2010-06-17 42 1 8 REPS 0 0 2010-06-17 The SPEAKER (Mr Harry Jenkins) took the chair at 9 am and read prayers. 5695 Delegation Reports 5695 5695 09:01:00 SPEAKER, The 10000 PO N/A 1 0 The SPEAKER —As leader of the delegation, I present the report of the Australian Parliamentary Delegation to the 18th Annual Meeting of the Asia Pacific Parliamentary Forum, held in Singapore from 17 to 23 January 2010. The delegation comprised the father of the House, the member for Berowra, as deputy leader; the member for Deakin; and Senators Ian Macdonald and Glenn Sterle. I first attended the APPF in 1998 and have witnessed its development over the years and understand its relevance to the Australian parliament. The countries that participate in the APPF matter to Australia because of our strategic and economic interests. So each January for the past 18 years members of the Australian parliament have joined with members of other national parliaments in the Asia-Pacific region to discuss matters of common interest. With such a broad membership, it is inevitable that there are varied perspectives on many issues raised at the annual meetings. But I think it is fair to say that participants endeavour to treat each others’ views with respect. Therefore, one of the principal outcomes of the meetings is that a measure of understanding is gained of the views and interests of regional neighbours. The matters addressed at the Singapore meeting were along the same lines as in the past. They can be grouped under three broad headings: economic and trade matters, political and security issues, and interparliamentary cooperation within the region. I will turn now, briefly, to the substance of the meeting. The delegation proposed resolutions on terrorism, energy security, the global economic situation and trade liberalisation, and regional collaboration on social measures in the economic downturn. We were also involved in the discussions in the plenary on agenda items such as climate change and the APEC meeting in 2009. The delegation fully participated in all sessions of the drafting committee, where draft resolutions were settled before they were returned to the plenary for adoption at the final session. At that final session 14 resolutions were adopted. As might be expected in an organisation that has been operating for so many years, there are issues that need to be reviewed from time to time. At the Singapore meeting some delegations raised issues relating to the APPF’s rules and their interpretation. I am pleased that steps have been taken by the APPF to consult member countries about possible reforms. The proposals that are received will be considered at the next annual meeting, which will be held in Mongolia in January next year. In preparation for the meeting, the Department of Foreign Affairs and Trade in Canberra assisted with comprehensive briefing materials and advice and with the drafting of resolutions. The Parliamentary Library assisted with valuable briefing material, and the Parliamentary Relations Office provided administrative support. The delegation appreciates all their assistance. On behalf of the delegation, I would like to thank the Australian High Commission representatives in Singapore: the High Commissioner, Mr Doug Chester; the Deputy High Commissioner, Ms Penny Burtt; and the First Secretary, Dr Anton Alblas. Their briefings were very helpful. The hospitality offered by Mr Chester gave us an opportunity to build on our relationships with Singaporean members of parliament and others in Singapore who have ties to Australia. Dr Alblas provided additional assistance to us, including arranging meetings, at our request, with the Ministry of Finance, the waste management department and the Singapore Marina Barrage and accompanying us throughout those meetings. I thank the delegation secretary, Catherine Cornish, for her diligence and support, and my senior adviser, Christopher Paterson, especially for his assistance in the workings of the drafting committee. I thank the deputy leader, the member for Berowra, and all members of the delegation and their accompanying spouses. I believe we represented the parliament effectively. 5696 09:05:00 Ruddock, Philip, MP 0J4 Berowra LP 0 0 Mr RUDDOCK —by leave—Mr Speaker, I thank you for your leadership of the Australian Parliamentary Delegation to the 18th Annual Meeting of the Asia Pacific Parliamentary Forum. I wish to make a few observations in the context of the history and role of this organisation. I believe a former member for Bradfield, David Connolly, was instrumental in moving for the establishment of the organisation. It was formally established while he was still in the parliament, in January 1993. Its objectives involve promoting dialogue amongst parliamentarians within the region. I would commend those who are interested to examine paragraphs 2.20 through to 2.29 of the report of the delegation because they outline the contribution that was made to the debate and the resolutions that were settled. I had the privilege of being able to speak—and I note the Attorney is in the chamber—on matters relating to terrorism and particularly its impact on our region and the regional responses that had been made. It was particularly important, I think, to encourage dialogue and cooperation to prevent terrorism. In that context, working with members of parliament, particularly from Indonesia, who were involved in the drafting committee was in my view a very valuable role to fulfil. The efforts that are needed in relation to counterterrorism depend very much upon political leadership, and it is needed not just here in Australia but in the region generally. The opportunity for dialogue in relation to those matters seemed to me to be a very important and complementary contribution. As the Speaker noted, our colleagues Senators Sterle and Macdonald were there, as well as the member for Deakin. Each of them made substantial contributions, as are outlined in the paragraphs I have referred to. I would encourage those who are interested to see whether it fulfils a useful role to examine the matters discussed and the contributions that were made and to contemplate how this plays a positive role in terms of consensus building. 10000 SPEAKER, The The SPEAKER —I thank the member for Berowra for his comments. 5696 Bills R4326 5696 Bill and explanatory memorandum presented by Mr Snowdon, for Ms Roxon. Bill read a first time. 5696 5696 09:08:00 Snowdon, Warren, MP IJ4 Lingiari ALP Minister for Indigenous Health, Rural and Regional Health and Regional Service Delivery 1 0 Mr SNOWDON —I move: That this bill be now read a second time. The Professional Services Review (PSR) Scheme and the Medicare Participation Review Committee (MPRC) are important parts of the government’s efforts to ensure Medicare is used correctly and taxpayers’ money is not abused. The PSR Scheme is a peer review process for investigating whether a practitioner has inappropriately rendered or initiated Medicare or Pharmaceutical Benefits Scheme (PBS) services. This scheme also aims to protect patients from the risks associated with inappropriate practice and this bill enhances the protection of the public. In 2008-09 Medicare Australia referred 136 matters to PSR. This bill makes amendments to the provisions for the Professional Services Review (PSR) Scheme and the Medicare Participation Review Committee (MPRC) in the Health Insurance Act 1973 (the act). The proposed amendments do not alter the purpose of the PSR Scheme or the MPRC process, but address the recommendations of the 2007 review of the PSR Scheme. Change in requirement to refer to the MPRC Practitioners who are found to have engaged in inappropriate practice may be reprimanded, counselled and/or disqualified through the PSR process from providing these services for up to three years. At present, a practitioner must be referred to the MPRC if they have committed a relevant civil or criminal offence, or been found to have engaged in inappropriate practice by the PSR on two or more occasions. The bill removes the requirement for the Director of PSR to refer practitioners who have been found to have engaged in inappropriate practice on two or more occasions to the MPRC and provides for the director and the determining authority to apply a disqualification period of up to five years to those practitioners. Prescribed pattern of services In 1999 the profession agreed that when high numbers of services are provided a possibility of poor quality arises. The number agreed was 80 or more unreferred attendances on 20 or more days in a 12-month period. This bill clarifies in legislation that a practitioner who performs this number of services is automatically deemed by the legislation to have practised inappropriately, unless they can provide evidence that exceptional circumstances existed. The bill requires the Medicare Australia CEO to request a review by the Director of PSR, if the CEO becomes aware of a ‘prescribed pattern of services’. The final determination that a ‘prescribed pattern of services’ constitutes inappropriate practice can only be made under the PSR Scheme. It is not a decision that can be taken by the Medicare Australia CEO. Expanding the coverage of the PSR Scheme At present the PSR Scheme and the MPRC apply only to medical practitioners, dentists, chiropractors, physiotherapists, podiatrists, optometrists and osteopaths who provide services under Medicare and the PBS. In the 2009 calendar year, practitioners not covered by PSR and MPRC arrangements provided 3.6 million services at a cost to Medicare of $350 million. These practitioners include audiologists, diabetes educators, dieticians, exercise physiologists, mental health nurses, occupational therapists, psychologists, social workers and speech pathologists. The bill provides for a determination to be made that a health professional is a practitioner for the purposes of the PSR Scheme and the MPRC (recommendation 12 of the review committee). This will enable the PSR Scheme and the MPRC to be applied to allied health professionals who provide Medicare services. Administration improvements The bill provides for improvements to streamline the administration of the scheme related to recommendation 4 of the review committee by: providing an extension of time for a PSR committee or the determining authority process in some circumstances, such as where a person is unable to participate in the process due to illness; providing for a PSR committee or the determining authority to take no further action in some circumstances, such as where the person dies; providing for a final determination to take effect seven days after the day on which an appeal is withdrawn or discontinued by the person. Improving the protection of the public The bill includes amendments to improve the protection of the public under the PSR Scheme. If the conduct of a person under review poses a threat to patient life or health, the director must contact the relevant body—that is, the body in each state or territory that is authorised to recall patients for independent medical review, such as the Chief Medical Officer. The bill also requires the director to notify the relevant registration body. Other minor changes The bill makes a number of other minor administrative changes to the scheme. These are: clarifying that Medicare services which are requested may be reviewed by PSR, whether or not they have been rendered; authorising the Director of PSR to give information about a person to the determining authority, on one occasion, up until the authority makes its draft determination; protecting patients by requiring persons who are disqualified due to a PSR or MPRC process to display a notice to inform patients that services will not attract Medicare benefits; and amending certain provisions to clarify that the instrument referred to is a legislative instrument under the Legislative Instruments Act 2003. Unrelated amendment The bill contains one amendment not directly related to the PSR Scheme or the MPRC. Currently the Health Insurance Act provides for regulations to be made in relation to referrals to consultant physicians and specialists. Over the last decade a broad range of health practitioners have become able to provide Medicare services. This change will enable the current regulations applying to referrals to consultant physicians and specialists to be expanded so that they apply to any referral made for a Medicare service. This bill will ensure that the PSR Scheme continues to operate effectively as part of the government’s efforts to protect the integrity of Medicare. I commend the bill to the House. Debate (on motion by Mr Coulton) adjourned. 5698 Bills R4369 5698 Debate resumed from 16 June, on motion by Mr Stephen Smith: That this bill be now read a second time. 5699 09:16:00 Ripoll, Bernie, MP 83E Oxley ALP 1 0 Mr RIPOLL —It is a pleasure to speak on the Export Market Development Grants Amendment Bill 2010. I have spoken on EMDG bills in the past, because I am a supporter of this type of legislation and this program. It is always a pleasure to speak on one again, although the context of this amendment bill is unfinished business from the previous government in relation to the Export Market Development Grants Scheme. Firstly, I would like to congratulate the Hon. Simon Crean, the Minister for Trade, for his good work in this area. I know his commitment to export business, to export companies, to Brand Australia, to a range of key issues around Australia as an export nation. I strongly support this amendment bill because it will enhance Australia’s ability to export and will encourage business, particularly small and medium enterprise, to participate in an important part of Australia’s economy, and that is exporting. This bill will reduce the demand on the scheme. It needs to do that because the previous government, in an unfunded manner, overran the scheme, causing a range of problems in funding years for people who had applied for funding and grants—the budget for this program had actually run out. This is not good enough. It is not satisfactory for business to be placed in those circumstances. The reason we are here debating this bill, the reason we have this amendment, is to fix up a problem left over from the previous government, who saw fit, during a heated election campaign in 2007, to overrun this program without funding that overrun. This amendment bill will increase the minimum requirement for export promotion expenditure from the current $10,000 to $20,000. That will mean that organisations will have to spend $20,000 before they are eligible, before they can apply. I think that is a fair and reasonable beginning point, given that the $10,000 figure has not changed for quite some time. We propose to reduce the maximum number of individual grants that are available to an applicant from eight to seven—a reduction of just one. We also propose to reduce the maximum that is payable per grant from the current $200,000 to $150,000. That will mean there are more grants available for more individual companies and businesses. We also propose to cap the maximum amount claimable for intellectual property expenses at $50,000. Most important is the fact that we will be extending this program for a further five years, giving certainty and confidence to a whole range of mostly small businesses, but some larger ones as well, that rely on these programs to develop their export markets. We need to understand that in its context. It is a grant to help them develop those markets. Once a company can stand on its own feet, once it has established itself overseas in the particular market that it has chosen, then it no longer needs the assistance of the Commonwealth and should be able to make enough profit, have enough revenue from its export markets, that it no longer needs the assistance of the government. The amendments we have placed on the table are fair, equitable and reasonable. They were done in consultation with the sector, and the sector supports them. The sector understands that, if we are to continue this program, the program needs to be checked and measured against expectations and funding. It is never satisfactory that a program is left unchecked or that a government overpromotes and overruns a program deliberately but then does not fund that overrun. I just do not think that is a satisfactory position. We have taken action to do something about this. We have increased the funding that is available, to make amends as best as possible and fund the unfunded liabilities that were left over from the previous government. As I say, these unfunded liabilities were run up close to the election last year. These are good changes. They do provide some certainty. They do provide for an extension of the program by five years. What this program does is build on that contribution that small and medium enterprises make to the nation now. It does provide for a strong export culture to grow even stronger and it helps to reduce that information gap between government organisations and the export markets they are particularly targeting. It is done in coordination and cooperation with Austrade and a range of other government service bodies. Most importantly, if you are a small business owner, it reduces your costs. It means what you actually spend can be reduced because the government will foot part of that bill, which I think is very important. Australia is a competitive export nation. The program is about trying to assist those very important small businesses that we all acknowledge are the backbone of our national economy, the largest employer in the country. It is the small businesses, the mum-and-dad businesses and the unexpected businesses that are very important exporters. It would surprise a lot of people who they are. I have spoken in the past on these grants, because I think they are very important. I recall very early on in my tenure as a member of parliament visiting Claypave, a paver and brick manufacturer, which was then in my electorate but, sadly, is no longer. They are a great local business, a large employer, and they do a fantastic job. It would probably surprise people to understand that a brick manufacturer, a paver manufacturer, would export its product. Bricks are pretty big and heavy. They are not something you would naturally think Australia would export if you think of the labour costs. It is a labour intensive production, which would suggest that it was not a viable export product or that exporting a product such as bricks to a nation such as China is counterintuitive, but that is exactly what Claypave do. What they did was differentiate themselves from every other brickmaker in the world with a high-quality, well-manufactured, highly labour intensive product and exported it to the rest of the world. They export to China, the United States and the Middle East and they are looking to other markets. I know, because I have spoken to the CEO and the company on many occasions, that a part of their success—it is only a small part—and a part of the confidence they had to go out and spend the R&D and marketing development money they needed to in those markets was due to the federal government standing there behind them with a really good program. We have always been supportive of this program and it is good to have the Minister for Trade, Simon Crean, in the House today speaking on this particular bill. He knows just how important this bill is. That is why these amendments are on the table. We want to make sure that this program not only survives but grows in a properly funded manner and not in the manner that was left behind by the previous government. For our enterprising, innovative companies around the country, the biggest tick of all is that we have extended this program for a further five years. I could not think of a better way to promote a whole range of businesses. Just in case people are listening or later read these speeches, think in just one seat how much impact a grant has. How much impact does it have in a seat like Oxley, which is my seat? I can tell you it is enormous. Over the years I have had dozens of companies not only apply for but also receive grants. I will run quickly through a list. In my electorate I have got companies like Majans and Leslie Consulting, which is another incredible story.  Bruce Leslie is the proprietor of Leslie Consulting, a mining engineering firm in my electorate. Counterintuitive to what you might think would exist in Goodna, on a small plot in Goodna we have a small firm of highly skilled, highly dedicated individuals that provide services and intellectual property to NASA, to the United States, to German engineering companies and to European mining engineering companies. In South-East Queensland, in a small suburb in Goodna, is this incredible company that is doing global things. Most people who drive past never know that, but it is a great story to tell and I congratulate Leslie Consulting, Bruce Leslie and his team for the great work they do. They have applied for funding and they obviously deal in export markets. There are companies such as FARMkids, Acoustic Technologies Electronics, Aren Education, Eighteen Hunter Street, Australian Cotton Shippers, Very Small Particle Co.—it is not half obvious what they might be into—and companies like Welding Sales, Decina Export, Specialty Products Group, Excel Technology Group, PR Polymers, Global Chef, Tooltech and John Woodward’s Australian Finegrain Marble. These companies are in a range of sectors from food manufacturing and product manufacturing to professional services to scientific and technical services, to motion picture and video production, to election equipment manufacturing, to higher education, to toy and sporting goods wholesaling, to cotton growing, to basic chemical product manufacturing, to hardware goods wholesaling and to other basic polymer manufacturing. There is a bit of a pattern building here with lots of manufacturing companies. There are lots of highly skilled, highly trained expertise that small Australian companies are exporting to the rest of the world. We are exporting toy, sporting and recreational product manufacturing, non-metallic mineral mining and quarrying technologies. Companies such as Cooke Freeze, Mox Products, Metal Storm, PR Polymers, Decina Export and a whole range of other companies are all exporting. I wanted to read the names of those companies out and talk briefly about the industries involved not only to demonstrate just how important the program is and the money that is spent on promoting export markets but also to highlight the variety and the manufacturing base of the sorts of companies that you do not see in the headlines and that you do not really see when you drive past commercial or industrial states or even in parts of suburbia where some of these businesses exist. They are the backbone of this country. They are, in totality, the largest employer by a lot, which would be the easiest way to describe it. Those small- and medium-sized enterprises are the biggest employer in the country. I congratulate the minister for his work in this area, for supporting this very important program and for ensuring its survivability and its sustainability over a long period of time and particularly for extending it for the next five years. I commend the amendment bill to the House. 5701 09:29:00 Crean, Simon, MP DT4 Hotham ALP Minister for Trade 1 0 Mr CREAN —I congratulate the member for Oxley on not only his contribution to this debate but the way in which he has brought home the significance of the EMDG Scheme, what it means, to businesses and small- and medium-sized enterprises in particular within his electorate. The great potential for this nation is our ability to grow our trade. Trade is not just exports, as I will go on to explain. The fact is that trade is the multiplier of economic growth in this nation, and the more we can do to assist more of our people to export and those who already know their potential to export to get into more markets the better off this country will be, in terms of not only economic growth but also job opportunities. I also thank all of the other members who have participated in this debate. In particular I thank the opposition for their support for the amendments that we are proposing in the Export Market Development Grants Amendment Bill 2010. The Export Market Development Grants Scheme, the EMDG Scheme, does make a valuable contribution towards building a strong national export culture for this nation. It reduces the information gap about export markets by supporting marketing activities in new markets and it lends a much-needed helping hand to small- and medium-sized enterprises seeking to get into those markets to take advantage of the opportunities through the increasing trade liberalisation and the success of our trade negotiations. The scheme also reduces the financial barrier to exporting, by providing enhanced access to funds. It increases the competitiveness of Australian companies by exposing them to competitive overseas markets, and this in turn forces non-exporting local companies to become more competitive. EFIC’s 2009 global readiness index shows that one in five jobs in this country are related to trade; one in seven jobs, to exporting; and one in 10 jobs, to imports. This year, the EMDG Scheme will help support the jobs of over 140,000 workers employed by grant recipients—small- and medium-sized Australian exporters. Analysts have long accepted that companies which export tend to pay higher real wages than non-exporting companies. So not only is trade good for economic growth; it is good for jobs and it is good in terms of its tendency to drive real wages higher. The Export Market Development Grants Scheme is itself a great multiplier: for every dollar spent under the scheme, we generate over $5 in taxpayer benefit, and studies show that EMDG recipients tend to enjoy much greater levels of labour productivity in their workforce. I made the point earlier, but it is worth repeating, that trade is not just about exports; it is also about imports. To underscore this point, many export market development grant recipients highlight the fact that many exporters value-add imported inputs to finished products which are then themselves exported. I will give a few examples. Optalert Pty Ltd manufactures an advanced driver assistance system for use in the mining and transport sector. Up to 70 per cent of inputs are imported, but the company now has exports valued in excess of a million dollars. Data Signs Pty Ltd manufactures traffic signs which incorporate imported solar panels. The company is exporting finished products to markets including the UK and the United Arab Emirates. Heldon Products uses imported gas fittings to manufacture air-conditioning components which are then exported to markets including India, the UK and the US. These are all companies supported by the Export Market Development Grants Scheme and all good examples of companies that acquire their inputs through imports; but their competitive advantage, their value-add, is the way they convert that into a value-added commodity for export. This is a government that has demonstrated a genuine and substantial commitment to the Export Market Development Grants Scheme. Since we came to office, we have injected an additional $100 million over the past two years, and this has played an important role in helping Australian exporters deal with very tough global conditions. The fact is we did inherit a mess from the coalition government, which was content to introduce guidelines that increased demand on the scheme but did not see fit to provide the extra funding needed to fund those changes. When we made changes to the Export Market Development Grants Scheme on coming to office, we injected the $50 million needed to fund them and we then had to find a further $50 million to fund the coalition’s changes. This stands in stark contrast to a coalition that was happy to take the lazy policy option: expand eligibility but do not fund it—once again, a policy low-road approach. But the substantial growth in grant demand in recent years has created a growing imbalance between the scheme’s provisions and the funding available under the scheme. The scheme is now out of balance due to a combination of natural growth and increased demand arising from guideline changes introduced by successive governments. Now is the time to restore that balance, and these amendments will rein in future demand on the scheme and lay the foundations for a more sustainable funding model. The changes will move us further along the road towards the goal of building greater certainty into the scheme—this was a specific recommendation of the Mortimer review of trade policy—and industry itself is broadly supportive of the amendments and accepts the need to restore balance to the scheme. I am confident that industry will welcome the moves to put in place a more sustainable funding model for the scheme. I personally remain fully committed to the EMDG, and these amendments will help secure the long-term future of the scheme and its role in promoting Australian jobs and Australian exports. Following government actions to address the impact of the global financial crisis, a tight and responsible central budget was called for and in this context the EMDG has had to play its part as well. I remain strongly committed to the future viability of the scheme. These amendments lay the foundation for it. I commend them to the House and I welcome the contributions that have been made to the debate. Question agreed to. Bill read a second time. 5703 Mr CREAN (Hotham —Minister for Trade) 09:37:00 —by leave—I move: That this bill be now read a third time. Question agreed to. Bill read a third time. 5703 Bills R4324 5703 09:38:00 McClelland, Robert, MP JK6 Barton ALP Attorney-General 1 0 Mr McCLELLAND —For the information of honourable members I present a replacement explanatory memorandum for the Building Energy Efficiency Disclosure Bill 2010. 5703 Bills R4354 Cognate bill: 5703 Bills R4355 5703 Debate resumed from 13 May, on motion by Dr Emerson: That this bill be now read a second time. 5703 09:39:00 Ley, Sussan, MP 00AMN Farrer LP 0 0 Ms LEY —I am pleased to speak today on Tax Laws Amendment (Research and Development) Bill 2010 and Income Tax Rates Amendment (Research and Development) Bill 2010. At the time the Rudd government was elected there were four tax incentives for business research and development: the 125 per cent R&D tax concession, the 175 per cent incremental premium concession, the 175 per cent international premium concession and the R&D tax offset. What we are seeing here with the introduction of this legislation by the government is clearly a revenue-raising exercise. The government’s publicly stated intent was to offer enhanced incentives for companies to invest in R&D. It claimed that the new R&D tax credit would offer more predictable, less complex and more generous support. Labor has made various concessions since its original announcement. They have included: changes to definitions, the reversal of its decision to largely treat software development differently from other forms of R&D activity, the elimination of certain forms of R&D that had originally been placed on an exclusions list, and changes to feedstock rules. However, throughout the process the government has continued to signal its intention to substantially alter the definitions of core and supporting R&D, restrict the eligibility criteria so that supporting R&D will only be funded if it is undertaken for the dominant purpose of supporting core R&D, confer sufficiently vague meaning on the term ‘dominant purpose’ so as to render it confusing and subjective, and revise the objects clause to reduce support for spillover and additionality benefits. The government’s changes to the eligibility requirements are sweeping and threaten to significantly erode support for R&D investment in Australia. They are also fundamentally inconsistent with Labor’s stated intent of making R&D tax support arrangements simpler, more predictable and more generous. Instead, they impose a series of barriers upon firms rather than offering encouragement for innovation. In narrowing the definition of what constitutes genuine R&D the legislation will disqualify from assistance many forms of R&D undertaken by Australian businesses. In turn, the overwhelming expectation of those groups who have launched submissions on the exposure drafts is that Labor’s changes will reduce the number of firms qualifying for concession. The proposed definitions of R&D will also foster significant uncertainty and complexity and will impose unnecessary administrative and compliance costs on many firms, especially small and medium enterprises. Indeed, Business Strategies International has advised that it is likely that protracted and expensive legal challenges to the interpretation of the new definitions will even be initiated in some cases. So, in short, the legislation radically alters a regime that has been operating effectively since the 1980s and does so in a way that disadvantages a large number of Australian businesses. Where companies must currently demonstrate that their R&D activities are novel or have high technical risk, Labor proposes to fund firms only in cases where they can show that they have introduced a wholly new technique, process or solution. Its effect is punitive on a large number of companies whose best innovations are often based upon making refinements to existing practices, as well as the small business sector given that approximately 60 per cent of current applicants are small or medium enterprises. The changes have attracted substantial criticism from a variety of stakeholders. Increased innovation and productivity are both key factors in Australia’s future economic success, but this legislation seeks to gut an incentive that is integral to assisting and encouraging a diversity of companies to improve their business operations. Within the last couple of days the Senate committee that inquired into this legislation handed down its report, and there was a comprehensive dissenting report by the coalition senators. I would like to draw on some of the comments made in that report to underline the opposition’s feeling and disappointment with this legislation and obviously to underscore the fact that we will be voting against the legislation in the House. The coalition does support increased business investment in research and development and appropriate reforms to legislation to help achieve this outcome. Clearly, we do. We also accept the general principle that changes to the current law may potentially help to achieve a higher R&D rate for a greater number of Australian businesses, but we will not be supporting this bill because of its several significant shortcomings. The first problem area that the coalition senators have drawn people’s attention to is the consultation process. Throughout the inquiry, there have been considerable complaints made about the failure of appropriate consultation associated with the legislation. The government has given itself an absurdly short timetable for community consultation and examination by the parliament of what is a fundamentally new approach to the definition of ‘eligible expenditure’. The new approach would apply to all business R&D expenditure undertaken from 1 July 2010. Under the timetable presented, business will have two weeks to examine the new act before R&D spending will come under the new regime. Even putting aside the particular features of the proposed changes, this timetable for introducing a fundamentally new approach will increase the range of grey areas surrounding the tax incentive and the resulting uncertainty will see businesses scale back their expenditure. This outcome sits in stark contrast to the purpose of the R&D tax incentive, which is to encourage additional R&D expenditure by business. A consistent theme of the submissions to the committee’s hearings was the inadequate time to digest the key documents associated with the introduction of the bills. Proper consultation with all relevant industry stakeholders over an extended period of time would have, we believe, prevented the numerous problems identified in the coalition senators’ report. There is no evidence of any supporting documentation, rulings, regulations, guidelines or forms for the new legislation, and this is really concerning, particularly if the bills are to take effect from 1 July 2010. How can we expect business to pick up on such a complex new regime, with no supporting documentation, in little under a month? It was stated at the hearings that the educational material was still being developed by AusIndustry. The fact is that this legislation is being unnecessarily rushed through the parliament, leaving the Department of Innovation, Industry, Science and Research to prepare education campaigns, regulations and guidelines which have not been adequately tested with industry and stakeholders. This is a totally inappropriate state of affairs when industry is recovering from the global financial crisis and possibly facing further rough times ahead. The first recommendation from the coalition senators’ dissenting report is that the start date for these bills be amended to 1 July 2011. Let us at least give it 12 months. An additional result of the hasty development of the bills was numerous drafting errors, as well as inconsistencies between the explanatory memorandum and the bills as identified in several submissions. We continue to be alarmed at the regular drafting errors that keep coming up in the Rudd government’s legislation. This is hardly surprising, given that there is such limited time between drafting and introduction. In no way do I blame the parliamentary draftspeople, who do an excellent job, but time is necessary and time is clearly not being made available to them. The second recommendation the coalition senators made is that the passage of the bills be delayed in order to rectify those drafting errors. I would now like to move to the substantive problems with the legislation itself, centring on the definitions of ‘core’ and ‘supporting R&D’. This bill substantially alters the definitions of core and supporting R&D. In narrowing the definition of what constitutes genuine R&D, the bill will disqualify from assistance many forms of R&D undertaken by Australian businesses. In turn, the overwhelming expectation of the groups who have lodged submissions on the exposure drafts is that the government’s changes will reduce the number of firms who will qualify for the concession. There will be particularly grave consequences for firms focused on industrial R&D and other non-white lab coat activities, including those involved in manufacturing, prototyping and process development. This was well explained in a submission to the Senate committee by Michael Johnson Associates. They explained that the problem with the new definition was that it is not better aligned with the Frascati Manual definition as had previously been contended by Treasury. In fact, the eligibility of the third limb of the Frascati definition, ‘experimental development,’ is in real doubt. R&D expenditure and concessions have been built on this definition for as long as I can remember. There is a very narrow definition of a ‘core activity’, ‘experimental work’, ‘unknown outcomes’, ‘new knowledge’ and then there are a range of choices as to what ‘supporting activity’ might be, with a strong flavour that anything in a production environment is in danger of not being eligible. It is those trials that could be unable to be claimed. Certain companies, when they look at this definition, believe that the majority of what they do is core and that their claims might be able to be sustained in this environment, but other companies look at this definition and say that a lot of what they do is in a production context—hence, the considerable confusion. The second and central basis for the coalition senators’ strong opposition to this new approach to defining eligible business R&D is that it is highly restrictive. As I said, for approximately 25 years our R&D tax incentive has been based on what is known as the Frascati model, which has been developed under the auspices of the OECD over a number of decades. Under this model R&D is defined as: … creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society and the use of this stock of knowledge to devise new applications. The second part of the definition—‘the use of this stock of knowledge to devise new applications’—is central to the objections that many people have made about this new approach proposed by the government. The objects clause of the bill states that it is to encourage industry to conduct research and development activities: … by providing a tax incentive for industry to conduct in a scientific way experimental activities for the purpose of generating new knowledge or information in either a general or applied form. So, critically, this clause omits the second critical element in the Frascati approach: ‘the use of this stock of knowledge to devise new applications’. Similarly problematic is the ‘supporting R&D activities’ definition in the bill. This was raised with considerable concern in several submissions and I understand it was followed up quite substantially during the hearings. The Australian Industry Group pointed out two major concerns with the definition of supporting R&D: Firstly, supporting R&D expenditure is only eligible if it is ether “directly related to” core R&D activities or if it is “undertaken for the dominant purpose of supporting” core R&D activities. This means that businesses would have to be undertaking core R&D before any of its R&D expenditure could qualify as supporting R&D expenditure. If a business has no expenditure that qualifies as core R&D, it will have no eligible R&D expenditure. Secondly, in any case much experimental development is neglected by the dominant purpose test in the definition of supporting R&D activities. In the Bill (s355-30), a supporting R&D activity is defined as an activity directly related to core R&D activities except if it is an activity that is: explicitly excluded, or if it is an activity that “produces goods or services”, or if it is an activity “is directly related to producing goods or services”. In any of these cases the expenditure needs to be undertaken for “the dominant purpose of” supporting core R&D activities. So the third recommendation of the dissenting report of the committee is: The Coalition recommends that the definitions of core and supporting R&D be reconsidered to be more closely aligned to the Frascati model of R&D. Another area of concern is the eligibility criteria. The government’s changes to the eligibility requirements are sweeping and they threaten to significantly erode support for R&D investment in Australia. They are also fundamentally inconsistent with the government’s stated intent of making R&D tax support arrangements simpler, more predictable and more generous. Instead, they impose a series of barriers upon firms rather than offering encouragement for innovation. The major concern was the use of the term ‘dominant purpose’. Several witnesses at these hearings expressed concern about what the term actually meant. In submissions and during the hearings, there was evidence of continual and considerable confusion about what was meant by ‘dominant purpose’. The introduction of the dominant purpose test appears to be a large impost on businesses. As KPMG said in their submission: The overwhelming feedback from our diverse client base indicates that a “dominant purpose” test will exclude a large proportion of production trial activity that is a necessary and legitimate part of the research and development cycle. If the aim is to contain the cost to revenue associated with large and open-ended production trials, the introduction of a cap on the total value of the group’s R&D claim would better achieve this objective, whilst also providing clarity and simplicity for claimants. The dominant purpose test should be removed as it imposes an unnecessarily high threshold as evidenced in the EM, and does not target the minority of excessive claims which the Government purports are occurring. Several alternative models were suggested, such as ‘a purpose directly related to’ test; a ‘substantial purpose’ test; apportionment of expenditure; dollar-capping the extent of production trials on the total value of the R&D claim, or on eligible R&D expenditure, for companies with group annual revenue exceeding a billion dollars; using more sympathetic language; specific provisions for specific excesses; time limits for trials; and pre-approvals for projects above certain values. All of those are options, either individually or in combination. So recommendation 4 was: The Coalition recommends that the dominant purpose test be removed and be reconsidered. The last area of technical objection concerns the object clause. The object clause needs to be revised in respect of spillover and additionality benefits. The object clause currently reads: The object of this Division is to encourage industry to conduct research and development activities that might otherwise not be conducted because of an uncertain return from the activities, in cases where the knowledge gained is likely to benefit the wider Australian economy. This object is to be achieved by providing a tax incentive for industry to conduct, in a scientific way, experimental activities for the purpose of generating new knowledge or information in either a general or applied form. It was pointed out that this definition is much more restrictive and could impact on Australian industry. The Corporate Tax Association said: While those concepts may be well and good, they are impossible to prove and therefore should not be part of the statutory framework—even as part of an objects clause. Such language might well be appropriate for a second reading speech but, in our view, does not belong in the law itself. We would much prefer the objects clause to make reference to increasing the efficiency and international competitiveness of Australian business, which reflects what we regard as the proper rationale for the incentive. The fifth recommendation of the coalition senators is: The Coalition recommends that the Object clause be amended to ensure that both research and development are given equal tax benefits. In short, this bill radically alters a regime that has been operating effectively since the 1980s and alters it in a way that disadvantages a large number of Australian businesses. While companies must currently demonstrate that their R&D activities are novel or have high technical risk, this government essentially proposes to fund firms only in cases in which they can show they have introduced a wholly new technique, process or solution. Its effect is punitive on a large number of companies whose best innovations are often based upon making refinements to existing practices, as well as on the small-business sector, given that approximately 60 per cent of current applicants are small or medium enterprises. Together, the proposed changes to elements of the legislation, such as the definition of R&D activities, the dominant purpose test for supporting activities, the registration processes and the feedstock rules, will have an effect opposite to the government’s stated intentions of providing greater generosity, predictability and simplicity. They will disadvantage rather than benefit most Australian companies intending to undertake R&D. The changes have attracted substantial criticism from a wide diversity of stakeholders, including major organisations. This is notwithstanding that during the development process of this legislation there were changes made that did meet with the approval of those stakeholders. Those changes did not, however, answer all the stakeholder concerns. The government itself implicitly acknowledges a large number of potential problems with the legislation, including drafting errors and definitional concerns. It is not appropriate that bills be rushed through when they contain such errors and therefore give rise to considerable uncertainty. Reviewing elements of bills after three years is not an appropriate means of addressing problems of the kind that are evident in this legislation. A more practical step would be to make sure they are more appropriately drafted in the first place. I am not reflecting on wasting the parliament’s time when we have to fix up poorly drafted legislation but on wasting the efforts and the energy of small businesses, who will often back away if they do not understand and cannot conclude that they fit into a published set of criteria and cannot be confident that, if they make an investment, they will get the R&D tax benefit they seek. Increased innovation and productivity are both key factors in Australia’s future economic success, but as I said earlier these bills do damage to an incentive that is important in assisting and encouraging a great array of our wonderful small and medium enterprises to improve their business operations. The coalition will not be supporting these bills. 