been some interesting stuff talked about. I will quote Kevin Rudd’s Black Book of Broken Promises: Kevin Rudd’s efforts in the area of housing affordability are doomed to fail, because he does not seem to understand that the problem in Australia lies on the supply, not the demand side. In other words, there are a lot more interested buyers than available houses and land, causing the prices to go up. This is the elementary economics of supply and demand, which the “economic conservative” Kevin Rudd fails to grasp— sorry, Mr Deputy Speaker, I am referring to our Prime Minister— instead preferring to paper over cracks and appear to be doing something, alas, without actually achieving tangible results. For example, the Rudd government’s First Home Saver Accounts (FHSA) will not make entry level housing more affordable for first home buyers, quite the contrary, they are unlikely to increase house prices by giving buyers more money to spend, whilst doing nothing to increase the supply of housing. Labor’s recently re-launched $512 million Housing Affordability Fund (HAF) cannot possibly cut $20 000 from the cost of a home, as claimed by Kevin Rudd— our Prime Minister— Instead, it is nothing more than a slush fund designed to bail out failed state governments. Before you rise up in alarm, eligible organisations under the program are state and local governments and, according to the Rudd government’s guidelines, typical projects would include the installation of sewerage, roads and parks as well as funding that reduces holding costs imposed on developers by government planning systems. Isn’t that propping up state governments? It is a clear instance of picking up the tab for the responsibilities of other levels of government whilst doing nothing about the other major contributors to problems with housing affordability—the outrageous levels of taxes, fees and charges claimed by the state government. They are using housing as a convenient cash cow. I do not know whether the government really understands the full national scope of these housing issues. I say that because I think this is intended to be a positive solution, and it possibly is if you work and live in a metropolitan area. But I am afraid that, like the former state Labor government in WA, this federal government has no idea of what is happening out in regional Australia—and I include Tasmania in that; it is part of Australia. The electorate of Kalgoorlie is a far cry from the comfortable metropolitan electorates where the Prime Minister, Deputy Prime Minister and Minister for Housing live. Years ago, if Australians talked about high rents, they may have with bated breath told each other stories of the unbelievable rental prices they heard of in Sydney, maybe even of the prices in some of the suburbs in the housing minister’s electorate. That was before the mining boom. Now we hear stories about the unbelievable rental prices in mining towns and the seemingly ridiculous prices people will pay and the lengths they will go to just to secure a caravan site, a shipping container or a shed to live in. If you are lucky you will get a two-storey shipping container, and that is high living! Some of the stories that have been reported in newspapers and on current affairs shows on TV are not funny. They are very tragic in fact because these are real people trying to make their way in real jobs in my electorate in the Pilbara. It is a sad reflection of the state of the regional commercial housing market. Mining is a key industry in the Kalgoorlie electorate and it is not just my electorate but Western Australia at large and, indeed, nationally. The economy’s big benefit from the boom, of course, has been national. Everyone is getting a slice of the Pilbara cake but they do not suffer the pain would-be residents are suffering. There is a predictable effect when an industry that generally operates in remote areas increases exponentially almost overnight. The Pilbara has made its name in iron ore and, as iron ore boomed, the industry cried out for more workers and affordable accommodation in the Pilbara became harder and harder to find. It is especially true for permanent affordable accommodation. As I alluded to earlier, a modest three-bedroom, one-bathroom house can set you back $1,500 a week in rent and a brand new four-bedroom, one-bathroom house will set you back more than $2,500 a week—that is, if you are lucky enough to get a rental. There is such a high demand that landlords can choose from the many applicants for each house, and I know that when a tenant moves on, often because of the absolutely unsustainable rental prices, the landlord has the opportunity to increase the rent. In the early days—and I am talking as close as two years ago—rents were doubling from one tenant to the next. There is a very scary world out there if you have not been to the Pilbara and you lob in there expecting to find accommodation. I am sure that you can pay these high prices in upmarket suburbs in the housing minister’s electorate but you have the choice to pay a lot less if you want to, and if you do have a couple of grand a week you would get a very swish house with a very nice view of Sydney Harbour for your dollars. In the Pilbara you have to be on very substantial wages to pay that kind of money. It is common knowledge that our miners work hard in tough conditions and get paid well for it, but what about the rest of the community which supports those mine workers—government workers, nurses, teachers et cetera? The whole GEHA housing system in Western Australian regional centres has virtually collapsed because the Labor government, over the last eight years, has not put money into it. Local government employees and small councils simply have to acquire land and build houses to try to accommodate their workers. Small service organisations cannot get staff simply because they cannot accommodate those staff. So the level of service for all industries in my Pilbara towns deteriorates. Why would any investor thinking of building homes in my electorate join the National Rental Affordability Scheme? As I said before, they have to forgo 20 per cent of the market rate, and with the levels of rent in the Pilbara, and in the Kimberley, that would start from about $20,000 a year and they would get back a paltry $8,000. It simply does not work. One of the major reasons in the early days that housing affordability slumped in the Pilbara area was LandCorp. I am sorry to say that LandCorp’s modus operandi was altered some years ago. Their initial responsibility was to provide a steady stream of land for building and a continuum of affordable housing. Some years ago they were asked to make sure that they contributed to the bottom line of government income. Profit became the incentive. Since those days they have dropped the ball when it comes to providing affordable housing. They have simply trickled land onto the market, ensuring that, as land becomes available, it will be fought over to the extent that maximum prices will be paid. That is certainly not the work of an organisation charged with the responsibility of providing affordable housing. So much has been said about native title and how, in my vast Pilbara areas, land is not available because of the uncertainty of covering future costs when native title is finally sorted. So what LandCorp have been doing is spoiling what ought to be a positive economic loop. They have been trickling down land so as to push the price up, so as to make more money for LandCorp, so as to pay more money into the coffers of the previous Western Australian Labor government. I have been in parliament for 10 years now, speaking volumes about the failings of LandCorp. I am pleased to say that there is now a glimmer of hope for changes. With a newly elected Liberal government in Western Australia, LandCorp just may be given a shake-up or at least brought to heel. I wrote to the former state Labor government practically begging them to do something about greedy LandCorp, but they remained a problem for housing of an affordable nature in my electorate. It does not matter how good the incentive is for investors to create housing when LandCorp will not release the land for them to buy and build on. There is just no way that prices will be affordable. Of course, the cycle is vicious. There is no land to build on except what has trickled down, so the price goes up. Then, when you secure the land on which to build a home, you pay exorbitant prices to builders because they have to factor in exorbitantly high prices for accommodation for their crew whilst they build the home. But the delays are extortive, often because builders cannot get accommodation of any nature. It happens to contractors time and time again. A good mate of mine, Doug Gould, finished up having to buy a hotel in Port Hedland so that he could accommodate his 28 truck drivers, so that he could fill the requirements of the contract, while working with one of the large companies in Port Hedland. It is a situation that is certainly not going to go away as a result of any part of this proposed legislation. The situation in the Pilbara was so bad that it loomed large on the agenda of the Senate inquiry into housing affordability that took place last year. I draw your attention to the submissions to that Senate inquiry. They highlight the issues about which I have been speaking. In particular, the Chamber of Commerce and Industry Western Australia’s submission points out some very alarming factors about land release in Western Australia. Broome’s population, for instance, is estimated to have grown by 3.4 per cent, or 2,400 permanent residents, between 2001 and 2007. There is also a significant demand for seasonal accommodation as a result of the boom in tourism in Broome. Despite this, the lots of land released onto the market did not increase over the same period, with a record low in 2004-05 of just 50 blocks released by LandCorp. During this time the median house price in Broome rose from $225,000 to $610,000. That is not bad for a very, very short period of time if you are an investor. If you are trying as a normal employee in the Broome area to find a house that is affordable and you are being forced to consider an increase from $225,000 to $610,000, you are not going to be very happy about it. These are the same people I was talking about earlier whose eyes lit up at the mention of improving housing affordability from the then candidate to become Prime Minister of this country, Kevin Rudd. He was going to change the world when it came to simple employees, these working families he speaks so much about these days, and they were very impressed. In fact, I am sure it is why he did so well at the last election. There were so many people out in the electorate who thought he would honour his commitment and his promises. He did not, of course. I cannot emphasise enough the severe impacts that house and land shortages are having in areas like the Pilbara and the Kimberley. Housing is a basic human need. People who want to move to the region to find work cannot afford the housing. We developed a pilot case to bring prospective employees from areas of high unemployment to the goldfields, the Pilbara and Kununurra, where people are screaming out for employees. With our principle of mutual obligation, it seemed perfectly logical to ask individuals in high-unemployment areas to move to these areas where employers are screaming out for somebody with two arms, two legs and a head. It did not work because there was simply no affordable accommodation in those areas for the unemployed people to move to. Much more needs to be done. In many cases even if people can afford accommodation, they still cannot get housing because the demand is so high and the supply is so limited. Companies and organisations cannot get the workers they need because they cannot provide the accommodation either. Even though many offer generous housing subsidies, the houses simply are not available. This leads to a loss of services in areas where wages are not as high as in the mining industry. It all impacts on the quality of life for people in those communities, with few or no shops, restaurants, childcare facilities, medical and dental services and more. The lack of affordable housing is directly contributing to a deterioration in lifestyle in these centres. We have had so many broken promises, so many failed statements of passion that have been realised in the months since the election of this government. There was the broken broadband promise, the broken border protection promise and the broken budget accountability promise. We have had the creation of ‘child care watch’ and we have had the creation of Fuelwatch. I believe it was mooted recently that we were going to have ‘watch watch’; ‘Defence watch’ we have now, too. I am appalled that, having promised so much to so many working Australians prior to last November’s election, now the goods are supposedly to be delivered our Prime Minister and his team are found to be so wanting. It is a disappointment to me but, my goodness, I have a roof over my head and I have a quid in my wallet. That is not the case for so many Australians, and they are severely disappointed. I believe it is a situation that will not be righted until such time as we have another federal election to set the record straight for the delivery of good governance and real services for the people of Australia. 