5708 10:00:00 Thomson, Craig, MP HVZ Dobell ALP 1 0 Mr CRAIG THOMSON —I rise to support the Tax Laws Amendment (Research and Development) Bill 2010 and the Income Tax Rates Amendment (Research and Development) Bill 2010. It should not come as a surprise to anyone in the community that the opposition is opposed to this legislation. This is an opposition that is opposed to a two per cent cut in the company tax for all businesses. It is an opposition that wants to put a new tax on businesses as well. The fact that it has taken a position opposed to what is a very beneficial piece of legislation that is supportive of business should not come as a surprise to any of us here. Indeed, the opposition is the worst friend that business has ever had and it is demonstrating that again here today with its opposition to these bills. These bills implement the government’s new tax incentive for research and development to replace the existing R&D tax concessions. The new R&D tax incentive is about boosting investment in research and development, strengthening Australian companies to become more innovative, productive and prosperous, and creating jobs for the future. I want to talk little bit about productivity for a moment. I would have expected the member for Farrer, who is a member of the House of Representatives Standing Committee on Economics which recently delivered a report on this subject, to have made a more meaningful contribution in this debate. Unfortunately, the position of the opposition really is to oppose everything and we again had a demonstration of that today. I recently had the pleasure of presenting the Standing Committee on Economics report entitled: Inquiry into raising the productivity growth rate in the Australian economy. Over the past decade, Australia’s productivity growth has slowed considerably. Average annual labour productivity growth fell from 2.1 per cent in the 1990s to around 1.4 per cent in the 2000s. Compared to other countries in the OECD, Australia’s average annual productivity growth has performed relatively well since 1985, approximating the OECD average and ranking 12th, one below the US. But the productivity growth rate has been in decline since the 2003-04 productivity cycle, with growth rates averaging minus 0.2 per cent per year. What would it mean if we were to increase our productivity again? An increase in productivity growth rates would mean a larger economy, higher living standards, and a reduction of the fiscal pressure from ageing. It is useful to remind ourselves of this simple fact: if we were to boost productivity growth from an average of 1.6 per cent to two per cent a year and sustain this over the next 40 years, real GDP per person would be around 15 per cent higher. That is equivalent to raising living standards by $16,000 a year in today’s dollars by 2050 for every man, woman and child in Australia. Given that increasing productivity is one of the desired outcomes of the new research and development tax incentive, it is pertinent to talk about how we can increase productivity. Productivity growth was responsible for 80 per cent of the increase in our incomes over the past 40 years, but achieving this higher average productivity growth will not be easy. It will take the right investment and effort and it also requires all sectors of the economy to work together to achieve this goal. The government has a broad agenda to increase Australia’s productivity including: investment in critical nation-building infrastructure such as roads, rail, ports, clean energy, water, and health and education infrastructure including computers and trade training centres in schools; investment in skills and human capital, including measures to enhance teacher quality, the early childhood quality education agenda, and investment to achieve ambitious targets for higher education attainment rates; support for innovation in critical areas, including innovation by business, collaboration between private and public sector researchers and investing in the research capabilities of our universities and public research agencies; economic reform, including reducing business costs from regulation and tax reform as part of this government’s response to the Australia’s Future Tax System Review. Productivity-enhancing reforms, particularly through nation-building infrastructure and improving the skills base, will grow the economy, improve living standards and partly offset the fiscal pressures of ageing. By growing the economy we increase our capacity to meet the fiscal costs of ageing without increasing the overall tax burden on working Australians. The best way to grow the economy is to maintain our focus on productivity and on investing in skills and infrastructure—nation building, the education revolution and regulatory and tax reform to underpin productivity growth in the decades to come. Building productivity, of course, is not just a challenge for government. Ultimately, it is Australian workers and businesses that will deliver higher productivity by skilling themselves up, tooling up, and working smarter. With an ageing population, productivity growth is the key driver of future growth prospects. Reforms that reduce barriers to participation will also lift growth and reduce future pressures. Steps to grow the economy and ensure permanent spending growth is sustainable, including through the implementation of the government’s fiscal strategy, will reduce future adjustment costs and the economic and fiscal consequences of ageing. Of course, the bills I am speaking on today will do a number of things besides offering better incentives to Australian firms for increasing productivity. The new research and development tax incentive provides more generous benefits and is better targeted towards R&D that benefits Australia than the existing concession. It redistributes support in favour of small and medium firms which are more responsive to fiscal incentives. It provides cash upfront to small innovative firms, giving them the certainty they need to invest in growing their business. It is also substantially simpler and accompanied by improved administrative arrangements. The new R&D tax incentive replaces the existing R&D tax concession for all income years starting on or after 1 July 2010. The two core components of the new incentive are a 45 per cent refundable R&D tax offset for eligible entities with a turnover of less than $20 million, which is small and medium enterprises, and a non-refundable 40 per cent R&D tax offset for all other eligible entities. This doubles the base rate of existing support for small and medium enterprises and raises the base rate for larger firms by a third. Instead of receiving 7.5c in every dollar, small and medium enterprises will receive 15c for every dollar and larger firms will receive 10c for every dollar. The new refundable tax offset provision makes upfront cash support available to more small and medium-size companies. The new refundable tax offset is available to corporations with turnover under $20 million. Under the current law, a refundable tax offset is only available to corporations with an annual group turnover of less than $5 million whose group aggregate R&D expenditure is not more than $2 million per year. The government aims to lift Australia’s R&D performance through increasing the number of businesses undertaking R&D. There are two million businesses in Australia and only around 8,000 of these businesses benefit from the current R&D tax concession. The government’s intention is for the higher rates of reward under the new incentives to attract more firms to the program. It is fairly obvious that a very small proportion of Australian businesses—only 8,000 out of two million—are taking advantage of the current R&D tax concession. Without a doubt we need to encourage many more businesses into R&D and this legislation will help towards that end. This legislation also tightens up the scheme of R&D tax concessions. The existing scheme is allowing some companies to use taxpayer dollars to subsidise ‘business as usual’ activities rather than research and development activities. It appears from the member for Farrer’s contributions she is keen to ensure this continues. The government has a responsibility, however, to deliver value for money for taxpayers through better targeting of the scheme. This has been achieved in the new legislation through a more focussed definition of eligible R&D activities. The new definition of core R&D activities still covers both research and development activities. A common misperception—and one that the member for Farrer tried to perpetuate—is that the new incentive excludes R&D activities carried out in a production environment. It is not true that production trials are effectively excluded by the dominant purpose test. Manufacturers will still be able to claim core R&D activities that fall within the definition of an experiment generated for the purpose of acquiring new knowledge. The dominant purpose test only applies to supporting R&D activities that are production activities. The explanatory memorandum emphasises that the fact that an activity serves a commercial objective as well as being directly related to R&D does not preclude it from qualifying as supporting R&D. The government has undertaken—despite what the member for Farrer said—an extensive consultation process, including inviting public submissions on a consultation paper and two exposure drafts of legislation. The government has received over 380 submissions during these three rounds of consultation and has held public hearings attended by 550 people. In addition, there have been extensive discussions with key industry representatives and advisers over almost a year. So for the member for Farrer to say that this legislation is rushed is simply not true and a misrepresentation of what occurred in what was a very extensive consultation process. During this consultation process the government has made some significant changes where stakeholders have made constructive suggestions for improvement. In particular, the definition of core R&D is now simpler and the dominant purpose test for supporting R&D has been limited to production activities and activities on the exclusions list. The government has decided not to enact the widely criticised ‘augmented feedstock’ rule that was set out in the first exposure draft legislation. The government still plans for the new R&D tax incentive to start on 1 July 2010. Although some industry groups have called for its introduction to be delayed for a year—as the member for Farrer did—a delay would mean that many Australian companies would not get the very substantial benefits that the new scheme offers, with a doubling of benefits and cash upfront to smaller firms. Introducing the new incentive is critical to Australia’s future, to enhancing productivity, to making us more competitive and to creating new wealth and jobs. Stakeholders in the biotechnology and pharmaceutical industries have been supportive of the new incentive and are keen to see the new R&D tax incentive enacted as soon as possible. The information technology industry has also welcomed the revised approach to software R&D. The government provided $38 million in the 2009-10 budget to ensure that AusIndustry and the ATO are equipped to assist taxpayers in adjusting to the new scheme. AusIndustry will provide guidance and educational material to industry, including specific information on those industry sectors in which there is the most concern—manufacturing and mining. Research is critical to Australia’s prosperity. That is why this government has committed itself to a program of renewal and reform for Australian innovation and research. Our overarching goal is to create a stronger, fairer and more productive Australia. We must be a country where individuals, communities and industries all benefit from the fruits of research and innovation. This government is helping boost R&D performance, encouraging researchers and industry to collaborate in ways that make both more competitive, and helping translate new ideas and technologies into high-skilled, high-wage jobs. Australia does a lot of research and much of that research is brilliant. In recent years we ranked 11th in the world for output of research papers and ninth in the world for total citations. We averaged ten citations per paper, which puts us in the top 20 internationally and which most people would agree represents a pretty high impact. But is this good enough? Can we do better? China and India have become research superpowers in a relatively short time and we need to be aware of that competition. China is increasing its total expenditure on R&D as a share of GDP by eight or nine per cent a year. In Australia, it is only one or two per cent. India lifted its spending on academic research by 180 per cent in the seven years to 2005. Not only do we need to lift our productivity growth, but we also need to increase our overall research. If there are to be more new jobs and new economic opportunities, there has to be also a dramatic increase in collaboration between universities and industry. This is one of the great weaknesses of our innovation system and an area in which we fell further behind under the previous government. Australia ranked 16th out of 28 OECD countries for research collaboration between industry and universities in 1997. By 2004, we had fallen 10 places to be last out of 26 countries. ABS data for 2006-07 suggests that less than one per cent of Australian firms get information or ideas for innovation from universities. Australian businesses will receive a significant boost in support for research and development under the new R&D tax incentive legislation about which I am speaking at the moment. This important reform will encourage more Australian companies to engage in R&D, providing Australians with the high-end technologies and skills needed to compete in a competitive global market. This will make Australian companies more innovative, productive and prosperous and position them to create jobs for the future. This government is replacing a complex and outdated R&D tax concession with a simplified R&D tax credit that gives business better incentives to invest in research and development. The scheme will stimulate more of Australia’s two million businesses to undertake research and development—rather than just the 8,000 businesses that benefit from the current concession. The R&D tax credit doubles the incentive for small and medium enterprises—the engine room of the economy—while increasing by a third the incentive for big business to undertake R&D. Small innovative firms will be the big winners from the new R&D tax credit, with greater access to cash refunds for their R&D expenditure and more generous rates of assistance. The R&D tax credit will focus on supporting genuine R&D and be worth $1.5 billion a year to industry. These bills deliver one of the biggest improvements to public support for business innovation in over a decade. Small companies have greater access to cash refunds and a higher base rate of assistance being provided through the new 45 per cent refundable tax offset. Large companies can invest knowing they can claim a non-refundable tax offset of 40 per cent of their expenditure on eligible R&D activities. The new R&D tax incentive better focuses public support towards activities likely to produce economy-wide benefits. This will ensure that the new R&D tax incentive rewards a company’s genuine R&D, not business-as-usual activities, as proposed by the member for Farrer. The new R&D tax incentive is an important part of the government’s plan to encourage knowledge-creating and knowledge-using industries to boost productivity and activity in all sectors of the economy. I commend the bills to the House. 5713 10:16:00 Fletcher, Paul, MP L6B Bradfield LP 1 0 Mr FLETCHER —When I gave my maiden speech to the House in February this year, I mentioned key policy areas in which I hoped over time to be a voice for change. One of the areas I spoke about was the process of commercialisation of innovation—that is, moving smart ideas from the laboratory to the market place. In my speech at that time I mentioned that I saw this as requiring: … closer ties between research institutions and industry … choosing key areas of research where we can build real scale and leverage that into a national competitive advantage. In addition, the emphasis on the commercialisation stage is very important to bear in mind and goes to perhaps one of the key differences between the coalition and the government on this legislation, which seems to embody a philosophy which fails to recognise the importance of the commercialisation phase and fails to recognise the relative importance of the development phase, as contrasted to the research phase. I want to pay particular tribute to the Howard government Minister for Communications, Information Technology and the Arts, Senator Richard Alston, for whom I worked. Senator Alston had a deep interest in the issues of innovation and commercialisation. It was a privilege to work with him and others, including Neville Stevens, the then secretary of his department, David Quilty, his then chief of staff, and indeed Dr Terry Cutler, who was an important informal adviser on these issues. Dr Cutler’s name is prominent in this policy area as the author of one of the key reports which influences the policy changes put forward today. It is unfortunate perhaps that the connection between Dr Cutler’s recommendations and the specific policy changes appears to be less direct than it ought to be. It is very disappointing that the legislation before the House is flawed in its approach to re-engineering the mechanism of concessions for Australian businesses for research and development. This legislation does not give effect to the theme which the Labor Party took to the 2007 campaign of promoting innovation. Its substantive effect is quite at odds with what is claimed and in fact winds back support for research and development in Australia. It is certainly true that Australia’s research and development levels are running at below the OECD average and the objective of increasing research and development levels is one which all of us support. The key issue before the House is whether the mechanism proposed in this legislation is going to be effective in encouraging research and development. On this side of the House, we are clearly of the view that it will not be effective. It is important to understand the context for the current research and development tax concession and the way it has worked in practice. It has been an important mechanism to support business expenditure on research and development. The Australian Industry Group, in one of its submissions during the process of developing these bills, had this to say: The case for public support of business research and development arises because of the direct and indirect spillovers that arise when the full value that flows from the expenditure is not captured by the businesses making the expenditures but part of which flow to other parties … Without public support, the total quantity of business expenditure undertaken would be less than the socially optimum level. It is clear that inherent in that is the notion of a public good and it is well accepted that an appropriate area of public policy activity by a government is to encourage public goods because, for the reasons the Australian Industry Group has articulated, private players may not sufficiently act to encourage those goods themselves. The existing research and development incentive arrangements consist of four elements: the basic 125 per cent tax concession; the 175 per cent premium concession; the 175 per cent international premium concession, and the refundable R&D offset for small companies. The Rudd government’s stated aims are to make the R&D tax support arrangements simpler, more predictable and more generous. None of these aims, regrettably, has been achieved in this bill. One of the things that are particularly striking is the profound internal contradictions between the two major reports that have been used by the government as the basis for these legislative changes. There was the Productivity Commission report, which was released in 2007, which concluded that the basic 125 per cent tax concession was failing in its purpose as it gave concessions in relation to R&D that would have happened anyway. I do not express a view as to the merits of that conclusion; I just note that there is a contradiction between the underlying philosophy of the 2007 Productivity Commission report and the review that was conducted in 2008 by Dr Terry Cutler, of whom I spoke earlier. He is a man who has been involved in policymaking in this area for many years. Objective observers have described Dr Cutler’s recommendations as being the polar opposite of the Productivity Commission report. He recommended an increase in the base concession, a greater concession available for smaller entities and a closure of the incremental provisions. When the government first responded in May 2009, in its Powering ideas statement, it supported the move to a tax credit. But the story then got very murky as the Treasury got involved in the consultation process, issuing a paper in September 2009 and exposure drafts in December 2009 and March 2010. The Treasury’s paper seemed to revert to the Productivity Commission approach of substantially tightening up eligibility criteria for the tax concessions. It is important to note that the Productivity Commission conceded that its proposals for restricting the scope of the concession would increase administrative and compliance costs and that there would be unforeseen consequences. One industry participant I have spoken to expressed the view that the September 2009 paper could have been written based wholly on the Productivity Commission report, as it makes so little reference in substantive terms to what was recommended by Dr Cutler. It is for this and other reasons that a number of industry observers have asked whether this is simply a revenue measure in substance, designed to reduce the amount of tax expenditure in this area, and that that is the overriding policy objective as opposed to stimulating research and development. The key provisions in this bill create a 45 per cent refundable tax credit for entities with a turnover of less than $20 million and a 40 per cent non-refundable tax credit for all other eligible entities. But there is an important sting in the tail: this bill brings a new and more restrictive regime to determine eligible research and development activity. The bill creates two key categories for eligibility, being core research and development activity; and supporting research and development activity. There are very significant problems with both of these definitions. Many industry participants have made that point, including the Australian Industry Group. It has been widely pointed out that the bill and the new provisions that it introduces are not consistent with the Frascati definition of research and development, which has been the basis for the approach used by the OECD in this area for decades. Under that approach, research and development is defined as ‘creative work undertaken on a systemic basis in order to increase the stock of knowledge, including knowledge of humanity, culture and society, and the use of this stock to devise new applications’. Importantly, under the existing arrangements in Australia consistent with this definition, research and development includes both creating new knowledge and using existing knowledge to create new applications. The problem with the approach that the bill takes is that it limits, in both its objects and its specific provisions, the availability of the credit for activities that are undertaken for the purpose of ‘acquiring new knowledge or information’. In other words, this bill involves a clear shift to put a greater emphasis on research and a reduced emphasis on development. We do not believe that that is a good policy approach. It removes from the application of the credit a key aspect of what research and development involves—what in the Frascati model is called ‘experimental development’ which is defined as, ‘Systemic work, drawing on existing knowledge gained from research and/or practical experience, which is directed to producing new materials, products or devices, to installing new processes, systems and services, or to improving substantially those already produced or installed.’ In other words, under the bill, novelty becomes a prerequisite, and the use of existing knowledge to develop new applications is rejected. The bill seeks to address this concern with the notion of ‘supporting R&D activity’ but the definition of that term is so circumscribed that most observers believe it is going to be very difficult to take advantage of it. A whole range of activities are specifically excluded—for example, an activity that produces goods or services or an activity that is directly related to producing goods and services. In addition, there is an overarching test that the activity must be for the ‘dominant purpose’ of supporting core research and development activities. This dominant purpose test effectively operates to kill off any application of the credit to experimental development. Some experts have pointed out that it is difficult to envisage a situation where a supporting activity would not fall within one of these exemptions and thus be barred from eligibility for the credit. There is, in addition, real uncertainty as to what this new term ‘dominant purpose’ means. Heather Ridout, of the Australian Industry Group, has called the new approach deeply flawed and says that it will significantly reduce innovation. Indeed, the Australian Industry Group commented in its submission: In a manufacturing environment, research and development is necessarily heavily biased towards development in a live production environment—whether that be to commercialise research into new marketable products, to improve existing products, or to improve the efficiency of manufacturing processes. All of these activities are essential in order to remain competitive in a mature global industry, continue to export, and compete against imports. Another party making submissions on this bill estimated that 60 per cent of their activities would no long be eligible under the new definition. It is also noteworthy that that 2007 Productivity Commission report to which I referred earlier found that 61 per cent of business research and development was experimental development—that is, drawing on existing knowledge. In other words, there is a huge area of ground which has now been excluded from being eligible for the tax credit. So we are at risk of moving from a regime which provides incentives for research and development to a regime which simply provides incentives for research. Therefore, one has to be very sceptical about the government’s real motives for this legislation, particularly given the strong involvement of the Treasury in the final form of the legislation. It is hard to avoid the conclusion that the primary motivation is to achieve cost savings. An additional aspect of this legislation which is deeply troubling is that the consultation process has been wholly inadequate. It is interesting how often that is the theme of the Rudd government. The timetable for these proposals was completely absurd. The first draft exposure bill was released just before Christmas. There were very substantial rewrites and a second draft exposure bill was released with entire concepts having been altered. The new regime is supposed to take effect on 1 July—that is, in less than 15 days. The bills have not even been passed. A Senate committee inquiring into this matter reported only one or two days ago. So we have flawed policy and policy which has been developed with inadequate consultation. We also have policy which has a substantive effect which is quite different to the government’s rhetoric—once again a clear theme in the way the Rudd government operates. What we have seen, regrettably, is an all too clear example of the atrocious process that characterises the way that the Rudd government operates. In substance, what we are seeing is a bill which introduces a complete change to a regime that has operated effectively for quite a number of years to provide tax incentives for research and development activity. The way in which the changes have been introduced has maximised confusion and uncertainty in the sectors that rely upon this research and development tax concession. The underlying substantive policy impacts of this legislation do not conform to the government’s rhetoric and its stated objectives, so it is no wonder that amongst the comments which have been made by expert observers about this legislation is the following: The R&D tax concession was broad-based and available to every company. With this nonsensical and complex piece of legislation, they are killing it. That comment comes from a KPMG partner. A tax partner at PricewaterhouseCoopers described this legislation as ‘a kick in the guts for business’. The Dean of Business at the University of Technology Sydney, Roy Green, was quoted in the Australian Financial Review as saying the proposal ‘seems mainly designed to bring about cost savings on support for large corporate R&D budgets’. The CEO of the Australian Information Industry Association has stated: … the whole success of the NBN rests on the value-added services to be delivered on the back of the network. This is a huge area of opportunity that will be stifled by the proposed changes to R&D that limit what software companies can claim. Without expressing any additional views on the merits of the NBN—my views on that topic are well known—I would simply point out that that is yet another piece of evidence of the internal contradictions which are absolutely rife in this legislation. The fact is that its substantive effect will be at odds with its stated purpose. The fact is that the regime of consultation which has occurred has been wholly inadequate and has left most interested parties frustrated and disappointed that their expertise has been disregarded. The fact is that we have, in substance, a piece of legislation which not only is not going to achieve the stated objectives but in fact, on all of the evidence, appears designed to achieve a quite different set of objectives. Sadly, this is a story which is all too common under the Rudd government, where we hear one stated policy objective but the actual substance of what is done is quite the opposite. For these and many other reasons, the coalition is not supporting this legislation. 10000 SPEAKER, The The SPEAKER —Order! The question is that this bill be now read a second time. Before calling the member for Canberra, I understand that it is the desire of the House that there be no points of order during the speech. I call the member for Canberra. 5717 10:35:00 Ellis, Annette, MP 5K6 Canberra ALP 1 0 Ms ANNETTE ELLIS —Thank you, Mr Speaker. Wouldn’t it be good if that happened all the time! It is indeed a challenge for me to do justice to almost 15 years in this place in just over 15 minutes. But I suppose I cannot complain about the constraint, given the opportunities I have had over those years to burden our long-suffering Hansard reporters with just under 250 speeches and 40 questions without notice, which I suppose is something I can claim a little pride in. I have to admit, though, that there are probably a lot of people with a higher record than mine—but I have left that to others to prove! I would like to reflect on these 15 years and, in doing so, I would like to thank a few people. The first thankyou, of course, is to the people of my electorate of Canberra. It is such a special place and it is easy to love every part of it. In this ancestral land of the Ngunawal people, from the Gordon Valley, under the eaves of the snow capped Brindabellas—and they have been of late—to the rural areas to the south, through the picturesque Tuggeranong and Woden valleys and Weston Creek, right into the old heart of the city and the inner south, it is a very beautiful place of idyllic family living, a free and relaxed city, confident in itself and proud of its place at the heart of the democracy of the nation. But it is the double-sided nature of Canberra, the city and the seat of government, which makes it a special place, and this is a subject that I would like to come back to a little later. I thank my fellow Canberrans for the trust they have placed in me. I can genuinely say that representing them in this place has been pretty special. I want to thank the people of the ACT Labor Party. Of course, Bill Hayden famously said, ‘Hell hath no fury compared to the ACT ALP.’ The real quote, of course, is: ‘Hell hath no fury compared to a woman scorned.’ Well, I am glad to say that neither quote described my experience. In fact, on both counts, the contrary is very much the case. The ACT branch is a wonderfully loyal and talented part of the ALP that makes a major contribution to the federal party in so many different ways. It has been a great honour to be their choice to represent the people of Canberra and I thank them for their support. I have been fortunate to enjoy wonderful support from so many gifted and generous individuals over my career. Sadly, I cannot and will not try to list all of them here, so I want to thank all of my supporters, both inside and outside the party, who have done so much to help me over my 15 years as the member for Canberra and, originally, the member for Namadgi. I want to issue a special thanks to the members of Centre Coalition, my own party grouping; to the trade unions in the ACT, whose support I have always valued; and most especially, of course, to my own staff through all of the years who have worked so tirelessly and effectively for me on both the bright and the darker days. I want to thank the member for Fraser and Senator Kate Lundy. Bob and Kate and I have formed what I would call an effective triumvirate in this territory, and I am happy to think we have grown to four recently with Mike Kelly in Eden-Monaro not that far away. I want to thank the previous long-serving member for Canberra, Ros Kelly, for her encouragement and her strong mentoring role. I also need and want to recall the contribution of Terry Connolly, a close friend and former Attorney-General in the ACT who, sadly, passed away three years ago. I came to this place at an immense time of change in Australia. A long period of Labor government had come to a stark end and a new period of uncertainty was emerging in Australian political life. I want to remind the House of the shock the people of Canberra had to face through significant Public Service cutbacks at the time which caused considerable pain for many of my constituents and saw this community plunge into a recession. It was indeed a very challenging time. I also recall the manner in which a former member for Oxley announced the arrival of the One Nation Party on the national scene. But Labor’s response to this time of uncertainty was defined by the tremendous campaign waged by federal Labor under Kim Beazley in 1998, when we actually won the popular vote. Difficult times followed, with the tough debate on the GST legislation and the stressful period of East Timorese independence, but Labor remained a strong and effective opposition and our electoral prospects looked positive in 2001. Then came the flow of asylum seekers, and the infamous Tampa incident on that fateful dawn of 24 August 2001. Then there was the ‘children overboard’ affair—in my view, one of the darkest days of government in Australia, eventually leading later to the tragic so-called ‘Pacific solution’ to deal with the issue of asylum seekers. As I reflect on this period and the long cold years of opposition that followed it, I cannot but conclude that Australia seemed to retreat in on itself a little. The great compassionate element to the Australian personality, which I cherish and see as crucial to the national personality, seemed to grow just a little dimmer over those years. Although overall these were very tough times for those on this side, there were some extremely rewarding things occurring for me. I was given the opportunity to come to the shadow ministry, with responsibility at different times for family and community services, ageing, seniors and disabilities. I am very grateful for the confidence my colleagues placed in me to hold those important roles. I had the opportunity to push the social justice concerns which I am passionate about and, I believe, position the ALP fairly well in policy terms. I would like to leave a message here today. I think Australia is still coming to terms with the issue of disability. There is a need for an increased consciousness in the nation of the enormous challenges that those with disabilities face and the incredible strains placed on those that care for them. There is no doubt that, over time, decisions have been taken to help improve opportunities and life participation for those living with disability. However, they need more support from us, the Australian community, and we need to work more closely with them to deal with the immense practical day-to-day challenges that they face. I do not in any way wish to diminish the gains made and the work that has been done. But there is a need for a change in national consciousness and I hope that I, along with colleagues, have played some small part in assisting this. A courageous policy response is also called for. We do need to think seriously about a national disability insurance scheme, federally funded as Medicare is. Such a scheme would be a significant change, but it has to be placed firmly on the debate for social policy reform in this country. We now await the Productivity Commission inquiry, which is due to report in July 2011. I want to make a few other points which I think are really important. I do not think there is a political cookie cutter that you can use to cut out the shape of the perfect politician. If so, it certainly wasn’t used on me! But my point is that there is no one profile for success in this place. I entered this parliament slightly further along the age scale than many—well, not many, but some—and without the perceived advantage of a tertiary education. I carry these two elements with a certain sense of pride and I encourage others out there to consider what they might do. Also, I loved very much being on Labor’s front bench but I also loved the work that I have done as a normal parliamentarian. I reckon there is a bit of a mentality around that unless you have got to sit up the front then you have not really made it. Honourable members—Hear, hear! 5K6 Ellis, Annette, MP Ms ANNETTE ELLIS —Those who haven’t are all here, hearing from me! Honourable members—Hear, hear! 5K6 Ellis, Annette, MP Ms ANNETTE ELLIS —I do not agree with that at all. Some of the best things I have done to serve this House have been in the committee work I have been involved with. I have certainly done my fair share. I calculate that I have served to some degree on around 50 inquiries. I want to mention two, but before I do I want to take the opportunity to thank the incredibly professional committee staff that we have in this place. Their calibre is incredibly high and, may I say, there are not enough of them. We need to pay attention to that. The 2½-year inquiry into Indigenous health, leading to the Health is life report in 2000, was in my view a significant turning point in facing up to the scandal of Indigenous health in Australia. It was a long and difficult journey and I know that it changed the attitudes of the members in this House who were involved. I was also very fortunate to chair the inquiry into the challenges facing carers and their support needs. I am glad to say that the report’s key recommendation—to increase financial assistance for carers—has been acted on by this government, along with other important recommendations. Of course, there is always much still to be done. Another great privilege I enjoyed in this place was to see the apology given so eloquently by the Prime Minister to the victims of the stolen generation. I know that all those around me were, like me, deeply aware of the power of the moment, the quiet sacredness of it and the real healing that it can and will lead to and has led to. This of course flowed from the excellent Bringing them home report, which we on this side read into the Hansard through the adjournment debate back in 1997, if I recall, because the government of the day would not allow us to debate it. But where I want to conclude is to return to where, of course, it all counts the most: my work in the electorate. I have been asked many times lately what has been my biggest or best achievement during this career. I look at it in a slightly different way. It has been a privilege to be able to assist individuals or families or local organisations within my community in a very personal way at times. No matter the issue, if you are able to guide them through difficult times or circumstances, to me that is the great achievement. So there have been thousands of great achievements. Over the years, people have shared their private and personal stories with me, and I have to thank them for their trust and confidence in so doing. As well, I must recall that fateful Saturday in 2003—and I look at the member for McEwen as I do this—when this city was under terrible threat. The Canberra bushfires were a shocking and horrendous experience, but we saw the best in people at the same time. I had the privilege of being appointed to the ACT Chief Minister’s bushfire recovery community reference committee and worked very closely with a variety of community representatives for over 18 months. The bushfire recovery response processes established by the ACT government were remarkable in their structure and detail. They became a model for emergency response generally and, I believe, had some reflection in the Victorian processes. Now I want to make a comment specifically about this wonderful city, as I did in my maiden speech. It is a home to people born here and people who have chosen to move here for work or other reasons. They make up a great little Australian community. They also happen to live in the country’s national capital, and they are very proud to do so. They do their bit to promote the national capital, to defend it when the odd sledging comes along—and that comes along a little bit too often—and to care for it. They realise that at that level it does not belong just to them; it actually belongs to the whole country—to all the people in all the electorates represented here in this House. So, if I could leave a parting request, please, please, please always remember that this city has two personalities: it is a local community, much like every other local community represented here, but it happens also to be the national capital of all of Australia. It is a city we would like all Australians to be particularly proud of. May I remind you that its centenary is coming up in 2013. I very much cherish the opportunity I have had to serve the people of Canberra. It is a very large electorate in population terms—we should have a third seat soon, one would hope—and the demands have always been there. I have made working with community groups a key focus. I am proud, like many members in this place, to be a patron of a number of organisations. They include groups such as the ACT Eden Monaro Cancer Support Group, the Tuggeranong Festival, the Australia Thailand Association, the Tuggeranong Hawks Football Club, Special Olympics ACT Region and Arthritis ACT, to name but a few. These and so many other groups have given me so much energy and enjoyment. I also cannot help but mention the thrill I have had at seeing my much loved Sydney Swans play so many games at Manuka Oval. I am sorry to see they are diminishing in number. I only hope to enjoy seeing many more in future footy seasons. I hope the ACT Minister for Sport and Recreation hears that comment. I did my thankyous at the beginning but I have left a couple till the end. I want to thank all the Parliament House staff who do such a wonderful job helping us. We know it is not easy, as we pollies can sometimes be a high-maintenance bunch of people. I will mention all of them, I hope—the attendants, Hansard, the clerks, the drivers, the printers, the cleaners, the library staff, the plumbers, the painters, the education unit. If I have missed you out, please forgive me, but this place would not operate without all of you. My last thankyou is to my caucus companions and my colleagues opposite. It has been a delight—in fact, an absolute privilege—sitting here with you. Of course, it is the friendships with the people you work with that make this business so rewarding. I thank you for helping me in this difficult yet privileged role of serving the Australian democracy for almost 15 long, happy years. It will depend on when the election is called whether I reach that 15-year mark. In conclusion, Mr Speaker, my thanks to you as well and to all of my colleagues, both present and past. I would like to mention a couple in particular: Graham Edwards, who left the House a couple of elections ago, and was a great friend and mentor to me; and Janice Crosio, who left a little bit earlier than that, and under whose wing I was placed on the first day I came into this place. Any ill behaviour I have displayed I attribute entirely to her! I am sure she is proud of the one time that I was ejected from the chamber! Mr Speaker, I thank you. 10000 SPEAKER, The The SPEAKER —To the member for Canberra, I say that I will always cherish the association and working with her on a number of parliamentary and caucus committees where I was advantaged by her sharing her insight and compassion. 5721 10:52:00 Marino, Nola, MP HWP Forrest LP 0 0 Ms MARINO —I rise to speak on the Tax Laws Amendment (Research and Development) Bill 2010 and related bill. This legislation contains a number of significant changes to the eligibility criteria and requirements for government support for research and development. These changes, as we know, have attracted substantial criticism from a wide range of industry groups—the very groups that need to be taking advantage of the research and development support. There is great uncertainty and there is great concern. Following a review of the National Innovation System administered by the newly elected government, Labor announced in its 2009-10 budget that it would replace the four current tax incentives for business R&D with a new R&D tax credit. The main components of the Labor government’s new R&D tax credit packages are restrictions to the categories and types of eligible activities, a 45 per cent refundable credit for firms with an annual turnover of less than $20 million and 40 per cent non-refundable credit for firms with a turnover of more than $20 million. The new tax credit actually imposes restrictive barriers on firms rather than offering encouragement for research and innovation. No-one should underestimate the need for research and innovation as a proven driver of continuous and evolving economic growth, productivity, competitiveness and profitability. That is why the coalition has serious concerns over the government’s changes to the R&D tax concession. The changes to the eligibility requirements are quite broad. Less emphasis appears to apply to development and it is a real issue. It threatens to significantly erode financial support for R&D investment in Australia—an unintended consequence, I would hope, but one that is very real. The eligible R&D activities under the legislation to qualify for the tax incentives are categorised as either ‘core’ or ‘supporting’. There is a stricter test on the definition of ‘supporting’ R&D in this bill. What I would not want to see is any reduction in innovation as a result of this restrictive part of this particular bill. It may disqualify assistance from many forms of R&D currently undertaken by Australian businesses—the drivers of innovation, productivity and profitability. The proposed definitions of R&D will cause significant uncertainty—they are already. They are extremely complex and, for practical purposes, will impose unnecessary administrative and compliance costs on many firms, particularly small to medium enterprises. When you read through the definitions in the legislation, it becomes clear and apparent where the complexity and uncertainty is arising and will continue to arise. The concern has been echoed by Business Strategies International, which has said that it is likely that protracted and expensive legal challenges will be initiated in some cases. That is something businesses do not need and should not have to afford. It could well lead to a reduction, as I said, in investment in R&D as a result. Interestingly, in their submission to the Senate Economics Legislation Committee inquiry, the Corporate Tax Association detailed concerns they have regarding this legislation, largely about the proposed new definition of R&D. Their submission stated: From what members have said to us, many corporates expect to see their claims reduced significantly, mainly as a result of the proposed dominant purpose test for supporting R&D activities in a production environment. In some cases, corporates may form the view that the compliance costs involved in working up a claim are not warranted, and will not register projects they might have under the existing rules. That certainly will not be of benefit to this nation. Coincidentally, in the current political environment of the resource super profits tax, in both the explanatory memorandum and in oral briefings from Treasury and the Department of Innovation, Industry, Science and Research, the examples of offending behaviour were dominated by those in the mining sector, one after another. I am afraid that this is just another attack on Australia’s mining and resource sector. The legislation is seeking to change not only the new resource tax but also R&D in the mining industry. The Minerals Council of Australia, in its submission to the consultation paper, described this legislation with the heading ‘A shift in the wrong direction’. The submission also stated that the exposure draft was ‘likely to have extensive adverse effects on the minerals industry’. The MCA further stated: … the second exposure draft fundamentally alters the nature of the R&D tax benefit by the replacement of long standing and well understood concepts … They are two very important issues for those engaged in R&D, and they certainly are longstanding and well-understood concepts. Similarly, an article in the Australian Journal of Mining from September-October 2009 stated: Based on the recommendations contained in the Cutler review, tightening of the definition of eligible R&D activities may focus on preventing what are referred to as ‘whole of mine’ claims. The article continued: Companies with increasing levels of R&D expenditure may also wish to bring R&D spending forward to take advantage of the … concession before it ends on July 1st, 2010. As I mentioned, the changes contained in this legislation have attracted substantial criticism from a wide range of industry groups. In an article in the Australian newspaper on 2 June 2010, the Advanced Manufacturing Coalition was quoted as saying: … the new system could “increase the time, cost and risk of undertaking R&D in Australia”. I am certainly very concerned about that. This indicates that the scheme could threaten some manufacturing firms’ international competitiveness during the next decade, and we should be seriously concerned about that. In their submission to the Senate inquiry, the Advanced Manufacturing Coalition raised concerns that this legislation increases the risk that some manufacturers will defer or cancel R&D or simply take it offshore, a move that would be highly detrimental to the Australian manufacturing industry, researchers and workers. KPMG Australia has expressed concerns that the changes will restrict the access of all companies, irrespective of size—not just small- and medium-sized enterprises—to the R&D system. That may be the intent of this legislation, but it is not a sound intent. The petroleum industry also provided a submission and participated in the public hearings. During the Sydney public hearing, Caltex’s Manager for Government Affairs and Media, Mr Topham, stated: We have a long history of investment in R&D, averaging approximately $15 million per annum. Our concern is that the current drafting of the legislation could leave a substantial amount of our R&D expenditure ineligible for tax credits. … We believe the eligibility rules are flawed and that the implementation timetable is unreasonable and impractical. This has been a repeated complaint. The Minerals Council of Australia submission also highlighted their concern: … the Bill fundamentally alters the nature of the R&D tax benefit by the replacement of— as I said earlier— long standing and well understood concepts with new and … completely unheralded concepts. I note, on the examples in the biotech and surgical industries being quoted by those opposite, that those industries may not be affected by the changes in this legislation. I believe that research and development is a vital component of this nation and of any industry, whether it is health, mining, petroleum, natural resource or environmental management, agriculture or any other. I do see, as does the coalition, immense benefit in R&D programs. The fact that this legislation seeks to remove an incentive that is integral to assisting and encouraging a diversity of companies to improve their business operations has to be of concern to everyone in this House, on all sides, and the need for clear, concise guidelines for R&D for small to medium enterprises is very important. As stated in the dissenting report by coalition senators to the Senate Economics Legislation Committee inquiry report: The Coalition supports increased business investment in research and development (R&D)— as we should— and appropriate reforms to legislation to help achieve this outcome. That should be the desired outcome of any legislation of this type: to support increased business investment in research and development. However, we cannot support legislation that has shortcomings that include the failure to have appropriate consultation, the substantial alterations of those definitions of ‘core’ and ‘supporting’ R&D, the government’s changes to the eligibility criteria, the object clause contained in the legislation and the intellectual property issues. The new regime is due to start on 1 July, but there is very serious confusion and uncertainty out there, right across the board, and I note that the education campaign to inform companies of various sizes will not come into effect until after the legislation is passed. The education campaign needs to happen prior to the legislation changing. As I have said, the changes proposed by the Labor government have attracted substantial criticism from a variety of stakeholders, for very, very good reasons. Unfortunately, and it is typical of this government, this legislation is seriously flawed. 5723 11:05:00 Symon, Mike, MP HW8 Deakin ALP 1 0 Mr SYMON —I speak in support of the Tax Laws Amendment (Research and Development) Bill 2010 together with the supporting bill, the Income Tax Rates Amendment (Research and Development) Bill 2010. These introduce a new research and development tax incentive to replace the outdated and complex R&D tax concession. Expanding research and development in our business is a central requirement of building an innovative and productive country. Increasing research and development that is conducted in Australia by businesses and companies is important; indeed, it is vital to our country’s future. If we look at where R&D tax concessions came from, we go all the way back to the 1980s when it was introduced by the Hawke government, with the tax concession originally set at 150 per cent. But, as we have seen over the years, there was a problem with that—that is, companies could not claim the tax concession until they turned a profit. I see that as a bit of a chicken-and-egg problem when it applies to small and innovative start-up companies who are spending money on R&D but, as in many cases, not making a profit so there is nothing to claim. The 2008 Cutler report also highlighted that issue. The House of Representatives Standing Committee on Industry, Science and Innovation examined national research and development funding as a part of its 2008 report entitled Building Australia’s research capacity. At that time, the committee—of which I am a member—heard evidence from Universities Australia that, in Australia, gross expenditure on research and development as a percentage of GDP stood at 1.76 per cent in 2007-08. But that was in comparison to the OECD average, where that same measure of gross expenditure on research and development was 2.26 per cent. In dollar terms that gap was estimated to be $5 billion. Research and development comes from two main sources, of course—public institutions such as universities, CSIRO, research institutes and government organisations; and the private sector. I think it has been a challenge for everyone in this parliament over the years to increase that private sector research and development expenditure. In 2001 Australia ranked 15th out of 21 nations of the OECD for private expenditure on R&D, and yet ranked third at that time for government expenditure on research and development. In 2001 Australian private sector R&D was 0.76 per cent of GDP. But this compared to Sweden investing 2.84 per cent of GDP in private R&D, Finland investing 2.39 per cent and Japan investing 2.11 per cent. In the figures from 2007-08 Australia’s private R&D has increased so that 1.27 per cent of GDP is invested by the private sector in R&D. However, we still remain 14th in the OECD ranking for that. Any sustained rise in private R&D leads to the development of better products and innovations that generate more economic growth, create jobs and help keep Australia at the leading edge of technological advances. As an example of the benefits that can be derived from successful developments from R&D we need look no further than the CSIRO patent on Wi-Fi technology. It has been in the news quite a lot lately through various legal cases. CSIRO first applied for its Wi-Fi patent in 1992, and of course we now all use it. Every day, anywhere you take a portable device, you are more than likely—whether it is a portable computer, an iPad, a PDA of any sort, or one of a whole heap of other gadgets—to have a Wi-Fi connection. That is one of the things that we now take for granted in the 21st century. When it was first invented it was unprecedented, of course. People did not do that sort of thing in those years, and they were not that long ago. It is estimated that this patent alone could deliver $1 billion to the CSIRO in years to come as this patent is applied and enforced—and of course actions are still going on worldwide to apply that patent to make sure that CSIRO and, ultimately, the Australian people benefit from that discovery. In 2007-08 Australian businesses invested over $14 billion in R&D. We can do much better, and that is why the Rudd government is introducing this new R&D tax incentive. The new R&D tax incentive provides benefits more generous benefits for eligible research and development activities. It provides more than the existing concession and is better targeted towards research and development that benefits Australia. It is also substantially simpler and accompanied by improved administrative arrangements. The new R&D tax incentive will replace the existing research and development tax concession for all income years starting on or after 1 July 2010. These bills provide for increased assistance for genuine R&D and redistribute support in favour of small- and medium-sized enterprises with annual turnovers of less than $20 million. R&D activities contribute to innovation by creating new knowledge and technologies, and by increasing productivity, jobs and economic growth it allows Australia to respond to present and future challenges. These bills will expand the number of businesses that can access government support for their R&D expenditure and investments. There are more than two million businesses in Australia but at present only around 8,000 of these businesses benefit from the current R&D tax concession. The intention of these bills is for the higher rates of reward under the new incentive to attract more firms to the program. The two core components of this program are: a 45 per cent refundable R&D tax offset for eligible entities with a turnover of less than $20 million, as I have mentioned, and a nonrefundable 40 per cent R&D tax offset for all other eligible entities. With this change of rates and delivery mechanism there is a clearer and better-targeted definition of ‘eligible R&D activities’ that ensures that the incentive is available in circumstances consistent with the underlying rationale for government intervention and, what is more, that taxpayers get real value from it. These bills double the base rate of existing R&D support for small to medium enterprises and raise the base rate for larger firms by a third. Instead of receiving 7.5c for every dollar in R&D, small to medium enterprises will receive 15c and larger firms will receive 10c. Small, innovative firms are big winners from the new R&D tax incentive, with greater access to cash refunds for their R&D expenditure and better rates of assistance. To give an example, suppose a company with a turnover of $10 million spends $1 million on eligible R&D activities in an income year and that they are in a tax loss position. Under the new R&D tax incentive that company would be entitled to a cash refund of $450,000. Under the existing R&D tax concession the company would only receive a tax deduction worth $375,000. Of course, there would be zero benefit if the company was not running at a profit. Profit can be many years away, and many start-up firms may never get to access it. They may actually not survive that start-up process. So small to medium enterprises will be encouraged to take the risks on R&D through the government substantially increasing the overall concessions and, for the first time, introducing payments for companies that are yet to make a profit because they have invested in R&D. This new scheme will really help small start-ups and encourage innovation in Australian industry. The new R&D tax incentive will better target government support towards genuine R&D activities. The key elements of an approach such as this are to establish a clearer definition of ‘core R&D activities and to introduce a test for supporting R&D activities and stronger administration of the incentive. These changes will ensure that the new R&D tax incentive rewards a company’s genuine R&D, not their business-as-usual activities. The existing scheme is allowing some companies to use taxpayer dollars to subsidise business-as-usual activities rather than genuine research and development activities. This new legislation provides a more focused definition of eligible R&D activities. The new definition of core R&D activities still covers both research and development activities but it is focused at a project level. It recognises that the innovation dividend for the economy will come from refocusing public support on genuine R&D, not on routine business activities as has been previously commentated on in many sources of the media and, indeed, in this place. Obviously, these changes will cause current recipients of research and development incentives to examine the impact of the definitional changes, and I would hope that they would then apply it to genuine R&D that does benefit the country as a whole. Business-as-usual support is not what is needed when we are talking about innovation. We want new ideas. We want support to chase those ideas so that Australia benefits. Recognising the importance of information technology in a modern economy, the new R&D tax incentive will ensure most software R&D is treated consistently with R&D occurring in other sectors. Importantly, these bills further open up the new R&D tax incentive to foreign corporations that are resident in Australia and those that carry on R&D activities through a permanent establishment in Australia. The bills also ensure a new incentive will be available for expenditure on eligible R&D activities conducted in Australia, regardless of where the resulting intellectual property is held. That strengthens the case for foreign companies to conduct R&D activities locally. On an underlying cash basis, the new R&D tax incentive is expected to be budget neutral over its first four years of operation. Small companies are the winners from the R&D tax incentive, with access to cash refunds on R&D expenditure if they do not make a profit and higher base rates of assistance being provided through the new 45 per cent refundable tax offset. Larger companies can invest, knowing that they can claim a non-refundable tax offset of 40 per cent of their expenditure on eligible R&D activities. The new R&D tax incentive better focuses public support on activities likely to produce economy-wide benefits. This will ensure that the new R&D tax incentive rewards a company’s genuine R&D, not business-as-usual activities. Finally, the new R&D tax incentive is an important part of the government’s plan to encourage knowledge-creating and knowledge-using industries to boost productivity and activity in all sectors of the economy. I commend the bills to the House. 5726 11:17:00 Jensen, Dennis, MP DYN Tangney LP 0 0 Dr JENSEN —I am speaking in unequivocal opposition to the government’s Tax Laws Amendment (Research and Development) Bill 2010. I am the only person in this House that I am aware of who has worked as a research scientist within both CSIRO and the Defence Science and Technology Organisation. I have spoken in this House many times on this government’s short-sighted penny-pinching budget cuts to such organisations as CSIRO and ANSTO. This legislation just drives another stake into the heart of scientific research in the form of business R&D in this country. So much for the clever country! The first question which should always be asked about legislation is: is it necessary, especially when there is a very good system already in place? Given this government’s dismal track record based on the philosophy of ‘if it ain’t broke, let’s break it’, what are the alleged problems? Michael Johnson Associates is Australia’s leading specialist R&D tax concession firm, and this is how it views the so-called flaws in the current system that are used as excuses for this legislation: … 1—The current Concession facilitates bogus, illegitimate claims against the taxpayer …            …            … In fact, all the evidence over the history of the program is that it is responsibly used by the vast majority of users and very few risk assessments proceed to prosecutions. Removing benefits from all taxpayers for the inappropriate behaviour of the few is not a rational response to the issue of alleged misuse. … 2—The Concession provides assistance to non-genuine R&D …            …            … The real mischief here is when one starts to import a moral dimension to what is genuine R&D. The strength of the current Concession is that it delivers an internationally-competitive definition of eligible industrial R&D. The proposed definition in the Credit, in seeking to narrow the definition to limit assistance to “genuine R&D”, manages to disqualify the vast majority of R&D actually conducted by Australian businesses, large or small. … 3—The criticism of the Credit has come from those with a vested interest in the status quo …            …            … If a submission comes in arguing for the status quo, does it automatically follow that the submission can be discounted because it is designed to protect a vested interest? …            …            … … responses such as the recent public submissions to the Treasury will always come in the main from those with a vested interest. That is the usual driver for a party to respond at all. Blind Freddy could see that! Using that ridiculous and specious argument, can we then look forward to the union movement being locked out of any input into IR legislation? It continues: … 4—80% of the Concession goes to 100 companies For decades, Australian Bureau of Statistics on R&D have indicated that the vast majority of innovation spend is incurred by a handful of Australian companies. This is, and will always be, a matter of fact. The current trends in the Concession simply reflect this fact. Given that the Concession is open-ended, the share of those 100 companies will be determined by the prevailing rules and the amount they identify and claim. When added to the spend and claim of the other 7,900 firms in the program, the proportions will then be determined as a matter of mathematics. There is not a finite amount of claims and assistance available. The proportions are only determined after the claims are identified and made against the rules. The thinking behind the restrictions in the new Credit is that the rules can be changed to alter these proportions. This is entirely possible. You can rewrite the rules so that the proportion of assistance accessed by the other 7,900 is a much larger figure. The problem comes in when the rules are so restrictive that the proportion is larger but the overall value of the assistance to those 7,900 companies falls. This is exactly the concern being reflected by the commentators regarding the Credit. We are being offered a program that wipes out assistance across-the-board. A larger slice of the cake might go to SMEs but so what if we are now cutting up a cup cake as opposed to a passionfruit sponge. Yet again, the good old socialist focus on distributing current wealth instead of enabling individuals and companies to create more is writ large in bold italics. This is the classic Fabian sheep clothing of R&D funding hiding the wolf of grabbing back money and wrecking proven and effective programs. This bill has been condemned by groups and individuals across the business and scientific spectrum. Let us hope that this dissent will not prompt another unscrupulous and indefensible ad campaign from this government. Last February, Peter Roberts wrote a comprehensive article in the Australian Financial Review giving a cross-section of responses about why this bill should be defeated. He said that the change in definitions of eligibility and exclusions will ‘slash the $1.4 billion cost of assistance by as much as half’, according to KPMG. Roberts continues: While the new credit is a big boost for start-up companies and some foreign companies, it has been condemned by business groups, tax professionals, academics and staunch Labor supporters as betraying an innovation agenda pioneered by Hawke government minister John Button. Of course we know the respect the Prime Minister showed for John Button and his work. He chose to visit a film star for a photo opportunity rather than pay his respects at John Button’s funeral. 83M Plibersek, Tanya, MP Ms Plibersek —That really is a bit off. DYN Jensen, Dennis, MP Dr JENSEN —Well, it is true. Celebrity over substance has been one of the hallmarks of our egocentric Prime Minister. The general feeling is that the main aim of this legislation is to bring about cost savings in the R&D area. One of the main criteria is that core R&D be both innovative and risky when in the past it could be one or the other. This incompetent and fiscally destructive government knows nothing about being innovative but a lot about being risky. As if the mining industry has not already been bludgeoned with a proposed resources rent supertax, this R&D legislation will, according to Roberts, ‘reduce the claims of mining companies for pilot plant expenditure and manufacturers for the cost of prototypes.’ So, what sorts of investment levels have we enjoyed in the past? According to reports on a Booz & Company innovation study, Australia was the sixth largest importer of global spending on research and development in 2007, attracting $4.3 billion in global R&D investment. Booz’s strategy practice principal, Bernadette Howlett, was reported as saying that Australia is ‘clearly benefiting from the globalised outsourcing of R&D spending’. She continued: The long-term outlook is encouraging because of the capability of our local skill base, and the increased reputation our R&D teams have for innovation and for being able to respond to consumer demand … Now that the full impact of this legislation is starting to be appreciated, that long-term outlook will not look anywhere near as rosy. Furthermore, the government cannot resort to its tried and true ‘plan A’ when things start going rapidly round the U-bend: pretending they were not aware of problems. The Senate inquiry into the scheme was told by grants experts only last month that the scheme is too restrictive and complex. Let me repeat that: this legislation, which the government claims will simplify and improve funding for R&D, is too restrictive and complex. Accounting firm BDO told the inquiry that modelling it had conducted involving its clients in the mining and manufacturing sectors showed that those sectors would be particularly hard hit. One must ask again: why is this government doing its level best, or actually worst, to destroy the mining and associated industries? This is economic treason. BDO’s R&D partner Tracey Murray said: In the mining industry, 90% of our current claimants would have their R&D claim reduced under the R&D tax credit program by at least 80%, with 10% of claimants not being able to access the incentive at all. And what of manufacturing, where I am sure at least a few of the Prime Minister’s favourite ‘working families’ are employed? BDO’s assessment was: When we modelled the manufacturing industry, the very industry that Australia is striving to increase productivity in, our modelling indicated a significant number of clients would have their access to the R&D program reduced by at least 65% in terms of value, with a number of well-known, world-leading companies unable to access the provisions at all because of the operation of the dominant purpose and the feedstock provisions. The compliance burdens of this proposal are also going to increase, another blow to businesses which are keeping this company afloat despite the Prime Minister’s cynical and pathetic attempts to portray himself as the great saviour of our economy. Sandra Mason, a partner at PricewaterhouseCoopers, says it appears that the government is trying to target some sectors or groups who it feels are getting more than their fair share of R&D tax incentives. However, she says that the legislation is too broad and will capture or rope in many other companies. Using a sledgehammer to crack a nut is another familiar and abiding failing of this grossly incompetent administration, so those critical comments sadly have a ring of truth as loud as Big Ben. Ms Mason was also reported as expressing concern at the introduction of a dominant purpose test, which requires that companies hoping to claim for supporting R&D will need to prove that the work complies with the dominant purpose test of supporting core R&D. According to critics, this goes too far as many traditional supporting activities, such as market research, market development and feasibility studies, have the dual purpose of supporting core R&D and furthering a firm’s commercial strategy. But then, what would this government know about how business operates? Thanks to the calamitous handling of the BER and insulation programs, we can clearly see the answer—absolutely nothing. The Prime Minister has been saying he wants Australia to become more productive. How does this alleged desire marry with the R&D tax legislation? A major issue with R&D is trying to quantify much of it. Dean Parham, until recently an Assistant Commissioner of the Productivity Commission, wrote a paper on the empirical analysis of the effects of R&D on productivity. According to that paper, while growth in the OECD area was slower in parts of the eighties and nineties, that was a period of major growth in R&D in Australia. He wrote: Local tax incentives are thought to have contributed substantially to the growth and timing of change in Australian R&D activity. The problem really comes when you attempt to measure the value of R&D. As Dean Parham wrote: … R&D activity is an investment in knowledge accumulation and in the development of technologies. The corresponding assets—the stocks of knowledge and technologies—are intangible assets whose values are largely unobservable. …            …            … This measurement difficulty looms as a fundamental problem in establishing a link empirically between R&D and productivity. Therefore, if these changes are being driven by Treasury and taxation officers who are seeing an opportunity to claw back some of the money this government has wasted, this paper illustrates the difficulty of measuring R&D outputs, and the inherent dangers in trying to quantify intangibles. I should remind the government that this is not an esoteric philosophical debate; it is about real companies, real employees and the real future of our country. I have received representations from companies in my electorate who are reiterating many of the concerns that major players have voiced. I hope that the government will listen to these concerns now and act accordingly, instead of barging ahead with deeply flawed legislation and then wanting to consult with industry. Where have we heard that one before? One of my constituents said that R&D tax incentives have been critical to the recent growth of his company and to increasing the level of intellectual property and the resulting design and manufacture undertaken in Australia. He posed questions about keeping promises, which are very relevant to this government. I must say I admire his optimism. He wants to be assured that the stated aims are fulfilled by this legislation—remaining revenue neutral at $1.4 billion funding; shifting the benefit to SMEs; removing compromising claims for whole-of-mine style projects and supporting activities which form a large part of the expenditure; increasing the number of claimants; increasing business expenditure on R&D; and targeting R&D with concepts of additionality and spillovers. He explained that there are major economic pressures on companies to relocate their design and manufacturing activities to low-cost centres offshore. However, while the current R&D tax incentive scheme is in operation, the development of intellectual property can be economically pursued in Australia. The only real question about the intent of this legislation is: is it yet another desperate attempt by an ideologically driven and intellectually destitute government to reclaim money to fill in the gaping black hole of debt it created, or is it yet another mean spirited and vindictive attempt to destroy another success story of the Howard government? Or is it a bit of both? My constituent warns that: Any move to constrain or reduce the support of R&D to companies would only hasten and increase the tendencies to move offshore. I do hope that this statement of fact, which is blindingly obvious to anyone outside the Labor Party, will prompt the more intelligent and economically literate members of the Labor Party to for once abjure the party line and stand for what is good for the country by not supporting this bill. We shall soon see which is more important to them—their own continued existence as Labor Party ciphers or people genuinely concerned for the greater good of Australia. 5730 11:35:00 Owens, Julie, MP E09 Parramatta ALP 1 0 Ms OWENS —I am pleased to support the Tax Laws Amendment (Research and Development) Bill 2010 and the associated Income Tax Rates Amendment (Research and Development) Bill 2010. Those who have known me for a while will know that I have a great passion for innovation in all areas and that I see our nation as one with great talent in this area. Innovation and R&D drives productivity growth and it drives the creation of national wealth. We are very good at it. Many Australians know that ours is a land with great wealth in its soil—both under it and within it—but we also have great talent in mines. Whether it is through science or research, as a percentage of our population we lead the world in terms of our creativity. We are very good at it. Fifteen years ago we led the world in solar technology; we do not now. But we did and the capacity is there to lead the world again in so many areas. When we look back at the period of the last government, one of the great regrets we will have as a nation is that, in the time of one of the greatest booms we have ever seen, we did not invest in that natural talent. In fact, our level of innovation as a percentage of GDP dropped. We dropped further and further down the OECD table until we sat well and truly at the bottom in terms of innovation between our universities and businesses at the end of the last government’s term. We did not invest in our talent for innovation and, as a nation, we were let down as a result of that. We were one of the few developed countries in a parallel area that reduced expenditure on education as a percentage against GDP. There can be no doubt that, in the modern world of global competition, innovation must be at the core of any strategic plan that a nation has for its future. We must continue to improve the way that governments encourage business to invest in innovation because it does drive productivity and growth and it drives the wealth of the nation. The current scheme does not get the return that we might expect for the investment that we make. Funds are increasingly going to business as usual, to projects which include parts of what we might legitimately call innovation in R&D but which go to the whole project. The consultancies that have grown up around the program have increasingly regular clients and we now find that there are only about 8,000 small businesses out of the two million out there that apply for funding. We also see a narrowing of the field of successful applicants. This is not an indication that there is bad behaviour going on. It is just an indication of a pattern that tends to happen when a grant program exists for a long period of time and consultancies get involved. I know this because I fulfilled that role for a while before I came into parliament. I was not working in the R&D area, but I did have five grant writers that worked for me in procuring grants for small business. I know very well that over time, as a consultant, you get better and better at squeezing projects into the guidelines, extending the guidelines out a little year by year, and that your client base does tend to narrow. You get very, very good at getting grants year after year for the same businesses. There was one year when my clients received 100 per cent of the funding in one particular federal government grant category and it was well known that, if you wanted funding in that area, you had to come to me. So I do actually know how good you can get at stretching those boundaries and reducing the number of clients that receive the funding. We are now down to a situation where, out of two million businesses, only 8,000 apply and a relatively small number of those receive the bulk of the funding. Our innovation needs to be spread across the economy and it is recognised internationally as an important driver of productivity and growth. It encompasses a wide range of activities including workforce skills, venture capital, knowledge transfer, management practices, technology uptake and, of course, R&D. In our global economy, companies must invest in R&D to improve their competitiveness and their ongoing profitability. Knowledge produced by a firm’s R&D often has benefits to other firms and to the economy as a whole—that is, the R&D can have a net positive impact beyond the benefits that accrue to the firm. However, from an individual firm’s point of view, uncertain returns from the R&D activities may mean that a firm chooses not to undertake them. Where this happens, less R&D may take place than would be desirable from a whole economy perspective. A carefully designed incentive lowers the cost of doing R&D and helps boost productivity and economic growth. To this end, this new R&D tax incentive focuses assistance on activities that are likely to deliver economy-wide benefits that would not be enjoyed in the absence of public support. It also significantly improves the incentive for smaller firms to undertake R&D. The current scheme, as I said, does not get the return that we might expect because so much of current funds are going to what would be called business as usual. The new scheme is more generous and better targeted towards R&D that benefits Australia than the existing concession. It redistributes support importantly in favour of small and medium firms. We all know that small and medium firms are more responsive to fiscal incentives than large firms, so that is a very sensible measure. It provides cash upfront to small innovative firms, giving them the certainty they need to invest in growing business. I worked in small business for a substantial part of my career before entering parliament and I am well aware of how important that upfront cash payment is in encouraging innovation. The new system is also substantially simpler and accompanied by improved administrative arrangements. It is also very important that we reduce the burden on businesses applying for this concession. The new incentive replaces the existing R&D tax concession for all income years starting on or after 1 July. There are two core components of the new incentive—a 45 per cent refundable R&D tax offset for eligible entities with a turnover of less than $20 million and a non-refundable 40 per cent tax offset for all other eligible entities. This effectively doubles the base rate of existing support for small to medium enterprises and raises the base rate for larger firms by a third. So, for small businesses, instead of receiving 7.5c for every dollar they will receive 15c for every dollar and larger firms will receive 10c for every dollar. The new refundable tax offset provision also makes upfront cash support available to many more small- and medium-sized companies. The new tax offset is available to corporations with a turnover under $20 million. The current law sets the cap at companies with an annual group turnover of less than $5 million, so there is a substantial improvement for small- to medium-sized enterprises there. The government also aims to lift R&D performance through increasing the number of businesses undertaking R&D up from that relatively small 8,000 businesses that apply now. The government has a responsibility to deliver value for money for taxpayers through the better targeting of the scheme and I believe that the new legislation achieves that through a more focused definition of eligible R&D. The new definition is simpler than the old one. Core R&D activities are experimental activities whose outcome cannot be known or determined in advance on the basis of current knowledge, information or experience but can only be determined by applying a systematic progression of work that is based on principles of established science and proceeds from hypothesis to experiment, observation and evaluation and leads to logical conclusions and is conducted for the purpose of acquiring new knowledge, including knowledge or information concerning the creation of new or improved materials, products, devices, processes or services. The new definition of core R&D activities still covers both the research and the development activities. The government has undertaken an extensive consultation process on this, including inviting public submissions on a consultation paper and two exposure drafts of legislation. That the member for Tangney could see that as a lack of consultation defies belief because there has, as I said, been extensive consultation over two exposure drafts and prior consultation. The government received over 380 submissions during these three rounds of consultation and held public hearings which were attended by 550 people—again, considerable consultation in this area. There have also been extensive discussions with key industry representatives and advisers over almost a year. The government have made some significant changes where stakeholders have made constructive suggestions for improvement, as we should. In particular, we have simplified the R&D definition—and I have read that out—and the dominant purpose test for supporting R&D has been limited to production activities and activities on the exclusion list—again, simplifications requested by the sector itself. The government still plan for the new R&D tax incentive to start on 1 July 2010. We acknowledge that some industry groups have called for its introduction to be delayed for a year but a delay would mean that Australian companies do not get the very substantial benefits that the new scheme offers, which is a doubling of benefits and cash upfront to smaller firms. Introducing the new incentive is critical to Australia’s future—to enhancing productivity, to making us more competitive and to creating new wealth and jobs. I have to say I am quite shocked to hear that the opposition will not be supporting these amendments. Stakeholders in the biotechnology and pharmaceutical industries have been supportive of the new incentive and are keen to see the new R&D tax incentive enacted as soon as possible. The information technology industry has also welcomed the revised approach to software R&D. I am also pleased that the new scheme will reduce compliance costs—that is very important for small business. The measure provides a tax benefit above the normal corporate income tax benchmark and the benefit is voluntary, so all associated compliance costs are also voluntary but we still must work towards keeping them to a minimum. The draft R&D provisions are shorter, clearer and simpler than the existing R&D provisions, mainly because we have avoided the four different benefits available under the existing law and replaced them with a single entitlement to a tax offset. They are important simplifications. There will be compliance costs associated with the change from the former arrangements during the early stages of the new incentive but these will reduce as taxpayers become accustomed to the new scheme and adjust their practices. We have also provided $38 million in the 2009-10 budget to ensure that AusIndustry and the ATO are equipped to assist taxpayers in adjusting to the new scheme. AusIndustry will provide guidance and educational material to industry, including specific information on those industry sectors in which there is most concern, including manufacturing and mining. These are very sensible reforms to an incredibly important area of government incentives, namely research and development. As I said, research and development and innovation, particularly in the modern world, drive growth and wealth creation and are fundamental to any nation seeking to position itself as a strong economy in the future. I commend these bills to the House. 5733 11:49:00 Turnbull, Malcolm, MP 885 Wentworth LP 0 0 Mr TURNBULL —This legislation, the Tax Laws Amendment (Research and Development) Bill 2010 and the Income Tax Rates Amendment (Research and Development) Bill 2010, proposes altering the basic structure of Commonwealth government incentives for business research and development spending for the first time in almost a quarter of a century. If passed, it would replace the existing R&D tax concession available to businesses since 1986 with a new R&D tax credit, effective from 1 July 2010. The existing tax concession has been the key mechanism supporting business innovation for 24 years under both Labor and coalition governments. It has been repeatedly refined and amended over the years, but is very familiar to businesses and currently assists around 8,000 firms. The concession is estimated to have a cost to the budget of $1.5 billion in the 2009-10 financial year. Not only is the existing concession well understood by business; it also has been very successful over time in encouraging a higher level of private investment in innovation in Australia. So it is not surprising that the Rudd government’s proposal to replace it with an entirely new incentive scheme has been contentious, most of all among those Australian businesses most committed to investing in science and innovation. The government is presenting its proposed shift to an R&D tax credit as a ‘more generous, more predictable, and less complex tax incentive’ that provides better value for money. I agree, as I am sure all honourable members would, that taxpayers have every right to demand value for money when they support the business sector. And there are a number of features of this legislation that are sensible, in particular the ideas of replacing tax deductions with tax credits and making tax credits for eligible R&D refundable in cash to small firms without tax liabilities. But in the end, the coalition opposes this legislation for the same reasons that many innovative Australian businesses have opposed it. Firstly, the government’s claims that these changes would be revenue-neutral over the forward estimates do not seem credible. While it is true the level of assistance for eligible spending will increase modestly, the activities eligible for support have been drastically narrowed. The bills look more like a revenue grab than a reallocation of resources. Secondly, Labor claims that the new regime will be simpler and easier to administer are already in tatters, given the business uncertainty and legal questions created by sweeping changes to the eligibility rules and tests, in particular the new distinction between ‘core’ and ‘supporting’ R&D and the ‘dominant purpose’ test. And thirdly, these changes replace a well-understood policy with a successful track record of encouraging business activity critical to our economic future with an incentive very different in design which may deliver very different outcomes. These risks posed were summarised very well by AVCAL, the venture capital industry group, in their response to the exposure draft: … the narrowing of the eligibility criteria for the R&D tax incentive will materially affect the future of many innovative businesses in Australia. These businesses, which would have been at the forefront of the Government’s efforts to foster home-grown innovation, will now be ineligible for the very incentives which are intended to propel innovation forward in Australia. While it claims this legislation is revenue neutral, the government concedes it dramatically alters the types of R&D eligible for public support. This can be seen if we consider the most important features of the bill. Assistance would be directed to core R&D and away from supporting R&D—to basic research, for example, but not industrial process improvements. Supporting R&D activities could still be assisted if innovation rather than commercial advantage is their dominant purpose but, as so many businesses have pointed out, virtually all R&D serves both objectives. Dominance of innovation alone is likely to be difficult to establish. Tests for spending eligibility would be tightened. Currently, activities must be innovative or involve high levels of technical risk to receive support. The legislation would change this requirement to ‘considerable novelty’ and ‘high technical risk’. As AVCAL’s response to the exposure draft points out: This change to the definition may unintentionally lead to the exclusion of many genuine value-adding R&D activities that should be supported and are currently eligible for support … The form of the incentive would change. The current tax concession applies an uplift to eligible R&D spending to create a tax deduction which varies in value if the company tax rate changes. The new legislation would replace this with a tax credit which has a dollar value uncoupled from other tax rates. In the case of small firms without tax liabilities the credit would be refundable in cash. The level of assistance would rise. Currently, firms receive a tax deduction of 125 per cent of eligible R&D spending or a premium tax deduction of 175 per cent when spending exceeds the average of the three previous years. Under the new legislation firms that turn over under $20 million would receive a 45 per cent tax credit—equivalent to 150 per cent deduction. Larger firms would receive a 40 per cent tax credit—equivalent to a 130 per cent deduction. Because of the narrower range of activities that would be supported, a larger proportion of assistance is expected to go to small firms with a turnover of under $20 million. It is helpful to consider these proposed changes in the context of the original rationale for the R&D tax concession and the backdrop of the government’s broader role in science and innovation. The R&D concession was introduced by the Hawke government in 1986, with broad aims to encourage Australian firms to lift onshore research and development and so become more innovative and internationally competitive. This appeared to be a daunting challenge in the 1980s, when most Australian manufacturers were struggling to survive and modernise, and local firms invested far less in innovation on average than their counterparts in other OECD countries. Private spending on science and innovation started rising gradually, in relative terms, in the late 1980s but as recently as 1998-99 gross business expenditure on R&D in Australia was still only 43 per cent of the OECD average. Happily, over the past decade that gap has narrowed quickly. In 2006-07, the most recent year for which we have international data, business R&D spending in Australia was 80 per cent of the OECD average. If the data is adjusted for industry structure, recognising Australia’s smaller than average manufacturing sector for an OECD country, business R&D exceeded the OECD average. In 2007-08, the most recent year of the ABS data, Australian companies spent $14.4 billion on research and development—up 85 per cent from four years earlier. Most of that investment took place in the manufacturing and mining sectors, as we would expect. Growth rates for business R&D in Australia have been particularly rapid in the last four or five years, but this spurt is just the latest phase in a long uptrend which has transformed Australia from a laggard in private R&D into a normal advanced economy. Since the existing R&D tax concession was introduced 24 years ago, business spending on innovation has grown by almost seven per cent in real terms, annually—double the growth rate of the economy. Obviously, the R&D concession has played a critical role in all of this—almost certainly in kick-starting business investment in innovation from its moribund levels of the mid-1980s; probably in driving strong subsequent growth; certainly in making R&D less costly for firms which spent on eligible activities. It is notoriously difficult to measure the precise impact of policies such as incentives for R&D since we cannot observe what would have happened in their absence. But it goes without saying that innovation—the introduction of new or significantly improved products or processes—should be, must be, a critical policy concern for government. In the long run a nation’s capacity to innovate determines how quickly its economy can grow, how quickly its living standards can increase and how well equipped it is to surmount economic, social or environmental challenges. Climate change and the health needs of an ageing population are just two examples of public policy challenges where it is clear innovation and new technologies are going to play a major role in the solutions. Market economies obviously provide wonderful incentives for innovation in the private sector, but the public sector also has a critical role—and not only in providing well-educated workers, fair laws, stable macro-economic and tax policies, and the other institutions and infrastructure essential for a strong economy. As the Productivity Commission has pointed out, there are two powerful rationales for direct use of public resources in science and innovation. The first is to pay for R&D that improves the functioning of government or the quality of the products and services it delivers. This includes advances in areas from defence to transport, health and education. Obviously, not all of this R&D needs to be carried out in the public sector, but much of it needs to be funded by the public sector. The second is to pay for R&D that generates ‘spillovers’—benefits that are not easily or completely captured by the innovator but boost the economy as a whole. Such spillovers often arise from basic research or ideas and processes that are readily mimicked, adapted or diffused without any reward to the inventor. Understandably, the private sector tends to underfund such spending. The Commonwealth government currently spends more than $8 billion a year on what can be broadly defined as research and development, or around a third of gross expenditure on R&D in Australia. The bulk of this spending—almost $5 out of every $6—is channelled through research institutes, research grants, universities or public sector agencies such as the CSIRO or the Defence Science and Technology Organisation. The remaining $1 in $6 is largely delivered through the R&D tax concession, which of course is the main instrument for encouraging private spending likely to create spillover benefits for the wider economy as well as commercial value for the investing firm. In the past three years the design of the existing R&D concession twice came under scrutiny during inquiries into innovation policy, first by the Productivity Commission, in 2007, and then by the review led by Dr Terry Cutler, in 2008. In each case changes were recommended. The Productivity Commission found the eligibility criteria for the basic 125 per cent tax concession did not fully screen out R&D which would have happened anyway and suggested economic pay-offs could be increased by restricting it to small firms. It recommended the 175 per cent premium rate be retained for all firms but the criteria for eligible R&D spending be tightened. Finally, the Productivity Commission acknowledged that restricting the concession would increase administrative and compliance costs. The Cutler review urged that the existing R&D tax concession be converted to a tax credit of 40 per cent for larger firms and a refundable tax credit of 50 per cent for firms with turnover under $50 million. It also recommended that all R&D undertaken in Australia which met the relevant definitions be eligible for the tax credit, including R&D by foreign companies. There is merit in both sets of recommendations, and each review raised legitimate questions over aspects of the design of the existing R&D tax concession—in particular the provision of support to some R&D which provides sufficient returns to the companies that undertake it and which would happen in any case. The government’s response, however, combines the most onerous features of both and ignores the generous aspects of each. Cutler’s proposed 50 per cent tax credit for small firms is reduced to 45 per cent and limited to a turnover of $20 million, not $50 million. The idea of premium support for firms which invest consistently in R&D over multiple years does not make the cut. The arbitrary distinction between ‘core’ and ‘supporting’ R&D is a heavy-handed response to the challenge of screening out spending on innovation that does not need assistance, that does not pass the additionality test. And there is little doubt the proposed legislation would add to uncertainty and complexity in the near term, rather than reduce it. There are also several positive features of the legislation, as I mentioned earlier: specifically the replacement of tax deductions with tax credits, the scope for cash refunds of credits to small firms without tax liabilities, and the higher rate of assistance provided to small firms. But on balance, however, the negatives outweigh the positives. As I noted earlier, incentives to private firms are only a fraction of the government’s total commitment to R&D—$1.5 billion out of more than $8 billion. So while it is important to get the mechanism for distributing the $1 in $6 right, it is even more important to ensure we also spend the other $5 in the most economically beneficial way. This is a much broader topic than the scope of this legislation but it is important to address nonetheless. I have always believed Australia should develop more of its own intellectual property, and a large part of my experience before politics involved starting innovative businesses which created jobs and indeed exported technology. Over the past couple of decades Australia has evolved into a much more conducive environment for innovation than it has been in the past. I have described the growth in business investment in R&D over the past two decades, which in turn has increased the cost of the concession. We can be pretty positive about the existing environment Australia presents for innovation, particularly innovation in early-stage companies. In fact, according to a survey by Ernst & Young in 2009-10, Australia ranked as the fourth most attractive market for venture capital investment, behind the United States, the United Kingdom and Canada. But there is always room for improvement. Our combined government and private expenditure on R&D now exceeds two per cent of GDP and is above the OECD average but it still lags behind the high levels of spending on innovation in leading countries such as the United States, Japan and Israel. Many countries have tried to emulate the dynamic level of innovation seen in the US economy, but most have failed: the web of economic, educational and cultural forces and institutions that create a Silicon Valley are hard to untangle or replicate. Israel is an interesting contrarian example, however, and over the past decade has emerged as an economy increasingly driven by innovation and technology. There are more Israeli than European companies listed on the Nasdaq, the world’s main stock exchange for tech firms, and the per capita venture capital investment in Israel is twice the per capita level in the United States and 30 times the level in the EU. As with Silicon Valley, there are many forces behind this story, some of them difficult to replicate. Favourable immigration policies and a flow of technically skilled migrants from the former Eastern Bloc, the use of military procurement to develop targeted areas of technical expertise, higher education funding that promotes interdisciplinary collaboration and university-business linkages, and high but targeted public spending on R&D all contributed. Australia shares some of these advantages and lacks others. But perhaps the most important lesson to take away from Israel’s experience is that the public sector’s role in leading and encouraging this economic transformation was not driven by direct support for private R&D. It involved effective policy design and coherent objectives across the whole of the public sector’s support for innovation—or, in Australian terms, the $5 in $6 as well as the $1 in $6. It would be easier to accept the Rudd government’s bona fides on innovation if it were committed to better economic returns and taxpayer value for money across the whole of public spending on science and innovation. Instead, we find it focused on narrowing the R&D tax concession, the one part of that spending which unequivocally benefits business. So much as there are some positive features of this legislation, they are outweighed by its negatives and the very strong underlying hint of Labor antibusiness ideology. I will not be voting for this legislation. 