9815 18:21:00 Symon, Mike, MP HW8 Deakin ALP 1 0 Mr SYMON —I speak today in support of the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008. There is a shortage of affordable housing in Australia and many families are struggling to find and keep a roof over their heads. This problem is not confined to less well-off areas or regions; it is spread across our nation. There may be different causes for the shortage, but the effect is the same. Many people are moving house or cutting back on essentials to keep a roof over their head. They are renting in a private rental market where rent rises are outstripping wages growth and inflation. The data in the 2006 census reveals that 28.1 per cent of Australian household dwellings are rented. That is more than two million houses, flats, units, townhouses and the like. In my electorate of Deakin this figure sits at 10,367 dwellings. This comes in below the national average as a percentage, with 22.3 per cent of dwellings in this category. Of this amount, though, there are only 1,062 state housing authority dwellings in Deakin recorded in the census figures. The rental stress figure in Deakin has been measured at 32.6 per cent. For those who are not aware of how it is measured, it is a situation where the renter is paying more than 30 per cent of their income in housing costs every week or month as the case may be. In Victoria, the state average of renters experiencing rental stress is 35.6 per cent. The proportion of people spending more than 30 per cent of their disposable income on housing increased from 19 per cent to 23 per cent in the 10 years from 1995-96, according to the 2008 AMP.NATSEM income and wealth report. There are 1,037,652 households in Australia that are under housing stress when rental and mortgage stress are combined. Approximately 700,000 of these households are renters. Australia wide, renters tend to be younger than those in owner occupied households. Rates of renting are higher among those people without partners. And lower income is associated with higher rates of renting, except for households with people over 65. So, as income rises, the likelihood of renting decreases and, of course, the likelihood of owning your own home increases. Many working families are stuck in the private rental market without a way to move into home purchase, and it is even worse for low-income earners. The AMP.NATSEM report of 18 March this year shows that the price of a typical house in 2005-06 was about 27 times the annual disposable income of the poorest renters. In 1995-96 the median house price was only 16 times the disposable income of the poorest renters. This same report found that, of all English-speaking, industrialised countries, Australia had one of the least affordable housing markets, with nearly 90 per cent of the areas considered severely unaffordable. In the period from 1995-96 to 2005-06 there was little change in the proportions of householders who were renters for most age groups, except for those in the 35-44 year age group. For this group the proportion who were renting increased form 27 per cent in 1995 to 32 per cent in 2005-06. Many people who want to own their own homes cannot because they are priced out of the market due to the rising cost of housing. And it is the entry price of the market for homes in the eastern suburbs of Melbourne that is the first step in the problem in my electorate of Deakin. A check of these figures shows the scale of the barrier when it comes to buying property in the electorate of Deakin. For instance, in Blackburn the median house price in June 2008 was $646,000. That was up from $561,000 in June 2007. A little bit further out, in Mitcham, the median house price in June 2008 was $468,000, up from $440,000 in June 2007. Out in my area of the electorate, in Heathmont, the median house price in June 2008 was $450,000, up from $380,000 in June 2007. At the eastern end of the electorate of Deakin, in Croydon, the median house price in June 2008 was $360,000, up from $343,000 in June 2007. These are not inner city suburbs; these are areas up to 30 kilometres outside the Melbourne CBD. The alternative to buying is to rent, but the knock-on effect is that people on lower incomes can be pushed out of the market as those with higher incomes soak up rental vacancies. This pushes up the entry point for rental accommodation, especially for larger accommodation such as three bedroom houses which are suitable for families with children. A check with local real estate agents last week revealed the following range for average rental prices of a three bedroom house in Deakin: in Blackburn it was between $300 and $400 a week; in Mitcham between $330 and $350 a week; in Heathmont over $300 a week; and in Croydon between $350 and $380 a week. Further to that, the agent contacted in Heathmont said they only had a total of four rental vacancies on their books anyway. Affordable housing was the top of the agenda when the Minister for Housing, Tanya Plibersek, addressed a local social and affordable housing summit hosted by the City of Whitehorse, the member for Chisholm and me earlier this month, on Tuesday 7 October. This forum included over 60 local community members and stakeholders. Included were representatives from housing community groups like Melbourne Affordable Housing, disability groups, developers, Victorian state government representatives, social service providers like Family Access Network, welfare groups such as Wesley Central Mission and church groups. The forum heard about federal, state and local governments’ plans for tackling the crisis in affordability in the eastern suburbs of Melbourne. The state government representatives highlighted the statistics that reinforced that vacancies are at an all time low and that the public and community housing sector is overloaded with demand for accommodation. Mr John Trimmer and Mr Rob McGauran from Melbourne Affordable Housing both gave presentations about how their not-for-profit organisation acts as developers, owners and managers of affordable rental housing for people in need. Melbourne Affordable Housing was formed in 2001 and has 300 properties tenanted with a forecast of an additional 200 properties over the next 18 to 24 months. The properties they have developed are small in number with a couple of examples being their Lion Garden development in Melbourne where they have partnered with the Collins Street Baptist Church, and the Melbourne City Mission to develop nine one bedroom units. They have also delivered a 52 unit apartment complex in Preston developed in partnership with Buildcorp. Both John Trimmer and Rob McGauran highlighted the particular problem that housing is unaffordable in areas with opportunities for employment, learning, services and low-cost living. Hence, in inner city areas and those suburban areas with good public transport, the availability of affordable rental accommodation is below two per cent. The local press in my electorate of Deakin have reported a rental vacancy figure as low as one per cent, which makes it almost impossible to find a home to rent once time for turnover of tenants is taken into account. Melbourne Affordable Housing is an organisation that takes a community development approach and seeks to build diverse and sustainable communities through the provision of appropriate and affordable social housing. This includes redeveloping vacant car park sites so that the car parking is still there but, for instance, the units may be built above so that there is no loss of public amenity. Melbourne Affordable Housing uses a joint venture model and forms partnerships with churches, local government and community groups. The forum heard that public housing in both the Whitehorse and Maroondah local government areas is stretched to the limit. As the Senate Select Committee on Housing Affordability in Australia recorded in their report of June 2008, the number of public housing dwellings nationally declined from 372,134 in 1996 to 341,378 in 2006. During this time, Australia’s population increased by around 13 per cent, therefore producing an even larger decline in real terms. The steady decline in public housing stock over the last 10 years has led to an increase in waiting lists which flows over into the private rental market, affecting vacancy rates and rental prices. The 2008 Productivity Commission report on government services found that, in 2006-07, the Australian state and territory governments provided $1.3 billion for housing assistance under the Commonwealth-State Housing Agreement. The bulk of this funding was for public and community housing, but this was a reduction in funding in real terms of 16.7 per cent between 1997-98 and 2006-07. That is a reduction in real terms of nearly $300 million per year. The National Rental Affordability Scheme will increase the supply of affordable housing and reduce rental costs for many low- and moderate-income families. As housing affordability problems are fundamentally driven by a lack of housing supply, there are incentives to increase the supply of privately constructed rental dwellings. This scheme encourages large-scale investment in affordable rental housing by offering an incentive to providers of new housing on the condition that dwellings are rented to low- and moderate-income households at 20 per cent below market rates. These incentives comprise a Commonwealth contribution of $6,000 per dwelling per year, but they also include a state or territory contribution of $2,000 per dwelling per year, either as a direct financial support or an in-kind contribution such as reduced stamp duty, infrastructure charges or fast-tracked development approvals. Incentive can be in the form of a refundable tax offset or a payment for 10 years, which will be indexed to the rental component of the CPI. All up, $622.7 million over four years is to be allocated to create up to 50,000 new rental properties across Australia. And if the market demand for the scheme remains strong, the Rudd government will make a further 50,000 incentives available from July 2012. This would help build another 50,000 affordable rental dwellings on top of the funding for 50,000 rental dwellings delivered in this bill. This scheme is a key part of the government’s $2.2 billion affordable housing package. More than 1.5 million households will be eligible for tenancies under the scheme, including key workers such as entry-level police officers, teachers, carers, apprentices, cleaners, hospitality staff and childcare workers, to name just a few. The National Rental Affordability Scheme will be of great assistance to low- and moderate-income renters in Deakin and Australia as a whole. I commend the bills to the House. 9818 18:33:00 Neal, Belinda, MP B36 Robertson ALP 1 0 Ms NEAL —I rise in the House in support of the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008. These bills provide the legislative basis to implement the Australian government’s National Rental Affordability Scheme. NRAS is a key component of the Rudd government’s $2.2 billion affordable housing package, which will boost rental stocks, help people save for their first home and lower housing infrastructure costs. There is acute housing stress being felt at this time by many people across Australia. The National Rental Affordability scheme is a $623 million investment in the provision of 50,000 new and affordable rental properties within four years to address this need. The objective of the scheme is to encourage large-scale investment in affordable rental housing through incentives to providers of new dwellings. The homes must be rented to low- and moderate-income households at 20 per cent below market rates. The incentives include both a Commonwealth contribution of $6,000 per dwelling per year and a state or territory contribution in the form of direct financial support or in-kind contribution to the value of $2,000 per dwelling per year. The Commonwealth contribution can be in the form of a refundable tax offset or direct payment. The incentive will be provided each year, for 10 years, to those people who satisfy the criteria. It will be indexed in accordance with the rental component of the Consumer Price Index. The associated National Rental Affordability Scheme (Consequential Amendments) Bill 2008 will make amendments to the Income Tax Assessment Act 1997. This will provide for the refundable tax offset and ensure that state and territory contributions to entities participating in the scheme are non-assessable and non-exempt income for taxation purposes. For partnerships envisioned under this scheme to work, there must be surety and clarity regarding the tax implications of the legislation. This bill ensures that there are no capital gains tax consequences from the receipt of incentives under the scheme. The structure of the bill allows certain details of the scheme to be administered by regulation. This gives the government the scope and flexibility to address any issues that may arise for potential partnerships between investors and the not-for-profit sector. That is why there will be a review of the scheme in its early years of implementation. This will ensure that the scheme is having its intended impact. The review will also assess the possibility of lightening the administrative burden of the proposals and make recommendations on possible improvements. The government is open to the possibilities that come from creative partnerships between investors and the not-for-profit sector. We are more than willing to work with potential partners to iron out details to make this policy a world-class innovation in the provision of affordable housing. Already in my electorate, community housing providers have begun talks with developers specialising in environmental housing. The opportunities for affordable, environmentally friendly housing to flourish under the National Rental Affordability Scheme cannot be understated. These creative partnerships are crucial to the success of the scheme, and the government looks forward with confidence to the affordable housing outcomes that will arise from the goodwill and creative enterprise already in motion as a result of this Labor government policy. These bills address fundamental problems in the supply of affordable rental accommodation, which are being felt Australia wide. In my electorate of Robertson, those who have not yet bought their own home are experiencing unprecedented pressure as rental prices skyrocket in a period of low supply. With median house prices in New South Wales now reaching $385,000—even on the Central Coast the median house price is $364,000—the 10 per cent deposit required is often far beyond the reach of many people, particularly young people, families and pensioners. Their only option in these circumstances is to rent. On the Central Coast, rental vacancy rates are at 1.1 per cent, and below that from time to time. In Robertson the proportion of renters under stress—that is, those paying more than 30 per cent of their net income on rent—is a staggering 44.5 per cent. That is more than 4,000 households in my electorate experiencing rental stress. Nearly 30 per cent of mortgage holders are likewise under financial stress. In some cases this unfortunately leads to repossessions, forcing more families to rent in a market of diminished supply. The effect of this on pensioners, seniors, families and young people trying to make ends meet is devastating. More and more income is being used just to put a roof over their heads. This situation is emblematic of a crisis that has been building within the housing sector over the past decade. The average price of housing has exceeded income by an average seven times the average annual wage and represents a far greater proportion of income than is acceptable and feasible for many potential homebuyers. Australia needs practical solutions to this problem, and the Rudd government is delivering this very practical solution. It has the additional benefit of providing a stimulus to the housing industry and will add to economic activity. If we fail to address the housing needs of young people and young families, we are at risk of developing a generational divide, where those who already own homes grow more affluent on capital gains while future generations are locked out of the market for good. A lack of affordable rental properties is only adding to this pressure, making it even less likely that people will be in a position to save a deposit for their own home. I noted with optimism the announcement last week to triple the First Home Owner Grant to $21,000 for people buying a newly constructed home. This will certainly provide a substantial support to young people on the Central Coast seeking to enter the homebuyers market for the first time. This measure will also complement the impact that the National Rental Affordability Scheme will have on the supply of