5738 12:07:00 McKew, Maxine, MP BP4 Bennelong ALP Parliamentary Secretary for Infrastructure, Transport, Regional Development and Local Government 1 0 Ms McKEW —I am delighted to be able to speak to the Tax Laws Amendment (Research and Development) Bill 2010 and the Income Tax Rates Amendment (Research and Development) Bill 2010 in far less conditional terms than the previous speaker, the member for Wentworth. I feel this legislation is a very significant reform that aims to achieve a number of things. Firstly, it will support investment in research and development. Secondly, it will strengthen companies either undertaking or seeking to undertake research and development activities in Australia and encourage them to become more innovative, productive and prosperous. Thirdly, this is about the promotion of high income, high quality jobs for the future. The research and development tax credit is also a central element of the Rudd government’s long-term agenda to lift Australia’s innovation capacity and indeed our performance. The minister, Senator Carr, set out late last year in his landmark Powering ideas report the government’s framework for a 10-year reform agenda to make Australia more productive and more competitive. The Powering ideas report in turn was borne out of Dr Terry Cutler’s 2008 review of the National Innovation System. The recommendation there, of course, was delivered in August 2008, and that was that the research and development tax concession be changed from a tax deduction to a tax credit. We have been pursuing this case since we came into government in 2007. I am particularly pleased to speak in this debate because this reform is especially important for the many innovative companies in my electorate, the bulk of which are located in the Macquarie Park Corridor. More than 30,000 people work there, the vast majority of them in research driven industries. There is also the Macquarie University campus, so it is a very exciting hub. The City of Ryde’s own economic development strategy says the total floor space of the corridor could accommodate in the future as many as 18,000 workers. This corridor is an important and growing part of what is sometimes called the northern Sydney global technology corridor. It is also the northernmost tip of what the New South Wales and Metropolitan Strategy calls the state’s global economic corridor, often described as the powerhouse of the Australian economy, and with good reason. There are also major pharmaceutical companies, the likes of Johnson & Johnson, Novartis, Sanofi-Aventis, and Astra Zeneca. Pfizer’s head office is on the other side of Bennelong, down at West Ryde. In Macquarie Park you have major information technology companies—Microsoft, Oracle, CA, CSC and Compuware. There are also some of the giants of consumer electronics—Sony, Toshiba, Philips and Canon—including Canon Information Systems Research Australia. They had their 20th anniversary recently and I was given a guided tour of the marvellous facility on Thomas Holt Drive. That was by the managing director Dr Kenji Kobayashi and director Dr Jim Metcalfe. In telecommunications, Optus also has its corporate headquarters there. This is all by way of saying that really there are few parts of Sydney, let alone the rest of the country, which boast such a rich concentration of research dependent industries. It is certainly the case that not all of them manufacture or research in this country. That is true, but Bennelong certainly has a strong case to make that it is the hub of Australian research and development—which leads me of course to these bills and the new R&D tax credit. What we are creating with this new system is a fairer, more efficient system that will provide greater incentives to foster research and development activity. It is a system that is already rated the world’s best system for providing R&D incentives. I will come back to that in a little more detail. First, I want to explain a bit about the technical details of this legislation. The new R&D tax incentive replaces the existing R&D tax concession. There will be a 45 per cent refundable tax credit for companies turning over less than $20 million and a 40 per cent non-refundable credit for larger corporations. This doubles the base rate of existing support for small and medium enterprises, restoring support to pre-1996 levels. It also raises the base rate for larger firms by one-third. Instead of receiving 7.5 cents for every dollar, small and medium enterprises will get 15 cents of every dollar and larger firms will receive 10 cents for every dollar. That will apply for all income years starting on or after 1 July this year. Certainly for people on this side of the chamber the most important consideration when it comes to matters of taxation and incentives is the concept of fairness. This concept of fairness is at the heart of everything that we attempt to do on this side of the chamber: fairness for workers when it comes to our changes to the former government’s unfair dismissal laws; fairness for all Australians in across-the-board investments in schools and in our health facilities; fairness for young parents in our universal 18-week paid parental leave scheme that I spoke on just a week or so ago; and fairness for all Australians by boosting our retirement savings through the important tax reform debate going on right now over the resource super profits tax. Importantly, the new refundable R&D tax offset provisions make upfront cash support available to many more small- and medium-sized companies. It is a fairer system. The new refundable tax offset will be available to corporations with a turnover of under $20 million. Under the current law, a refundable tax offset is available only to corporations with an annual group turnover of less than $5 million where the group aggregate R&D expenditure is not more than $2 million a year. There are two million businesses in Australia and only about 8,000 of these benefit from the current R&D tax concession. The Rudd government’s intention is for these higher rates of reward under the new incentive to attract more firms to the program. We are widening the net, and I think that is fair. It is a major step towards lifting Australia’s R&D performance through increasing the number of businesses undertaking R&D. We are also improving efficiency. The new administrative arrangements that this legislation puts in place will be a lot simpler. As many have noted, Australia is very good at designing efficient tax measures. Tax credits are already in use in the United States, in Japan and in many parts of Europe. The new system will be familiar to international firms headquartered in those places. However, the existing scheme is allowing some companies to use taxpayer dollars to subsidise business-as-usual activities rather than what we call genuine research and development activities. Last financial year, a record number of companies registered for the tax concession, but the majority of the funding went to only 100 of the 7,754 companies approved for the concession. The government has a responsibility to deliver value for money for taxpayers through better targeting of the scheme, and this has been achieved in the new legislation through a more focused definition of eligible R&D activities. So let us be clear about this: we want to fund business innovation, not business as usual. The new definition of core R&D activity still covers both R&D activities, but it will weed out companies taking advantage of the scheme for business-as-usual activities for which they receive normal business deductions. I note that the Cutler review mentions whole-of-project claims using the R&D tax concession. The report from the review described this phenomenon in the following terms: In recent years several firms have been successful in the aggressive use of the R&D Tax Concession to make claims for a very large share of expenditure in large one-off projects like mines and civil engineering. These claims have demonstrated that some aspect of the project is new and technically risky. This having been done it has been possible, despite the efforts of the Australian Taxation Office, to claim as much as 80 percent or more of all investment expenditures in the project. The Panel appreciates that such ventures are both risky and innovative. At the same time it is clear that such ‘whole of mine’ claims are gaining for themselves a degree of assistance disproportionate to the benefits available to many other innovative projects. While they are also being undertaken by firms with very good access to capital, it is also true that capital markets are averse to risks in long term technology projects. This is an issue which needs to be addressed in its own right and not by default through a general tax concession. That was the problem identified in 2008. Further, in comments about Labor’s new R&D tax credit to the Adelaide Advertiser last month, Dr Leanna Read, the head of TGR BioSciences and a former member of the Industry Research and Development Board, had this to say: Certainly some claims from some of the big companies … were based largely on supporting activities rather than core, so something might be 99.9 per cent for supporting activity but because it supported some tiddlywink of R&D it got through. Our legislation will promote real innovation by closing that loophole. There are, I am afraid, some other examples of loopholes that show how far the funding has been stretched in the past. Funding has been made available to companies to construct a new building to test air conditioning, for instance, and to upgrade a processing plant and install a computer system in a large bank. All these are activities with inherent worth, but they are not research driven. Clearly we can do better than we are doing to reward real innovation. I mentioned earlier that the R&D tax credit system is already acknowledged as the world’s best system of its kind. As part of their Competitive alternatives 2010 report into international business costs, the consultants KPMG studied general tax competitiveness across 95 cities in 10 major countries. The countries in the study were Australia, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, and the United States. The report details just how competitive Australia’s R&D sector is. In the section of the report on R&D, Australia is the runaway winner at No. 1, and on the strength of Labor’s new R&D tax credit we moved from fifth place to first in the rankings. Further into the KPMG report, it is also interesting to see the city rankings. Melbourne and Sydney are first and third respectively. It is not that I subscribe to the old supremacy arguments, but I think we might see Sydney climbing back up to No. 1 there. Those rankings are well ahead of other global cities such as London and New York, and this endorsement by KPMG is unsolicited. Earlier this month the Minister for Innovation, Industry, Science and Research, Senator Carr, who has been driving all these changes to deliver the new R&D tax credit, welcomed KPMG’s conclusions. He observed that they place our new tax credit ahead of other, similar offerings by Canada, the United States, France, Italy, Japan and Mexico. In fact, it also ranks higher than the R&D assistance provided in the Netherlands and the UK. The minister then went on to describe KPMG’s unsolicited endorsement as ‘one of the strongest possible vindications of the Australian government’s new R&D support measures’, and I concur with that wholeheartedly. Getting praise from the experts is good, but getting praise from the industries involved is even better. I am confident that, when we are able to cut company tax to 28 per cent as part of the implementation of the resource super profits tax, the R&D environment in Australia will become that much more competitive. Labor’s R&D tax credit has also already won glowing endorsements from several major players in the R&D sector. Dr Brendan Shaw, the Chief Executive of Medicines Australia, said: This could be a massive opportunity for the pharmaceutical and biotech industries in this country … All indications are that the new program will help bring global investment in pharmaceuticals R&D to Australia, in large part by reducing the cost of conducting eligible R&D in this country. The bottom line is that this new program will reduce the net cost of undertaking R&D in Australia and make us more globally competitive. We look forward to continue working with Government to ensure this program delivers tangible benefits to companies who bring R&D investment to Australia. I look forward to continuing to work with Dr Shaw, because he and many of his members know that they can rely on me as their local member to be a strong voice for the interests of the pharmaceutical sector and ensure they get a good hearing. I bump into Dr Shaw on a fairly regular basis up on ‘Pill Hill’, as it is known in my area. I was with him recently at the official opening of the new permanent Australian office of the global biopharmaceutical company Shire, which is on Waterloo Road in North Ryde. They had a terrific gathering there in April. Shire is a company that specialises in life-saving treatments for very rare or, as they say, ‘orphan’ genetic disorders in which there are few or no therapeutic options. Shire employed 11 permanent full-time staff and four people as contract part-timers in the last year, and they intend hiring another seven permanent full-timers over the next year. Their general manager, Dominic Barnes, tells me they have about three treatments available—two are currently being reviewed by the TGA—and they are intending to submit four more to the TGA this coming year. I mention this because this is precisely the kind of company I am sure is keen to take advantage of the government’s R&D tax credit. So are other pharma companies like Johnson&Johnson and GlaxoSmithKline. The J&J family of companies is headquartered in North Ryde. Their pharmaceutical company Janssen-Cilag Australia is built on research and development. GSK has its division in Melbourne, but it has its healthcare division in Ermington in my electorate. I am emphasising all this, Madam Deputy Speaker, because many roads lead back to Bennelong. What do these companies have in common and what are they like? There are several things. The fact is that ongoing compliance with this new system will be much simpler. The fact is that this legislation takes into account variable levels of investment from year to year. The fact is that it makes Australia as competitive as other companies or divisions of the same R&D companies in the US or the UK. In the case of Janssen-Cilag, this change to an R&D tax credit system will assist them to attract and employ more researchers to carry out early-stage pharmaceutical research on new molecules in diseases in areas like cancer and virology. It will mean more demand for local clinicians and allow R&D companies to at least maintain and possibly increase research in hospitals across the country. These companies have been supportive of a move to a tax credit for a number of years. They know that a tax credit is a better way of supporting real R&D and that many parts of our health sector will benefit—more so than under the previous scheme. Dr Anna Lavelle, the CEO of AusBiotech, is certainly on the record in this regard. Dr Lavelle represents around 3,000 member organisations in the Australian biotechnology sector. She has said this legislation is ‘good for the biotech sector and good for small innovative Australian companies’. In her submission to the Senate Economics Committee, Dr Lavelle said the following: Cognisant of the unique business model required by biotechnology, where significant funds are required often over many years and up-front before any return can be realised, the tax credit, especially the refundable credit, is vital if innovations and the start-up biotechnology industry are to thrive in Australia. The biotechnology, medical technology and pharmaceutical industries all believe the move to the tax credit is the right government policy, and best for Australian innovation - with spillover benefits to the Australia community in terms of jobs, economic growth and access to technological developments. Dr Lavelle went on to observe: … the move from the tax concession, which is not working for the industry as a whole, to the tax credit … will provide a much-needed lifeline. I note as well that in Dr Lavelle’s submission she said that her sector had lost 16 of its 128 listed biotech companies between 2008 and 2009—the height of the global financial crisis. She said: Any further delay will mean young innovative companies will not be able to access the refundable credit— and that would have adverse consequences. So biotech is undoubtedly our future, and the sector needs the support of the credit tax to replace the tax concession now. The Rudd government has no intention of jeopardising this vital sector—quite the contrary. Through these proposals we are providing much needed support. Let there be no misunderstanding about these incentives. They do not exclude R&D activities carried out in a production environment. It is not true that production trials are effectively excluded by the dominant purpose test. Manufacturers will still be able to claim core R&D activities that fall within the definition of an experiment generated for the purpose of acquiring new knowledge, and the dominant purpose test only applies to supporting R&D activities that are production activities. So the government have undertaken an extensive consultation process. We invited public submissions and there were two exposure drafts of the legislation. As a result of all of this, the government has made some significant changes. (Time expired) 5742 12:27:00 Scott, Bruce, MP YT4 Maranoa NATS 0 0 Mr BRUCE SCOTT —I rise on this Tax Laws Amendment (Research and Development) Bill 2010 and will be joining my colleagues in opposing it. It is a clear demonstration of this government’s inability to consult with key stakeholders, including small- and medium-sized businesses, and there are a couple of areas in my electorate that I want to discuss. I listened to the parliamentary secretary, and she seemed to be focusing on the very big end of town—international companies with their head offices located in other parts of the world rather than Australian companies, small- and medium-sized businesses. It is these businesses that I will focus on in my contribution. There is a lot of confusion and uncertainty with this legislation, and that has been a typical feature that we have observed of this government. There has always been little consultation with affected stakeholders. The exposure drafts were ushered through in the weeks before Christmas and Easter, but with this legislation going through the House this week, firms, companies and businesses will have just two weeks to read and understand the legislation and how it pertains to their process and industry before the new rules come into place on 1 July. There simply has not been enough consultation, information or education about what the new rules are and how they will be applied. That is why we are asking that the implementation date be delayed until at least July 2011 so that there is an adequate time for consultation with community, particularly with small businesses and of course the key stakeholders. Industry needs that time to deal with the impracticalities and the realities of how this legislation would apply, and the legislation does need to be amended. Perhaps the most blatant and adverse implication of this legislation is how it will erode incentives for R&D. Concerns have been raised by stakeholders that these legislative changes will be a disincentive to undertake R&D here in Australia; instead, it could well encourage a shift of R&D offshore. The dairy industry is just one stakeholder group which has voiced its concern. In my own electorate of Maranoa there is a significant dairy industry. This legislation is more about research than development and it will have a punitive impact on those companies which, through innovation, can refine and improve an existing product and make a better product. The bill limits R&D eligibility to the creation of new knowledge, which was acknowledged by the Parliamentary Secretary for Infrastructure, Transport, Regional Development and Local Government, rather than applied research and development. Let me touch on some issues that were raised by the Australian Dairy Products Federation, a very reputable body. As you would know, Madam Deputy Speaker Moylan, the dairy industry has been through massive deregulation, but it has always been at the forefront, moving forward, and R&D has been a key factor in bringing new products to the market. I will read into the Hansard some of the federation’s concerns, as outlined in its submission to the exposure draft of the legislation: Many different R&D outcomes are sought, for example new dairy products, new pharmaceutical applications of extracted milk factors and compounds, new processes and techniques to extract and process milk, milk by-products and fractions, environmental and sustainability driven developments, herd, pasture and on-farm development … This occurs across a range of products including … milk powder and cheese products, products such as infant formulas and specialised products including functional food products … and cosmeceutical products. These factors will complicate the application of new concepts, particularly where uncertainty exists. The submission goes on to say: The use of the term ‘directly related’ is ambiguous, and potentially creates an extensive nexus. Much of the (successful) R&D undertaken in the dairy industry will eventually lead to a viable commercial outcome, most likely in the form of a new or improved dairy product, or production process/technique that leads to improved dairy products, at some stage. Often this will not be readily discernable at the time of early stage R&D activities, (i.e. the results and/or likely success is not yet known). How direct the connection with the ultimate production needs to be is unclear and requires more clarity. That is an example of the uncertainty. An industry such as the dairy industry cannot decipher how this would apply. They understand the existing rules and they have worked with the existing rules. I put their concerns on the record. The Minerals Council of Australia wrote in its submission to Treasury on the exposure draft: Some innovations are revolutionary; others are marked shifts in what has gone before … Yet the government is dismissing that reality. The legislation significantly alters the definitions of ‘core’ and ‘supporting’ R&D. With its narrow definition of what constitutes genuine R&D, this bill will disqualify from assistance many forms of R&D undertaken by Australian businesses. I would like to give an example of a small business based in Dalby, in my electorate of Maranoa, which has voiced concerns about how the change to the legislation will affect its R&D projects. Dingo Australia is a privately owned manufacturer that has designed a very impressive mini-digger, the Dingo, that is sold not only in Australia but in many markets around the world, from the Middle East to North America. It is a product that has been developed through R&D in the town of Dalby. In its submission to Treasury on the first exposure draft of the legislation, Dingo used an example of a specific R&D project for putting tracks on the Dingo machine that would have qualified for the tax concession under the current legislation. The project involves innovative design amendments and testing to ensure that the product can perform in different conditions. It is important to be able to test a product before it is put onto the market—but even before you get to the test stage you have to do the R&D to see whether the innovation will work on the product in a practical sense. However, because it is not really considered ‘novel’ or ‘new’, it may be excluded from the assistance. The Dingo company has been in operation for 20 years and has produced over 7½ thousand machines in various forms. The machine has progressed over the years. Dingo has refined and developed it using R&D to create a safer and more efficient product that is very widely sought. But they have not stopped at that. It is just like the modern motor car. Manufacturers have not stopped developing the piston driven engine. Look at Toyota. It received R&D money from this federal government to produce a hybrid Camry here in Australia. I think the technology was developed in Japan, so the money went to Japan. The car may be manufactured here, but the R&D work was done offshore in another country. Dingo Australia, in Dalby, employ 90 people. When you consider the multiplier effect of 90 people, you have another 500 or 600 people who are employed because of those initial 90 jobs. Dingo have relied on investment in R&D. They spend something like 2½ per cent of their annual turnover on R&D. The other point they raised with me was that, with a turnover of $28 million, they regard themselves as an SME—a small and medium enterprise. The limit of $20 million on a small- and medium-sized enterprise they say is a joke and should be increased to at least $40 million. As I said, they are a small company that employs 90 people. There should be a distinction between a publicly listed company and privately owned companies with a turnover of less than $40 million. That is a classic example in a rural community of people with an idea putting it into a product and employing local people. They have been successful for 20 years. They are genuine in their concern about this legislation. It does require more time for consultation with key stakeholders. That is just one example, quite apart from the dairy industry’s concerns—and we all know just how the dairy industry has been under a lot of pressure from imports, particularly from New Zealand. Let’s make sure we keep our dairy industry at the forefront of new R&D and make sure that we in Australia, through our dairy farmers, are at the cutting edge of research and leading that research to make sure we stay in front of the game. So I put it to the minister: this legislation does not need to be rammed through before 1 July this year. Many of us on this side of the House see it as nothing more than a revenue grab. We should be making sure that industry has time to consult and put their points to the government. It is, after all, the businesses that take the risks. Let us make sure we encourage innovation and let us make sure we encourage Australian companies to be the innovators. Let us ensure that the benefits of this tax concession go to these Australian companies that are going to do that research right here in Australia so that we own the research and those companies are able to make sure that the products they make are not only competitive and more innovative and meeting a market need in Australia but also have the potential to be exported and be at the cutting edge always against our competitors who would want some of the markets that our exporters have been so successful over many years in getting a foothold into. In conclusion, I will be supporting my colleagues on this side of the House calling for more time and more consultation with the industry and key stakeholders. As it is drafted, I cannot support this legislation and I will be voting against it when it comes up for a vote today. 5745 12:40:00 Bird, Sharon, MP DZP Cunningham ALP 1 0 Ms BIRD —I rise to speak in support of the bills before us today—the Tax Laws Amendment (Research and Development) Bill 2010 and the Income Tax Rates Amendment (Research and Development) Bill 2010. I understand that several speakers on the other side have raised, as the member for Maranoa did, issues around their desire to see more time for consultation. In the detail of my speech I will go through the quiet extensive process that has been put in place to reach this point. I just make the observation that it seems to be a consistent theme from the other side these days to say that we need more time for consultation when really they just do not want to support reform. There is a clear indication, and the government strongly believes, that innovation is the primary driver of sustainable growth as well social wellbeing and therefore should be a priority for any government, as it is for this government. The bills before us are an important component of the government’s broader innovation agenda. The first schedule of the Tax Laws Amendment (Research and Development) Bill implements a more generous research and development tax incentive benefit for eligible activities, and it is better targeted towards research and development that benefits Australia than the existing tax concession system. Importantly, it should also be noted that the new scheme is also substantially simpler and is supported by improved administrative arrangements to make it more efficient. At the heart of the new incentives are two core components: the first is a 45 per cent refundable research and development tax offset for eligible entities with a turnover of less than $20 million; and the second is a non-refundable 40 per cent research and development tax offset for all other eligible entities. These changed rates are supported by a delivery mechanism that is clearer and by a better targeted definition of the eligible research and development activities. That will ensure that the incentive is available in the circumstances, consistent with the underlying rationale for government intervention, and that it delivers value for money for taxpayers. It is the intention of the government that the new research and development incentive will start on 1 July 2010 so that the benefits can be delivered as soon as possible. To this end the government has provided $38 million in the 2009-10 budget to ensure that AusIndustry and the ATO are equipped to assist taxpayers in adjusting to the new scheme as it comes into force. These new incentives are targeted at stimulating productivity growth and innovation throughout the Australian economy with the aim of building prosperity and competitiveness for the long term. The new 45 per cent refundable tax credit is equivalent to a 150 per cent tax deduction and is therefore a doubling of the current base incentive for smaller entities to expend money on research and development. This is important, as in so many parts of the country, including my own in the Illawarra, smaller and medium-sized businesses are often the driving force for growth in jobs and opportunities in our regions. The Treasurer and the Minister for Innovation, Industry, Science and Research indicated in announcing the reforms that approximately 5,500 small business firms could benefit from the incentive. The 40 per cent non-refundable tax credit is equivalent to a 133 per cent tax deduction and therefore raises the current base incentive for larger entities by one-third. These bills are based on extensive inquiries, as I indicated at the beginning of my comments, into building an effective incentive scheme to appropriately support research and development activities across the economy. In 2007—nearly three years ago now—the Productivity Commission released a research report entitled Public support for science and innovation. This report identified some issues with the existing scheme that hampered its effectiveness. Prior to that time, in the previous government, when I was a member of the House Economics Committee we took evidence from across industry about concerns they had about the effectiveness of the scheme as it existed. The Productivity Commission report identified that the criteria for the basic 125 per cent tax concession was not successful in screening out research and development that would have happened anyway, that the benefits of the existing incentive were not large and could in effect be negative, and that the net payoff from the concession could be substantially improved by maintaining access to the concession for small entities only. This report was followed in 2008 by the Cutler review. On 22 January 2008, Minister Carr announced a review of Australia’s innovation system and appointed Dr Terry Cutler to undertake the review. The report was released in August 2008 and was titled Venturous Australia: building strength in innovation. The Cutler review made several findings, including that the existing incentive should be changed from a tax deduction to a tax credit, that a 40 per cent tax credit should be available to larger entities and a refundable 50 per cent tax credit to smaller entities, that all research and development undertaken in Australia that meets the relevant definitions be eligible for tax credit and that research and development expenditure undertaken in Australia by foreign owned entities be eligible for the tax credit. On 12 May 2009 the government released its response to the Cutler review. The response outlined the government’s long-term innovation policy agenda and was titled Powering ideas: an innovation agenda for the 21st century. The government broadly accepted the intentions of the findings of the Cutler review and consequently announced the proposed new incentive, which was included as a budget measure in the 2010-11 budget. In announcing the government’s response the Minister for Innovation, Industry, Science and Research, Kim Carr, outlined that the government’s support for innovation and for competitiveness in our industries and companies was even more significant and important through the period of international instability that was the global financial crisis. As part of the overall innovation changes that this government has put in place, we have started an annual Australian innovation system report, which is intended to be an ongoing annual series providing information on the state of innovation in Australia. The first report has been published—for the 2010 year. The report makes the very important point about the integration of the innovation system in Australia. This bill goes to the issues around private companies investing in innovation and development supported through, appropriately, government programs. The report indicates the great importance of integration between the public and private sectors and also collaboration between them. I think it is worth repeating a comment made in the report under the heading ‘Research capacity and skill base’: Australia’s innovation performance is underpinned by its research capacity and skills base. Research in the public and private sectors creates new ideas which fuel innovation, while skilled workers drive innovation by turning ideas into new products, services and processes for the benefit of the economy and society. Indeed, these bills sit within that overall structure. I want to highlight in my contribution to this debate some real-life examples of that in my own area of the Illawarra. I am pleased to see in here Parliamentary Secretary Marles, who has played a significant role in the announcement of some of these. I have been very pleased to welcome him to the Illawarra. I will first outline for the House a program that is a tremendous example of the collaborative model, and that is the Cooperative Research Centres Program. The parliamentary secretary recently attended the Innovation Campus at the University of Wollongong with me and members not only of the university but also of industry to launch the Energy Pipelines CRC. This is a particularly exciting initiative. At that launching we had people from industry not only from across Australia but from industry internationally. This particular CRC will be located at the University of Wollongong. It is important to note that the CRC will receive $17.48 million over the 10 years of its operation. That will be complemented by significant partner cash from the private sector of around $70.6 million—a great example of the government and the private sector working together. The CRC’s aim is to deliver long-term safety and security for Australia’s energy sector, a task that could hardly be more important as we look around the world and see nations dealing with energy security and energy efficiency issues. Some of those from industry who were in attendance on the day said to me that—sadly—pipelines, because they generally are under the ground, out of sight, tend to be out of mind. It would be a great failing for a nation to take that view, because the reliability and security of our pipelines is so important to the provision of energy throughout the nation. In my own area, only very recently we saw an example of how disruptive a failure in the pipelines can be when we had a failure in the gas pipelines to the Southern Highlands area. The local ABC radio station had people ringing in and giving quite innovative feedback, I have to say, on how they were managing to get a shower or to make a cup of coffee. People were commenting on how much we take for granted our energy supply and how disruptive it is when it is no longer there. The cooperative research centre at the University of Wollongong will be working specifically around metals and materials development in order to provide not only cheaper, more efficient pipeline but also more reliable and secure pipeline. The development of that sort of expertise in Australia would be hugely valuable and no doubt important in placing us competitively on the international scene in this area as well. So I was very pleased. It is no surprise that in the Illawarra we combine the great development of manufacturing knowledge and skills from our years and years of involvement in the manufacturing sector—including and epitomised by BlueScope Steel, a tremendous corporate citizen in our area—with that driving house of research and innovation, Wollongong university. Marrying those two in such an initiative seems to me a tremendous outcome and something that will indeed place us nationally very well in innovation. The second development locally that I wanted to outline to the House was this. In March this year I participated in a groundbreaking ceremony at another facility, the Innovation Campus of the University of Wollongong. This was to establish the Australian Institute for Innovative Materials Processing and Devices Facility, funded by the federal government with a $50 million grant. That is another critically important facility contributing to innovating and working closely with industry in order to well position the country on innovation and commercialisation. Currently there are no facilities available in Australia to produce multifunctional materials at the scale and quantity required to bridge what the university describes as ‘the valley of death’ to commercialisation. The new facility that my colleague Jennie George and I turned the sod for at the Innovation Campus of the Wollongong university is due to be completed by March 2011. I would like to indicate that the Deputy Vice-Chancellor (Research), Professor Judy Raper, has been quoted as saying about this facility: Australia now has the opportunity to transform multifunctional materials research and be the world leader in this research and also in its commercialisation. The piece went on: Multifunctional materials (such as electromaterials that generate and/or transfer electric charge—an area where UOW is a recognised international leader—have the potential to solve many of the world’s health and technology problems. However, many such advanced multifunctional materials cannot be processed using conventional methods. Professor Raper said the challenge now— for the university— was to take these materials from fundamental research, through the proof of concept stage and into real world applications, novel fabrication, processing and to develop manufacturing methods. This is a truly fantastic initiative and I think it epitomises the intention of not only the university but the broader Wollongong community for the Innovation Campus and, indeed, for Wollongong to be a city of innovation. It is a really important outcome for our region but also for the nation as it builds upon those partnerships of meaningful research and engaging with industry. Only last Friday I again was over at the Innovation Campus to announce that $25 million had been granted by the federal government to establish a new facility. It will be titled the Retrofitting for Resilient and Sustainable Buildings facility. It is a really important initiative, where the university will be working to do research and, again, product development in partnership with Illawarra TAFE around the retrofitting of buildings for a more efficient energy future. This will be a tremendous new facility. It will develop evidence based practice in sustainable building technologies and design for Southern Hemisphere environments. This is really important in developing efficient methods for our environment rather than just taking Northern Hemisphere developed solutions, which may not always translate over particularly well. I was very pleased to attend the Innovation Campus. They assure me they still have more blocks of land available. Whilst we have had a tremendous investment over at that Innovation Campus in the 2½ years of the Rudd government, I look forward to more in the future. I want to conclude my comments in this debate by indicating that all of this fits together into an integrated approach by this government to innovation. Our world and the future of our nation in a highly competitive global economy will be heavily reliant on capacity in the development of knowledge and technology and pressured by emerging social and environmental issues. This will require us to ensure an efficient and effective national system that fosters and supports innovation across and between the public and private sectors. In the minister’s publication referred to earlier, Powering ideas, this government identified a number of critically important initiatives to best position our nation. The Prime Minister’s Science, Engineering and Innovation Council steers a whole-of-government approach to ensure integration of policy developments. This work will be supported by the research workforce strategy, which is currently under development, and the Innovation Metrics Framework to provide an evidence base for policy and review. These bills sit, importantly, within that comprehensive framework of innovation and, after a significant number of years of consultation and development, they should be supported by this parliament as an important part of our innovation future. I commend the bills to the House. 5749 12:58:00 Marles, Richard, MP HWQ Corio ALP Parliamentary Secretary for Innovation and Industry 1 0 Mr MARLES —Can I start by thanking the members who have contributed to the debate on the Tax Laws Amendment (Research and Development) Bill 2010 and the Income Tax Rates Amendment (Research and Development) Bill 2010. In summing up, I would like to start by saying that in the innovation and research and development space we need to look at what the Rudd government inherited after 11½ years of the Howard government. At the end of the Howard government, what we found in this country was a level of public expenditure on research and development that was simply inadequate and that was growing slowly. We had seen the private spend on research and development hit significantly by the reduction in the tax concession that was introduced at the outset of the Howard government, which meant that for the first few years of the Howard government we actually saw the private spend on R&D decline in Australia. Whilst it started to grow again in the latter part of the Howard government, by the time of its end we still found that the private spend on R&D in Australia was less than the OECD average. When you look at collaboration, which is regarded as the key driver of innovation, at the end of the Howard government we had a collaboration situation in Australia that was simply pathetic. Throughout the period from 2004 to 2006 Australia ranked stone motherless last within the OECD in terms of the level of collaboration between the private sector and the public research institutions. When you look at the spend on national knowledge, which is a statistic kept by the OECD, at the end of the Howard government Australia was spending about 3.9 per cent of GDP against the OECD average of 4.9 per cent. Again, between 1998 and 2003 that spend grew by a much smaller rate than what was occurring in the rest of the OECD. All of this was painting a picture of Australia being a cut-price, low-tech economy, which was driving wages down and taking Australia away from being a modern developed economy. On coming to government the very first thing that the Rudd government did in this area, as has been mentioned by a number of speakers in this debate, was to implement the Cutler review of Australia’s innovation system. That led to the policy statement of the government last year entitled Powering Ideas, which set forth a 10-year strategy on innovation within Australia. That was backed up by a significant increase in our spend in this area during the 2009-10 budget. We saw a 25 per cent increase in the spend on innovation, industry, science and research in Australia—the single largest increase in expenditure that this area has ever seen. We saw the raw figures go from a spend of $6.88 billion to $8.58 billion in that budget. When you look at the levels of public research, we see in the 2009-10 budget $1.2 billion more being spent than was spent in the 2007-08 budget. We see areas of activity to try to promote collaboration. For example, the Researchers in Business program, which forms part of Enterprise Connect, places in businesses young researchers at the cutting edge of technology so that collaboration and that sharing can occur. When you look at trying to improve the private spend on R&D, we have this raft of legislation, which deals with R&D tax credits. This is a critical plank in the strategy to improve the private spend on research and development in Australia. The very first aspect of this bill will cut out the wasteful expenditure which is going on in the current R&D tax concession program, which was implemented by the Howard government. A lot of what is being funded under that program is actually business-as-usual activities. It is not R&D in the sense of creating new knowledge or developing new products; it is just expenditure that would have occurred if there were no tax incentive at all. Take for example the customising of an existing software platform for your business. On purchasing the software program you would do that even if there were no R&D tax incentive. Clearly, that is not an efficient way to spend public money. What we seek to do through the R&D tax credits is make sure the expenditure is clearly focused on genuine R&D activities and not on business-as-usual activities. There have been assertions made from the other side that in tightening that definition the new scheme will not adequately cover development as opposed to research activities. That is simply not true. The object clause includes both research and development activities and refers to activities undertaken for the purpose of generating new knowledge in either a general or applied form. The development aspect of R&D is captured by the term ‘applied’, which is consistent with the approach taken in the Frascati Manual. The definition of ‘core R&D activities’ includes experimental activities ‘conducted for the purpose of generating new knowledge (including about the creation of new or improved materials, products, devices, processes or services)’. The expression ‘improved’ within ‘new or improved’ means experimental developmental activities. There has also been some comment on the dominant purpose test. The dominant purpose test is a well-defined concept that is commonly used in tax law. The explanatory memorandum states that ‘dominant purpose’ means ‘the prevailing or most influential purpose’. It is consistent with the terms used throughout tax law. Following the passage of this bill AusIndustry will produce an abundance of guidance material to assist firms to prepare their registration, including guidance on how the application of the dominant purpose test applies. In tightening this definition we have provided a much closer connection between core R&D research and this policy that supports that R&D activity so that at the end of the day what is being supported is genuine research and development. With the savings that come from that tightening of the definition we will be able to increase the base rate provided to those companies which are engaging in R&D activities in a very significant way. It will be 45 per cent for small businesses—businesses that have a turnover of less than $20 million—effectively doubling the rate of assistance from 7½c to 15c, and 40 per cent for other companies, which increases by a third, from 7½c to 10c, the effective rate of government assistance. It has been said by those opposite that in effect what is going on here is a revenue-raising measure. It has been asserted by the shadow Assistant Treasurer. That is patently ridiculous. The Treasury has costed the changes to the R&D tax credit and made clear that this is a proposal which is revenue neutral. Indeed, that was confirmed in the Senate Economics Legislation Committee’s report on this bill. That report absolutely took into account each of the key aspects of this bill: the increase in the base rates and the estimated change in the take-up of the R&D tax credit, as well as the abolition of the 175 per cent incremental tax concession and the tightening of the eligibility criteria. The R&D tax credit has a particular focus on small business by having the small business threshold. Under the old R&D tax concession scheme we had a situation where there were two million businesses that could potentially have availed themselves of a form of R&D and yet only 8,000 were doing so. We need to see more R&D conducted in small businesses, hence the focus on small business. We have also made sure that this is an R&D tax credit, that there is a credit nature to this proposal, which means that those businesses in a tax loss situation will still be able to get a credit in respect of the R&D activity they are undertaking. That is really important because quite often the R&D activity is taken at the beginning of the development of a product, when a profit may not necessarily be turned. Again, there have been assertions from the opposition in relation to the level of consultation around the R&D tax credit legislation. That is simply unfounded. The changes to the existing R&D tax concession were first canvassed in the independent review of the National Innovation System back in 2008. There has been an extensive program of consultation over the last 12 months. Industry has had numerous opportunities, including three rounds of public consultation and a Senate committee process, to participate. The government received over 380 submissions during these three rounds of consultation and held public hearings attended by 550 people. The government has made some significant changes where stakeholders have been able to make constructive suggestions for improvement. The coalition has also referred to drafting errors as a reason for delaying the passage of the bill. The Senate committee report did not identify any legislative drafting errors. A number of minor referencing errors in the explanatory memorandum were identified, and these have already been addressed in a correction to the explanatory memorandum tabled in this chamber back on 2 June. I will conclude in summing up by referring to a recent report by KPMG which ranked Australia as No. 1 in the world for incentives which foster R&D activity. The report states: This change is a result of Australia adopting a new R&D tax credit as of July 1st, 2010 … It goes on to state: For many R&D operations, such as spin-offs from larger firms or university research projects, the potentially refundable nature of these tax credits will represent a powerful incentive to structure within the defined revenue limits. The same report ranks Melbourne and Sydney as, respectively, the No. 1 and No. 3 cities in the world for their R&D tax competitiveness. In doing so, it places them ahead of places such as London and New York. This is a clear point of difference between the government and the opposition. We see the role of innovation as utterly critical to improving productivity within the workplace in Australia. Indeed, if you look at the history of productivity growth in Australia, which has inevitably been driven by Labor policies, this is the new frontier. Having a vibrant innovation space is what will see the next leap in productivity within this country. That is something that we are committed to; that is something that the Howard government utterly ignored and that the opposition are continuing to ignore. But it is critical for the development of our country’s economy, and a key plank in that is these bills. I commend them to the House. Question put: That this bill be now read a second time. 13:15:00 The House divided.     (The Deputy Speaker—Mr S Georganas) 72 Adams, D.G.H. Albanese, A.N. Bevis, A.R. Bidgood, J. Bird, S. Bowen, C. Bradbury, D.J. Burke, A.S. Butler, M.C. Byrne, A.M. Campbell, J. Champion, N. Cheeseman, D.L. Clare, J.D. Combet, G. Crean, S.F. D’Ath, Y.M. Danby, M. Debus, B. Dreyfus, M.A. Elliot, J. Ellis, A.L. Emerson, C.A. Ferguson, L.D.T. Fitzgibbon, J.A. Garrett, P. George, J. Gibbons, S.W. Gray, G. Grierson, S.J. Hale, D.F. Hall, J.G. * Hayes, C.P. * Irwin, J. Jackson, S.M. Kelly, M.J. Kerr, D.J.C. King, C.F. Livermore, K.F. Macklin, J.L. 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. Owens, J. Parke, M. Perrett, G.D. Plibersek, T. Price, L.R.S. 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. Swan, W.M. Symon, M. Tanner, L. Thomson, C. Thomson, K.J. Turnour, J.P. Vamvakinou, M. Zappia, A. 54 Andrews, K.J. Bailey, F.E. Billson, B.F. Bishop, B.K. Briggs, J.E. Broadbent, R. Chester, D. Ciobo, S.M. Cobb, J.K. Coulton, M. Dutton, P.C. Farmer, P.F. Fletcher, P. Forrest, J.A. Georgiou, P. Haase, B.W. Hartsuyker, L. Hawke, A. Hawker, D.P.M. Hull, K.E. * Hunt, G.A. Jensen, D. Keenan, M. Laming, A. Ley, S.P. Macfarlane, I.E. Marino, N.B. Markus, L.E. May, M.A. Morrison, S.J. Moylan, J.E. Neville, P.C. O’Dwyer, K Oakeshott, R.J.M. Pearce, C.J. Pyne, C. Randall, D.J. Robb, A. Robert, S.R. Ruddock, P.M. Schultz, A. Scott, B.C. Secker, P.D. * Slipper, P.N. Smith, A.D.H. Somlyay, A.M. Southcott, A.J. Stone, S.N. Truss, W.E. Tuckey, C.W. Turnbull, M. Washer, M.J. Windsor, A.H.C. Wood, J. * denotes teller Question agreed to. Bill read a second time. Message from the Governor-General recommending appropriation announced. 5753 Mr MARLES (Corio —Parliamentary Secretary for Innovation and Industry) 13:20:00 —by leave—I move: That this bill be now read a third time. Question agreed to. Bill read a third time. 5753 Bills R4355 5753 Debate resumed from 13 May, on motion by Dr Emerson: That this bill be now read a second time. Question agreed to. Bill read a second time. 5753 Mr MARLES (Corio —Parliamentary Secretary for Innovation and Industry) 13:21:00 —by leave—I move: That this bill be now read a third time. Question agreed to. Bill read a third time. 5753 Bills R4353 5753 Debate resumed from 12 May, on motion by Mrs Elliot: That this bill be now read a second time. 5753 13:22:00 Dutton, Peter, MP 00AKI Dickson LP 0 0 Mr DUTTON —I rise to speak on the National Health Amendment (Continence Aids Payment Scheme) Bill 2010. Whilst serious health and quality of life impacts of incontinence may not be widely recognised, it is an important area of health that has deservedly received government support over many years. The coalition government, in 1998, established and funded the National Continence Management Strategy. This important initiative provided funding for research and service development programs aimed at prevention and treatment. The Continence Aids Assistance Scheme, which the government will amend with this bill, has provided funding to assist Australians with permanent and severe incontinence to purchase continence products. The previous coalition government invested to expand the program on a number of occasions. Most recently, in July 2007, the coalition expanded the scheme to provide access to subsidised continence products for an additional 54,000 Australians with permanent incontinence. The 2007 budget measure expanded the program for people aged five to 15 years and those aged 65 years and over with a neurological condition causing incontinence as well as pensioner concession card holders and their dependants in those age groups with non-neurological causes of permanent incontinence such as dementia and prostate disease. Previously, the program had been available only to people of working age with a neurological cause of incontinence. The coalition’s expansion of the program trebled the number of people receiving assistance for continence products and provided those affected with the opportunity to remain active in their homes and communities. As a result of the changes in 2007, the coalition provided an additional $98.5 million over the forward estimates to assist Australians to access continence products. The bill before us today enacts the 2009-10 budget measure and provides a saving of $10.7 million over the forward estimates in the area of continence aids assistance. The bill amends the National Health Act to provide the minister with the legislative authority to create a scheme by means of legislative instrument that provides payments to eligible persons to assist with the costs of incontinence management products. The Continence Aids Payment Scheme will replace the Continence Aids Assistance Scheme. Under the assistance scheme, products up to the value of $489, indexed annually, were provided to eligible people with severe and permanent incontinence by a single supplier on behalf of the Department of Health and Ageing. Under the government’s new scheme, those eligible will now receive a direct payment into their nominated bank account and it is to be administered by Medicare Australia. According to the explanatory memorandum, the amount of the payment will be specified in the legislative instrument. The Department of Health and Ageing fact sheet indicates that the payment will equate to the current value available under CAAS—that is, $489 indexed annually. The government argues that the new scheme will provide greater choice to consumers, enhance competition and reduce administrative costs. For a person receiving assistance directly before the commencement date of 1 July 2010, under proposed section 3(3) of the legislation that person is entitled to receive a payment under the CAP Scheme for the financial year starting 1 July 2010, provided they supply the requisite details by 30 November. After 1 July 2011 the Medicare Australia CEO will be entitled to make eligibility decisions regarding the CAP Scheme. I note the department’s fact sheet states that the eligibility for the CAP Scheme will remain the same as it is now, and this is an essential point to underscore. It is claimed that people who are five years of age or older and have permanent and severe incontinence due to a neurological condition or caused by another specified condition will continue to be eligible. Unfortunately, this government has a terrible history of backflipping on major health promises and, understandably, many people are concerned about the government’s intentions beyond 1 July 2011 as specified in this legislation. According to the government, 55 per cent of people accessing support under the existing program are over 65 years of age. Many of these people will clearly remember the actions of the Minister for Health and Ageing on the cataract rebate and the Rudd government’s attempt to rip millions of dollars out of Medicare through a savage 50 per cent rebate cut. The people affected by the change to the National Health Act under this legislation will also recall it was Minister Roxon who on 26 September stated: Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private health Insurance rebates … As we know, they have now tried on multiple occasions to rip $2 billion out of health through changes to the rebate. Patients affected by this legislation are also in age groups affected by the Rudd government’s proposed and enacted caps to the Medicare safety net for macular degeneration. Varicose vein treatment and cataract treatment are part of the Rudd government’s attempt to rip another $450 million out of Medicare. Of course it was then opposition leader, Kevin Rudd, and health spokesperson, Nicola Roxon, who gave the iron-clad promise on 22 September: With about one million people each year receiving some cost relief from the safety net, federal Labor will not put more pressure on family budgets by taking that assistance away. These are just some of the reasons why the Rudd government, and this minister in particular, have lost the trust of the Australian people when it comes to their promises and in particular their promises in relation to health. It is certainly the case—and the Australian people now realise this—that the Rudd government’s word cannot be believed, particularly in relation to measures in the health portfolio. There have been concerns raised regarding the distribution of products and any additional associated costs for those eligible for the scheme. It is argued that increased competition as a result of the new scheme will ensure delivery costs will not be passed on to consumers. This may turn out to be the case but it does seem a big assumption. Also, many people receiving access to the scheme do not live in major metropolitan areas, so it is important that the government is able to give some assurances that their timely access to products will not be disrupted. There is a risk for some people on fixed incomes and pensions that a direct cash payment may be used to offset the rising cost of living in other areas. It would be a terrible situation if people are forced to forgo these important products to pay rising electricity costs or, indeed, basic food items. As I have outlined, the coalition strongly support appropriate assistance for continence products and recognise the important impact it can have on a person’s health and quality of life. That was our record when we were in government. That is our record now in opposition. We do have a number of concerns, though, regarding the Rudd government’s ability to implement this measure without disadvantaging eligible Australians. So, while we do not oppose this legislation, we will be monitoring very closely the Rudd government’s handling of this change and we put them on notice to that effect. Debate (on motion by Ms Macklin) adjourned. Leave granted for second reading debate to resume at a later hour this day. 5755 Bills R4347 5755 Bill returned from the Senate with request for amendments. Ordered that the requested amendments be considered immediately. Senate’s requested amendments— Schedule A (1)    Clause 6, page 9 (after line 15), after the definition of birth verification form, insert: born prematurely: a child is born prematurely if, at the time of the child’s delivery, the child’s period of gestation is less than 37 weeks. (2)    Clause 31, page 40 (line 8), after “(see Division 3)”, insert “or subsection (4A) applies to the person”. (3)    Clause 31, page 40 (line 32), after “(see Division 3)”, insert “or subsection (4A) applies to the person”. (4)    Clause 31, page 41 (after line 6), after subclause (4), insert:       (4A)    This subsection applies to a person if:               (a)    the person does not satisfy the work test in relation to a child; and               (b)    the person is the birth mother of the child; and               (c)    the Secretary is satisfied that either or both of the following subparagraphs apply:                     (i)    the child was born prematurely;                    (ii)    while the person was pregnant with the child, the person had complications or illness related to the pregnancy which prevented the person from performing paid work; and               (d)    the Secretary is satisfied that the person would have satisfied the work test if either or both of the subparagraphs in paragraph (c) had not applied. 5756 13:32:00 Macklin, Jenny, MP PG6 Jagajaga ALP Minister for Families, Housing, Community Services and Indigenous Affairs 1 0 Ms MACKLIN —I move: That the requested amendments be made. The Senate has requested that the House make amendments to the Paid Parental Leave Bill 2010 to modify the work test for women who experience a premature birth and/or are unable to meet the work test due to complications or illness related to their pregnancy. This request was initiated by the government in the Senate in response to concerns raised in the Senate committee inquiry about whether women who have premature births or pregnancy complications that prevent them from working will meet the work test. The government acknowledges submissions made by the National Foundation for Australian Women, the ACTU and the Shop, Distributive and Allied Employees Association on this issue. The Senate committee, in its report, recommended: … that the government examine the eligibility requirements … to ensure that … women who experience unexpected difficulties during pregnancy which may affect their ability to meet the eligibility requirements of the bill are able to access paid parental leave. The government is therefore moving amendments to the Paid Parental Leave Bill to modify the work test for women who experience a premature birth and/or are unable to meet the work test due to complications or illness relating to their pregnancy. These amendments will allow a birth mother to be eligible for parental leave pay where the department secretary is satisfied that she would have met the work test but for the premature birth of her child or pregnancy related complications or illness. The changes will ensure that women in these circumstances are not precluded from the Paid Parental Leave scheme because of unexpected developments in their pregnancy which prevent them from doing the amount of paid work they otherwise would have undertaken. The cost of the amendments is likely to be negligible. Many women experiencing pregnancy related illness or complications will have access to paid leave which already counts as qualifying work for the paid parental leave work test. The new provisions will ensure that the small number of women who may not have met the paid parental leave work test for these reasons will be able to access parental leave pay. It would not be appropriate for women who clearly have a genuine labour market attachment to be made ineligible in these sorts of situations. 5756 13:34:00 Billson, Bruce, MP 1K6 Dunkley LP 0 0 Mr BILLSON —I congratulate the minister on bringing these amendments forward. They have the complete and wholehearted support of the coalition. So as not to delay the passage of the bill through the parliamentary process, I will briefly highlight an amendment of particular interest to the small business community—the government’s agreement to the opposition’s request to have the department secretary continue to be the pay clerk, effectively, for this arrangement, indefinitely. PG6 Macklin, Jenny, MP Ms Macklin interjecting— 1K6 Billson, Bruce, MP Mr BILLSON —That is an issue that we are pleased we have got agreement on in that respect and we are encouraged by that. It is a great comfort to many in the small business community, and I thank the minister for her interest in and willingness to deal with that. 5756 13:35:00 Stone, Dr Sharman, MP EM6 Murray LP 0 0 Dr STONE —In relation to these amendments I will just say that we support the inclusion of women who may have those pregnancy difficulties and who do have an attachment to the workplace. We think they are very sensible amendments, and certainly they would be reflected in the paid parental leave plan that the coalition will introduce when we are in government. This is very important, and we commend these amendments to the House. 5757 13:36:00 Billson, Bruce, MP 1K6 Dunkley LP 0 0 Mr BILLSON —The minister has just corrected me, and I thank her for that. Just to put the record straight, it is the Senate that has so far agreed with the proposition we have put forward, and I would encourage the government in this place to consider embracing that very thoughtful proposition—that, if we are going to set up those systems for six months for the Family Assistance Office, it makes a lot of sense to keep utilising that investment rather than transfer the cost and compliance burden to smaller employers. Thank you. Question agreed to. 5757 Bills R4373 5757 Bill returned from the Senate with an amendment. Ordered that the amendment be considered at a later hour this day. 5757 Bills R4353 5757 Debate resumed. 5757 13:37:00 Neumann, Shayne, MP HVO Blair ALP 1 0 Mr NEUMANN —I speak in support of the National Health Amendment (Continence Aids Payment Scheme) Bill 2010. The member for Dickson was critical in his speech of the Rudd government’s initiatives in relation to health and aged care, but the problems he mentioned have not been the experience of the constituents in the electorate of Blair, which I have the honour to represent in this House. In our area there has been substantial investment in health and ageing—in the 2008-09 budget, the 2009-10 budget, and the 2010-11 budget, which we have recently passed. Incontinence is a real problem for some of our senior citizens and many in aged-care facilities and, while the member for Dickson was critical of what we are doing in relation to so much of the legislative agenda of the Rudd government, if he were to come to the electorate of Blair he would see in Ipswich and the rural areas outside significant investment in health, particularly in hospitals, such as the Ipswich General Hospital, and in aged-care facilities. We have some fantastic aged-care facilities in the electorate of Blair, such as Cabanda Aged Care at Rosewood, a rural area outside Ipswich City. The Rudd government is supporting 500 jobs in a $1.5 million election commitment to that facility. Another wonderful facility is Elim Village, part of the Queensland Baptist Care facility. Recently I was there to salute their service. There was a flagpole and a memorial set up there. There are many other fine facilities. Colthup Home in Ipswich is another great facility run by Queensland Baptist Care. Many of the residents in our aged-care facilities across Australia suffer from the terrible embarrassment and difficulties of permanent and severe incontinence. This is defined as a frequent and uncontrollable moderate to large loss of urine or faeces which impacts upon a person’s quality of life and is unlikely to improve with medical, surgical or clinical treatment regimes. The definition in the new scheme we are establishing is the same as in the old, but the legislation before the House is about improving open markets and flexibility and choice for those poor people who are suffering from this embarrassing problem. All of us in this place have relatives, and all of us in this place have had senior relatives suffering from illness, disease and other ailments. My father, who died earlier this year, suffered this problem significantly in the latter part of his life. He suffered from prostate cancer for seven years before he died in January this year, and I know the embarrassment, the difficulties, the troubles and travails that he had in his personal life as he went through the last 18 months of being bedridden and having problems of incontinence. This is a problem which affects the families, relatives and friends of politicians and all other people in Australia. It is a serious problem for many people in this country. I am pleased that the coalition is supporting this initiative as it deserves bipartisan support. We are introducing the Continence Aids Payment Scheme, which will replace the current Continence Aids Assistance scheme. The bill will allow the Minister for Ageing, the Hon. Justine Elliott, to formulate a Continence Aids Payment Scheme through a legislative instrument, as the member for Dickson said. It will allow the Commonwealth to make payments to eligible persons under that new scheme and will ensure an adequate process is put in place to facilitate the transfer of clients from one scheme to another and to provide information and news so that people understand what is happening. There will be a transition process. Power is conferred on the Secretary of the Department of Health and Ageing and the Medicare Australia CEO to request information in relation to the provision of payments under the scheme in order that there be an adequate and appropriate auditing of the scheme. The bill delivers on the commitment we made in the 2009-10 budget. The cost of such a scheme, obviously, has to be demand driven. People do not choose to suffer from this problem, and it causes them significant embarrassment and difficulties in their personal lives. The payment is made through a special standing appropriation under the National Health Act 1953. The National Health Act provides the legislative framework for the provision of services to the Australian public, whether they are medical, dental, pharmaceutical or other types of services. We are seeing a legislative change which will enable a new scheme to be put in place. The funding will be made available through the special appropriation. The CAPS payments will be up to $489.95 for the 2010-11 financial year and will continue to be adjusted, obviously, with indexation. We are providing greater flexibility and choice for recipients under this scheme. Currently, they are stuck with simply having to use one particular provider. This will provide more consumer choice. Consumers will be in a better position to control their destiny, and that is a good thing in the circumstances. The minister in her second reading speech made reference to the fact that promotion of consumer choice and control is consistent with the government’s Charter of Rights and Responsibilities for Community Care released in 2009. This is also a worthy aspect of the government’s legislative framework and agenda. There is a bit of mythology perpetuated by those opposite that Labor governments do not promote choice, do not promote competition and do not support open markets. I have never subscribed to that view. I think that is simply nonsense. Labor governments are every bit about improving the power of consumers and their ability to decide their destiny. Independence or autonomy is particularly important for individuals, no matter whether they are young or old, no matter whether they have sickness or injury and no matter whether they enjoy good health. The Continence Aids Payments Scheme is not a reimbursement scheme. Clients of the scheme will not be required to produce receipts. Of course, the CAPS payment will not affect a person’s income. Income tax exemption has been approved for CAPS. The Department of Health and Ageing will write directly to all existing clients under the old scheme to ensure that they understand and have information about the transition. Professionals such as doctors and other allied health workers associated with those patients or clients will also be notified. Intouch Direct, which is the sole provider for continence services under the old scheme, will continue to offer their services and products but they will suffer and endure what most other companies and businesses have to go through—that is, they will be faced with competition. Of course, clients can choose to purchase products from Intouch, if they wish to. The CAP Scheme is designed to help people with permanent and severe incontinence meet some of their costs. No government, coalition or Labor, has ever aimed to ensure that the full costs of a client of the scheme would be covered. The scheme provides assistance. It is a helping hand to those people who suffer from this problem. In the Department of Health and Ageing forward estimates on the financial impact of the changes to the scheme, the figures range from approximately $40 million to $46 million per annum over the next four years. I think that is a small price to pay to assist people who are suffering from this problem. This assistance will improve their life and lifestyle. It will allow them to enjoy recreational activities as well as other opportunities at home, outside the home and in the workplace. To provide people with choice and assistance is, I think, a decent and humane thing to do. It is the Australian thing to do. I welcome the fact that the coalition supports this legislation. It will support the lives of thousands of Australians who are suffering from this problem, and it will make a big difference in helping to ensure that they live their lives to the full and that they enjoy an abundant and fruitful retirement and that the years left in their life’s journey are also abundant and fruitful. 5759 13:48:00 Hartsuyker, Luke, MP 00AMM Cowper NATS 0 0 Mr HARTSUYKER —The Continence Aids Assistance Scheme has proven to be very important in providing the supplies needed to allow people affected by incontinence to live with dignity. Incontinence is a subject that is rarely discussed, despite it affecting a significant number of Australians. Incontinence affects up to four million Australians of varying ages and for a variety of reasons. According to the Continence Foundation of Australia, incontinence affects 20 per cent of Australian men and 37 per cent of Australian women. For many people, this condition is embarrassing and inconvenient. The Continence Aids Assistance Scheme helps to pay for the supplies needed to allow people to manage incontinence. Under the current scheme, eligible people with severe and permanent incontinence may receive up to $489.95 in incontinence products. The products are supplied by a sole provider on behalf of the Department of Health and Ageing. The National Health Amendment (Continence Aids Payment Scheme) Bill 2010 , which is before the House today, will allow the Minister for Health and Ageing to formulate a scheme to provide direct payments to eligible persons as a contribution towards the cost of incontinence products. Medicare will administer the new scheme, which is to be called the Continence Aids Payments Scheme, or CAP Scheme. The CAP Scheme is intended to give recipients more flexibility and choice and to promote competition. The bill also provides for a transition period to allow people currently under the CAAS to move smoothly onto the CAP Scheme. Given the Rudd government’s track record in service delivery, I very much doubt that the transition will be as smooth as the minister would have us believe. As a principle, the opposition supports measures that increase competition and that allow individuals to take greater control of their own lives. For many people, this change will be positive. However, I have recently been contacted by a group of local incontinence advisers and stomal therapy nurses who are concerned about the changes. The nurses are mainly concerned that the money provided under the CAP Scheme may not in some cases be spent on incontinence aids. The nurses are also concerned that the changes may lead to some people purchasing incorrect or inappropriate products for their individual circumstances, leading to an increased risk of falls or infections. The nurses also expressed concern about the increased stress and cost for carers who are responsible for managing a person’s access to incontinence products. There are also questions about whether the new CAP Scheme will make it more difficult for people to access the New South Wales Program of Appliances for Disabled People. Under the current arrangements, people who are living in New South Wales can access help through the state system once they have exhausted their allowance from the Australian government. The new CAP Scheme will make it more difficult to determine when someone has used their entire entitlement from the Commonwealth and it has the potential to result in some people being denied access to the state system for a period once they have used up their allowance from the Commonwealth. My office has been in contact with the North Coast Area Health Service for advice about how the new CAP Scheme will interact with the New South Wales system. I have been told that the details are yet to be worked out. With the scheme to come into operation shortly, we have a situation where the details are yet to be sorted out. I must say that this government has proven itself not to be good at paying attention to detail. In the overall scheme of the national health budget, this is a relatively minor program worth around $40 million each year, but lack of attention to the detail of this program is not isolated and is being repeated around my electorate. In the Cowper electorate, we have Coffs Harbour Health Campus and Kempsey District Hospital, plus hospitals at Maclean, Bellingen and Macksville and a multipurpose facility at Dorrigo. In the smaller hospitals, we have seen the North Coast Area Health Service continue to downgrade services and cut resources from smaller facilities. This has not only outraged residents from smaller communities but also placed extra pressure on the larger campuses, such as Coffs Harbour, as more patients are transferred there for treatment or care. I take this opportunity to acknowledge the great work of local communities who support their hospitals in Bellingen, Maclean, Kempsey, Macksville, Coffs Harbour and Dorrigo. In Bellingen, the Bellingen Health Action Group is very active and very supportive of their local hospital. I recently organised a meeting between the shadow parliamentary secretary for rural health, Dr Andrew Southcott, and the Bellingen hospital support group. Attending the meeting were Barbara Moore, Fiona Crosskill and Solvieg Larsen from the action group, Dr Deidre Little from the medical staff council, Mayor Mark Troy and council general manager Mike Colreavy. I also joined the Bellingen community in a public rally about the hospital on 15 May. The Bellingen group is genuinely concerned about the ongoing downgrade of services at its local hospital. In recent years we have seen maternity services withdrawn and the executive officer and director of nursing positions scrapped. There have also been ongoing concerns about plans to close the accident and emergency ward from 11 pm until 7 am. That is despite the fact that the emergency department in Bellingen handles around 30 emergencies each year involving triage 1 or triage 2 patients. Such cases require immediate treatment and therefore should not be delayed because the patient has to get to the Coffs Harbour Health Campus some 30 minutes away. As one of the hospital action group members said to me recently, these are lives that could have otherwise been lost. In the past few weeks, the North Coast Area Health Service have pledged not to close the emergency department at night and have flagged that they will restore maternity services. However, whilst these words are welcome, the Bellingen community knows that the fight is not over. Too often in the past we have had plenty of promises but very little action. The removal of maternity services at the hospital has highlighted how the area health service can say one thing and do the complete opposite. At Bellingen we have seen out-of-hours and on-call X-ray services cancelled and the use of the operating theatre severely cut back. The cutbacks and downgrading of services has had a spiral effect on the training and skills base of the staff. In the end, staff may have had no choice but to resign or seek work elsewhere. The treatment of the Bellingen community by the local area health service has been nothing short of deplorable. The bottom line with Bellingen hospital is that the Bellingen shire is flood prone. Last year was enormously challenging, with up to six floods in the Bellingen local government area. In many cases, Bellingen was cut off from Coffs Harbour. Having adequate health services at Bellingen hospital was therefore vital to treat those who needed medical assistance. The Bellingen River District Hospital services the Bellingen Valley and Dorrigo communities. For more than 108 years, it has done so in an excellent manner, but despite the growing population services are being eroded. Given the changes to the health system which this government has announced, the very least it could do is to ensure that there are no further services cut or positions abolished. Only last week, there were media reports that a further 80 jobs were being cut across the North Coast Area Health Service. That is why there is real concern that the Rudd government has come up with a political fix rather than reforms that will genuinely improve health services on the North Coast. Recently I called for an immediate cessation of ongoing costcutting in hospitals across the North Coast until the Rudd government explains how health services in the region will be managed in the future. It is clear that local communities are scared about what these changes mean for smaller hospitals. They are worried that the North Coast Area Health Service will continue to slash services and sack staff and that the proposed new hospital networks will only disadvantage smaller health facilities. If these proposed new networks are going to deliver better outcomes for regional communities, the slashing and burning must cease. That is why I join the Bellingen Hospital Action Group and remain vigilant to ensure vital services are restored and that there are no further downgrades, regardless of what the North Coast Area Health Service says. I know the North Coast community is also concerned that the Prime Minister’s health package is going to do nothing more than add another layer of bureaucracy. The recent federal budget set aside an additional $500 million for bureaucrats, which means an expanded federal layer of administration. That is more expenditure on desks than on beds. Instead of investing in beds, the government is investing in desks. Regardless of what the Prime Minister says, we must remember that under his new health agreement state governments retain control of the health-funding pool. We all know that it is the poor management of public hospitals by the state government which is the real reason why health services in New South Wales have descended into such a parlous state. One must question whether this new agreement will actually deliver meaningful outcomes on the ground or whether we are going to see more waste and more mismanagement. I previously touched on the downgrading of Bellingen hospital and its flow-on effect to the workload at Coffs Harbour Health Campus. Almost every day there is a shortage of beds at the Coffs Harbour Health Campus. One of the main reasons for this is that patients are not being treated at their local hospital but rather are being transferred to Coffs Harbour. As a result, the Coffs Harbour Health Campus is bursting at the seams and there is a lack of beds in the medical wards. This flows back into the emergency department where waiting times continue to blow out because the emergency department has nowhere to transfer treated patients. Doctors and nurses are being asked to do more with less and that places unsustainable pressure on our medical staff. In the end, patient care is suffering despite the best efforts of that very dedicated staff. One of the problems with the health bureaucracy is that they are quick to reject statistics and figures which are presented to them by hospital medical professionals, but at the same time they will embrace their own data if it provides some justification for reducing investment in services. For some time now the nurses at Kempsey District Hospital have put forward a logical case, supported by strong statistical evidence, that their emergency department should have an additional registered nurse on each shift. In recent weeks the local area health service has at least acknowledged the problem, but I believe the House should be made aware of the long battle which these nurses have endured just to get to this point. The Kempsey nurses have produced evidence which shows they are not receiving resources which reflect the number of presentations in the emergency department. I acknowledge the work of nurses such as Di Lohman, Jennifer Clarke, Jo Hensler and Linda Weir. I also acknowledge the tireless support of Mayor John Bowell, who has been an active supporter of the hospital for many years. Collectively, these people, along with many other colleagues, do a great job in representing the interests of health services in the Macleay Valley. The North Coast Area Health Service and the Minister for Health and Ageing have consistently ignored these people, despite the strong case that has been put. The area health service is guilty of treating Kempsey as a poor cousin of the Port Macquarie Base Hospital. In Kempsey, the nurses have comparisons of their hospital with similar hospitals where the difference in the number of presentations is 20 per cent yet the difference in the level of resourcing is 300 per cent. 10000 SPEAKER, The The SPEAKER —Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed. 5762 Ministerial Arrangements 5762 14:00:00 Gillard, Julia, MP 83L Lalor ALP Deputy Prime Minister 1 0 Ms GILLARD —I inform the House that the Prime Minister will be absent from question time today as he is attending the funeral of Sapper Jacob Moerland in Gayndah in Queensland. I am sure all members of the House would have Sapper Moerland in their thoughts on this very tragic occasion and would wish well to those who are attending the funeral. I will answer questions on behalf of the Prime Minister. The Minister for Veterans’ Affairs and Minister for Defence Personnel is also attending the funeral. The Minister for Defence Materiel and Science will answer questions on his behalf. 5763 14:00:00 Questions Without Notice 5763 14:00:00 5763 Bishop, Julie, MP 83P Curtin LP 0 Ms JULIE BISHOP —Mr Speaker, my question is to the Deputy Prime Minister. I refer the Deputy Prime Minister to the Prime Minister’s commitment that he would take personal control of the supertax negotiations with mining companies. Given that the Prime Minister did not even turn up to yesterday’s negotiations with the three largest companies, has leadership on this issue now been handed to the Deputy Prime Minister? 5763 Gillard, Julia, MP 83L Lalor ALP Deputy Prime Minister 1 Ms GILLARD —I thank the Deputy Leader of the Opposition acting for the Leader of the Opposition for the question. Of course, what the government has said consistently about the resource super profits tax is that there would be consultation with industry. We are actually in a process that started around two years ago with the Henry tax review and with the extensive consultations undertaken for the formulation of the Henry tax review, including the receipt of around 1,300 submissions. At the moment, there is consultation involving around 80 companies. Each of those consultations is important to the government. There was consultation yesterday involving the Treasurer and the resources minister, who met with the executives of BHP, Rio Tinto and Xstrata. I do not propose to go into any of the details of those discussions as they are confidential, but I do note that those discussions continue with the around 80 companies involved in the consultations. The government is seriously engaged in that process. Of course, it is appropriate for the Treasurer and for the resources minister as well as the Prime Minister himself to participate in these consultations and in the various meetings that are occurring. Each of those ministers, including the Prime Minister, is participating. 5763 5763 14:03:00 Cheeseman, Darren, MP HW7 Corangamite ALP 1 Mr CHEESEMAN —Mr Speaker, my question is to the Minister for Employment and Workplace Relations, Minister for Education and Minister for Social Inclusion. How does Australia’s current economic strength compare with that elsewhere in the world? How are Australians benefiting from this performance and are there any barriers to this continuing? 