housing. Young people are effectively locked out of the market unless they are assisted by a parent or relative who is in a financial position to act as a guarantor for a loan or provide financial support in paying the mortgage. The flow-on effect of this is to entrench disadvantage in homeownership, despite any gains that may have been made in the areas of school retention and higher education. For example, a young professional who has had the benefit of a higher education may be better off in their career options than, say, their parents but would still find it difficult or impossible to break into the homeownership market on a single income. Another crisis coalescing in the housing sector is the effect of rising land values on residential home parks. Residential home parks often become the last-ditch option for seniors or pensioners to own their own home. The catch is, of course, that they do not own the land upon which their home resides, only the structure of their home, paying strata fees—in effect, rent—to the park owner. As land values increase, residential park owners seek to realise their capital gains and develop these parcels of land. The flow-on effect is that the last bastions of affordable housing evaporate as the land is developed into housing that costs far more than the previous tenants could possibly afford. A very large proportion of residential home park tenants are elderly, many of them pensioners, both age and disability pensioners. Worse still, as values rise in any given area, the problem becomes compounded as multiple park owners seek to realise these capital gains at the same time, leaving people who have lived in a particular area maybe all their lives or for a very long period with nowhere viable to shift locally that they can afford. Imagine, then, a pensioner who has lived in a particular area their entire life. This pensioner may have overlapping medical conditions, as many do, being managed by their local GP. They know their local GP well; this is the same GP who has treated them for years and understands their condition—so do the home care service providers who visit this pensioner from time to time. This senior Australian, possibly a pensioner with limited resources, is then made to relocate as a result of a residential home park closure. The home park down the road may have closed months ago, and the state department of housing premises are already occupied. In fact, on the Central Coast, in my electorate, there is a 10-year waiting period for state housing. There are no local options to relocate to. The only option then is to be moved out of the area—moved away from family, friends and community, away from services and local networks that they are accustomed to. This is as a result of the housing shortage that was allowed to occur by the previous government due to their drastic failure to commit resources to housing. Relocating a pensioner or senior Australian under such circumstances has the potential to cause tangible and detrimental health effects. This is a real and present danger for many pensioners exposed to this housing crisis as a result of the lack of foresight by the previous government. They simply failed to respond to this obvious emerging housing crisis. The situation I presented to you is not merely hypothetical, as we can see. I note with concern the difficulties faced by the 80-plus residents of Karalta Court Residential Home Park in Erina, again in my electorate. The park residents are seeking a way to relocate their homes and to continue to live together as a community in an area that they can afford. The residents own their homes, or the structures, and are currently seeking partnership models by which to relocate and re-establish their small community within reach of the essential services required by the park’s residents. Many of them are elderly and must be within reasonable reach of medical services. The residents, as I said, own the structures but not the land. They are therefore not strictly seeking to build new affordable rental properties within the scale of this proposal before us in the legislation. They are, however, seeking land for affordable housing that they already have—the buildings themselves. While applauding the present legislation, I encourage the government to look further at this issue of residential home parks and to bear in mind that this area needs further work. These are just some of the scenarios presented to me in my electorate of Robertson. I am immensely proud of the steps we are taking as a government to address the supply of affordable housing for all Australians. I particularly thank the minister, Tanya Plibersek, for her commitment and hard work in implementing the raft of housing policies which is designed to restore balance to the housing sector and to boost affordability. Affordable housing is the foundation stone of a just and equitable society, and it is an objective that this government is pursuing with great passion. I commend these bills to the House. 9821 18:46:00 Jackson, Sharryn, MP 00AN2 Hasluck ALP 1 0 Ms JACKSON —I am pleased to rise and support these two pieces of legislation, the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008, that establish the National Rental Affordability Scheme. The objective of the scheme is to encourage large-scale investment in housing by offering an incentive to participants in the scheme to increase the supply of affordable rental dwellings and to reduce rental costs for low- and moderate-income households. It is a key part of the Rudd government’s $2.2 billion affordable housing package, and the NRAS will increase the supply of affordable rental homes, help people save for their first home, lower housing costs and build new homes for the homeless. There is quite substantial reasoning behind the legislation that is before the House. It is about the fact that an increasing number of Australians are experiencing housing stress. There is an absolute imperative, a great need, to stimulate the supply of lower rent homes. As many know, it is tougher than ever before for low- and moderate-income earners to find affordable rental housing for themselves and their families. Vacancy rates across Australia, including in the electorate of Hasluck, are at critically low levels, and rents are increasing faster than other everyday living costs. More and more families are spending more than 30 per cent of their limited income on rent. That is generally the level at which commentators assess that a household is facing mortgage or rental stress. Once upon a time, many Australians rented as a stepping stone to the purchase of their own home; now many are finding it harder to save the deposit. I welcome the introduction to parliament of these bills to establish the scheme. This new program, which delivers one of Labor’s 2007 election commitments, is a $623 million investment that will create 50,000 affordable rental properties for low- and moderate-income earners in its first four years. Increasing the supply of affordable rental housing is a priority for the Rudd Labor government. Across Australia, nearly 700,000 low- and moderate-income families are now spending more than 30 per cent of their limited incomes just to pay the rent. In Hasluck, based on 2006 census data, 2,406 households, or 36.2 per cent of households renting, are experiencing rental stress. These people are being forced to move house, to live with other families or relatives, to live in cramped conditions or to cut back on essentials just to keep a roof over their heads. I think in Western Australia we have seen even greater housing and rental pressure than in other states. That is why increasing the supply of affordable rental homes is a major priority for this government. The scheme essentially offers incentives to providers of new dwellings on the condition that they are rented to low- and moderate-income households at 20 per cent below market rates. That incentive comprises a Commonwealth contribution of a refundable tax offset or payment to the value of $6,000 per dwelling per year and a state or territory contribution of direct financial support or in-kind contribution to the value of $2,000 per dwelling per year. I would hope that the West Australian government continues to honour its commitments to meet that in-kind or direct financial support contribution. The incentive will be provided each year for 10 years to complying participants and will be indexed in line with the rental component of the Consumer Price Index. It is important to say that this scheme provides a new opportunity for all levels of government, federal, state and local, to work together with business and not-for-profit organisations to meet that objective of increasing the supply of affordable rental dwellings. I believe it will also facilitate new and creative partnerships between traditional institutional investors, perhaps hopefully even superannuation funds as well as developers and community housing providers. We know from the terms of the legislation that it is to be reviewed in its early years of operation to test whether there cannot be further modifications made to reduce the administrative burden to ensure that it is meeting whatever the evolving issues are in this area and also to ensure that it is addressing issues of noncompliance. Most of the administrative details of operation will be covered in regulations to provide flexibility to address changing circumstances, as I have indicated. Importantly, there are some mandatory assessment criteria. They include five criteria in section 7 of the legislation: a demonstrated need for the proposal; the delivery of accessibility and sustainability outcomes; the participant has demonstrated capacity and experience to deliver the proposal; the proposal is financially viable; and the priority areas of interest are addressed in the proposal. I note that applications for round 1 have already been called for and the priority areas for round 1 as set out in the explanatory memorandum are: directed towards rental dwellings that will become available for rent in this financial year, 2008-09; large-scale projects, over 100 dwellings; to be consistent with state, territory and local government affordable housing priorities; and to include dwellings for tenants with special needs, in particular people with disabilities, older Australians and Indigenous Australians. Of course, overriding this is the aim to maximise long-term affordable housing outcomes for tenants. As I said earlier, this scheme is a part of a $2.2 billion affordable housing package. The package includes a number of measures designed to increase the supply of affordable housing, to help people save for their first home and to lower housing costs and build new homes for the homeless. I want to take this opportunity—perhaps straying a bit from the bill—to say that I am pleased that the First Home Saver Accounts legislation is well and truly on its way to being in place because I know that many first home buyers are finding it tougher than ever to buy a house. The average first home mortgage has more than doubled in the last eight years, from some $123,000 in December 2000 to 246,500 in July 2008. Fewer low- and moderate-income earners are able to buy a first home. Only 17.6 per cent of first home buyers came from the bottom 40 per cent of earners in 2005-06, compared to over 20 per cent from this group a decade ago. Households in the bottom 20 per cent of earners that are lucky enough to buy a first home then use up 66 per cent of their income to pay for the privilege. This is why the Rudd government is investing $1.2 billion in new first home saver accounts to help aspiring first home buyers save a deposit for a home. In addition, contributions to first home saver accounts will not be subject to tax when contributed to an account, and interest on the accounts will be taxed at 15 per cent rather than at the account holder’s marginal rate. This mirrors the tax treatment provided to superannuation, ensuring that young Australians get support to buy a first home similar to the help older Australians get to save for retirement. We hope that by 2012 there will be more than $6.5 billion saved in these new accounts. That is just one measure. Another measure is the Housing Affordability Fund. The federal government is putting half a billion on the table to invest in infrastructure that currently adds tens of thousands of dollars to the cost of houses. The money will also provide an incentive to local governments to cut red tape, in particular, to reduce planning and development delays that can add significantly to the cost of new homes. Local governments, in conjunction with the private sector, will come forward with proposals applying for the Commonwealth grants. These will be assessed on a competitive basis—on how much they can reduce the cost of housing and pass on savings to homebuyers. It is a partnership between federal, state and local government to create more affordable housing. The fund provides local governments, as well as state and territory governments, with the financial incentive to reform and streamline planning processes and reduce costs to develop land. Only governments that are prepared to undertake reform will receive grants under the fund. The federal government is interested in solving problems and improving housing affordability, not playing the ‘blame game’. Importantly, another part of the Rudd government’s program, A Place to Call Home, will deliver some 600 new dwellings for homeless people. I have taken some time to go over items in the housing affordability package put forward by the government largely because I spent some time this afternoon listening to speeches made by members opposite and some days ago I listened to the member for Cook as he addressed the legislation and proposed an amendment. I oppose the amendment proposed by the member for Cook. I take up a number of issues with him and with members opposite concerning their response to this legislation and to the scheme. In his proposed amendment, the member for Cook goes to a number of specific criteria which he would seek to have applied to the National Rental Affordability Scheme. I would argue that most of what he seeks to do is at best unnecessary but perhaps also in some places unclear. For example, I have talked about how the legislation contains sufficient flexibility to allow adjustments to the scheme to ensure that it addresses evolving issues. Many of those evolving issues—the way in which the scheme operates, compliance issues—give the government flexibility to deal with issues as they practically unfold on the ground. A number of members opposite have talked at length about questions involving sustainability. Indeed, the amendment proposed by the honourable member for Cook seeks to specifically apply certain federal government subsidies to the rental dwellings included under the proposal, subsidies such as the federal government’s solar panel rebate and solar hot water rebate. I take members to the five mandatory criteria currently contained within the legislation against which proposals will be assessed. One of those criteria includes the issues of