5763 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 Corangamite for his question—the first sensible one we have heard today. I know that the member for Corangamite, like all members on this side of the House, is desperately concerned that working Australians have the benefit of a strong economy and the benefit of work. We understand that, when working Australians lose their jobs, it can be a personal tragedy for them and for their families. During the global financial crisis and global recession that threatened this country, the government did what we needed to do to keep the economy going. This month we saw our unemployment rate decrease to 5.2 per cent and our GDP grow by 0.5 per cent in the March quarter. What these figures make clear—and they are particularly clear from the national accounts figures—is that our economic growth is being underpinned by stimulus spending. For example, take the Building the Education Revolution program alone, which is responsible for around a third of the economic activity in the non-residential building sector to April 2010. We should reflect one moment and compare this with the kind of unemployment rates being experienced overseas—the United States at 9.7 per cent, the eurozone at more than 10 per cent and the UK at almost eight per cent, representing a tragedy for literally millions of working people. As Australians, we know that in times past, when there have been economic difficulties, it has taken a long time for us to climb out of those economic difficulties, particularly a long time for us to see unemployment rates start to fall. In the 1990s unemployment climbed to 10.9 per cent and long-term unemployment peaked at more than 32 per cent. It took around eight years to fall back to pre-recession levels of six per cent. In the recession of the early eighties, the unemployment rate climbed to more than 10 per cent. It took five years to fall down to the pre-recessionary levels of six per cent. In these circumstances, we should be saying to ourselves and to each other that it is great for working families that we are already seeing unemployment fall following the economic downturn brought to this country by the global financial crisis and global recession. Opposition members interjecting— 83L Gillard, Julia, MP Ms GILLARD —Of course, I do not expect the opposition to indicate any interest in the jobs of working Australians, because if we had followed their strategy an extra 200,000 working Australians would have been out of work and we would have seen this nation in a deep recession. In addition to the tragedy of unemployment, there is also the loss of skills and the loss of the ability to give young Australians a start. If we look at earlier economic downturns—let’s look at the early 1980s—we saw a 28.7 per cent drop in the 1980s in apprenticeship commencements and it took five years to recover to pre-recession levels. In the 1990s there was a 35 per cent drop and it took 13 years to get to pre-recession levels. In this economic downturn, on the early data we can say we are already moving to returning to pre-recession levels. We do not want to see a generation of young Australians stranded. If we had taken the advice of the opposition, we would have seen that generation stranded. We would have seen more than 200,000 extra Australians out of work. In terms of analysing this advice from the opposition much has been made of their economic folly and their inability to analyse and respond to what needed to be done in the face of the global financial crisis and global recession. I think there is more at work here than simply that kind of economic folly. There is malice at work because they showed in government their complete indifference to working Australians, their job security and their needs by introducing Work Choices. In opposition, through denying economic stimulus, they continue to show that complete indifference to the needs of working families to have a job. 5764 5764 14:08:00 Hockey, Joe, MP DK6 North Sydney LP 0 Mr HOCKEY —My question is to the Deputy Prime Minister. I refer the Deputy Prime Minister to reports that the Minister for Trade has directed bureaucrats in his department to contact bureaucrats in other departments to find out what is going on within the government. Isn’t it an amateur hour government when the trade minister has to plead with his own bureaucrats to stay in touch with other bureaucrats because in this government it is the gang of four that makes all the decisions? 5764 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 shadow Treasurer for his question and note that it is based on the normal level of research the opposition does for question time. That is, they get out the newspapers, have a little read of them, spot an article, get out the scissors, clip it out and then bring it in and base the question on it. It is an act of pure genius that they are capable of reading the newspapers. I do not want to deny the shadow Treasurer an answer to his question based on his cut and paste, so the answer is as follows: the Minister for Trade attended a meeting of senior departmental staff of his department on 10 May in Canberra. He spoke to those staff and addressed a range of policy issues. As part of those remarks I understand that the minister urged the officials of his department to engage more closely with other departments and become more active in the policy development process and that is a good thing. DK6 Hockey, Joe, MP Mr Hockey interjecting— 10000 SPEAKER, The The SPEAKER —Order! The member for North Sydney has already asked his question. 83L Gillard, Julia, MP Ms GILLARD —The shadow Treasurer may want to just listen for one moment about his cut and paste. I am advised that the Sydney Morning Herald report of the minister’s remarks is not accurate. The shadow Treasurer may want to listen to that. The problem with cut and paste and the lack of original research is once again on display. 5765 5765 14:11:00 Rishworth, Amanda, MP HWA Kingston ALP 1 Ms RISHWORTH —My question is to the Minister for Health and Ageing. Will the minister update the House on the latest performances of our public hospitals in delivering more elective surgery and more doctors and nurses? Are there any impediments to this performance? 5765 Roxon, Nicola, MP 83K Gellibrand ALP Minister for Health and Ageing 1 Ms ROXON —I thank the member for Kingston for her question. As a health professional herself she always takes a particular interest in these issues. There is a lot of very good news in the latest report that has been released by the Australian Institute of Health and Welfare. It is showing good news for those families and Australians, the very many millions of them, who rely on public hospitals for their treatment, whether it is elective surgery, turning up in emergency departments or for a range of outpatient services. We are proud of the fact that, when the Rudd government was elected, we made commitments which immediately boosted funding to our hospitals. We were repairing an enormous amount of damage that was left by the Leader of the Opposition in his time as the health minister. The latest report from the Australian Institute of Health and Welfare shows that hospitals have started to benefit as the funding starts to hit the front line. This report shows that there has been a very big increase in the amount of elective surgery performed. If you want to compare the 2008-09 year of this report with the last year of the former government, 2006-07, when the Leader of the Opposition was the health minister, 38,000 additional elective surgery procedures have been undertaken. It surprises me that some of those opposite are murmuring because a large number of those 38,000 people would live in their electorates as they do across the entire country. It means they are not waiting as long as they used to for their surgery. Have a listen to these figures. Public elective surgery increased by 3.1 per cent. This is over and above the previous average increases, which might account for population growth of 1.7 per cent—a very significant increase. Importantly, the number of people who are waiting longer than a year for their surgery, the very long wait patients, has dropped from 4.8 per cent in 2004-05 down to 2.9 per cent in 2008-09. The Australian Institute of Health and Welfare report notes that this was the first year of the Rudd government’s targeted $600 million election commitment to improve access to elective surgery. That increased the number of Australians who are obtaining their surgery on time. Just as importantly, this report shows another significant jump, which I would have thought all in the House would welcome. This is in the number of doctors and nurses working in our public hospitals. There are now more doctors and nurses than ever before. In 2008-09, there were an additional 2,200 more doctors at work, an eight per cent increase from the previous year. We have also welcomed an additional 4,781 nurses, a 4½ per cent increase from the previous years. These new doctors and nurses are delivering more services to Australian families and to patients across the country. The report also notes—and I think particularly on this side of the House people will be interested—that the Commonwealth’s share of hospital funding increased for the first time in the decade in 2007-08 as the Rudd government’s election commitments started to pay off in hospital services. Of course, this means that our reform plans are starting to deliver more on-time surgery, more doctors and nurses and more funding for the front line. 9V5 Pyne, Chris, MP Mr Pyne —Where are they? Not in Adelaide. 83K Roxon, Nicola, MP Ms ROXON —Those opposite might actually start interjecting at this point because they know that this stands in stark contrast to the record of the Leader of the Opposition. He made it harder to access elective surgery. He cut $1 billion from our hospitals, never put a single cent into elective surgery, made it harder for Australians to access GPs by putting a cap on GP training places and left the country with a shortage of 6,000 nurses. Tony Abbott’s legacy was to make it harder for Australians to get access to public health services. 10000 SPEAKER, The The SPEAKER —The minister will refer to members by their parliamentary titles. 83K Roxon, Nicola, MP Ms ROXON —The Leader of the Opposition’s legacy made it harder for Australians to get access to public health services. The most depressing part about this is that the Liberal Party have indicated that we are about to go for another around. They want to cut another billion dollars out of our health services—from primary care, from e-health and now also from diabetes. What today’s report makes clear is that, if you do invest strategically, you can turn around some of the statistics of our public hospitals, but if you cut money, which the Liberal Party now say they want to do if they are re-elected, we will just go back to the bad old days. That is a risk Australians cannot afford. 5766 5766 14:16:00 Truss, Warren, MP GT4 Wide Bay NATS 0 Mr TRUSS —My question is directed to the Minister for Trade. I refer the minister to the answer he gave in this House on Tuesday to my question about his advance knowledge of the government’s great big new tax on mining when he said: … of course I was consulted. How does the minister reconcile this statement with reports today that he ordered his own department to consult better with other departments as he had been ‘surprised’ by the mining tax announcement? Why did the minister tell the parliament that he had been consulted when obviously he had not? Apart from the ‘gang of four’, how senior does a minister have to be before he knows what is going on in this government? 5766 Crean, Simon, MP DT4 Hotham ALP Minister for Trade 1 Mr CREAN —I thank the member for his question. I stand by my answer of last Tuesday. I repeat what the Deputy Prime Minister has had to say. The trouble with your side of the House is that there is no attention to detail, no capacity for creativity and the only thing you ever run off is what you read in the newspaper. You do not even go past the front page and then you do not even bother to check whether or not it is accurate. DK6 Hockey, Joe, MP Mr Hockey interjecting— 10000 SPEAKER, The The SPEAKER —Order! The member for North Sydney! Government members interjecting— NV5 Forrest, John, MP Mr Forrest —On a point of order, Mr Speaker: I draw your attention to the dreadful things you are being accused of, Mr Speaker, and ask you to direct ministers to address their remarks through the chair. 10000 SPEAKER, The The SPEAKER —I remind the Minister for Trade of the need to address his remarks through the chair. I assure the member for Mallee that my hide is getting thicker with each day that passes. DT4 Crean, Simon, MP Mr CREAN —Mr Speaker, it is true that I attended a DFAT retreat session— Opposition members interjecting— 10000 SPEAKER, The The SPEAKER —Order! The minister has the call. DT4 Crean, Simon, MP Mr CREAN —I do not think they are interested in the answer, Mr Speaker. Opposition members interjecting— 10000 SPEAKER, The The SPEAKER —Those on my left will come to order. The member for Canning! DT4 Crean, Simon, MP Mr CREAN —If they looked at the article, they would see that the session was on 10 May. So we are not just talking about a report on the front page today which is inaccurate; it relates to a discussion I had back on 10 May. It is also true that, while that discussion was Chatham House rules, I can confirm a number of things because it is important— Opposition members interjecting— 10000 SPEAKER, The The SPEAKER —Order! The Minister for Trade will resume his seat. A question has been asked. The minister is responding to that question and should be heard in silence. DT4 Crean, Simon, MP Mr CREAN —Thank you, Mr Speaker. It is important—because people are trying to misrepresent it—that I say a number of things on the record. It is true that I had a discussion with the department about the importance of interacting more with other departments of government. That is because we take the view that trade has implications beyond just trade negotiations, that we actually understand the economic dynamics of trade and the importance of having engagement across portfolios. That is a statement I have made on a number of occasions including in this House. I also believe it is important that within the department there is more interaction and engagement with the agencies of the department—with Austrade, AusAID and EFIC. What is not accurate is that I told departmental officials that I found out about the details of the Henry tax review and the changes to the timing of the CPRS legislation in newspapers. I did not say that to the media. 83P Bishop, Julie, MP Ms Julie Bishop —You said it on the radio! DT4 Crean, Simon, MP Mr CREAN —I said it on the radio, did I? I think the opposition needs to understand the importance of what it stands for. Let me go to this point because, as I understand it, the question that is asked— Opposition members interjecting— 10000 SPEAKER, The The SPEAKER —The Minister for Trade will again resume his seat. A question has been asked and is being responded to. People might be seeking an early mark. We might have to accommodate them. DT4 Crean, Simon, MP Mr CREAN —The truth is that had those on the other side bothered to read a statement that was put out by me earlier today they would have understood that point. But let me also go to what the thrust of this question is about. As I understand it—if I have this right—what we are being accused of is being a government that is not consulting with the full executive. 00AKI Dutton, Peter, MP Mr Dutton —With each other! DT4 Crean, Simon, MP Mr CREAN —Is that the nature of the complaint? 10000 SPEAKER, The The SPEAKER —The member for Dickson will leave the chamber for one hour under standing order 94(a). The member for Dickson then left the chamber. Government members interjecting— 10000 SPEAKER, The The SPEAKER —Members on my right are very lucky not to have been warned or dealt with. The minister will watch the reflections. DT4 Crean, Simon, MP Mr CREAN —Me? 10000 SPEAKER, The The SPEAKER —Sorry, not the minister at the dispatch box. I might just use this opportunity to say that it is a bit rich, when discipline is being exerted, for others to make it very hard at that time by intervening. It makes it very difficult for action to be taken. The Minister for Trade has the call and as I have said repeatedly throughout this question: a question was asked; the question was in order. The minister has been responding to that question but many people have not been bothered to listen to the response. DT4 Crean, Simon, MP Mr CREAN —I just remind the House that the thrust of this question was about the lack of consultation. Let me just remind the House about the Leader of the Opposition being forced to apologise, back in March, to his colleagues for failing to consult them on his plan to tax big business to fund a 26-week paid maternity leave scheme. This is the person who is accusing us of putting taxes up, and he not only introduces a tax increase of 1.7 per cent, he fails to consult. What has this got to do with it? It has got to do with the fact that you have no consultation. You are a sclerotic group over there with no creativity and no ideas— 10000 SPEAKER, The The SPEAKER —The minister will refer his remarks through the chair. DT4 Crean, Simon, MP Mr CREAN —and you come into the House accusing us of it! So what was the Leader of the Opposition’s statement, then? Mr Abbott, in defence of that failure— 10000 SPEAKER, The The SPEAKER —The minister will refer to members by their parliamentary title. DT4 Crean, Simon, MP Mr CREAN —The Leader of the Opposition’s answer to his failure to consult is: sometimes it is better to ask forgiveness than permission. The next time he wanted to go into his party room with a proposal for acceptance—this was the $10,000 stay at home payment for mums—rather than showing forgiveness they just rejected him. So do not come into this place and lecture us about lack of consultation. I said the other day that I was consulted in relation to the RSPT. I stand by that. What I do say is that this is a government that is united in the purpose of better returns to this nation of what the nation owns, and that is the resource base. 5768 5768 14:25:00 King, Catherine, MP 00AMR Ballarat ALP 1 Ms KING —My question is to the Minister for Families, Housing, Community Services and Indigenous Affairs. How is the government supporting families to make their own work and family choices? 5768 Macklin, Jenny, MP PG6 Jagajaga ALP Minister for Families, Housing, Community Services and Indigenous Affairs 1 Ms MACKLIN —I very much thank the member for Ballarat for her question, because on Tuesday this week 25,000 Australians delivered a very clear message to this parliament. Whether they were nurses, teachers, hospitality workers, construction workers, or students and their mums and dads and grandparents, they all signed a petition calling on each and every one of us—all of their elected representatives—to do the right thing and vote for Australia’s first paid parental leave scheme. Australian families have been waiting decades for paid parental leave, and now legislation for Australia’s first paid parental leave scheme is in the final stages of passage through this parliament. When the bill passes, Australia will finally catch up with the rest of the developed world and deliver this vital support for families. Under our scheme, eligible families will receive 18 weeks of paid parental leave, paid at the federal minimum wage. It will start on 1 January next year. Of course, the scheme designed by the government is fully costed and fully funded in the budget. It is fair to both businesses and families. This will be a huge win for Australian families. Parents will finally get the support that they need to stay home with their newborn babies. Of course, it means that children will get a better start in life. Businesses too will benefit. They will be able to retain their skilled workers and we will see particular advantages for seasonal workers, casual workers, contract workers and the self-employed. They will now get access to paid parental leave. For many of them it will be for the first time. One of the particular advantages of the government scheme is that families will have support to make their own work and family choices. Under our scheme parents will be able to transfer the leave so that mums and dads will have more options for balancing their work and family lives, because on this side of the chamber we recognise that in today’s families more and more dads want to be more hands-on at home. This is a historic reform. It has been a very long time coming, and it is this government that is going to deliver Australia’s first paid parental leave scheme. 5769 5769 14:29:00 Macfarlane, Ian, MP WN6 Groom LP 0 Mr IAN MACFARLANE —My question is to the Treasurer. Will the Treasurer guarantee that no worker in the mining industry or their family will be worse off as a result of the government’s great big new tax on the mining industry? 5769 Swan, Wayne, MP 2V5 Lilley ALP Treasurer 1 Mr SWAN —On this side of the House jobs, jobs and jobs go to the heart of our agenda—jobs, jobs and more jobs. If those on that side of the House had had their way last year, this country would have been in recession. But, because we took action to stimulate the economy and to support demand, jobs in this country have grown by 250,000 over the past year—something everybody on this side of the House is proud of. Where would this country be if those opposite had been in control? We would be in recession. When it comes to getting the big economic calls right, we on this side of the House got that call right and those on the other side of the House got it dead wrong. When I go to G20 meetings and sit down with finance ministers, they say— 9V5 Pyne, Chris, MP Mr Pyne —Mr Speaker, on a point of order: the Treasurer was asked to guarantee that miners and their families would not be worse off. 10000 SPEAKER, The The SPEAKER —Order! The member for Sturt will resume his seat. The point of order is on relevance no matter how he puts it, but he will not debate it. The Treasurer is aware of the requirement to relate his answer to the question. 2V5 Swan, Wayne, MP Mr SWAN —Central to the government’s reform agenda, central to the modernisation of resource taxation, central to the boost for superannuation, central to the investment in infrastructure and central to the cut in company tax is to support jobs and business in this economy. That is what is central to our agenda. I can absolutely guarantee that the rounds of reform that we are putting in place will grow our economy for the long term. What are we dealing with here? We are dealing with an opposition that mismanaged the last mining boom. As a consequence of their mismanagement, they put upward pressure on inflation and capacity constraints emerged in our economy. We on this side of the House are absolutely intent on making sure that we manage mining boom mark 2 so we maximise all of the opportunities that will flow from that for all of our citizens—and, of course, that includes supporting employment. Let us take the example of small business. If those opposite had had their way during the global financial crisis, tens of thousands of small businesses would have hit the wall and tens of thousands of people would have lost their jobs. What we are going to do now as the economy recovers is put in place a generation of reforms that will support economic growth, that will deal with capacity constraints, that will invest in infrastructure and that will make all of our companies much more competitive. What are those on the other side of the House saying about our proposal? They are saying that the mining companies in this country pay too much tax. Effectively they are arguing for a tax cut for the mining industry, plus they are going to increase the corporate rate by 1.7 per cent for all companies over a certain level. So there is a big tax out there, a very big tax slug from those opposite, for Australian corporates. We are asking some of the very profitable mining companies in this country to pay a fair share of their superprofits to the owners of those resources—the Australian people. As the price of commodities goes through the roof, those opposite have the extraordinary proposition that the Australian people should not get a fair share of it. DK6 Hockey, Joe, MP Mr Hockey —Mr Speaker, I rise on a point of order on relevance. He was asked for a simple guarantee—a simple guarantee. 10000 SPEAKER, The The SPEAKER —On the matter of relevance: the question might be couched in a way so the person asking the question believes that a direct answer or a short answer can be made, but in the past the precedent in this place has been that, because the only standing order that is relevant to answers relates to relevance, if the answer is relevant then it is okay. I wish to stress the point again that allowing a certain degree of debate in the question opens an avenue for things to be opened up. Where either a euphemism or a dysphemism is used for a policy of the government, it does open it up a little bit. 2V5 Swan, Wayne, MP Mr SWAN —We on this side of the House will not sit here and watch those windfall profits walk straight out the door. They have to be used to create employment and support businesses in this country to deal with the challenges that will flow from mining boom mark 2. We will not sit back and let that rip-off continue. We on this side of the House are determined to ensure that a fair system is put in place so we can grow our whole economy, all of our businesses can grow together, we can deal with our capacity constraints and we can support employment, particularly in small business. 5770 5770 14:35:00 Livermore, Kirsten, MP 83A Capricornia ALP 1 Ms LIVERMORE —My question is to the Minister for Infrastructure, Transport, Regional Development and Local Government. Why is investment in regional infrastructure in mining communities important? Is the minister aware of the position of mining companies on this issue? 5770 Albanese, Anthony, MP R36 Grayndler ALP Minister for Infrastructure, Transport, Regional Development and Local Government 1 Mr ALBANESE —I thank the member for Capricornia for her question and for her ongoing interest in infrastructure in her regional community in Queensland. The Minerals Council of Australia made it very clear when Mitch Hooke said on 26 May 2009: There are significant gaps in Australia’s export infrastructure and some of the nation’s existing capital is in a state of disrepair … …            …            … … too often governments in the past have abrogated their responsibility to local communities and thus constrained the investment that private sector has wanted to make. These are issues that are raised with us by state governments, by local governments and indeed by the private sector. We have argued that there is a great need for infrastructure investment, particularly in states such as Western Australia and Queensland. The Leader of the Opposition has argued that that is the job of the private sector—they are doing it all and there is no need for the government’s Regional Infrastructure Fund. I am asked about what the attitude is of mining companies. I certainly acknowledge that I receive continual representations. Just this week a letter BHP Billiton wrote to me on 11 June was received in my office, on 15 June. It goes to the heart of both infrastructure need and the government’s plan to address that infrastructure need. It says it all about why the Regional Infrastructure Fund is necessary. I will read some of the letter because I think it speaks louder than some of the rhetoric we are hearing in this debate: Dear Minister The purpose of this letter is to outline concerns in relation to an area on the Landsborough Highway that BHP Billiton Cannington Mine believes to be a significant hazard to all motorists. This highway is heavily travelled by large trucks and general motorists as well as the Cannington Mine personnel. It goes on to say: In February this year a Toll North truck carrying Cannington Mine concentrate was involved in a crash at Rutchillo Creek. It further goes on to say: This is the second event that we are aware of where a truck has crashed at this location. The previous event occurred on 28 October 2006 when a Mitchell Corp truck carrying gravel travelling south met another truck travelling north at Rutchillo Creek. Since the event in February this year, BHP Billiton Cannington Mine, working with Toll North, has undertaken research relating to road conditions and crashes in the area. The research indicates that a zone from Nora Creek through to Bull Creek is highly dangerous. And it goes on to say: It is our belief that this area represents a significant risk to all motorists using the road and that an urgent upgrade is required. It puts some of the debate that we are having at the moment in its proper context: that we know that the resources boom is putting real pressure on infrastructure and that has an impact on all those who work directly in the industry but also those who live around those communities. I acknowledge the fact that these are genuine concerns raised by BHP Billiton, as are other concerns raised by major resource companies and indeed by the trade unions that represent those workers, such as the Mining Division of the CFMEU, and the Australian Workers Union. If anyone was in any doubt whatsoever about the need to make sure we are in a position to invest in infrastructure in those regional mining communities, this letter says it all, in the words of BHP Billiton. I table the letter. 5771 5771 14:40:00 Ramsey, Rowan, MP HWS Grey LP 0 Mr RAMSEY —My question is to the Deputy Prime Minister. I refer the Deputy Prime Minister to this letter to shareholders from OneSteel Chairman Peter Smedley, and I quote from it: The Whyalla and Newcastle businesses in total employ approximately 4,000 employees and contractors. Any adverse impact on OneSteel also has flow on implications for our employees and these local communities in which we operate. Deputy Prime Minister, were you, as part of the kitchen cabinet, and was the Prime Minister, whom you are representing here today, aware of the implications of the superprofits tax on OneSteel’s steel-making operation when the Treasurer announced the tax in his budget? 5771 Gillard, Julia, MP 83L Lalor ALP Deputy Prime Minister 1 Ms GILLARD —I thank the member for his question. As the Prime Minister has made clear, and as the Treasurer has made clear even as recently as his answer to a question in question time today, obviously in considering the resource super profits tax we considered what was best for economic reform and economic growth in this country. The member raises with me the circumstances of businesses in his local community. Well, let us actually look at the resource super profits tax package, because the member might like to reflect on this question: is it in the interests of businesses in his local community to have a company tax cut? Is it in the interests of business in his local community to have the special tax benefits for small businesses? HWS Ramsey, Rowan, MP Mr Ramsey —Mr Speaker, on a point of order— FU4 Robb, Andrew, MP Mr Robb interjecting— 10000 SPEAKER, The The SPEAKER —Order! The member for Goldstein! HWS Ramsey, Rowan, MP Mr Ramsey —Mr Speaker— 10000 SPEAKER, The The SPEAKER —You will get the call when your colleagues allow you, I have to be frank. Now they are quiet, the member for Grey on a point of order. HWS Ramsey, Rowan, MP Mr Ramsey —Mr Speaker, the point of order is on relevance. The question asked if the Deputy Prime Minister was aware at the time they announced— 10000 SPEAKER, The The SPEAKER —The member for Grey will resume his seat. The member is allowed to rise on a point of order, and basically the only point of order he can raise is on relevance, but he cannot then cherry pick parts of his question. The Deputy Prime Minister is responding to the question. 83L Gillard, Julia, MP Ms GILLARD —I was asking whether the member for Grey may have reflected on the benefits for small businesses in his community of the new small business tax write-off arrangements that are in this package. Of course the government, in designing the resource super profits tax, considered what was appropriate to ensure that the nation benefited from this resources boom, that we still continued to see mining companies grow and make good profits, that we still continued to see working people who work in mining earn good wages and that we could see a fair share for the nation overall, including the companies and small businesses in his electorate as well as the working Australians whose superannuation would grow from nine to 12 per cent in his electorate. 5772 5772 14:44:00 Symon, Mike, MP HW8 Deakin ALP 1 Mr SYMON —My question is to the Minister for Resources and Energy and Minister for Tourism. Will the minister inform the House of the outlook for investment in the resources sector? 5772 Ferguson, Martin, MP LS4 Batman ALP Minister for Resources and Energy and Minister for Tourism 1 Mr MARTIN FERGUSON —I thank the member for Deakin for the question and in doing so remind the House that, yes, from Australia’s point of view the outlook for Australia’s resources sector has never been brighter. Opposition members interjecting— 2V5 Swan, Wayne, MP Mr Swan —They just keep talking the country down. 10000 SPEAKER, The The SPEAKER —Order! LS4 Ferguson, Martin, MP Mr MARTIN FERGUSON —Yes, Mr Speaker, all they can ever do is talk Australia down. Opposition members interjecting— 10000 SPEAKER, The The SPEAKER —Order! Those on my left will come to order. The minister will ignore the interjections. LS4 Ferguson, Martin, MP Mr MARTIN FERGUSON —We as a nation have always been rich in natural assets. The real issue is our capacity to develop those natural assets by putting the necessary reforms in place. In that context I remind the House that demand for Australia’s LNG is set to grow. One of the reasons is the tough debate this government took on 25 years ago about the introduction of a petroleum resource rent tax, which saw the biggest ever investment in Australia’s history—the Gorgon project of $43 billion—last year. Similarly, demand for our minerals continues to grow because of the growth in China—and we all have regard for the Indian market that is yet to come on. One of the reasons we are well placed is the key reforms that Labor in government took on in the eighties and the nineties. It was those reforms that well positioned Australia for the challenge that confronts us in the 21st century. Labor has always been up to standing up for reform in Australia. We have lost market share in the last decade because of the failure of the Howard government year in and year out to invest in infrastructure and to invest in the skilling of Australia. Just think about the reforms that set up Australia under the Hawke and Keating governments, reforms quite often opposed by the coalition because they are never interested in Australia’s national interests—they continually talk Australia down domestically and internationally. Let us go to some of those reforms: the floating of the dollar; embracing free trade and open markets globally; our engagement with Asia, which has given us the market opportunities in China and India; the issue of introducing productivity bargaining—something I know a little bit about—and the capacity to negotiate— 9V5 Pyne, Chris, MP Mr Pyne —Mr Speaker, I rise on a point of order. The member for Deakin asked the minister about the outlook of the resources industry in the future. He did not ask about a rewriting of the history of the last 30 years. 10000 SPEAKER, The The SPEAKER —Order! The member for Sturt will resume his seat. The minister is responding to the question. LS4 Ferguson, Martin, MP Mr MARTIN FERGUSON —Yes, Labor in government is proud of its reforming record. I understand why the coalition wants to run away from this debate, because it was never up to the tough debates about reforming Australia. I also remind the House of the importance of the savings and retirement income debate and introducing the superannuation guarantee. It is for those reasons that we have decided to take on another tough process of reform—the issue of Australia fronting up to the debate about a resource super profit tax, a profits based tax system, something that the minerals sector demanded that Australia put in place, something that was on the table for consideration under the Howard government, something that the Howard government ran away from and something that we are prepared to actually take forward to conclusion. This debate is about certainty. It is about fairly rewarding risk and it is about providing the Australian community with a fair return for the nation’s resources. Think about the broader aspects of this debate. Yes, it is about a new approach to a profits based tax system in Australia, but it is also about infrastructure. The Minister for Infrastructure, Transport, Regional Development and Local Government referred earlier today to demands by the Minerals Council of Australia for us as a nation to invest in infrastructure. Infrastructure, to the coalition, was not about fixing the Australian national railway system; it was not about investing moneys in Port Hedland roads; it was not about fixing Esperance port; it was about projects such as Tumbi Creek. We can all remember the ‘Regional Rorts’ program and the coalition’s approach to infrastructure. There we had a creek that drained itself, but what did the coalition do? It decided to allocate scarce Australian dollars to put in place a so-called draining opportunity. 9V5 Pyne, Chris, MP Mr Pyne —Mr Speaker, I rise on a point of order. The minister was asked about the outlook for the resources industry. He is now talking about— 10000 SPEAKER, The The SPEAKER —The member will resume his seat. I have got the point of order. 9V5 Pyne, Chris, MP Mr Pyne interjecting— 10000 SPEAKER, The The SPEAKER —The member will resume his seat! I have got the point of order but, if he wants to argue me out of agreeing with any part of his point of order, I am quite happy. PK6 Randall, Don, MP Mr Randall interjecting— 10000 SPEAKER, The The SPEAKER —The member for Canning can leave the chamber for one hour under standing order 94(a). The member for Canning then left the chamber. 10000 SPEAKER, The The SPEAKER —The minister will not stray as far as he has been and he will consider at this stage concluding his answer quickly. LS4 Ferguson, Martin, MP Mr MARTIN FERGUSON —Yes, Mr Speaker. I am talking about infrastructure and skilling and the associated processes of government. The coalition has referred to a few media articles in question time today. I have also come across an interesting media article, in the Australian of yesterday. It is about the member for Curtin, the Acting Leader of the Opposition. I think this really goes to the national interest debate at the moment. DK6 Hockey, Joe, MP Mr Hockey —Mr Speaker, I rise on a point of order. 10000 SPEAKER, The The SPEAKER —The member for North Sydney will resume his seat. The minister will relate his material to the question. LS4 Ferguson, Martin, MP Mr MARTIN FERGUSON —Mr Speaker, it goes to the serious question of consultation with industry. 10000 SPEAKER, The The SPEAKER —The minister will have to try harder. LS4 Ferguson, Martin, MP Mr MARTIN FERGUSON —I will show you, Mr Speaker. It refers directly to consultation with industry—yes, the member for Curtin’s consultation. It says: Forget the publicity shots next to Twiggy Forrest— 10000 SPEAKER, The The SPEAKER —Order! The minister must relate the material to the question, which was about the outlook of the resources sector. It was actually a very short question. LS4 Ferguson, Martin, MP Mr MARTIN FERGUSON —That is why the article goes on to talk about backroom discussions and consultations. 10000 SPEAKER, The The SPEAKER —Order! The minister will resume his seat. 5774 5774 14:53:00 Andrews, Kevin, MP HK5 Menzies LP 0 Mr ANDREWS —I refer the Minister for Housing to the report from Cement Concrete and Aggregates Australia, the representative body for the quarrying industry, that building materials will increase in cost under the government’s mining tax. I ask the minister: why is she supporting a great big new mining tax that will make housing more unaffordable for young Australians? 5774 Plibersek, Tanya, MP 83M Sydney ALP Minister for Housing and Minister for the Status of Women 1 Ms PLIBERSEK —It is terrific to finally have a question about housing affordability from the opposition, who took house prices from about four times annual income to about seven times annual income during their term in government. Honourable members interjecting— 10000 SPEAKER, The The SPEAKER —Order! The member for Menzies has asked his question and the member for Braddon is warned. 83M Plibersek, Tanya, MP Ms PLIBERSEK —Have a look at interest rates and the unaffordability that we saw because of interest rate increases that, when you were in government, you promised would never happen. Turning for a moment to the suggestion that has been made about the mining tax and housing costs, this is an absolute furphy that is being perpetuated once again by the self-interest of the opposition in league with their bosses, the mining companies—bought and paid for by the Australian mining companies. We know that what is affecting housing affordability is the huge investment that this government has made in ensuring that more homes are built. Half a billion dollars through the Housing Affordability Fund has helped thousands of Australian home buyers buy a more affordable home. Hundreds of thousands of blocks and homes are more affordable because of the Housing Affordability Fund. More than a quarter of a million Australians have been helped into a home of their own by the first home owner boost, seeing the largest proportion of first home buyers entering the market in decades. I will tell you something else. Honourable members interjecting— 83M Plibersek, Tanya, MP Ms PLIBERSEK —I will. I will tell you a lot more. If you had bothered to read beyond page 1 of the newspapers, you would have found that the ABS statistics for the March quarter on housing construction say that one in seven homes being built at the moment are being built— TK6 Southcott, Dr Andrew, MP Dr Southcott —Mr Speaker, a point of order on relevance: the question was on the impact of the great big— 10000 SPEAKER, The The SPEAKER —Order! The member for Boothby will resume his seat. The minister will be relevant to the question and the House will assist by actually listening to the answer. 83M Plibersek, Tanya, MP Ms PLIBERSEK —Mr Speaker, I will finish on this point. It is to say that if you look at the March quarter statistics from the ABS on housing starts you will find that one in seven homes are being built because of this government’s investment in stimulus—one in seven housing starts and one in seven housing jobs that would not have happened if you had been in government. 5775 5775 14:57:00 Owens, Julie, MP E09 Parramatta ALP 1 Ms OWENS —My question is to the Minister for Human Services and the Minister for Financial Services, Superannuation and Corporate Law. What challenges confront Australian women in building adequate retirement savings and what impact will the government’s tax and superannuation reforms have on the retirement incomes of Australian women? 5775 Bowen, Chris, MP DZS Prospect ALP Minister for Financial Services, Superannuation and Corporate Law and Minister for Human Services 1 Mr BOWEN —I thank the member for Parramatta for her question, and I acknowledge her support for her 55,500 constituents that stand to benefit from this government’s superannuation reforms. There is no question that there are challenges confronting Australian women in building adequate retirement incomes. Research released last year showed that the average payout for a woman on retirement was only $73,000 compared to $155,000 for men. As a result of this difference, men hold about 60 per cent of superannuation balances while women hold over 30 per cent. A report issued yesterday by the Melbourne Institute showed that women aged 55 to 59 are expected to live for 21 years in retirement despite having only adequate retirement incomes for two years. That is exactly the reason for the government’s reforms to superannuation—to bring in more fairness to the superannuation system in Australia. Our changes will result in increased retirement savings for 4.1 million women across the country, including 2.1 million women on lower incomes and 100,000 Australian women over 50 who will be able to access the improved concessions for top-up payments to superannuation. As I said before, the member for Parramatta can report to her constituents that she is supporting 55,000 of those constituents in getting better superannuation payments. But some members elsewhere in Sydney will have a more difficult task. Take, for example, the seat of Hughes. There, the Liberal candidate will need to report to the people of Hughes why he opposes 53,000 of them getting better superannuation benefits. He will need to justify to 27,000 women in Hughes why he stands against them getting better superannuation payments and why he opposes 7,500 women over 50 getting better superannuation benefits through increased superannuation concessions. That is what the Liberal Party will need to justify to the people of Hughes, and that is what the Liberal candidate for Hughes will need to explain to the people—why he stands against them getting better superannuation benefits. I think the impact of the government’s superannuation reforms were perhaps best summed up by Fiona Reynolds, Chief Executive of the Australian Institute of Superannuation Trustees, when she said: ‘It’s all about building a fair and just society that takes care of those who need it most, and those who say now is the wrong time—they were wrong 25 years ago when we introduced super and they are wrong now.’ I am asked about the impact of our tax reforms on people’s retirement incomes, and this is something those opposite have been very voluble about. They have been very vocal about the impact on retirement incomes. They have claimed that the resource super profits tax is a tax on the retirement incomes of Australians. I am sure every honourable member welcomed the report last week from the Association of Superannuation Funds of Australia which showed that the claims of the opposition are complete dross—complete dross; it hit them for six. As the Australian Financial Review said: … the ASFA position debunks a central claim in the mining industry advertising campaign against the resource super profits tax—that ordinary superannuation investors would suffer if the tax was imposed. So the opposition’s arguments that these reforms and this tax would damage retirement savings have been dismissed as scaremongering by those who would know best—those responsible for superannuation funds in Australia, the trustees and those who run the funds. The opposition say: ‘What would they know? They only run the superannuation industry.’ They know better. Well, the superannuation industry has got news for them: they are wrong. They are talking nonsense—more bad news for the opposition and their scare campaign on the resource super profits tax. But there is at least one member opposite who has received some good news. I am sure he is already aware of this, because he would be in his office, looking at his computer, checking it out at the moment—and I know many members on this side are concerned for the welfare of the member for Dickson! I can inform the House that during question time BHP has again been trading for more than it cost on the day the member for Dickson bought his shares. Again, he makes a much better investor than he would a minister, I think it is fair to say— 10000 SPEAKER, The The SPEAKER —Order! The minister will bring his answer to a conclusion. DZS Bowen, Chris, MP Mr BOWEN —I think it is fair to say the member for Dickson’s share campaign— Opposition members interjecting— 10000 SPEAKER, The The SPEAKER —Order! DZS Bowen, Chris, MP Mr BOWEN —has been a whole lot more successful than the opposition’s scare campaign. HWT Robert, Stuart, MP Mr Robert —BHP has lost 51c today, you goose! 10000 SPEAKER, The The SPEAKER —Order! The member for Fadden! DZS Bowen, Chris, MP Mr Bowen interjecting— 10000 SPEAKER, The The SPEAKER —Minister! The member for Fadden will withdraw. HWT Robert, Stuart, MP Mr Robert —I withdraw, Mr Speaker. 10000 SPEAKER, The The SPEAKER —It appears—I could not hear it—that the minister, when I at least knew he was talking, said something that has caused offence. He should withdraw. DZS Bowen, Chris, MP Mr BOWEN —I withdraw. 10000 SPEAKER, The The SPEAKER —I thank the minister. 5777 5777 15:03:00 Windsor, Antony, MP 009LP New England IND 0 Mr WINDSOR —My question is to the Deputy Prime Minister and it relates to the funding of aged-care providers and wage rates for aged-care workers. The Deputy Prime Minister would be aware that the Productivity Commission is to carry out an inquiry into aged care. While this inquiry is welcome, I ask: is the Deputy Prime Minister aware that recent increases to the cost of living of 2.9 per cent are not matched by the 1.7 per cent increase in care subsidies? Given that the smaller aged-care providers are currently financially stressed and that aged-care workers are dreadfully underpaid, does the government have any plans to overcome that situation or is it going to wait and delay action until the Productivity Commission reports? 5777 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 New England for his question and I am sure that his concerns about the circumstances of aged care in his electorate and more broadly are very genuine. I am of course aware of the issue involving the aged-care workforce, including aged-care nurses. As the member may know, the Australian Nurses Federation, very properly, has been raising this issue with members of parliament because it is concerned about the wages and conditions of people who work in aged care. It is also concerned about how these wages and conditions compare with alternative occupations for nurses and, consequently, what that means for the workforce in the aged-care sector. I think the member would acknowledge that these are complex questions, because costs in aged care end up being borne, of course, by government but they also end up being borne by individuals. They end up being borne by government and individuals in a circumstance where, as we all know, our society is ageing, people are living longer, the circumstances in which they want to live the remainder of their lives are changing and the demand, particularly for ever-increasing quality, is high. That means that there are lots of costs and complexities that need to be worked through. That is why we have got the Productivity Commission working on this question. Of course, we will continue to work in dialogue with the Australian Nurses Federation and others who properly raised these issues on behalf of the industry. As a government we have endeavoured to lift some of the pressures in aged care, particularly some of the pressures about the availability of capital, and you would have seen some of the measures that have been taken there in recent budgets. But I understand the member’s concern is genuine, and we will be continuing to work with the aged-care industry, including in his electorate. 