sustainability and accessibility, and I draw that to the attention of members. Members who have some passing knowledge of planning issues in their own state will be aware that many state and local governments supply quite detailed planning requirements with respect to, particularly, sustainability issues but also, in some jurisdictions, accessibility issues for people with a disability. If you are going to have a partnership with local and state and territory governments, it is important that you indicate that it is a significant, important criterion in funding priorities that accessibility and sustainability are addressed. It would be absurd to limit that solely to current federal government rebates, as opposed to including the broad range of sustainability measures, often innovative measures, that are being taken in our states by state and local governments. It seems to me that the flavour of many opposition speeches in response to the legislation has been that of the good old blame game. I think the opposition fail to recognise that one of the clear objectives of the legislation is to try to create partnerships with state, territory and local governments, as opposed to setting state governments against the federal government, setting state governments against local governments and setting local governments against the federal government. We want to share the priority and the goal of increasing the supply of affordable rental housing stock throughout the country, throughout our local areas. I cannot let the comments of the member for Pearce go regarding responsibility for the reduction in the levels of public housing stock in Western Australia, which she laid at the feet of the former state Labor government. I think it is important for the purposes of the record to clarify for her sake that the public housing stock in Western Australia began to be reduced in 1996 by the then state Liberal government, with a number of schemes that were directly related to trying to move people from public housing, or Homeswest, accommodation into other forms of accommodation—in some cases, with people purchasing their own homes. For example, between 30 June 1996 and 30 March 1999 we saw a reduction of almost 2,000 public housing dwellings in Western Australia. Given my comments about wanting to work in partnership, it is a sad thing to have to say that, with the election of the new Liberal state government in Western Australia, they are at it again. I was incredibly concerned to see media releases from the now Minister for Housing and Works, the Hon. Troy Buswell, who is probably famous in this place and many other places in Australia for aspects of his behaviour and not necessarily for his expertise in the housing area. He has decided to order a review of public housing stock in ‘high-end suburbs of Perth’ with a view to eventually reinvesting the value of some properties to greater effect elsewhere. In other words, he is looking at moving public housing stock out of Perth’s more affluent suburbs and into other areas in Western Australia. That would be a great shame and does not seem to me to add anything either to the debate or to the quality of housing made available for low- and middle-income earners. I urge the minister to review his decision—and I urge my colleagues from Western Australia to ask the minister to review his decision—and to look at a far more sensible investment in public housing stock than moving it from his mates’ leafy suburbs to other suburbs within the metropolitan area. I find the hypocrisy from the opposition in respect of this debate extraordinary, given that they are the party that was in federal government for over a decade and gave absolutely no priority to housing. Now what we have before us is a comprehensive package of measures, and this National Rental Affordability Scheme is what we are dealing with this afternoon in the legislation before the House. They are commendable measures. I would say again that the National Rental Affordability Scheme provides incentives to participants to build new dwellings for renting to low- and moderate-income households at rates 20 per cent below market rates. It is hoped that more than 1.5 million households around Australia will be eligible to rent these dwellings at a 20 per cent discount to the market rate. That is a marvellous thing, as is the rest of the housing affordability package that is being put forward by the Rudd Labor government. I simply wish to record my appreciation and congratulate the Minister for Housing, the Hon. Tanya Plibersek, for this wonderful raft of legislation. I commend the bills to the House. 9825 19:05:00 Raguse, Brett, MP HVQ Forde ALP 1 0 Mr RAGUSE —It is with great pleasure that I rise tonight to talk about the National Rental Affordability Scheme Bill 2008 and related legislation. It is certainly welcome legislation. On many occasions I have spoken in this House—in this very chamber, in fact—about the concerns that I have in my own electorate of Forde, but what I would like to do tonight is talk a little bit about the rental scheme bill, some of the extreme situations that exist in the electorate of Forde and why a piece of legislation like this is so important. It fits a raft of programs and plans that the Rudd government has put together. I should say at the outset that, like my colleague who has just spoken, it does concern me that the opposition have a particular view on this legislation. We understand the opposition are there to oppose our legislation, but I think it is probably obvious from the lack of speakers on their side that they feel that this legislation is very important. I am happy for them to support it where they can. In this issue of housing affordability, whether we are buying or renting in this case, we need to put forward incentives to spur on the rental housing market. We looked at different schemes of different governments when we were forming our plan and our election commitment to take this particular piece of legislation forward. We looked at ways of reducing the concern of and the stress on people who are trying to rent. While I will quite often argue the benefits of commercialisation, I will certainly also argue the benefits of social infrastructure and the provision by governments of certain services. It is very interesting to see the concern for markets and ultimately market forces in the global economic situation we now have. Markets do fail. There is a need for intervention by governments at different levels at different times, and I should say that in this country we should not be at all concerned that governments have to step up to the plate and get involved to ensure that people who are affected by something as important as housing get the support of government. This is a time when you can see the need for governments to provide some basic services, whether it is in social ownership or in so many different ways. The fact is that public housing is of utmost importance. If we expect the market to provide something as essential as a roof over a person’s head, we can see when this fails that it is not a case of having time—that markets will correct themselves, cycles will move on and people will be able to afford or get access to housing. When people do not have a house, do not have a roof over their head, it creates so many other social problems. I think this is what is missing when the opposition argue points of this bill. This is not an academic argument. It is not about what we can or should or could not do or where we might make comparisons. I was intrigued by the emotive speech of the member for Kalgoorlie. He was saying that nowhere else in the country are there problems like those in his electorate. His electorate is different. All of our electorates are different. We have hot spots and we have areas that have different concerns. A mining boom creates certain problems—in fact, larger problems—but there is a benefit in a mining boom. There is a large amount of money flowing into that particular economy. In regions like mine, the effect on people is very much about other demands and market forces that mean that people who were previously able to access affordable housing have now found themselves out on a limb and with no solutions. The fear for me and certainly my electorate is that even some of the very affordable housing is disappearing. While we might prefer not to have people living in mobile home parks, they have provided a certain level of housing and even emergency housing. But the growth in the demand for land has meant that we are now getting to the point where even these options are fast disappearing, certainly from the electorate of Forde. We have had a major mobile home park close down, so even people who are in transitional accommodation phases are let down by that. I will go back to the bill and talk about what it is going to provide, and apply that to how it will help the seat of Forde. As I said, the National Affordability Rental Scheme is an integral part of the government’s $2.2 billion affordable housing package, with the aim, of course, of increasing the supply of affordable rental homes. The object of the bill is to encourage large-scale investment in housing—and I note that it is investment; this is about government being involved at a level that will stimulate the sector—by offering an incentive to participants in the National Rental Affordability Scheme so as to increase the supply of affordable rental dwellings and reduce rental costs for low- and moderate-income households. The scheme offers incentives to providers of new dwellings on the condition that they are rented to low- and moderate-income households at 20 per cent below market rates. We have heard other speakers talk about this, but it is important to reiterate that the National Rental Affordability Scheme will provide up to 50,000 new rental properties across Australia at a cost of $623 million in the first four years. As has been stated, if market demand remains strong, another 50,000 rental properties will be made available over five years from July 2012. I mentioned the 50,000 properties and the initiative by this government to provide incentives for investment. This was not possible under previous government schemes. We had a number of schemes that were worthwhile causes or worthwhile for a period of time in our history, such as rental assistance and the First Home Owner Grant. But if you do not have an overall plan for or an understanding of what rental affordability and availability, particularly high rents, will do to a community then the whole thing falls flat. I mentioned market forces before; the previous rental assistance schemes basically brought on market failure. There was nothing to prop up the fall from that position. So the government providing an incentive for investors to get into a particular type of market is very important. As has been mentioned, the incentive of $6,000 per dwelling per year and then the contribution from states and territories of that other $2,000 either in dollars or in kind will certainly go a long way toward encouraging developers and other investors to enter into that market. The incentive will be provided each year for 10 years to complying participants and will be indexed in line with the rental component of the consumer price index. We are in the middle of a housing crisis. We understand that. We know that. Members from the other side of the chamber had a go when they were in government. They put a number of incentives in place, but 12 years later they do not work. We have an extreme shortage of rental housing, and generally getting the market primed is what this legislation is about to do. Nowhere is the rental housing shortage more evident than in my electorate of Forde, and I gave you some examples of the changes that have occurred. To give you some on-the-ground examples, in September 2006 the median rent for a three-bedroom house in the Beenleigh, Eagleby and Mount Warren Park area was $245 per week. The most recent data from the Residential Tenancies Authority in Queensland for September this year, put the median rent at over $300 per week—and that is the median rent, so obviously there are different extremes of that. I should mention Eagleby. For those who know the region of Forde, Eagleby has always been seen as an area with low-cost accommodation—certainly for rental but also for purchase. Because the demand for housing has been so high and because investors have been able to get a guaranteed return on their investment, homes in Eagleby that were $150,000 to buy only a few years ago are now $400,000. This is pushing people directly out of the market in terms of being able to purchase a home, but people who want to rent in that particular area are certainly out of the market as well. In Beaudesert, which is very much a small regional town, the median rent in September 2006 was $270 for a three-bedroom house; now, in September 2008, it is over $320 a week. My electorate takes in the Gold Coast hinterland, so I have three local authorities. I take in the new Scenic Rim Regional Council, which is very much a rural area, of which Beaudesert is a township, and the areas of Tamborine Mountain and also the northern Gold Coast, from Beenleigh to Yatala. The rate of people moving into even those areas of Queensland is a net figure of over 1,500 a week. Whether economic conditions and changes mean that that may slow down, the reality is that that is the demand that we have on our region at the moment. Without any direct support immediately to get more rental housing in place, I can only see our conditions becoming more extreme. Essentially, that is why people are moving out of some of the higher density areas into regional towns within the electorate. But of course we then have another problem in my electorate of Forde of poor road infrastructure and transport infrastructure. So we have a range of other social problems that come out of this. To give you an understanding of that, on the northern end of the Gold Coast rents have risen in two years from $335 a week to over $400. As I said, that demand and that condition continue. If you look at the overall state of Queensland, the vacancy rates sit somewhere between 1.4 and 3.7 per cent. The member for Kalgoorlie pointed out that he has some extreme circumstances; the state of Queensland is no different. The mining areas of Queensland fall into that same category. My electorate, as I said, has vacancy rates as low as 1.4 per cent, which causes a huge amount of pressure. My concern is that, without schemes like this, people moving further out to get affordable or just available housing is going to have major potential for a lot of social discomfort. It should be pointed out that the city of Brisbane has undergone a lot of regional planning in the last five to 10 years and so there has been an accommodation made for more high-density accommodation, including rental accommodation. So, to a large degree, the metropolitan areas are not as stressed as areas like the electorate of Forde. As I said, people are being pushed out into areas that are unserviced. Again, a major overall part of our Building Australia approach is putting money into infrastructure and being able to provide more and more infrastructure. If we bring all those conditions together—more investment in rental properties, more investment through the first home owners scheme, which I will talk about more in a minute, and other incentives we have put in place—and if we can build more infrastructure and have more physical and transport infrastructure put in place, it is going to service people very well. One of the things that has concerned me to an increasing degree is not only the availability of rental property but simply the ability of local authorities to allow planning to proceed at a rate that would allow this sort of construction to take place. There are incentives to invest and build more rental accommodation. There will no doubt be a fair amount of higher density accommodation built through that process, and councils can respond reasonably quickly. But the problem is that the demand in areas like mine means that councils just cannot keep up with approvals. The extra resourcing that will be required by these local authorities will mean that we are probably going to need to consider how we make these changes and get this new accommodation put in place. Looking at some other initiatives of this government, we have been bringing local governments together to talk about infrastructure and how that infrastructure will work and the priorities. We can package that together and certainly have an understanding that certain infrastructure will go further in allowing us to build more rental accommodation quicker and also go further for those people who may decide to build new homes. The wonderful thing is that, yes, you can buy homes to some degree at a reasonable rate and you can have them built at a fairly quick rate, but available land is the major pressure certainly in the electorate of Forde. I have spoken in this House, even in my maiden speech, about the amount of available open space and new areas. However, planning is way behind. We will not have the ability to undertake any massive rollout of built environment for a number of years. That concerns me but, again, I believe that, through the initiatives of the Rudd government, working closer with local governments will resolve many of these issues. State governments have a role to play and have been responsible for this. If you look at rental properties and public housing in Queensland, you will see that, because of the lack of funding coming out of the federal government for many years, the Queensland government has had to make some hard decisions about how it prioritises housing. Of course, that is happening in metropolitan areas. Areas like mine have been left to work out their own solutions. Having this sort of legislation and these sorts of incentives will make it much better for regions like mine. A range of initiatives were released last week by this government to help prime the economy and ensure that we have continuing growth. The housing incentives, such as the tripling of the first home owners grant to $21,000, will certainly go a long way. To ensure that local authorities can understand the priorities we as a government have to solve ultimately our housing shortage problems they need to work more closely with us. I spoke last time in this House about the lack of road and transport infrastructure. Those in the chamber that evening heard me talk about Duck Creek Road, which raised a lot of eyebrows—some people know where Duck Creek Road is and others do not. It is an interesting part of the electorate that services O’Reilly’s guesthouse. People from South-East Queensland know the history of the O’Reilly family and the famous Stinson wreck. Duck Creek Road is only one piece of infrastructure—and I spoke about that at length—and getting road infrastructure with transport infrastructure with good housing infrastructure and services is very much what we have to do to complete the picture. I believe this government has put together a whole range of initiatives that package up the solutions for our future and our future growth. I could talk for a long time about the problems in the electorate of Forde. I believe that problems can be solved. Legislation like this goes a long way for me as a federal member to say that I, as the representative of my constituents, am doing the job and this government is doing the job. This is going to provide enormous relief for families who are really hurting. I am sure the member for Throsby’s constituents have similar issues to deal with. For members on both sides of this House, working towards solutions for our communities is our No. 1 priority. I commend this legislation to the House. 9829 19:23:00 George, Jennie, MP JH5 Throsby ALP 0 0 Ms GEORGE —I am pleased to follow my colleague the member for Forde on the National Rental Affordability Scheme Bill 2008 and associated legislation. He rightly pointed out that every electorate has its own housing and rental affordability issues. That is certainly the case in Throsby, as it is in the electorate of Forde and in the Illawarra region generally. When I last looked at the 2006 census data, I found then that nearly 11,000 households in the Illawarra were suffering mortgage stress. That data is a bit out of date now with the consecutive interest rate rises that came after the census data was collected, but interestingly enough in that five-year period between the 2001 census and the 2006 census there was in my region a 100 per cent increase in the number of households suffering mortgage stress. Data has also shown that over 40 per cent of households in private rental arrangements in my electorate of Throsby are in rental stress, paying more than 30 per cent of their income on rent. As we know, the queues for public housing keep getting longer. That is no surprise, because of the impact of the huge cuts—around $3 billion in real terms—that are the legacy of the Howard government. On top of that, an estimated 1,500 people in my region face homelessness on any given night. It is no wonder that housing and rental affordability issues fared largely as priority issues in the lead-up to the federal election. There was no doubt in my mind that the proactive response of the Rudd Labor government was very important in connecting with the real-life experiences of a lot of people I represent in my electorate. Of course, we have seen in the electorate of Throsby a lot of young couples being driven out of the housing rental market in Sydney and coming to establish their lives in a lovely part of the world, in the Illawarra. But we are also finding that the cost of the average home is now seven times the average wage when, not so long ago, it was about four times the average wage. So it is no wonder that many young people in my electorate are giving up on the idea of ever owning their own home. In that regard, the recent announcements made by the minister about the first home saver accounts were very welcome. Tonight, this specific bill that addresses the National Rental Affordability Scheme does provide some light at the end of the tunnel for all those people who found the going really tough. The Rudd Labor government has always maintained that there are no silver bullets to cure the affordability issue, but we are committed to a comprehensive, affordable housing agenda. In that regard, I particularly welcome the Minister for Housing’s proactive approach in pursuing a range of innovative strategies to try to deal with the legacy left by an uncaring government for whom the issue of housing affordability did not even register on their list of concerns. As I said earlier, there is not a silver bullet and we cannot resolve the problems overnight, but we have backed our commitments with a significant outlay in the order of $2.2 billion to address a range of supply- and demand-side issues. Among those, of course, are the first home saver accounts that I referred to; the National Rental Affordability Scheme, which is encompassed in the bill before us tonight; a commitment to an audit of surplus Commonwealth land; the Housing Affordability Fund, which I hope, in my area, will help to drive down the price of new homes; the National Housing Supply Research Council, which will publish an annual report analysing the adequacy of construction and land supply; and, very importantly—and I will touch on this later—a commitment to build new homes for homeless Australians through the program called A Place to Call Home. In the debate tonight we are looking at one specific policy proposal among a raft of innovative solutions to the affordability issue, and that is the National Rental Affordability Scheme. We know from the most recent data that, of the 1.1 million Australian household in housing stress, almost 700 of these household are in fact renters. They are renting in a private rental market where rent rises are outstripping, by far, wages growth and the cost of living index as measured in our inflation rate. Interestingly enough, the most recent data that I could find for the Illawarra, in a survey undertaken by our local research organisation called IRIS, showed that, in the quarter ending June 2008, rental markets in the Illawarra remained tight with demand continuing to outstrip supply. The report indicated: At the start of the year it was the southern parts of the Illawarra that were seeing record increases in median rents, now the northern suburbs have followed suit. In the 12 months to June the median rent for a house in the Bulli to Woonona area jumped 17 per cent, from $310 to $365. The region’s median rental price increased by 9 per cent to $300 during the year to June. So in my electorate, in the region that I represent, the pressures on households with rental increases way ahead of the kind of wage increases people are receiving are really causing enormous stress for a lot of people. Of course, the more that people are asked to pay in rent, the harder it is for them to save for their deposit for their first home, so the Australian dream for lots of young couples is becoming less of a realistic proposition than it was in my generation. The legislation before us tonight proposes that we provide a major supply-side initiative to make rental properties more affordable by encouraging large-scale investment in rental housing aimed at low- and moderate-income earners. As others have said, the scheme will offer institutional investors and other eligible bodies annual rental incentives every year for 10 years. These will be made up of a Commonwealth contribution of $6,000 per dwelling per year and a state contribution, which will be either direct financial support or an in-kind contribution to the tune of $2,000. As we know, these incentives will be available to providers only on the condition that dwellings are rented to low- and moderate-income households at 20 per cent below the market rate. We are aiming to create up to 50,000 new rental properties across Australia at a cost of $623 million in the first four years. This scheme provides, for the first time, a great opportunity for all levels of government, the business sector, and the not-for-profit organisations and the community sector in general to work together to increase the supply of rental housing for low- and middle-income earners. Recently, I wrote to the Minister for Families, Housing, Community Services and Indigenous Affairs on matters brought to my attention by the Illawarra Legal Centre. The issues they raised with me related to the upcoming national affordable housing agreement. Specifically, they asked that I pursue with the minister Commonwealth funding for social housing, to ensure its sustainability and growth, and the supply of community housing owned and managed by non-profit organisations. They were keen to ensure that the not-for-profit sector would be included in the new National Rental Affordability Scheme. In her response, the minister indicated that the new housing agreement would encompass housing assistance provided at all levels of government, including all programs funded through the Commonwealth-State Housing Agreement and the SAAP, as well as other measures aimed at making housing more affordable, including the scheme encompassed by this bill. Very importantly for the not-for-profit sector, the minister stated: The Government recognises the important role of public and community housing. Public and community housing provides safe, secure and affordable housing for low income and disadvantaged Australians. Reform in social housing should improve the social and economic opportunities of tenants and provide for the long term sustainability of the social housing sector. I can assure you— that is, the Illawarra Legal Centre— that these issues are being discussed as part of the negotiation of the NAHA. The NAHA will include performance measures applying to the delivery of high quality and sustainable public and community housing. The Government is supportive of an expanded role for not for profit community housing providers. The Government expects that the National Rental Affordability Scheme— which is encompassed by the bill before us tonight— will assist the community housing sector to grow, both as tenancy managers and owners of new stock. Under the National Rental Affordability Scheme Capacity Building Strategy, assistance will be available for not for profit affordable housing providers to help develop their capacity through grants and projects that target identified needs within the sector. The Government has committed $1.5 million over two years to assist affordable housing providers become involved in the National Rental Affordability Scheme. The Government supports opportunities for not for profit housing providers to grow in addition to the National Rental Affordability Scheme. As these opportunities arise, the Government intends to work closely with not for profit housing providers. She concludes: The Government is committed to tackling the problem of housing affordability in Australia, particularly for low income earners who are most vulnerable in the current housing market. These issues are central to the new NAHA. I quote her reply at length because I think it is probably not well known out there in the community that special initiatives and particular strategies will be encompassed by the National Rental Affordability Scheme to ensure that the not-for-profit sector can be involved in the provision of further housing. As others have commented, the legislation provides that the details in the making of this new scheme will be by way of regulation. In this manner, the government will have the necessary flexibility to address changing circumstances, including a process for determining market rent, tenant eligibility criteria and reporting requirements for the scheme. As we know, the legislation provides that the secretary can issue a certificate in relation to a refundable tax offset or make payment directly if it is an endorsed charitable institution that is involved in the provision of affordable housing. I want to say a few things about homelessness. Although it is not an issue directly taken up in the scope of the legislation before us tonight, it is one area among many which are being addressed by strategies, innovative ideas and commitments made by the Minister for Housing and the Prime Minister. In that regard, I do want to put on record my thanks to the Minister for Housing for coming to the Illawarra to address a roundtable discussion that we held with all the major service providers who provide services to homeless people in my electorate and in the member for Cunningham’s electorate. As I said in my introductory remarks, we know that more than 100,000 men, women and children are homeless on any one night in Australia. On the last count I saw, around 1,530 people in the Illawarra face homelessness on any given night. So it is a major issue locally. I want to commend the housing minister and the Prime Minister for their genuine commitment and desire to address this blight that exists in our country. We have made a beginning with the downpayment of $150 million through the A Place to Call Home initiative, and I understand this will provide supported accommodation facilities based on the Common Ground housing model. According to recent press releases from the minister, she has launched such a program in Tasmania, and plans are underway in Victoria, South Australia and New South Wales—my own state. This is the first time a federal government has displayed a commitment to dealing with homelessness, and full marks to them for taking on this major challenge. In that regard, I want to acknowledge the wonderful work of local organisations including Southern Youth and Family Services, the two women’s refuges, the men’s refuge at Coniston, the Women’s Housing Trust, Darcy House at Port Kembla and others who have been involved in ongoing discussions and have made submissions in response to the minister’s green paper on homelessness. Again, I think it has taken the election of the Rudd Labor government to deal with the issues of housing and rental affordability and with the legacy of homelessness in our affluent society in a compassionate and concerted way. I want to commend the government for its bold initiatives and innovative solutions. There are no silver bullets but I think we are seeing a government that is genuinely committed to addressing a major social problem. 9832 19:38:00 McKew, Maxine, MP BP4 Bennelong ALP Parliamentary Secretary for Early Childhood Education and Childcare 1 0 Ms McKEW —There has never been a more important time for governments to be proactive in providing for the very basics of human existence. No area is more critical than the ability of a society to provide adequate, affordable housing for its citizens. As Professor Julian Disney, the Director of the Social Justice Project from the University of New South Wales has been pointing out for many years, a lack of affordable housing strikes at the heart of our lives, our communities and Australia’s future prosperity. He says that it erodes families, destroys jobs, weakens the economy and damages the environment. On the other hand, a sound housing strategy, driven by governments, is what has been sadly lacking in recent years and we are now paying the price. The Rudd government, as we have heard, is changing that and we now have a comprehensive approach to housing in this country. The government’s policies support people in a range of circumstances—people who are buying their first home, people who are renting and people who are homeless—and the National Rental Affordability Scheme Bill 2008 and associated bill address the needs of the families who rent their homes. In many of our metropolitan cities, and especially in Sydney, we have seen newspaper reports suggesting that the rental squeeze is such that stressed-out applicants are turning on real estate agents and abusing them for lack of availability of rental stock at an affordable price. While I feel for real estate agents, the frustration of those desperate to find a home is understandable. The research on rental vacancy rates explains why prospective tenants in Sydney are so frustrated. In the 12 months to March 2008, the Australian Bureau of Statistics reported that Sydney had an average rental vacancy rate of only 1.2 per cent. This is significantly lower than the rate of three per cent, which is the generally accepted benchmark indicating fully-utilised rental supply. But we should not be in this position. The fact is that for many years the former government was a bystander, a passive player, with no housing strategy and certainly no minister sitting around the cabinet table with principal responsibility for promoting the interests of affordable housing and sound urban development. The Rudd government has changed that. Certainly, as a new member I feel it is one of our great strengths so that, as a new representative, I can now talk to my local government authorities, for instance, as I have done in my local community with both Ryde and Hornsby councillors, about the fresh opportunities there are for partnership that the federal government is making available through a range of ambitious housing initiatives. It is why I am an enthusiast for this particular bill, the National Rental Affordability Scheme, which is a key component of the government’s overall $2.2 billion package. Included in this package is the $623 million National Rental Affordability Scheme, with other key measures including a $1.2 billion investment in new first home saver accounts to help aspiring first home buyers save a bigger deposit through low tax savings accounts. There is also a $512 million Housing Affordability Fund. This will lower the cost of building new homes by tackling the critical supply side issues of the length of time taken to bring new houses to sale and the impact of infrastructure charges. As the minister said when she introduced this legislation last month, all up, our combined measures will increase the supply of affordable rental homes and help people to save for and purchase their first home. It will lower infrastructure costs and build new homes for homeless Australians. Further to these measures, last week the government announced an additional $1.5 billion investment in the first home owners grant. This means that Australians buying an existing home between 14 October this year and 30 June next year will have their first home owners grant doubled from $7,000 to $14,000. Those purchasing or building brand new homes will see their grant trebled from $7,000 to $21,000. I think Australians can see even more clearly now—and I know this is certainly true in my own electorate of Bennelong—that at a time of unprecedented global economic turmoil it has never been more important for governments to be key drivers of basic services, and of course housing is an absolutely essential service. I am proud to be a member of a party that was farsighted enough to be considering substantial supply-side housing initiatives long before the present crisis. I was a participant in the National Housing Summit convened by Kevin Rudd during last year’s election campaign. It attracted all the leading players—the peak industry groups, major developers, local government officials and public policy intellectuals such as the aforementioned Julian Disney. The dilemma that was universally expressed was this: how is it that, with so much bounty, we have comprehensively failed to provide a better supply of quality affordable housing for Australian families? It really is a major indictment of the previous government that on this, as on so many other areas of social policy, so many senior ministers remained cavalier about housing and the needs of families right through the years of maximum prosperity. Those struggling to put a roof over their head or pay an ever larger slice of their income on weekly rental payments will not thank them. But the Rudd government, as I say, is acting. It is acting swiftly and decisively with practical, fresh solutions to today’s housing problems. With this legislation the government is delivering on one of its key election commitments—that is, to increase the supply of affordable rental housing for Australians and their families. This is not before time. I am sorry to say there are an estimated 700,000 householders in the rental market experiencing rental stress. Rental stress is defined where those on low or moderate incomes are incurring housing costs above 30 per cent of their overall income. This group makes up a significant component of the estimated 1.1 million Australian households in some form of housing stress. Again, in my own area of Bennelong the proportion of people suffering significant rental stress is estimated to be around 38 per cent. That represents over 4,000 individual households. Many of Australia’s renting households are our low and moderate income earners. The Australian Bureau of Statistics reports that in 2005-06 around 30 per cent of households in the middle-income quintile were in rental accommodation and around half of the households in the lowest quintile of household incomes were in rental accommodation. The only option for many families with young children is to live long distances from work opportunities and, in many cases, from community services. This adds of course to social stress, family stress and can lead to increased dependency on welfare. The problem is particularly acute for those who are already marginalised. Many low-income and Indigenous Australians find themselves actively discriminated against when it comes to access to rental accommodation. As well the rental situation is now so dire that the problem is travelling up the income scale. What we are now having to cope with is the struggling middle. Those starting out in the workforce, childcare workers, retail workers, entry level teachers—many of our essential workers—find it increasingly difficult to afford a decent dwelling in reasonable approximation to where they work. This is unsustainable and it is why the Rudd government is acting. The National Rental Affordability Scheme will help to build up to 50,000 new rental homes across Australia. It represents an investment of $623 million over the next four years. If market demands remain strong, there is room for a further 50,000 rental dwellings over five years from July 2012. Up to 1½ million households will be eligible to be tenants under the scheme and this is how it works. With incentives to be indexed to the rental component of the CPI the National Rental Affordability Scheme will offer institutional investors and other eligible entities annual incentives every year for 10 years provided conditions continue to be met. As the Minister for Housing has said, this is a new way of doing business in Australia and it will create a new asset class for institutional investors in affordable residential housing. The two main elements are an annual Commonwealth government incentive to the value of $6,000 for each dwelling each year in the form of a refundable tax offset and, as well, an annual state or territory government incentive to the value of $2,000 for each dwelling each year, which will be provided through cash payments or in kind financial support. The incentives are for developers, builders and the community housing sector which will help manage tenancies. Central to the scheme is the provision of this $8,000 combined incentive and that will be available for every new home that is built and rented out at 20 per cent below the market rent for a particular area. This is long overdue, as I say, and it is a welcome initiative that will help meet the needs of many who now struggle with high rents. Of course, it is not the only answer but it is the start of a different kind of approach, one that recognises that no one party can solve this problem, an approach that recognises, I think, that creative collaboration is the only way to help more of our citizens with a need as basic as affordable housing. To conclude, at a time when I think we need to do everything we can to maintain growth in the economy, this is a scheme that is about as timely as it gets. It will bring substantial growth to the community housing sector and it will support those Australians who carry out the invaluable work on which a healthy community depends—our teachers, our childcare educators, our police officers and our retail workers. It will help them by reducing the costs of renting in the private market. It is time all of these people had the housing break they deserve and this bill certainly helps to deliver on that promise. 9835 19:49:00 Marles, Richard, MP HWQ Corio ALP 1 0 Mr MARLES —I rise to speak in support of the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008, a bill which introduces the National Rental Affordability Scheme. It does that by amending the Income Tax Assessment Act 1997. This is another commitment that was made by Labor in the lead-up to the election which is now being fulfilled by Labor in government. This legislation is part of the government’s response to the national housing affordability crisis and the national affordable housing shortage. That is a response which involves a $2.2 billion commitment in housing measures that were announced in this year’s budget. They include $1.2 billion for first home buyer savings accounts and $512 million for the Housing Affordability Fund. It involves the green paper consultative process around homelessness, with a white paper in relation to homelessness due later this year. Housing is fundamental to the principles of social cohesion and individual wellbeing. The great Australian dream of homeownership has become a distant memory over the past decade and in some cases an impossible objective to achieve. The Rudd government is committed to assisting Australians to reach that goal of making housing an affordable objective irrespective of whether or not Australians choose to rent or buy, and this bill forms part of the government’s response in relation to that. Accessibility to homeownership has long been one of the defining attributes of egalitarian Australia. As early as 1911 almost half—49 per cent—of Australian households owned or were purchasing their own home. Despite the Great Depression and two world wars, that level was maintained right through until 1947 when 53 per cent of Australian households owned or were purchasing their own home. That figure peaked in 1966 at 71.4 per cent and has since then been hovering in the high 60 per cents. By international standards that represents a significantly high level of homeownership. Countries such as Austria, France and Holland all have homeownership in the mid to low 50 per cent range. Germany, for example, has a level of homeownership which hovers just above 40 per cent. But, in Australia, at the same time that homeownership levels have remained high, housing affordability has been in decline. When the Housing Industry Association first commenced its affordability index in 1984, the rate was at 203.9. That represented a comparatively affordable level of housing. It represented a median house price back then of $61,000 a year, monthly repayments of $496 and a repayment to income percentage of 14.7 per cent. By December of 2001 that index and those figures remained comparable. The index was at 205.2. The median house price had jumped to $210,100 but the monthly repayments were at $1,049, which meant that the repayment to income percentage was almost the same at 14.6 per cent. But it is at that point that we have seen a dramatic fall in housing affordability. Since 2001 this index has been in freefall. By March of 2008 the affordability index was down to 103.1. It was at the lowest level in its recorded history. The median house price was at $425,600, a figure which had more than doubled in six years. Monthly repayments had climbed to $2,799, representing a 166 per cent increase on the 2001 figure and the repayment to income percentage was at 29.1 per cent—more than double the 2001 figure. To put that in some form of context, mortgage stress has often been defined as 30 per cent of a household’s income being spent on household costs. So what this was saying was that in March of 2008 the average percentage was hovering just below a level which is described as mortgage stress. As a result, homeownership went from being the dream of every working Australian to becoming a nightmare in many cases. At the time of the last election in 2007 over a million households in Australia were under mortgage stress, and 75 per cent of those households earned less than average weekly earnings—hardly a surprise. The main victims of mortgage stress, again, were those under the age of 35, people who had bought their first home in the years between 2000 and 2004. All of that then begs the question as to what the former Howard government did in the period between 2001 and 2007 when we saw such a dramatic reduction in housing affordability, such a dramatic increase in the cost of housing. Despite repeated warnings from the industry, that government found the nearest sandpit and plunged its head into it. Despite repeated calls from organisations such as the Urban Development Institute of Australia, the Housing Industry Association, the Tenants Union and none other than the Reserve Bank of Australia, the Howard government did almost nothing. The figures and arguments from those organisations were indisputable. The Urban Development Institute of Australia in 2007 released a report showing that only 39 per cent of Australians could afford to buy a house in their local area, compared to a figure of 96 per cent in 2001. In 2005, the Tenants Union called on the federal government ‘to commit to a housing plan that includes providing genuine housing affordability’. But still we saw no action on the part of the Howard government. The Housing Industry Association repeatedly warned of the chronic shortage of new housing stock and how that linked to other housing issues. That led Mr Harley Dale, the chief economist of the HIA, to say in 2007, in reference to the housing shortage: The situation for new home building will in turn sustain the current problems of struggling first home aspirants and tightening rental markets. Despite all of that, the Howard government did nothing. It ignored repeated requests and pleadings on the part of the industry. It disregarded data from the Housing Industry Association and the Reserve Bank of Australia and it was deaf to the cries of the Australian public who are feeling the housing pinch. In my electorate of Corio, which covers a large part of Geelong, we see a situation which is probably similar to situations all around Australia. The median household income in Geelong, according to the 2006 census figure, was $840 a week, compared to a national average of $1,027 a week. The median house price was $257,500. If you assume the mortgage repayments on a loan constituting 85 per cent, say, of the purchase price at a current market rate of around 8½ per cent over a 25-year standard variable loan, that amounted to $406.50 per week in mortgage repayments. Based on those figures, you can see that the average household expenditure in my electorate on mortgages was approaching almost 50 per cent of weekly income. The single most significant reason why we saw the lack of housing affordability go up was the 10 interest rate rises in a row which occurred under the Howard government. Thankfully, the people of Geelong and the people of Australia are beginning to receive some respite with the most recent round of interest rate cuts. The Rudd government came to power acknowledging that there was much work to be done in the area of housing, a problem which has grown over the course of the decade. This problem will take a lot more than the 11 months the Rudd government has had in office to fix. There is clearly no silver bullet in relation to this problem. Having said that, I also note that the Rudd government has come into office with clear policies, as seen in this legislation. That stands in stark contrast to what we have seen from the other side of the House—a coalition which offered very few policies, if any, in government. They offered nothing tangible in relation to this issue at the last election and we have seen absolutely nothing come from the Liberal Party while in opposition. A recent visit to the Liberal Party website to see what the shadow housing minister, the member for Cook, has done in his first few weeks in the job reveals that he has done not much at all. I suppose at least we have to commend the opposition on having a representative responsible for housing. He has issued three press releases since coming into the job. On 30 September he identified that there was ‘a gap between supply and demand for housing right across the country’, an insightful observation, but one that has come about five years too late. But having made that observation, there are no clear policy solutions offered to deal with that observation. Again, on 2 October, the same issue was identified and again no policy solutions were put forward. On 8 October, there was another press release identifying the same issue and the only policy response we saw at that point was, ‘Our approach will be driven by practical economic policies that address the supply challenges in the market.’ That is hardly an edifying comment about the direction in which the opposition would go in terms of this issue. The Australian people waited over a decade for the coalition to formulate a housing policy and it appears from what we have now seen that we are still waiting to see a housing policy from the other side. It begs the very obvious question: why would they bother to have a shadow housing minister if they are not actually going to produce any housing policies? As I said, by contrast with that, the Rudd government has had a very clear position in relation to this. A division having been called in the House of Representatives— Sitting suspended from 8.01 pm to 8.15 pm HWQ Marles, Richard, MP Mr MARLES —The Rudd government have been listening to the warnings of the industry and it has been hearing their calls. We listened to ideas and suggestions that came from the participants of the National Summit on Housing Affordability last year. From that a discussion paper was produced on the Australian housing market which was titled New directions for affordable housing. That of course included a discussion of, amongst other things, the issue of the shortage of supply in housing—and it would do well for the new shadow minister for housing to perhaps read that document and to learn something about these issues. We took these policies to the Australian people at the last election and since coming to office the Rudd government has been working to implement them. We have for the first time a Minister for Housing. We introduced and committed funding to real policy responses such as the First Home Saver Accounts, the national Homelessness Information Clearinghouse, the Housing Affordability Fund, the National Housing Supply Council and the electronic development assessment to speed up the planning approval process, and of course as late as last week we had the doubling of the first home buyers grant, a tripling for buying a new dwelling. And we have the National Rental Affordability Scheme, which is the basis of this legislation. The object of this scheme is to create affordable rental housing and reduce rental costs. Its implementation is forecast to create 50,000 new rental properties at a cost of $623 million in its first four years, and it does so by encouraging investment in new dwellings which, following a government incentive to the owner, can then be offered for rent at 20 per cent below the market rate. This will provide an option of affordable housing for low- and moderate-income households. The government incentive to the owners comprises a Commonwealth contribution of $6,000 per dwelling per year and then a $2,000 in-kind contribution from state and territory governments per dwelling per year. These contributions can be taken as a tax offset or as a payment and the incentives will be provided for a period of 10 years. The incentives will be indexed against the CPI so that they keep pace with inflation. This scheme has been developed in consultation with the Council of Australian Governments, which agreed to its implementation in March of this year. It will be reviewed in its early stages to ensure its effectiveness and scope. It is envisaged that if demand for the scheme is high then another 50,000 properties will be offered from July of 2012. In conclusion, this legislation is part of a suite of measures that constitutes the government’s response to the issues currently facing the Australian housing market. We have acknowledged not only the existence of the problem but also its gravity and complexity. The people of Geelong and the people of Australia are feeling the pinch. We have not got into this position overnight; it has taken the better part of a decade of neglect and it is going to take some time and some work to fix. But this government has a plan to do that and that plan is being implemented. It stands in stark contrast to those opposite who do nothing but continue to offer empty rhetoric and platitudes to the Australian people. They seem utterly disinterested in the plight of ordinary Australians when it comes to affordable housing. Housing, as I said, is fundamental to social cohesion and indeed the Australian way of life. The Rudd government acknowledges this, even if those opposite do not, and this legislation will assist Australians by providing more affordable rental housing and in that sense provide more affordable housing options to all Australians. I commend the bills to the House. 9838 20:19:00 Trevor, Chris, MP HVU Flynn ALP 1 0 Mr TREVOR —I rise to support the government’s National Rental Affordability Scheme Bill 2008 and the related National Rental Affordability Scheme (Consequential Amendments) Bill 2008. It is with great pride that I comment on these two bills. I am proud that my government is committed to tackling the issue of rental affordability and is acting swiftly, comprehensively and creatively to address this issue at its very core. As we are all aware, it is now harder than ever before in the history of Australia for people to find affordable rental accommodation. Nowhere is this pain felt more widely and more deeply than by those on low and even moderate incomes and their families. There are plenty of these people in my electorate of Flynn. It is these people on low and moderate incomes that are at the front of my mind today as I rise to speak on this very real, very painful and very relevant issue. Across Australia, rental vacancy rates are at an all-time low. In my electorate of Flynn, in my home town of Gladstone, I am informed that rental vacancy figures have dropped to 1.5 per cent for the largest rental agency in town, and median rents for a three-bedroom house in Emerald, also in my electorate, have increased from $350 per week in 2006 to $380 per week in 2008. Of course, with low rental vacancies across my electorate and throughout Australia generally, there is increasing pressure on rental prices. There is only one way that rents have gone, and that is upwards. This is a very real issue that impacts on everyday life for my constituents who rent homes, as their rent has increased faster than any other everyday living expense. While rents increase to levels never seen before, my constituents in Flynn are forced to cut back on essentials, move house more frequently or live in cramped conditions just to keep a roof over their heads. I am pleased to speak on these bills. They are particularly relevant to my electorate of Flynn. I am proud that my government is acting now on this problem that for too long has gone unanswered. The opposition’s approach to rental affordability when in government can be summed up in three ways, with respect, and they are neglect, more neglect and shameful neglect. Rather than sit and watch this problem worsen, we will act to give vulnerable Australian people access to affordable housing, to give them a home but, more importantly, to give them back a heart and their hope for the future. The National Rental Affordability Scheme is aimed at encouraging investment in an area that has previously been underutilised. The scheme will present new opportunities for investors and a new asset class of investment in residential property. The scheme will also present opportunities for new and creative partnerships between institutional investors, developers, community groups and not-for-profit organisations, as well as all levels of government, to work together and provide a sustainable solution to providing affordable housing in Australia. I believe in my own heart that we can make a difference. I am more than happy to commend the bills to the House. Debate (on motion by Ms Grierson) adjourned. 9839 20:23:00 Main Committee adjourned at 8.23 pm 9840 Questions in Writing 9840 9840 227 9840 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Education, in writing, on 28 August 2008: In respect of the Productivity Places Program: how often will the Priority Occupations and Qualifications List be updated. 9840 Gillard, Julia, MP 83L Lalor ALP Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion 1 Ms Gillard —The answer to the honourable member’s question is as follows: The list of priority occupations has been updated for each of the two phases of the Productivity Places Program and new qualifications relevant to the identified occupations continue to be added as they become available. The setting of future priorities for the Productivity Places Program is currently being considered by Skills Australia. 9840 9840 229 9840 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Education in writing, on 28 August 2008: In respect of the Productivity Places Program: how has the department determined the predictions for the number of commencements in Phase 2 of the program for (a) existing workers, and (b) job seekers? 9840 Gillard, Julia, MP 83L Lalor ALP Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion 1 Ms Gillard —The answer to the honourable member’s question is as follows: Calculation methods for the number of commencements in Phase 2 of the program are: The number of places available for Phase 2 of the program for existing workers is expected to be 9 616 and is based on negotiations with state and territory governments on the places those jurisdictions are able to deliver. The number of places available for Phase 2 of the program for job seekers is 22 000, which is half the full year allocation for 2008-09 of 44 000 places. Due to the success of the program, the Government has made available an additional 15 000 places for job seekers at the Certificate III level to 30 June 2009. 9840 9840 253 9840 Baldwin, Robert, MP LL6 Paterson LP 0 Mr Baldwin asked the Minister for Defence, in writing, on 2 September 2008: How many Australian military personnel in the D Company of the 6th Royal Australian Regiment Battalion were involved in the Battle of Long Tan on 18 August 1966, and how many were (a) National Service Conscripts; and (b) Regular Enlisted Personnel. How many Australian military personnel were killed in the Battle of Long Tan, and how many of those killed were (a) National Service Conscripts; and (b) Regular Enlisted Personnel. How many Australian military personnel were injured in the Battle of Long Tan, and how many of those injured were (a) National Service Conscripts; and (b) Regular Enlisted Personnel. How many Australian military personnel were awarded citations, medals or awards resulting from serving in the Battle of Long Tan, and how many of those who received these were (a) National Service Conscripts; and (b) Regular Enlisted Personnel. Were any citations, medals or awards given posthumously resulting from service in the Battle of Long Tan; if so, how many were (a) National Service Conscripts; and (b) Regular Enlisted Personnel; and in each case, who were they and what was their rank. 9841 Fitzgibbon, Joel, MP 8K6 Hunter ALP Minister for Defence 1 Mr Fitzgibbon —The answer to the honourable member’s question is as follows: The honourable member asked a similar question on 6 December 2004 (No. 313). The then Minister for Defence’s response was published in Hansard on 10 May 2005, page 134. An error has been identified in the previous response, following a review by the Central Army Records Office. The responses to parts (1) and (4) below contain the correct figures for this, and the previous, question. 124, (a) 64, (b) 60. 18*, (a) 11, (b) 7. * This total is different to part (3) of the 2005 response as the honourable member’s question then related only to D Company. 25*, (a) 14, (b) 11. * This total is different to part (5) of the 2005 response as the honourable member’s question then related only to D Company. The new total also includes psychological casualties. In addition, the total for (a) above, is one less that in the 2005 response because a soldier was counted as a National Service Conscript when in fact he was a Regular Army Private. 124, (a) 64, (b) 60. See response to House of Representatives Question on Notice 313 (published in Hansard on 10 May 2005, page 134). 9841 9841 285 9841 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Employment Participation, in writing, on 2 September 2008: What is considered a satisfactory reason for transferring a job seeker to a new Job Network provider. 9841 O’Connor, Brendan, MP 00AN3 Gorton ALP Minister for Employment Participation 1 Mr Brendan O’Connor —The answer to the honourable member’s question is as follows: Under the current Job Network contract, there are three circumstances where a job seeker may be transferred to a new Job Network member: a change of address to a location not serviced by their JNM; a transfer between JNMs where the JNMs and the job seeker are in agreement; and a transfer due to an irretrievable breakdown between the job seeker and JNM.  9841 9841 287 9841 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Employment Participation, in writing, on 2 September 2008: Will the new Employment Services contract be for three years? 9841 O’Connor, Brendan, MP 00AN3 Gorton ALP Minister for Employment Participation 1 Mr Brendan O’Connor —The answer to the honourable member’s question is as follows: Yes - the new Employment Services Contract will be for a period of three years, commencing on 1 July 2009 and ending on 30 June 2012, with the ability to be extended for a period of up to six years. 9841 9841 289 9841 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Employment Participation, in writing, on 2 September 2008: How many Green Corps providers offer other employment services administered by the department. 9842 O’Connor, Brendan, MP 00AN3 Gorton ALP Minister for Employment Participation 1 Mr Brendan O’Connor —The answer to the honourale member’s question is as follows: There are three Green Corps providers who offer other employment services administered by the Department of Education, Employment and Workplace Relations. 9842 9842 290 9842 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Employment Preparation, in writing, on 2 September 2008: In respect of Green Corps participants: (a) how many ceased participating prior to the scheduled six months; (b) how many of these were due to participants either gaining employment or undertaking further education; (c) how many of these were due to the program being of a shorter duration than scheduled. 9842 O’Connor, Brendan, MP 00AN3 Gorton ALP Minister for Employment Participation 1 Mr Brendan O’Connor —The answer to the honourable member’s question is as follows: In the 2007–08 financial year, of the 2169 participants who commenced in a Green Corps project, 1004 left prior to the 26 week project ending. From information provided by Green Corps providers, 211 exited for education and/or employment. Green Corps providers are contractually required to run projects for 26 weeks duration. All providers have met this requirement. 9842 9842 292 9842 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Employment Participation, in writing, on 2 September 2008: How many STEP ERS providers only offer pre-employment services. 9842 O’Connor, Brendan, MP 00AN3 Gorton ALP Minister for Employment Participation 1 Mr Brendan O’Connor —The answer to the honourable member’s question is as follows: There are 200 organisations on the Structured Training and Employment Projects Employment and Related Services (STEP ERS) panel, 21 of which are available to deliver pre-employment support services exclusively. 9842 9842 293 9842 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Employment Participation, in writing, on 2 September 2008: How many STEP ERS providers only offer mentoring. 9842 O’Connor, Brendan, MP 00AN3 Gorton ALP Minister for Employment Participation 1 Mr Brendan O’Connor —The answer to the honourable member’s question is as follows: There are 200 organisations on the Structured Training and Employment Projects Employment and Related Services (STEP ERS) panel, four of which are available to deliver mentoring support services exclusively. 9842 9842 295 9842 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Employment Participation, in writing, on 2 September 2008: What proportion of STEP-ERS participants have gained employment within three months of undertaking STEP-ERS. 9843 O’Connor, Brendan, MP 00AN3 Gorton ALP Minister for Employment Participation 1 Mr Brendan O’Connor —The answer to the honourable member’s question is as follows: As at 1 September 2008, of the 11,351 STEP ERS participants, 27% have obtained an Employment placement in the program within three months of commencing. 9843 9843 312 9843 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Families, Housing, Community Services and Indigenous Affairs, in writing, on 2 September 2008: Is the Northern Territory Government eligible to claim wage assistance when they take on former Community Development Employment Projects participants. 9843 O’Connor, Brendan, MP 00AN3 Gorton ALP Minister for Employment Participation 1 Mr Brendan O’Connor —The answer to the honourable member’s question is as follows: The Northern Territory Government is eligible to claim Wage Assistance for former CDEP participants who are employed either on an ongoing full-time or part-time (of at least 15 hours per week) basis under a normal employer-employee relationship. Wage Assistance is not payable where the placement is supported by another Commonwealth, State or Territory wage subsidy program. However, where a placement is funded under the Structured Training and Employment Projects (STEP) program, Wage Assistance can be claimed by an employer where the STEP agreement does not have a wage subsidy component. The information provided refers to the current Indigenous Employment Program. The Government has recently released a discussion paper and is currently considering the future of the Indigenous Employment Program. 9843 9843 315 9843 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Employment Participation, in writing, on 2 September 2008: How much has been budgeted for the payment of Community Development Employment Projects Placement Incentives for the 2008-09 financial year. 9843 O’Connor, Brendan, MP 00AN3 Gorton ALP Minister for Employment Participation 1 Mr Brendan O’Connor —The answer to the honourable member’s question is as follows: The CDEP Placement Incentive (CDEPPI) is one of a number of elements funded under the Indigenous Employment Program. The budget for the Indigenous Employment Program for the 2008-09 financial year is $115.595m. There is no separate budget cap or budget target for CDEPPI within this; the amount of CDEPPI that is paid is determined by the number of CDEP participants exited from CDEP into ongoing employment. The information provided refers to the current Indigenous Employment Program. The Government has recently released a discussion paper and is currently considering the future direction of the Indigenous Employment Program. 9843 9843 316 9843 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Education, in writing, on 2 September 2008: How many: (a) individual schools; and (b) cluster schools, applied for funding under round 1, phase 1 of the Trade Training Centres in Schools Program. 9844 Gillard, Julia, MP 83L Lalor ALP Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion 1 Ms Gillard —The answer to the honourable member’s question is as follows: In Round One (Phase One) 52 applications were received from individual schools and 35 applications were received from clusters involving 152 schools, for funding under the Trade Training Centres in Schools Program. 9844 9844 317 9844 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Education, in writing, on 2 September 2008: In respect of the schools that applied for funding under round 1, phase 1 of the Trade Training Centres in Schools Program: how many were from (a) Tasmania, and (b) the Australian Capital Territory. 9844 Gillard, Julia, MP 83L Lalor ALP Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion 1 Ms Gillard —The answer to the honourable member’s question is as follows: In Round One (Phase One) of the Trade Training Centres in Schools Program two applications for funding were received from Tasmanian schools and one application for funding was received from the Australian Capital Territory. 9844 9844 318 9844 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Education, in writing, on 2 September 2008: For round 1, phase 2 of the Trade Training Centres in Schools Program, how many applications have been received to date from Tasmanian schools. 9844 Gillard, Julia, MP 83L Lalor ALP Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion 1 Ms Gillard —The answer to the honourable member’s question is as follows: No applications have been received from Tasmanian schools for Round One (Phase Two) as at 19 September 2008.  The application round closes on 17 October 2008. 9844 9844 319 9844 Southcott, Dr Andrew, MP TK6 Boothby LP 0 Dr Southcott asked the Minister for Education, in writing, on 2 September 2008: For round 1, phase 2 of the Trade Training Centres in Schools Program, how many applications have been received to date from schools in the Australian Capital Territory. 9844 Gillard, Julia, MP 83L Lalor ALP Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion 1 Ms Gillard —The answer to the honourable member’s question is as follows: No applications have been received from the ACT for Round One (Phase Two) as at 19 September 2008. The Phase Two application round closes on 17 October 2008. 9844 9844 333 9844 Melham, Daryl, MP 4T4 Banks ALP 1 Mr Melham asked the Minister for Employment and Workplace Relations, in writing, on 16 September 2008: To date, what costs have been incurred by the Australian Building and Construction Commission in the case of Hadgkiss v CFMEU, Lane and Casper, for: (a) solicitors; and (b) counsel. 9844 Gillard, Julia, MP 83L Lalor ALP Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion 1 Ms Gillard —The answer to the honourable member’s question is as follows: As at 17 September 2008, the Office of the Australian Building and Construction Commissioner has incurred solicitor’s costs of $697,950.42 in the case of Hadgkiss v CFMEU, CFMEU (NSW), Lane and Casper. As at 17 September 2008, the Office of the Australian Building and Construction Commissioner has incurred counsel costs of $212,792.99 in the case of Hadgkiss v CFMEU, CFMEU (NSW), Lane and Casper. 9845 9845 351 9845 Lindsay, Peter, MP HK6 Herbert LP 0 Mr Lindsay asked the Minister for Defence, in writing, on 25 September 2008: What selection criteria were used in appointing Dr Anthony Burke as an Associate Professor to the University of New South Wales at the Australian Defence Force Academy (ADFA). Which academic board made the decision to appoint Dr Burke to ADFA. What input did ADFA or the Department of Defence have in Dr Burke’s appointment and to whom does he report. What subjects is Dr Burke teaching at the ADFA and in what year levels are his ADFA students. What changes have been made to the ADFA curriculum in the disciplines in which Dr Burke teaches. 9845 Fitzgibbon, Joel, MP 8K6 Hunter ALP Minister for Defence 1 Mr Fitzgibbon —The answer to the honourable member’s question is as follows: The University of New South Wales (UNSW) appoints academic staff on the basis of an individual’s education, research and teaching record. This is in accordance with UNSW selection rules. Dr Burke was appointed to the advertised position by a selection panel of UNSW at ADFA staff members. None. Dr Burke reports to the Head of the School of Humanities and Social Sciences at UNSW at ADFA. This semester Dr Burke is teaching an ‘Asia Pacific Security’ postgraduate course. In Semester 1 2008, Dr Burke taught a ‘Global Security’ postgraduate course. Postgraduate programs offered by UNSW at ADFA are open to Defence employees, both military and civilian, and to members of the community. In Semester 1 2008, Dr Burke also coordinated a ‘Terrorism in the International Order: Past Present and Future’ undergraduate course. Nine academics and officials contributed to lectures in this course. This was open to second and third year undergraduate students. Dr Burke teaches in courses already established in the curriculum that preceded his appointment. They have been updated with current literature and information, to ensure that they are up to date and reflect a range of views, including those of government and leading policy institutes.