5777 5777 15:06:00 Hayes, Chris, MP ECV Werriwa ALP 1 Mr HAYES —My question is to the Minister for Competition Policy and Consumer Affairs and Minister for Small Business, Independent Contractors and the Service Economy. Minister, how will the government’s tax reforms benefit small businesses and independent contractors; and are there any threats to these reforms, particularly for the communities of bayside Brisbane? 5777 Emerson, Craig, MP 83V Rankin ALP Minister for Small Business, Independent Contractors and the Service Economy, Minister Assisting the Finance Minister on Deregulation and Minister for Competition Policy and Consumer Affairs 1 Dr EMERSON —I thank my friend and colleague the member for Werriwa for his question and recall fondly working with the Macarthur Business Enterprise Centre and participating in a Werriwa small business forum to engage small businesses in the Building the Education Revolution program and other aspects of the economic stimulus package. In response to the question from the member for Werriwa, under the government’s tax reform package 25,000 small businesses on Brisbane’s bayside will benefit from the instant write-off of assets valued at up to $5,000, giving a very welcome boost in cash flow and a very strong incentive for those 25,000 small businesses to invest in productivity-raising assets. I can also advise the House that the small business companies on Brisbane’s bayside will benefit from the head start, the early start, on the reduction in the company tax rate made possible through the tax reform package as funded by the resource super profits tax. We know that anyone with any knowledge of Brisbane would know that the whole area of South-East Queensland is overwhelmingly a small business community. It is driven by small businesses, and nowhere is that more evident than in the bayside suburbs such as Alexandra Hills, Victoria Point and Wellington Point on Brisbane’s east. In that area, covered by the seat of Bowman, I can advise the House that there are no fewer than 11,676 small businesses. I can further advise the House that 96 per cent of all the businesses in that area are in fact small businesses and that amongst them there are 3,000 tradies. So it begs this question: why won’t the member for Bowman stand up for his local small business community? Why will he vote against the Rudd government’s small business tax breaks that are being funded by the resource super profits tax? I ask the member for Bowman further: why did he betray his local small business community by voting against our economic stimulus with more than $143 million going into his electorate? He voted against that. He voted against $3.3 million for the Redland City Council for 10 community infrastructure projects. He voted against projects in 34 different schools under the Building the Education Revolution program, including Alexandra Hills State School and Hilliard State School. I can advise the housing minister that he voted against 179 social houses being built in his electorate. I can tell the roads and infrastructure minister that he voted against fixing a black spot on the Beenleigh-Redland Bay Road. Why would you do that? He voted against jobs for tradies in his electorate. He voted against small businesses in his electorate. Why would you do that? The Liberal Party says that it is the party of small business—‘Look at us, we proudly represent small business’—and time and time again the coalition has voted against helping our small businesses, supporting our small businesses. Nowhere is that clearer than in the bayside suburbs of South-East Queensland where the member for Bowman has betrayed those small businesses. Given a choice between supporting Clive Palmer and supporting the 11,000 small businesses in his local electorate, what does the member for Bowman do? He supports Clive Palmer every time. Clive Palmer is a very wealthy man—hello, here’s Clive’s friend and defender. 83P Bishop, Julie, MP Ms Julie Bishop —Mr Speaker, I rise on a point of order on relevance. This personal vilification has nothing to do with the question. 10000 SPEAKER, The The SPEAKER —Order! The Deputy Leader of the Opposition will resume her seat. The minister will relate his material to the question. He will now quickly come to a conclusion as well. 83V Emerson, Craig, MP Dr EMERSON —Thank you, Mr Speaker. Clive Palmer is a wealthy man. He owns a very big mining company. Clive Palmer owns a football team. And Clive Palmer owns the Liberal and National parties. That is the truth of the matter. 9V5 Pyne, Chris, MP Mr Pyne —I rise on a point of order, Mr Speaker. 10000 SPEAKER, The The SPEAKER —Order! I really believe that this is something that has to be dealt with through other avenues open to members within the chamber, based on analogous situations throughout the history of the place. 9V5 Pyne, Chris, MP Mr Pyne interjecting— 10000 SPEAKER, The The SPEAKER —Order! The member for Sturt always makes it very difficult. 5779 5779 15:13:00 Gash, Joanna, MP AK6 Gilmore LP 0 Mrs GASH —My question is to the Minister for Education. I refer the minister to a media report that the Reed Group has been awarded a $1 million bonus for building 10 prefabricated libraries, each of which will cost almost twice as much as those built for Catholic schools in New South Wales. Does the minister agree with Kylie Gorton, President of the Parents and Citizens Association at the Stroud Public School, that, ‘We did not get value for money,’ and, ‘The government needs to be held accountable for this complete misuse of taxpayers’ funds’? Why isn’t the minister as angry as Ms Gorton and why do you not take real action to stop the rorts rather than hide behind your toothless task force? 5779 Gillard, Julia, MP 83L Lalor ALP Deputy Prime Minister 1 Ms GILLARD —I thank the member for her question. Of course, we are still waiting for her to stand up for her electorate and particularly for the trades training centre that she seeks in Vincentia. Once again, what we are seeing this action from the opposition—except, I would have to give it to the shadow Treasurer that at least, when he is going to base his question on newspaper reports, he gets them out of the newspaper reports that day, which probably implies that the shadow Treasurer reads his newspapers every day. But what the member for Gilmore has done is base this question on a newspaper report from a number of days ago. What the member may want to know—and the problem, of course, with just reading the newspaper and then assuming that without any further research one should rely on it and use it for question time—is that the matters in that report have already been dealt with by the New South Wales department. In particular, I am advised that the New South Wales department has made it absolutely clear that the claims in that report that somehow money—those incentive payments—is being conveyed is not right. Incentive payments are there and they can be paid if projects are brought in in accordance with certain project milestones. The report also has, from my recollection, sources of estimates rather than any other source of information. Honourable members interjecting— 10000 SPEAKER, The The SPEAKER —The question has been asked. The Deputy Prime Minister is responding to the question. I would have thought that the House would listen. 83L Gillard, Julia, MP Ms GILLARD —Can I indicate to the member that the things that she has asserted in her question as fact are simply not correct. Can I also say to the member: I, like her and like members in her electorate, including the parent representative that she quotes, am very concerned to get value for money. That is why I, as minister, and the Rudd government have appointed the Building the Education Revolution Implementation Taskforce to assist schools with value for money. If the member wishes this matter or any other matter to be dealt by the implementation task force then she is more than welcome to take that course. What I would say to the member in terms of the framing of her question and what I would also say to the shadow minister relating to a report in today’s paper is that I do not believe it is appropriate, whatever the opposition might think about the Building the Education Revolution, to have members of the opposition vilifying people serving on the task force and making assumptions about the task force. 9V5 Pyne, Chris, MP Mr Pyne interjecting— 10000 SPEAKER, The The SPEAKER —The member for Sturt is now warned. 83L Gillard, Julia, MP Ms GILLARD —The task force is led by a leading Australian businessman, Brad Orgill. He is doing, in my view, a very good job. He was the leader of UBS. That is a major, major corporate appointment in this country. I think it is pretty cheap indeed, regardless of political persuasion, to be making assertions about the work of Brad Orgill. It was included in the member’s question today. It is included in quotes from the shadow minister for education in today’s newspaper. I think it is completely inappropriate and quite wrong. So, if the member wants the task force led by a very high calibre Australian to deal with any of these issues, of course she is welcome to do so. 5780 5780 15:18:00 George, Jennie, MP JH5 Throsby ALP 0 Ms GEORGE —My question is to the Minister for Housing and Minister for the Status of Women. What are the government’s housing programs delivering in south-west Sydney? Are there any risks to the delivery of these and other government programs? 5780 Plibersek, Tanya, MP 83M Sydney ALP Minister for Housing and Minister for the Status of Women 1 Ms PLIBERSEK —I want to first thank the member for Throsby for her question. I know that she cares deeply about the social housing that is being constructed in her electorate from the stimulus spending in education and community projects because she has been a fierce and effective advocate for the people of the Illawarra. She is a supporter of the new services and the new buildings that are being constructed and, very importantly, the new jobs that go with them in the Illawarra. But she has asked me about south-west Sydney, and I am pleased to be able to say that I was in south-west Sydney the other day, visiting the electorate of Macarthur. I wanted to have a look at some of the terrific new stimulus spending on public housing that is happening in the electorate of Macarthur and particularly in the suburb of Rosemeadow. I had a look at a 57-unit development that is being purpose-built for seniors in Rosemeadow. No doubt the member for Macarthur has seen it. The units have been designed for seniors with all of the features that they need—grab rails in the bathrooms, detachable hand-held shower heads, wide corridors for walkers and wheelchairs, as well as six-star energy efficiency rating. The cost of living in these properties is lower because the energy bills are lower. Very importantly, this new construction is supporting jobs in the area. We were shown around the site by Steve Fussell, the project manager for Watpac Ltd—a construction company that is working on projects right across New South Wales. Steve told us that on an average day there would be about 60 people working on this site—that is, 60 people who would not be working on that site if the member for Macarthur and all of the members opposite had had their way on stimulus spending. Steve said that he had worked through other downturns and has had to lay people off. He knew the difference between laying people off and putting people on, which is what he had been doing during the downturn. We met Martin Munro, the National General Manager of Watpac, who told us that the stimulus plan had got it right and that, because private construction work had not fully recovered, the work that they were getting from the stimulus package was more important than ever. If you have a look at those ABS statistics that I mentioned to the shadow minister for housing—he is not paying much attention now, obviously—you will see that one in seven of the private dwellings being constructed are either public housing, funded through the stimulus, or private dwellings bought off the plan and also part of the stimulus package. All those jobs would not be there if the opposition had had their way on the stimulus package. When it came to the stimulus, it was not just housing they opposed. Look at what was happening in Macarthur when the member for Macarthur and all of the members opposite opposed all of those other stimulus measures. They did not want the one in seven homes to be constructed. They do not want the 51,000 working people of Macarthur to benefit from the superannuation increases that they would achieve if the resource super profits tax is passed. They do not want the 8,436 small businesses in Macarthur to benefit from the instant write-offs of up to $5,000. They do not want those 8,436 small businesses to benefit from the drop in the company tax rate from 30 per cent to 28 per cent. They did not want the schools of Macarthur to benefit from the 141 projects and the $114.3 million being spent on school— HK5 Andrews, Kevin, MP Mr Andrews —On a point of order, Mr Speaker: this was a question from the member for Throsby about housing in south-west Sydney. For the last 30 seconds, this answer has had nothing to do with housing in south-west Sydney. BV5 Adams, Dick, MP Mr Adams interjecting— 10000 SPEAKER, The The SPEAKER —Order! The member for Lyons is warned. The construction of the question goes to the risk to ‘these and other government programs’, which might be considered to allow some wriggle room. However, I do not think that too much comfort should be taken that a minister can, on that basis, talk about every government program. So I would ask that, having got this far, the minister goes to her conclusion. 83M Plibersek, Tanya, MP Ms PLIBERSEK —I am referring to these programs because they are also part of the Nation Building Economic Stimulus Plan along with the social housing package. It is distressing that the members opposite not only do not want to hear about what is happening in the electorate of Macarthur but also actually voted against jobs in the electorate of Macarthur. They voted against computers in schools—a thousand computers for the schools of Macarthur. They voted against $1½ million for three black spot projects in the electorate of Macarthur. They voted against 25 community infrastructure projects. HK5 Andrews, Kevin, MP Mr Andrews interjecting— 10000 SPEAKER, The The SPEAKER —Order! The member for Menzies will resume his seat and the minister will conclude her answer. 83M Plibersek, Tanya, MP Ms PLIBERSEK —I am concluding, Mr Speaker— Opposition members interjecting— 83M Plibersek, Tanya, MP Ms PLIBERSEK —and I take advice from the Speaker, not from you. The Liberals opposed all of these projects—these new homes, these computers in schools, these school upgrades, these park upgrades and these road upgrades—and they opposed every single one of the jobs that went with them. 5781 5781 15:26:00 Markus, Louise, MP E07 Greenway LP 0 Mrs MARKUS —My question is to the Minister for Home Affairs. I refer the minister to the fact that, since the introduction of the assessment freeze for Afghan and Sri Lankan asylum seekers on 9 April, 31 boats and 1,418 people have arrived. Given that boats are arriving at the rate of more than three a week and people at the rate of more than 630 a month since this decision was taken—an increase of more than 200 per cent on last year—does the minister stand by the government’s budget forecast of a 60 per cent reduction in boat arrivals in the next financial year? 5781 O’Connor, Brendan, MP 00AN3 Gorton ALP Minister for Home Affairs 1 Mr BRENDAN O’CONNOR —I thank the honourable member for her question. I am still waiting for the relevant shadow minister to ask me a question on border protection and on this particular issue this year. As the Minister for Immigration and Citizenship, the Minister for Foreign Affairs and I said on 9 April, we had been looking at whether there were changed circumstances in Afghanistan and Sri Lanka. As a result and based on the advice we had received, the government made the very important decision to suspend the processing of people seeking asylum from those two countries. As was said at the time, we did not suggest that the boats would necessarily stop. We understand—as does the opposition if they are fair dinkum—that this issue is driven primarily by international factors. That is what was said by the previous government and that is the case now. As a result of conflicts around the world and within our region, because of violence in Afghanistan, because of the conflicts within Sri Lanka, we have seen an increased number of vessels seeking to come to our shores. That is why this government has dedicated more resources than any other government when it comes to protecting our borders. As a result of that—here comes big mouth. E3L Morrison, Scott, MP Mr Morrison —Mr Speaker, on a point of order that goes to relevance: the minister was asked whether he stood by the 60 per cent decline— 10000 SPEAKER, The The SPEAKER —The member for Cook will resume his seat. 83Z Irwin, Julia, MP Mrs Irwin —If you are going to write the question, why don’t you ask the question? 10000 SPEAKER, The The SPEAKER —Order! The member for Fowler will leave the chamber for one hour under standing order 94(a). The member for Fowler then left the chamber. 10000 SPEAKER, The The SPEAKER —The House will come to order. The minister is responding to the question and I indicate that this has traditionally been an issue that has seen a lot of emotion in the House. I think that, if people have very firm views on this subject, they should perhaps sit there quietly and take a considered reflection on the matters at hand. The minister has the call. 00AN3 O’Connor, Brendan, MP Mr BRENDAN O’CONNOR —As I was saying, this government has dedicated more resources to deal with this matter than any previous government. If we were to accept the logic of those opposite that there was an increased number of arrivals as a result of something that was done by this government then one would have to conclude that the Howard government did something in 1999, because the greatest surge of arrivals in our history happened under the previous government. That is the reality. They like to pretend otherwise, but the greatest number of arrivals and the largest year of arrivals, as the former minister for immigration and the former Attorney-General know, happened under the previous government. We know that this is a complex issue. Everybody in this House, if they want to be fair dinkum, knows it is a complex issue. In relation to the question that has been asked, of course we are working very hard with our neighbours within the region. We are working very hard with transit— 10000 SPEAKER, The The SPEAKER —The minister will resume his seat. The member for Goldstein on a point of order. FU4 Robb, Andrew, MP Mr Robb —Is this budget a house of cards or do you stand by the number? 10000 SPEAKER, The The SPEAKER —Order! The member for Goldstein knows that he approaches the dispatch box for a point of order; he does no go to the dispatch box to make a point. He will leave the chamber for one hour under standing order 94(a). The member for Goldstein then left the chamber. 00AN3 O’Connor, Brendan, MP Mr BRENDAN O’CONNOR —We know this is a very difficult issue. That is why we are working very closely with transit countries and source countries in the region and that is why we have been working very closely, for example, with the Indonesian National Police. I can say that, as far as reducing the flow of those seeking to come to our shores goes, we have had a disruption of almost 5,000 within Indonesia and other countries, preventing them from embarking on perilous journeys. That is because of the good work that was undertaken by the Australian Federal Police in conjunction with the Indonesian National Police. We will continue to do whatever we can to tackle this very complex issue. Can I say in conclusion that it is entirely phoney for those opposite to pretend that this issue can be resolved with a silver bullet. I know there is a myth that has been perpetuated by the opposition, but the facts are these: the actual decline in numbers that occurred 10 years ago happened because of the greatest repatriation of asylum seekers since World War II, when 4.3 million people returned to Afghanistan in six years and many returned to Iraq as a result of changing circumstances. In the end, this matter will be solved through regional cooperation and global cooperation of transit countries and source countries. That is why I am confident that we will be able to resolve this matter through the efforts of our agencies and the cooperation of those countries within the region. 5783 5783 15:35:00 Hale, Damian, MP HWD Solomon ALP 1 Mr HALE —Mr Speaker, my question is to the Minister for Agriculture, Fisheries and Forestry. How is the Northern Territory cattle industry helping to close the gap between Indigenous and non-Indigenous Australians? 5783 Burke, Tony, MP DYW Watson ALP Minister for Agriculture, Fisheries and Forestry and Minister for Population 1 Mr BURKE —I thank the member for Solomon for raising what is an important issue. The government’s commitment to jobs and job creation goes across every portfolio. Members would be aware of the particular challenges in some of the more remote parts of the Northern Territory, where for generations people had jobs without fair wages and in recent years fair wages have been available but not many jobs. The commitment from the government, through what has been a relatively modest program delivered in a partnership between my department and the Indigenous Land Corporation within Minister Macklin’s department, has been to work cooperatively with the Northern Territory Cattlemen’s Association. We have a window of opportunity at the moment where some of the old stockmen and women are still alive and some of the people who are able to act as mentors for young people coming through are still with us. If we can make the connections with the cattle stations for the training and employment, we can actually close the gap in a way that should have been done many years ago. It is an opportunity that will not necessarily be available in exactly the same way for many more years into the future, with the mentors being available as they are right now. When I was last in the Northern Territory, it coincided with the visit of my Indonesian counterpart, Minister Suswono, who is responsible for receiving many of the cattle in Indonesian ports that are exported out of the Northern Territory. Together we visited Tipperary Station not long after the Minister for Infrastructure, Transport, Regional Development and Local Government had been there. There were 14 Indigenous young men and women who were being trained by a senior stock handler in a certificate II course and being able to get basic training with a direct connection following that to particular cattle stations. I think the significance of this program in terms of total employment numbers is very modest, but the significance of how it changes the lives of those involved was made clear when one of the participants, Tanya Callanan, spoke to me afterwards. We had a conversation there on the cattle station. I asked her how this was different from other training courses in which she had been involved in the past and she said, ‘Well, normally I get a certificate.’ I said, ‘Aren’t you getting one this time?’ and she said, ‘No, no, I’m getting a certificate; on this occasion I’m also getting a job.’ 5784 5784 15:38:00 Bishop, Bronwyn, MP SE4 Mackellar LP 0 Mrs BRONWYN BISHOP —My question is to the Treasurer. I refer the Treasurer to a report that if the government increased the superprofit threshold on its great big new tax on mining to 12.5 per cent it would represent ‘a very soft concession’ and would only reduce overall revenue from the tax from $9 billion to around $8.5 billion a year. Does this confirm that such a move would do next to nothing to reduce the adverse impact of this new tax on new investment and jobs? Further, does the Treasurer believe that he would have attracted a higher bid for his company at the mid-winter ball auction if he had not been saddled with the Prime Minister as part of the package? Honourable members interjecting— 10000 SPEAKER, The The SPEAKER —Order! The last part of the question is out of order. The House will come back to order. 5784 Swan, Wayne, MP 2V5 Lilley ALP Treasurer 1 Mr SWAN —Last night at the mid-winter ball I was at the table next door to the honourable member and she was pretty lonely. The answer is no. 5784 5784 15:39:00 Jackson, Sharryn, MP 00AN2 Hasluck ALP 1 Ms JACKSON —My question is to the Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion. How is the government investing in our schools and are there any threats to this funding and threats to jobs in particular in Western Australia? 5784 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 Hasluck for her question. Today I thought it was appropriate, with the Deputy Leader of the Opposition in the Leader of the Opposition’s chair, to reflect on a recent visit I had to her electorate in Western Australia. I visited Curtin and there I learned some things about education in Western Australia and about jobs in Western Australia. Curtin is a very nice electorate. I enjoyed my visit there. I particularly enjoyed finding out about the 19 libraries our Building the Education Revolution program is delivering, the 27 new classrooms that are being delivered, the 16 multipurpose halls and the refurbishment of all of the schools in the electorate of Curtin. I also enjoyed finding out about the new computers that kids in the electorate of Curtin had as a result of this government’s computers in schools program. There they are in the electorate of Curtin. We have delivered 1,792 computers. That is very important because under this government there would be more to come to join those computers. Under the opposition, of course, there would be no more computers and no more delivery of Building the Education Revolution. I was also interested to find out that there are 29,757 small businesses in Curtin and these small businesses would be looking forward to the reduction in company tax and the special measures for taxation for small businesses in the government’s resource super profits tax package. I believe as well that there would be 42,000 taxpayers in Curtin looking forward to benefiting from the government’s superannuation reforms. So I learned a lot about the electorate of Curtin when I was there. I particularly enjoyed a visit to Dalkeith Primary School, and I want to conclude my contribution to question time by marking the moment by indicating I have some gifts for the member for Curtin today. A government member—Always generous! 83L Gillard, Julia, MP Ms GILLARD —Always generous, that’s me. One of the things that I found out there was that people like a fair day’s pay when they have done a fair day’s work. So, to remind them of Work Choices when that was not the case and to help the member for Curtin in her election campaign where she will be promising Work Choices again, I have brought her a mouse pad to mark the moment, and for the wall of her office I thought she might particularly appreciate  the front page of the Cambridge Post in her electorate recording my visit to Dalkeith Primary School under the headline ‘Revolution in Lib land’—a very good headline, a very flattering photo of the children there. They look very attractive. I will let others judge about the photo of me. But the revolution in Lib land I think will go well on the wall of the member for Curtin. 10000 SPEAKER, The The SPEAKER —Order! I think the Deputy Prime Minister has made her point. 83L Gillard, Julia, MP Ms GILLARD —With the promise of these two gifts, I ask that further questions be placed on the Notice Paper. 5785 Auditor-General's Reports 5785 10000 SPEAKER, The The SPEAKER —I present the Auditor-General’s Audit report No. 45 of 2009-10 entitled Performance audit: contracting for Defence Force recruiting services. Ordered that the report be made a parliamentary paper. 5785 Documents Mr ALBANESE (Grayndler —Leader of the House) 15:44:00 —Documents are presented as listed in the schedule circulated to honourable members. Details of the documents will be recorded in Votes and Proceedings and I move: That the House take note of the following document: Australian National University—Report for 2009. Debate (on motion by Mr Hartsuyker) adjourned. 5785 Matters of Public Importance 5785 10000 SPEAKER, The The SPEAKER —I have received a letter from the honourable member for Dunkley proposing that a definite matter of public importance be submitted to the House for discussion, namely: The adverse impact of the Government’s Resource Super Profits Tax on small to medium enterprises 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— 5785 15:45:00 Billson, Bruce, MP 1K6 Dunkley LP 0 0 Mr BILLSON —The support for this MPI reflects the seriousness with which the coalition views the impact of the mining superprofits tax on small and medium enterprises. We hear a lot in this place from the government talking about it involving Rio, Xstrata and BHP Billiton. What they do not say is that this mining superprofits tax will affect all the small businesses, the family quarrying operations, those mining operations which are in no way huge like the ones the Labor Party would have you believe will be affected. Those small operations will get caught by this mining superprofits tax. The only super they might be involved with is superphosphate or fertilisers that are being extracted to support food production in Australia. 83V Emerson, Craig, MP Dr Emerson interjecting— 1K6 Billson, Bruce, MP Mr BILLSON —I welcome the interjection from the shadow minister opposite. Where has his voice been? HVP Perrett, Graham, MP Mr Perrett —He’s the minister! 1K6 Billson, Bruce, MP Mr BILLSON —He is the minister now, sorry. Some people think he is the shadow minister. Where has he been when the issues of the mining superprofits tax are being discussed by communities and small businesses right across Australia? The Minister for Small Business, Independent Contractors and the Service Economy is the Marcel Marceau of the mining supertax debate. He will not raise his voice in support of the small businesses in every corner of this vast continent who will be adversely impacted upon by this tax. He will not stand up for their interests. He will not highlight how the Henry tax review said, concerning a whole category of resources mined by small mining operators, by family business quarries, that we should, ‘Take those resources out of the mining superprofits tax.’ He will not stand up for the businesses that rely on what is extracted by those mining operations, those involved in building materials that use clay and stone. He will not stand up for the farming enterprises which are involved in extracting superphosphate to fertilise our food production in Australia. He will not even stand up for the small children who use the talcum powder extracted by those small operations. He will not stand up for any small business that is damaged by this tax, and they will be damaged quite severely. This is a government budget built on shifting sand, where the government is going to attack the sand which goes into kids sand pits in order to prop up this budget black hole. That is what is going on here. There will be no children’s sandpits spared from this government’s tax grab as they touch up the mining operators, the small family businesses, on the fringe of metropolitan areas in regions right across Australia which extract that sand. They are not Xstrata. They are not involved in export commodities. They are not involved in humungous profits, which this government wants to tax; they are just going about their business. They are just employing local people. They are supporting the landscapers, the construction industry, they are providing the gravel for the roads and they are getting involved in their local communities—they support the footy club. These are not the huge organisations that Labor would have you believe they are, but you never hear a word about that. You never hear the small business minister talk about their interests. I am betting that in the next few minutes the Marcel Marceau of small business interests, Dr Emerson, will again not say a word about paid parental leave. He will not say a word about the fact that the Senate will send back to this parliament a Senate position which says, ‘Don’t fit up small businesses with the administration of those schemes.’ You will not see the government support that and you will not see the small business minister stand up for what the small business community wants on paid parental leave; just as you do not hear the small business minister utter a single word about the adverse impacts of this mining supertax on small business involved in the mining sector. You do not hear a word about that. You do not hear a word about the impact and concerns of the cement industry, as Cement Concrete and Aggregates Australia have pointed out—about 80 to 90 per cent of quarried products that are extracted by small enterprises—they currently do not even pay royalties on those things. So we have this idea that we are trying to make sure that royalties are sucked up and somehow compensated for by this great big tax, but what is happening is that this federal Labor government is striking out on these small businesses for more money to fill the black hole in their budget. This is the concern about those people. E3L Morrison, Scott, MP Mr Morrison —Hoover! 1K6 Billson, Bruce, MP Mr BILLSON —They could hoover, but they are actually saying to these small businesses—some with family debts to finance their operations, they use their assets, their houses mortgaged up to the wazoo, their heavy trucks moving goods through their communities—‘On your earnings before interest and tax, we are going to take 40 per cent.’ At a time when small businesses are finding it hard to get finance—another issue on which the small business minister is Marcel Marceau—these small businesses are going to be finding it even harder because the opportunity for them to be profitable, to have enough profit to pay for their financing, is going to be sucked out by 40 per cent by this mining supertax. What is it about this government and this minister? Why do they keep doing things that disadvantage the small business community? Why do they not speak up on the clear adverse impacts that this mining supertax is going to have on thousands of small businesses right across Australia and on all of their customers? There are only two possibilities here. The 40 per cent mining supertax on small and family businesses in the quarrying and mining area is going to cause prices to go up—which we put to the minister for housing today and she seemed disinterested or completely unaware about this impact—and the cost will be passed through to consumers at a time when they are deeply troubled by cost of living pressures everywhere. Everywhere you go, small businesses are saying, ‘Customers are very price sensitive; we just can’t push costs on to those people.’ Or, if the government says, ‘No, this mining supertax and its impact won’t be pushed on to the small business customers,’ small businesses are going to suck it up themselves, are they? Are they just going to wear that? They are going to have their viability and prospects for prosperity in their businesses, their opportunity to employ, and their chance to reinvest in their local communities, diminished as the government sucks up 40 per cent of their EBIT just to fill up a hole in their budget. That is what we are faced with here: damage to consumers and cost increases right through the production chain. I have talked about the impact on building materials and construction materials. I have talked about the impact on local governments that have to get gravel for their roads and the impact of fertilizer production on the agriculture industry in the food that we produce in our country—more input costs there—and even on the sandpits and talcum powder consumers of Australia. But do you hear a word?—no, not a word. You do not hear a word. There are two possible reasons you do not hear a word. You certainly do not see this fact captured in the political propaganda exercise—$36 million of political propaganda about this mining supertax—and you do not hear even a squeak about this crucial issue for so many small businesses and family enterprises involved in mining and quarrying. There has not been a squeak. Why? Because to say that they are doing this would add to the concerns, fears and outrage that these small business operators have about this Rudd Labor government. And it would also alert the hundreds of thousands of consumers of these products that—directly or indirectly through these minerals and resources being in the production cycle—their costs will go up. It will be one thing or the other. So the government has deliberately not said anything about it in any of the material that is available—in any of the advertisements—and when constituents of mine ring the Prime Minister’s office and the Treasurer’s office looking for an explanation of this impost on exploration they get the run-around. They end up getting referred to a phone line that no-one answers. So when they are looking for certainty and confidence they get—beep, beep—nothing: no-one at the end of the phone. 83V Emerson, Craig, MP Dr Emerson —How is Hansard going to handle that? 1K6 Billson, Bruce, MP Mr BILLSON —What else could be happening here? There is one other possibility that Hansard would probably capture not quite as well as the sound of a phone that no-one is answering! There is one other possibility, and that is that the government has already decided to take those resource categories out: to say, ‘Look at us; we’ve consulted.’ That is the other possibility: that they have already made this decision. The mining industry and those at the bigger end of town have learnt that the government is completely uninterested in consultation and will not even discuss the fundamental issues about this tax and its impact on their businesses, on the jobs of thousands and thousands of people, on everyone’s superannuation, and on the costs of resources that are used in production in Australia. All those people get ignored. They will not even talk to them about that, but I bet you that in about a week—that would be my tip—Prime Minister Kevin Rudd, just before he goes on an overseas trip, will say: ‘I’ve consulted. I’ve talked and I’ve listened. And do you know what we’re going to do because we’re so consultative and so interested? We’re going to take out these resources, because that’s just the kind of guys that we are.’ That will be what Labor says: ‘Haven’t we consulted well?’ They will not say that that was what Henry recommended all along. If they had thought this through they would have done that to start with. They will say that it will not have any impact on the budget because there been this problem that if you keep the tax you damage the economy but if you change the tax you ruin their dodgy budget numbers. They will somehow find some new way of saying, ‘Well, it’s not going to cost anything because some of these businesses were doing it tough; maybe they weren’t going to add that much anyway.’ But we know that that is a concern. Small business operators are fearful and quite fatalistic. They are fatalistic because they know the government is not interested. Their circumstances will be used as some kind of political prop—some kind of spin—when what the government should be doing right now is strengthening confidence in those businesses that will be damaged by the tax. The government will use that announcement in the hope that somehow it will strengthen Australians’ confidence in the Prime Minister. That is what the government members will do. The Prime Minister will get out there and say, ‘See, I am listening. It is not that I’m difficult to work with and that if you’re not in the gang of four no-one is listening.’ That is exactly what they will do. That is always what this has been about. This tax has always been about exploration—not exploration of resources but exploration by Labor for a spine for the Prime Minister. They are trying to find him one. They are trying to find him a spine so he will take on a fight with those miners. You have seen the class warfare and the nonsense that has been trundled out here by the Labor Party in backing up what is essentially a tax grab—it is a fight they were looking for—to try and prop up a dodgy set of budget numbers and to make the Prime Minister look as if he believes in something. That is what this is about. Do you think they have thought this through? I think not. I think of Midland Brick in Western Australia. Midland Brick challenged this government—the Customs people on behalf of the Commonwealth—about diesel fuel rebates. They said, ‘We reckon we’re involved in mining. Therefore our clay extraction operations in Western Australia should be able to qualify for the diesel fuel rebate.’ Do you know what the government said? They said, ‘No, mate. You’re not in mining.’ And they declined access to the diesel fuel rebate because that clay extraction activity that Midland Brick is involved in, according to the law, is not mining. But do you think this government could be consistent? Do you think they could be honourable in their application of these technical descriptions? Do you think they would think through and see whether they were being consistent? Of course not. So, in one decision they said, ‘No, in terms of you gaining a benefit from government policy, you guys taking clay out to make bricks is not mining; it is something else. Uh-uh; you miss out. No money.’ But when it comes to copying this government’s mining supertax: ‘We know we said you weren’t in mining when there were some benefits available but, by golly, you’re in mining now. You are a miner now, because we will catch you in that net and we will insist that you are subject to that tax.’ So there is the inconsistency, the duplicity and the desperation by this Labor government. I think the Australian public is learning more and more about that. But it gets worse. On the Minister for Finance’s rather interesting performance on Meet the Press on 30 May he was quite dismissive—almost arrogantly dismissive—about concerns about the extreme complexity that this tax will have on businesses left to work with it. He said that concerns about the extreme complexity of the government’s mining tax are ‘fallacious’. He went on to say that the impact will be simply ‘dealt with by large companies with sophisticated accounting and computer systems’. Does the finance minister not know that this tax is going to land on small and family businesses operating local gravel, sand and fertilizer operations? Is he ignorant of the Henry recommendations to exclude those resources, or does he just not care? He is supposed to be one of the gang of four; he is supposed to be part of where all these big decisions are made. That is where the locus of knowledge now sits. But when it comes to the implications on small and medium enterprises he is completely indifferent. This is yet another example—and we saw it with the great big ETS tax—of everyone getting compensation except small businesses. We have seen it in relation to paid parental leave: ‘We don’t even worry about the administrative burden we’re going to fit you up with. We’ll ignore that for small business.’ This great big mining tax is supposed to land only on big companies that have shareholders in pinstriped suits on the other side of the world. That is completely wrong to start with. They have a complete blind spot because this lands on family-operated and local small businesses that are a part of their community right across Australia from Warwick in Queensland, where they are deeply concerned, down to Dunkley in southern Victoria, where the local sandpits in some cases dip into their profits to provide charitable contributions. They are going to be done over by this, and this government does not care. (Time expired) Dr EMERSON (Rankin —Minister for Small Business, Independent Contractors and the Service Economy, Minister Assisting the Finance Minister on Deregulation and Minister for Competition Policy and Consumer Affairs) 16:00:00 —by leave—I move: That the debate be interrupted. Question agreed to. 5790 Bills R4347 5790 Bill returned from the Senate with amendments. Ordered that the amendments be considered immediately. Senate’s amendments— Schedule B (1)    Page 2 (after line 10), after Division 1, insert: Division 1A—Object of this Act 3A Object of this Act          (1)    The object of this Act is to provide financial support to primary carers (mainly birth mothers) of newborn and newly adopted children, in order to:               (a)    allow those carers to take time off work to care for the child after the child’s birth or adoption; and               (b)    enhance the health and development of birth mothers and children; and               (c)    encourage women to continue to participate in the workforce; and               (d)    promote equality between men and women, and the balance between work and family life.          (2)    Generally, the financial support is provided only to primary carers who have a regular connection to the workforce.          (3)    The financial support provided by this Act is intended to complement and supplement existing entitlements to paid or unpaid leave in connection with the birth or adoption of a child. (2)    Clause 63, page 62 (lines 3 to 8), omit subclauses (1) and (2), substitute:          (1)    Parental leave pay must be paid to a person by the Secretary in instalments. (3)    Clause 64, page 62 (line 16) to page 63 (line 18), omit the clause, substitute: 64 A person’s instalment period and the payday for an instalment          (1)    A person’s instalment period is the period of 14 days starting on a day the Secretary considers appropriate for the person (or a class of person in which the person is included) and each successive 14 day period. Note:   Sections 93 and 94 affect when an instalment period for a person starts and ends in certain circumstances.          (2)    The payday for the instalment is a day that the Secretary considers appropriate that occurs after the instalment period to which the instalment relates. (4)    Clause 67, page 64 (line 22), omit “An employer or the Secretary”, substitute “The Secretary”. (5)    Clause 67, page 64 (lines 26 to 31), omit the note. (6)    Clause 68, page 65 (line 13), omit “An employer or the Secretary”, substitute “The Secretary”. (7)    Clause 69, page 65 (lines 18 to 21), omit subclause (1). (8)    Clause 69, page 65 (line 22), omit “(2)”. (9)    Clause 70, page 66 (lines 5 and 6), omit subclause (2) and the note. (10)  Part 3‑2, page 67 (line 1) to page 75 (line 9), omit the Part. (11)  Clause 83, page 76 (lines 3 to 16), omit the clause, substitute: 83 Guide to this Part This Part is about the payment of instalments to a person by the Secretary. The Secretary is required to pay instalments directly to a person on the payday for the instalment. In certain circumstances where the Secretary becomes required to pay instalments to a person, the Secretary is also required to pay the person arrears for instalments that had previously become payable, but not been paid, to the person.  (12) Clause 84, page 77 (line 2) to page 78 (line 28), omit the clause, substitute: 84 When the Secretary pays instalments                   The Secretary must pay an instalment that is payable to a person on the payday for the instalment. (13)  Clauses 85 and 86, page 78 (line 27) to page 80 (line 12), omit the clauses. (14)  Clauses 93 and 94, page 84 (line 1) to page 85 (line 1), omit the clauses. (15)  Page 86 (after line 29), at the end of Division 2, add: 99A Payment of paid parental leave does not affect other employer obligations                   An obligation of an employer to pay a person parental leave pay under this Act is in addition to any other obligation the employer may have in relation to the person, however that other obligation might arise (including, for example, under another law of the Commonwealth, a State or a Territory, or an industrial instrument (however described)). (16)  Part 3‑5, page 87 (line 1) to page 101 (line 8), omit the Part. (17)  Clause 117, page 103 (lines 15 and 16), omit paragraph (c). (18)  Clause 117, page 103 (line 19), omit “;”, substitute “.”. (19)  Clause 117, page 103 (lines 20 to 25), omit paragraphs (e) to (g). (20)  Heading to clause 133, page 112 (lines 3 and 4), omit “or PPL funding amount”. (21)  Clause 133, page 112 (lines 8 to 15), omit paragraph(1)(b), substitute:               (b)    order the person to pay the Commonwealth an amount equal to any amount paid to, or in relation to, the person by way of an instalment of parental leave pay because of the act, failure or omission that constituted the offence. (22)  Clause 138, page 113 (lines 21 and 22), omit “or a PPL funding amount”. (23)  Page 236 (after line 20), after clause 307, insert: 307A Review of the operation of this Act          (1)    The Minister must cause a comprehensive review of the general operation of this Act to be begun by 31 January 2013.          (2)    The review must consider the following matters:               (a)    the amount of time off work that primary carers are taking to care for newborn or newly adopted children;               (b)    the availability and amount of leave and payments provided by employers in relation to the birth or adoption of a child, and the interaction of those entitlements with parental leave pay provided under this Act;               (c)    the operation of the work test;               (d)    whether primary claimants’ partners should be paid parental leave pay separately from, or in addition to, primary claimants;               (e)    whether employers should make superannuation contributions in relation to parental leave pay;                (f)    the results of any evaluations conducted in relation to the operation of this Act;               (g)    the administration of this Act;               (h)    any other matter relevant to the general operation of this Act.          (3)    The Minister must ensure that public submissions are sought in relation to the review.          (4)    The Minister must cause a copy of a written report of the review to be tabled in each House of the Parliament within 15 sitting days of the day on which the Minister receives the report. 5791 16:01:00 Macklin, Jenny, MP PG6 Jagajaga ALP Minister for Families, Housing, Community Services and Indigenous Affairs 1 0 Ms MACKLIN —I thank the opposition for providing this opportunity to deal with the Paid Parental Leave Bill 2010 at this point. I indicate to the House that the government proposes that amendments (1), (15) and (23) be agreed to and that amendments (2) to (14) and (16) to (22) be disagreed to. I suggest, therefore, it may suit the convenience of the House if we first consider amendments (1), (15) and (23), which are the ones we are going to agree to, and when those have been disposed of then consider amendments (2) to (14) and (16) to (22). Therefore, I move: That Senate amendments (1), (15) and (23) be agreed to. I will briefly explain the implications of what the government proposes. The Senate has returned to the House the Paid Parental Leave Bill 2010 and the Paid Parental Leave (Consequential Amendments) Bill 2010 with a series of amendments. The government moved a number of these amendments in the Senate in response to the recommendations of the Senate inquiry and will obviously be accepting these amendments in this place. These government amendments, firstly, insert an object clause in the bill; secondly, clarify that an employer’s obligation to provide parental leave pay under the bill is additional to any other obligation of the employer, in particular an obligation to provide employer funded paid parental leave; and, thirdly, insert a clause to give effect to an existing commitment of the government to have a comprehensive review of the Paid Parental Leave scheme. I indicate to members opposite that these amendments were all agreed to in the Senate when they were debated there. That may help the opposition in their consideration. For the information of those opposite I will also take this opportunity to refer to the amendments that we will not be accepting. We will not be accepting the amendments moved by the opposition in the Senate to remove employer involvement in Paid Parental Leave. Employer involvement is a central element of the Paid Parental Leave scheme and we want paid parental leave to be considered a normal part of employers supporting women after giving birth to take leave from work to care for their children. The bill’s intention is that women maintain their attachment to the workforce while they are having their family. Women will maintain that strong connection by receiving their government funded parental leave pay through their employers as they would receive any other work entitlement. Employers will benefit from the scheme through the retention of skilled staff without having to fund the scheme. Our scheme is government funded, not paid for by an increase in the company tax rate for certain companies. For the information of those opposite, only nine per cent of all businesses and only three per cent of small businesses will be involved in Paid Parental Leave in any given year. To help employers prepare for the scheme, the role of employers in providing government funded parental leave pay will be phased in over the first six months to align with the new financial year. Employers will only be required to pay an employee where they have received sufficient funds. Employers will provide parental leave pay on a business-as-usual basis; they will not be required to lodge regular reports with the Family Assistance Office or establish special bank accounts. Parental leave pay will be paid in accordance with an employer’s normal pay practice and the employee’s usual pay cycle. There is no payroll tax and no workers compensation payable. Paid parental leave will be implemented in close consultation with employers, including through the Paid Parental Leave Implementation Group. This element of the bill, employer involvement in payment for long-term employees, was recommended by the Productivity Commission as it sends a very strong message that taking leave from work around the time of a birth is a normal part of work and family life. The bill is fair to business and fair to families. The passage of this legislation today is a landmark reform for Australian families. It is the result of a lot of hard work by generations of Australian men and women. Its passage today will be a tribute to each and every one of them. I commend the bill, as amended, to the House. 5793 16:08:00 Billson, Bruce, MP 1K6 Dunkley LP 0 0 Mr BILLSON —On behalf of the opposition I indicate that we are in agreement with the government on Senate amendments (1), (15) and (23) and acknowledge the government’s work and acceptance of those amendments and the purpose of them. Question agreed to. 5793 16:09:00 Macklin, Jenny, MP PG6 Jagajaga ALP Minister for Families, Housing, Community Services and Indigenous Affairs 1 0 Ms MACKLIN —I move: That amendments (2) to (14) and (16) to (22) be disagreed to. As I have already indicated our reasons I will not speak any further to those amendments. 5793 16:09:00 Billson, Bruce, MP 1K6 Dunkley LP 0 0 Mr BILLSON —This is where the opposition departs from the government’s position. The government has made precisely no case whatsoever as to why small employers should be fitted up with the payclerk obligations of administering this scheme. The government has not even attempted to address the very serious, genuine and heartfelt concerns of the small business community that it does not need to be in this role, it does not welcome this role and it sees no justification for this role. Moreover, it finds it bewildering that the Commonwealth would invest in setting up administrative and payment systems for the first six months of the operation of this scheme to be handled by the Family Assistance Office, not requiring small businesses to be the payclerk, and why it should then, having made that investment and established what in every respect is an adequate set of arrangements for the first six months, walk away from that taxpayer investment just to fit up small businesses with that responsibility. It has made no case for that whatsoever. The only justification that could possibly be made is a very dubious and distasteful one, and that is that, having set up the administrative and payment systems that drop small business into a role it has no business being in, the opportunity to top up the payments that are part of the government system will become an obligation to top them up. The risks that small businesses face include the risks of noncompliance in the administration of this scheme, the impact on other operations and the direct expense of varying and updating their payroll and accounting systems. The government has also put forward unconvincing arguments about how these payments would reflect in payroll related obligations that may be present in terms of superannuation, payroll tax and workers compensation. Those are all known risks they face—not to mention the regulatory and red tape burden that small business could well do without as many of them struggle to be viable enterprises in this difficult economic environment—but there is a bigger risk. No case whatsoever has been made to fit up small business with this obligation, but the real risk is that small business will then be fitted up with an obligation to top up these payments. All the systems are being set up to achieve that goal. I say to the government: shame on you for ignoring very considered and legitimate concerns raised by the small business community. Shame on you for not even attempting to make the case as to why this is necessary. Shame on you for investing taxpayers’ funding in a perfectly adequate set of arrangements administered by the Family Assistance Office which are going to be abandoned after six months with no justification whatsoever. I would urge you to be clear and very careful about how you use these tools that you are setting up. The small business community and the coalition parties will rise as one to hold you to account and will no doubt point out how duplicitous this process has been if, shortly after it is in place, this payclerk role fitted up with the administered obligations becomes a requirement to top up these payments in recognition of the many views around this nation, including in the coalition, that this arrangement is inadequate and does not provide the level of support that families are looking for. The government will say, ‘We’ve heard that voice, and the employers can stump up the rest of the money,’ knowing that the administrative systems are in place. So we will oppose this on the voices in the House of Representatives. We will not hold you up in the Senate because we know your game. We are not about denying the rollout of this program. We have run the argument about why these provisions are unnecessary— (Time expired) 5794 16:14:00 Stone, Dr Sharman, MP EM6 Murray LP 0 0 Dr STONE —In adding my voice to that of the shadow minister for small business, let me say that, in addition to the burden for small businesses that the amendment we put forward would have helped resolve, there is another dimension to this problem. I am concerned that when a small business, particularly a microbusiness with perhaps two or three employees, has to make a choice between two candidates for a new job, a woman of child-bearing age and man, and it knows about the administrative burden that it is going to have to take up with paid parental leave, that will see discrimination against the woman candidate. I do not think that is acceptable. We have already got a lot of discrimination in the Australian workforce in relation to women, with the gender pay equity problems. This reinstates or puts into place additional potential discrimination against women. I cannot understand for a minute why a government which has said that it will for six months have a moratorium on all businesses handling the payroll function cannot extend that, given in particular that the six months of payroll attention from the Family Assistance Office will continue beyond six months for the employees who do not have an employer who can be readily nominated, like the contract workers, the self-employed and the casual workers. They will continue to have their paid parental leave come through the Family Assistance Office indefinitely, but we are told that, for others, who have an identifiable employer, their payroll moratorium will cease after six months. We think that this is a very serious problem. The good news for Australian business and for Australian women is that when we get into government we will introduce an appropriate scheme which, in particular, will not burden and be a problem for businesses and will give working families every chance to have a good parental leave scheme that is amongst the world’s best, not amongst the world’s poorest and most inadequate. Question agreed to. 5794 16:16:00 Macklin, Jenny, MP PG6 Jagajaga ALP Minister for Families, Housing, Community Services and Indigenous Affairs 1 0 Ms MACKLIN —I present the reasons for the House disagreeing to Senate amendments (2) to (14) and (16) to (22) and I move: That the reasons be adopted. Question agreed to. Message from the Governor-General recommending appropriation for the bill and proposed amendments announced. 5795 Bills R4373 5795 Consideration resumed. Ordered that the amendment be considered immediately. Senate’s amendment— (1)    Schedule 2, Part 1, page 29 (line 2) to page 32 (line 28), omit the Part. 5795 16:17:00 Macklin, Jenny, MP PG6 Jagajaga ALP Minister for Families, Housing, Community Services and Indigenous Affairs 1 0 Ms MACKLIN —I move: That the amendment be disagreed to. Question agreed to. 5795 16:17:00 Macklin, Jenny, MP PG6 Jagajaga ALP Minister for Families, Housing, Community Services and Indigenous Affairs 1 0 Ms MACKLIN —I present the reasons for the House disagreeing to the Senate amendment and I move: That the reasons be adopted. Question agreed to. 5795 Bills R4334 5795 Bill returned from the Senate with amendments. Ordered that the amendments be considered immediately. Senate’s amendments—  (1)   Schedule 1, item 13, page 9 (after line 10), after subsection 109CA(7), insert:       (7A)    Subsection (1) does not apply to the provision of a dwelling to the entity if:               (a)    the dwelling is a flat or home unit that is part of a complex of 2 or more flats or home units; and               (b)    the provider of the dwelling is a company that owns a legal or equitable interest in the land on which the complex is erected; and               (c)    there is more than one share in the company, and each share (whether singly or as part of a parcel of shares) gives the relevant shareholder the right to occupy a flat or home unit in the complex; and               (d)    each flat or home unit in the complex is covered by a share, or a parcel of shares, in the company; and               (e)    the dwelling is provided to the entity because a shareholder holds such a share, or parcel of shares; and                (f)    the company does not have legal or equitable interests in any assets other than legal or equitable interests in:                     (i)    the complex, and the land on which it is erected; and                    (ii)    any related land and buildings; and                   (iii)    any related plant, machinery, equipment, furniture or fittings; and                   (iv)    any assets relating to the matters mentioned in paragraph (g); and               (g)    the assessable income of the company is derived predominantly from:                     (i)    managing and maintaining the complex (including the assets mentioned in subparagraphs (f)(i), (ii) and (iii)); and                    (ii)    interest and dividends relating to income derived from managing and maintaining the complex (including the assets mentioned in those subparagraphs).        (7B)    Subsection (7A) does not apply in a case to which Subdivision E (about interposed entities) applies, if the company mentioned in that subsection is interposed between:               (a)    a private company; and               (b)    a shareholder, or an associate of a shareholder, of the private company. (2)    Schedule 1, item 13, page 9 (lines 12 and 13), omit “subsections (6) and (7)”, substitute “subsections (6) to (7A)”. 5796 16:18:00 Clare, Jason, MP HWL Blaxland ALP Parliamentary Secretary for Employment 1 0 Mr CLARE —I move: That the amendments be agreed to. The amendments ensure that the use of certain company title flats or home units does not result in a payment for the purposes of division 7A of the Income Tax Assessment Act 1936. The amendments treat individuals who own a flat or home unit through a company title arrangement in the same way as those who purchase a flat or home unit under a strata title arrangement. The amendments implement a recommendation of the Senate Economics Legislation Committee in relation to schedule 1 of the bill. Question agreed to. 5796 Bills R4350 5796 Bills R4341 5796 Bills R4343 5796 Bills R4336 5796 Bills R4321 5796 Bills R4379 5796 Bills R4316 5796 Bills R4352 5796 Bills R4061 5796 Bills R4317 5796 Bills R4313 5796 Bills R4280 5796 Bills R4325 5796 Bills R4319 5796 Bills R4348 5796 Bills R4261 5796 Bills R4351 5796 Bills R4369 5796 Message received from the Senate returning the bills without amendment or request. 5796 Matters of Public Importance 5796 Consideration resumed. 5796 16:20:00 Emerson, Craig, MP 83V Rankin ALP Minister for Small Business, Independent Contractors and the Service Economy, Minister Assisting the Finance Minister on Deregulation and Minister for Competition Policy and Consumer Affairs 1 0 Dr EMERSON —I will deliver an abridged version of my address, understanding that it would be most unwise to seek an extension of time beyond the commencement of the normal adjournment debate because my proposal for such an extension would go down in a screaming heap, opposed by both coalition members and my colleagues here on the government side. So I will do the very best I can in the more limited time that I have. I observe that the member for Dunkley, the shadow small business minister, has displayed himself as the Inspector Clouseau of Australian politics. He came to the dispatch box with his magnifying glass. He could see all these conspiracies happening around him. He thought if he could dig a little further he might find under all of the detail what we were really up to with the resource super profits tax. In so doing, the member for Dunkley raised to record heights the scare campaign that has been engaged in by the coalition in relation to the resource super profits tax. Let this day be marked as the day that the coalition has said that the kiddies will not be able to get their sand in their play pits as a result of the resource super profits tax. That is what he came in here and said, as a serious point. I notice the shadow minister opposite, the member for Casey, shaking his head. I agree with him. He should shake his head at this stupid scare campaign of the member for Dunkley. 00APG Smith, Anthony, MP Mr Anthony Smith —Mr Deputy Speaker, I rise on a point of order. 83V Emerson, Craig, MP Dr EMERSON —This is going to be yet another frivolous point of order. They cannot handle the heat, so get out of the kitchen. 00APG Smith, Anthony, MP Mr Anthony Smith —On a point of order, Mr Deputy Speaker: frivolous and this minister go hand in hand. I am shaking my head at his ridiculous and pathetic waste of time in this House. 10000 Thomson, Kelvin (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Mr KJ Thomson)—Order! The shadow minister will resume his seat. There is no point of order. The shadow minister needs to be aware of the consequences of raising points of order which have no substance. 83V Emerson, Craig, MP Dr EMERSON —This is the point I was making: the shadow minister’s colleague walked into this chamber and said the kiddies will not be able to get any sand in their sandpits, in their playpits, as a result of the resource super profits tax. He might shake his head again at this one because the shadow minister for small business walked into this chamber and said the kiddies will not get their talcum powder because of the resource super profits tax. This is the absurdity of the scare campaign that has been launched by the coalition in relation to the resource super profits tax. This is a tax reform package and at no time during the contribution of the shadow small business minister did he mention the small business tax breaks. Did he mention the fact that every one of the 2.4 million small businesses in this country would receive a capacity to write off instantly the value of any eligible asset up to the value of $5,000, which would provide a welcome cash flow boost and an incentive to invest in productive assets? All 2.4 million businesses would get that. That would be a great thing for small businesses; but who is opposing that? The shadow small business minister and the coalition parties, especially the Liberal Party, say that they are the party of small business. They think and talk back to Sir Robert Menzies talking about the forgotten people and how the newly formed Liberal Party would represent the forgotten people, the shopkeepers and the small business owners of Australia. And what do they do? They cut their throats. They came into this chamber and said that they are going to oppose legislation that would provide a tax break for every one of those 2.4 million small businesses in Australia—that is, sole traders, partnerships and companies. 1K6 Billson, Bruce, MP Mr Billson —Mr Deputy Speaker, on a point of order: I heard from my office a complete untruth from the minister about my remarks. I know he has a habit of being a bit loose with the facts and he is very sensitive about what other people say. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The shadow minister will come to his point or I will sit him down. 1K6 Billson, Bruce, MP Mr Billson —I would urge him to withdraw the remarks about the points that were made. It is far more simple for him just to be honest and accurate in reflecting my quotes. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —There is no point of order. You can only seek a withdrawal at the time the remarks are made. You can make a personal explanation. 83V Emerson, Craig, MP Dr EMERSON —If he was committed to the debate he would have stayed in the chamber. He would have stayed in the chamber and the member for Bowman would have been in the chamber when we got onto the bayside. The member for Bonner is here with us today, every day, backing small business and her neighbour, the member for Bowman, cannot even last the distance. He had to go out for a break and then I think he came back in—I am not sure; he was probably at the party pies at the airport—because he cannot stay the distance. He will not stick up for small business. 00APG Smith, Anthony, MP Mr Anthony Smith —Mr Deputy Speaker, on a point of order: in terms of the conduct of the debate, even by the minister’s pathetically low standards, this is juvenile. We are talking about the conduct of the debate and your conduct in the chair. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The shadow minister needs to be careful about reflecting on the chair. You do not have a point of order. 00APG Smith, Anthony, MP Mr Anthony Smith —Mr Deputy Speaker, I have a point of order. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —What is your point of order? 00APG Smith, Anthony, MP Mr Anthony Smith —My point of order, Mr Deputy Speaker, is drawing you to relevance and the conduct of the debate. 83V Emerson, Craig, MP Dr EMERSON —Mr Deputy Speaker, on this ridiculous point of order— 00APG Smith, Anthony, MP Mr Anthony Smith —You don’t have the call. 83V Emerson, Craig, MP Dr EMERSON —I do now. Sit down! 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The shadow minister has raised as a point of order relevance. I rule that the minister is relevant. I ask him to continue. The shadow minister will resume his seat. 00APG Smith, Anthony, MP Mr Anthony Smith —Mr Deputy Speaker, on a separate point of order— 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —What is your point of order? 00APG Smith, Anthony, MP Mr Anthony Smith —The minister overruling you, Mr Deputy Speaker, when you were ruling on the point of order, telling me to sit down. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —I have ruled on the point of order. The minister has the call. 83V Emerson, Craig, MP Dr EMERSON —I will remind the member for Casey that he ought to stick up for the 19,242 small businesses in his electorate, every one of them being denied a small business tax break because the member for Casey and his colleagues intend to vote against a tax break for small businesses. They are the forgotten people all right. The Liberal Party have forgotten the small business people, the shopkeepers and small business owners of this country because they want to deny them a tax break. They do not believe in small business. They voted against the stimulus package, they completely opposed the stimulus package, they are against our tradies, they are against the shopkeepers and they are against all the small businesses in this country. We had the shadow minister for small business daring me to talk about paid parental leave. I will talk about it because the Leader of the Opposition has come up with a great big new tax on everything you buy—that is, a 1.7 per cent increase in the company tax rate for larger businesses which we passed on to every small business in the country, to the 19,242 small businesses in this country—when the member ought to be sticking up for small business. But he is sticking it up small business because he wants to apply the flow-on from that paid parental leave great big new tax on everything you buy to the 19,242 small businesses in this country. He wants to deny every small business company in his electorate a head-start reduction in the company tax rate. All he wants to do is increase taxes on small business. They have the temerity to come in here and say, ‘We are supporting small business.’ All you are doing is supporting an increase in taxation on small business. As I said in question time, you ought to be ashamed of yourselves. What happened to the once great Liberal Party that used to stick up for small business and now have abandoned them in their time of need? You are a complete disgrace to this House and a complete disgrace to the traditions of the Liberal Party. It proves yet again that the Rudd Labor government is the best friend that small business has ever had and will be the only friend that small business will ever have if you wantonly abandon the small business community of this country in their hour of need during the global financial recession. Now, when they want a bit of support during the recovery, you are prepared to abandon them yet again. You are a complete disgrace and should be ashamed of yourselves. 1K6 Billson, Bruce, MP Mr Billson —Mr Deputy Speaker, on a point of order: just quickly, there are 15 seconds left for the minister to actually address the MPI! Go for it, Minister; talk about the RSPT’s impact on small businesses— 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —Order! I have heard the point of order. Does the minister wish to continue? 1K6 Billson, Bruce, MP Mr Billson —Go on, say something about the issue. Go on! 83V Emerson, Craig, MP Dr Emerson interjecting— 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —No, in fact, you do not, Minister! The discussion is concluded. 5799 Adjournment 10000 Thomson, Kelvin (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Mr KJ Thomson)—Order! It being 4.30 pm, I propose the question: That the House do now adjourn. 5799 5799 16:30:00 Slipper, Peter, MP 0V5 Fisher LP 0 0 Mr SLIPPER —On 29 October, Day for Daniel 2010 is being held. That has been organised by the Daniel Morcombe Foundation, which was established by Bruce and Denise Morcombe to commemorate the disappearance of their son Daniel in December 2003 on the Sunshine Coast. I am urging all members to wear a red tie in the parliament on 29 October. Those members who are not able to wear a tie for reasons of gender ought to wear something else red. That will highlight our support for the principle of child safety in 2010. I am writing to all members of the federal parliament and of the Queensland state parliament to encourage them to wear a red tie or a red item of clothing on 29 October. My heart goes out to Bruce and Denise Morcombe. To have one’s child disappear, as happened to them in December 2003, is an extraordinarily tragic event. What they did was go out and establish this foundation with a view to making sure that other children in Australia are safe. I met with Mrs Morcombe just recently. She is a person of incredible character, fortitude and principle, with an incredible ability to convey the message of the importance of child safety. So I want to encourage all members of parliament to wear some red on 29 October this year. If the election has been held, I intend to write to all new members of parliament to encourage their participation as well. The Day for Daniel is an important opportunity for all of us to indicate our support for the principle of child safety. I think that in Australia in 2010 child safety is something we all support and is a principle which in fact unites us. I would also like to say that recently I held a meeting with key stakeholders, including the dive industry and the University of the Sunshine Coast, to support the sinking of the HMAS Tobruk as a dive wreck off the Sunshine Coast when she is decommissioned in 2012. The Brisbane was sunk off the Sunshine Coast in 2005 and since then has become an artificial reef, a magnet for dive tourists from around the world, boosting employment, and of course boosting our marine stock and helping our marine environment. These ships, which have served our nation for decades, will actually serve as artificial dive wrecks for 500 years. So this is a win-win situation. It is a win for the local community because we get additional jobs; it creates work not only in the dive industry but also in the hospitality industry, including restaurants, motels, taxis and so on. It gives us the opportunity to remember the wonderful service these ships like the Brisbane—and, if we get the Tobruk, the Tobruk also—have given to our nation. It is also a win for our marine environment. We would plan to situate the Brisbane and the Tobruk about one nautical mile apart, and that means that dive tourists could come to dive on one ship one day and on the other another day and use the third day to orient themselves in the area. The Adelaide is a ship that has been prepared for sinking off the Central Coast of New South Wales. Some $7 million has been spent on preparing that ship for sinking. I understand the ship is off the Central Coast awaiting sinking, but legal action by a local group has prevented that ship from being sunk. I have called for that ship to be moved 1,000 kilometres north to the Sunshine Coast, where we would have her as a companion dive wreck. The dive industry is very important, tourism is important and employment is important, and the addition of the Tobruk to the Brisbane as a companion dive wreck will boost the economy, which is very important. If we were to get the Adelaide as well, those ships would make us a world-class dive destination. People would come from right around the world to dive off the Sunshine Coast. That would of course be very important for the Sunshine Coast and for South-East Queensland. It would help us remember the wonderful service these ships have given and at the same time it would boost fish stocks and our marine environment. It really is a win-win situation—all winners, no losers. I encourage the government, whoever the government is at the time, to look favourably on permitting the Tobruk to be sunk off the Sunshine Coast—and, if the Central Coast of New South Wales does not want the Adelaide, we would like that as well. (Time expired) 5801 5801 16:35:00 Hayes, Chris, MP ECV Werriwa ALP 1 0 Mr HAYES —I would like to start off by talking about this government’s commitment to Australian schools and in particular our commitment to the education of our children. It should be no surprise to anyone in this place that I, along with many others, have a deep interest in the education of our kids. It is about giving them a future, and that is very important for kids growing up in my area of south-west Sydney. In the lead-up to the last election, we made it very clear that a Labor government would stand for an education revolution, and that is what we embarked upon—a substantial and sustained increase in the quantity of the investment in our education system and in the quality of our education system to deliver a future for our children. They need an education system that they can benefit from and that will take them forward. I would like to focus my comments today on the $2.1 billion National Secondary School Computer Fund, which is a key component of the Digital Education Revolution and which is, crucially, delivering a computer to every secondary school student in years nine to 12. Through the Digital Education Revolution initiative we have already delivered a quarter of a million computers to our schools. In my electorate alone, there were 2,800 computers delivered to 27 schools. That is thousands of kids who might typically not have access to computers generally and certainly not at home. Through this program they now have the opportunity to learn with the tools that they need, and that will equip them for their future in a modern and competitive workforce. Like other members in this place, I take great pride in visiting schools. Recently I was at Sarah Redford High School and the All Saints Catholic Senior College at Casula. The principal of All Saints, Mr Ray Wooby, explained that having computers is developing the innovation now coming about in computer based learning. It is enhancing students’ uptake and use of computers as qualitative instruments in improving their education attainments. The students—whether it was put on for me or not—were very engaged and extremely excited. Principals are telling me that the provision of these computers is doing much to address the digital inequity gap that exists between those students who have access to computers and those who do not. It is a simple fact that, if students are able to take computers home, not only will they have a chance to complete their homework and other tasks with the computer but they will be using instruments of modern technology which will equip them for the future. Rather shockingly, there is a threat to this program. Believe it or not, there are people who actually oppose it. Those people are sitting on the other side of the House. They will slash the programs for computers for our kids. I call upon each of those opposition members, particularly those who operate in the south-west of Sydney, to explain to people why they are happy to see our kids miss out on the important tools that they need to get jobs in the modern competitive workplace of tomorrow. How can they expect our kids to get a 21st century education if they are not going to give the kids the tools necessary? They are happy to have those schools that can provide those tools to kids from wealthy backgrounds—that is fine—but those schools that cannot provide computers are the ones who are going to miss out. That is what the school principals keep referring to as the ‘digital inequity’. The Liberal Party wants to force us back to where kids will only have computers if they can afford them. But they miss out the fundamental issue: this is not only about kids having access to computers but about education being based around this modern technology as well. It should be known that, of the 21,000 computers that now will not be funded because of the opposition, 1,000 are intended for schools in need in Werriwa. It is about time the coalition got up and explained, not simply in a throwaway line in a reply to a budget reply but in an articulate way, why they are happy to see these young kids who want a future being deprived of the tools they need to be able to get there. I am proud to be a member of a government that has taken the vital steps towards creating a first-class education system in this country and delivering the education revolution. (Time expired) 5802 5802 16:40:00 May, Margaret, MP 83B McPherson LP 0 0 Mrs MAY —Today I would like to place on record my congratulations to four of my constituents who have reached some very special milestones. Mrs Eileen Caton celebrated her 100th birthday in April. Mrs Ivy Maynard celebrated her 100th birthday in April. Mrs Mabel Watson celebrated her 105th birthday in May. Mr Frank Malcolm Gray will be celebrating his 100th birthday on 9 July, but also celebrated with Marcia, his wife, their 70th wedding anniversary in April. I would just like to put on the record a little bit about each of these people, because I have found it really interesting to read about them and their contributions to their communities. Mrs Caton was born in Longreach on 18 April 1910 and, after completing her education, she joined the Qantas office in Longreach. She was only the second female on staff at Qantas when she joined the Longreach office in August 1928 and was employee No. 73. Her name is on the honour roll in the Qantas Founders Museum. Her son, Michael Caton, who I think we all know very well, is the commentator on the documentary at the Qantas Founders Museum. Eileen left Qantas in 1931 and returned to Longreach to be married to her sweetheart, Septimus Caton. She and Sep were married on 19 July 1933 and they had three children, Beverley, Robyn, and Michael. Her husband, Sep, had been working with steam engines but, with these engines being phased out, he began studying as a refrigeration engineer. The family moved on to Biloela and unfortunately he was killed in a tragic work accident in 1945, and Eileen, left a widow, raised their three young children. Mr Speaker, you might be interested to know that, apart from her love of her family and the raising of three children, Eileen was actually a very active member of the Australian Labor Party in Brisbane for a great number of years, before she relocated to the Gold Coast when she turned 90. She is currently living in an aged-care facility at Burleigh Waters in my electorate. Mrs Ivy Maynard was born in April 1910 in Ballarat in country Victoria. She describes herself as an ‘ordinary student’ at school who enjoyed playing basketball and going in running races. She left school at 14 and went to work as a shop assistant in a furniture shop. She married, had two boys, took up lawn bowls and was a champion player. Currently, she spends time at the Kirrahaven Aged Care Facility, where she lives. She is a very popular member of that aged-care facility and loves the get-togethers that happen down there. Mabel Watson was born in Scotland on 25 May 1905. She was the second last daughter born—her sister died in infancy. Her earliest memories include sliding down the hill in winter when she and her siblings were taken on a toboggan track in the snow, and being taken to see the king and queen, George and Mary, when they arrived by train in 1913 in Scotland. She came to Australia in 1922 by boat. She fell in love with ship travel and had her last cruise at the age of 94. She married Charlie Watson and they came to Australia for a better life and raised their three sons here. All of them were members of the Kirra Surf Lifesaving Club, which is also in my electorate. Mabel was Secretary of the Coolangatta State School Mothers’ Committee and a long-serving office-bearer of the Coolangatta CWA and the South Coast Women’s Organisation. Mr Frank Malcolm Gray comes from a long line of Australians. His great grandfather, Samuel Gray, arrived in Adelaide at the age of 18. During his childhood years, Malcolm enjoyed constructing radios, or crystal sets as they were called then. His first job was as a draftsman in the Lands Department in Adelaide and then he applied for a vacancy as a draftsmen in Fiji, with the British government. Mr Speaker, Fiji is a place that I know very well; that is where I was born. Malcolm and Marcia celebrated their 70th wedding anniversary this year and, in July, Malcolm will celebrate his 100th birthday. I think each and every one of those milestones, Mr Speaker, you would agree, is a special milestone. When you look at what these people have achieved in their lives, along with raising their families and contributing to their local communities, you see a little of the history of Australia and the important role that they have played in it. 5803 5803 16:45:00 Parke, Melissa, MP HWR Fremantle ALP 1 0 Ms PARKE —Next week, American entertainer and comedian Jerry Lewis will be in the parliament in his capacity as international patron for the Muscular Dystrophy Foundation of Australia. I am very grateful for Mr Lewis’s visit and his efforts over many years to raise awareness about the difficulties for the children and families coping with muscular dystrophy. But I do think it is a sad reflection on our society that so often we need a celebrity endorsement of an issue or a cause that really should attract our interest on its own merits. In this context I want to talk about an extraordinary young man, Conor Murphy, who suffers from Duchenne muscular dystrophy (DMD), a progressive degenerative muscle disease affecting boys. On average, affected boys lose the ability to walk and become wheelchair-bound before the age of 12 and they generally do not survive beyond their late teens or early 20s. Last Saturday, 12 June, I joined with Conor’s many family and friends at the Leeuwin Barracks in East Fremantle to celebrate his 21st birthday, regarded as something of a miracle milestone. Even though Conor’s condition has deteriorated to the point where he is on a ventilator 24 hours a day and he needs the assistance of a cough machine to cough, Conor’s huge smile showed that he was not going to let these minor inconveniences detract from his birthday celebration. Conor lives over the road from my house in Beaconsfield in Fremantle, with his parents Maurice and Lesley Murphy. Lesley is the Community Support Director of the Muscular Dystrophy Association of WA and she also fundraises and does enormous amounts of volunteer work for the association, which receives very little government assistance. Last week, Lesley came to my office, together with John Gummer, the CEO of MDAWA, and Dr Hugh Dawkins from the Office of Population Health Genomics in the WA Department of Health. They explained to me that Australia does not have a national registry for muscular dystrophy or for any of the rare neuromuscular conditions such as spinal muscular atrophy. Not having such a registry is hampering the ability of our researchers to attract funds and patients to participate in trials for treatments, since there is no collated information about the number and location of sufferers in Australia or their clinical and genetic information. As Lesley said to me: ‘To be brutally frank, the fact that we are the only first world country without a rare disease registry makes us something of a laughing stock.’ Dr Hugh Dawkins has worked with a group of experts in the field from across Australia to produce a report for the Clinical, Technical, Ethical Principal Committee of the Australian Health Ministers Advisory Council on the need to establish a national Duchenne muscular dystrophy registry. The report notes that ‘although the disorder is comparatively uncommon affecting one in 3,300 live births, the impact is enormous with the burden of disease being grossly disproportionate to its frequency’. Access Economics has estimated this costs $126,000 per affected person per year. The report notes further that in Australia, even though there are several centres involved in the research and management of the disease, there is insufficient coordination on a national level to impart this research into improved patient outcomes. As noted by my colleague Senator Jan McLucas, the former Parliamentary Secretary for Health, in a comprehensive speech on this issue in February this year, the creation of a national registry for DMD is under consideration by the CTEPC. For the sake of patients like Conor, I hope the committee makes a decision soon so that he and others are able to obtain the best medical treatment that is currently available. It was also noted by Senator McLucas that until recently there were no treatments available to halt the disease process or to restore muscle function. However, advances in gene technology have facilitated potential treatment options to improve muscle function. The ABC’s Catalyst program reported on 22 April this year that research being conducted by WA scientists Steve Wilton and Sue Fletcher has discovered a form of treatment for genetic diseases, in particular Duchenne muscular dystrophy, which involves engineering a genetic patch for the faulty gene. This has produced some promising results, with a trial in the UK showing that boys who had the patch were able to produce some of the important protein dystrophi. The patients have displayed movement abilities previously unseen in boys with Duchennes. Professor Wilton informs me that the treatment may also have application to other diseases such as cancer. The researchers responsible for this world-first medical research breakthrough are based in Western Australia. It would be an enormous loss to the state and the country if they were forced to go overseas to continue this work. For a relatively small investment, full length DMD gene sequencing components could be created at a specialised laboratory in Perth that would meet the needs of DMD sufferers in Australia and potentially elsewhere. A national registry would allow these new opportunities for treatment to be implemented quickly and effectively, as information would be centralised and would provide an interface between patients, doctors and researchers. As Lesley Murphy said to me last week, as many people as possible should be able to access this amazing breakthrough. Boys like Conor deserve nothing less. 5804 5804 16:50:00 Briggs, Jamie, MP IYU Mayo LP 0 0 Mr BRIGGS —I rise again in this place to talk about the crisis in the Murray-Darling Basin and the catastrophic conditions faced by the communities in and around the Lower Lakes in my electorate and that of the member for Barker. I apologise, Mr Speaker, as you have heard me speak on this issue in this debate on many occasions. However, I think the issue is so significant that we should continue talking about it so that we do not forget how damaging and catastrophic the conditions are in and around the lower reaches of the Murray-Darling Basin. I know this place cares deeply about it. In the last few years, the issue of the Murray-Darling Basin has been addressed in this parliament, thanks to the work of the former Prime Minister John Howard and the member for Wentworth, who was the Minister for the Environment and Water Resources at the time. He launched groundbreaking reforms in January 2007 to deal with the crisis in the Murray-Darling Basin. This was done in several different ways. The federal government announced for the first time that a national system of water management should exist in this country because the states had failed to properly manage the Murray-Darling Basin for over 100 years. It also announced plans to buy back water licences to put more water back into the Murray-Darling Basin. The coalition did this because we recognise that, over the years, too many licences have been granted and too much has been extracted. So, the then federal government dealt with this very difficult subject. It also allocated significant amounts of money to on- and off-farm infrastructure to get more from less. As the member for Wentworth so rightly puts it: we need to continue to grow our own food, but we need to do it with less. The $10 billion announcement included a large allocation to fund on- and off-farm infrastructure—to put more water back in the system while still growing our own food. The last element of the package was investment in structural adjustment for those communities which would face challenges because of these difficult, but very necessary, reforms in the Murray-Darling Basin. It was a good plan and it was largely adopted by the Rudd government when they came to office in 2007. However, there were some elements of it which they changed. Some of those changes were for the worse, unfortunately. The worst mistake they have made was the failure to invest in infrastructure needs. The greatest example of that is at Menindee Lakes, where we are now going to see the loss of a massive amount of water because the Minister for Climate Change, Energy Efficiency and Water, Senator Wong, has failed to ensure that the investment in deepening those lakes and reducing the size of them went ahead before water came down from the massive floods in Queensland around Christmas. These meant that the Menindee Lakes got a huge injection of water. We will lose, it has been reported, up to 200 gigalitres of water in the next six months purely through evaporation. This is an excess we cannot afford and Senator Wong’s failure in that respect is a real shame. The biggest failure is that of the Rudd government and its state Labor mates failing to come to an agreement on a truly national system. That has been reflected by an ongoing fight over how much water South Australia would get out of these floods in Queensland. We are seeing right now that the chickens have come home to roost. There were big announcements in the state election campaign from Mike Rann and his cohorts in South Australia, but there has been very little action and very little water coming down the system. This highlights again just how hopeless the Rann state Labor government is. On this side of the House, we remain absolutely committed to ongoing and necessary reform in the Murray-Darling Basin. My leader, the Leader of the Opposition, has made it very clear that we are committed to the principles outlined by the member for Wentworth and by the former Prime Minister, in 2007. We will also have a referendum if the states refuse to hand over their powers, because we know it is necessary to have a national system of management for the system. Such a national system of management is essential to get the real reform needed to ensure that the Murray-Darling Basin is restored to health so that we can continue to grow our own food, so that communities can thrive and so our lower lakes at the bottom end, in my electorate and the member for Barker’s electorate, can be healthy once again. This is an extremely important reform, a reform that I will continue to fight for. I know my colleagues, particularly those in South Australia who see the worst of this, will continue to fight on— (Time expired) 5806 5806 16:55:00 Murphy, John, MP 83D Lowe ALP 1 0 Mr MURPHY —This afternoon, I provide an update on the great success of a project I brought to the attention of this House late last year. I am referring to Australia’s first all abilities playground, Livvi’s Place at Timbrell Park, Five Dock, in my electorate of Lowe. Since its opening in November last year, Livvi’s Place has been a huge success. Livvi’s Place has reduced the barriers faced by children with special needs and their families. It has encouraged all children to have fun together, regardless of age or ability. I am incredibly pleased to now report that, at the recent Institute of Public Works Engineering Australia engineering excellence awards for 2010 presented by the New South Wales division of the IPWEA, the City of Canada Bay Council received three awards out of nine categories. One of these awards, in the special community awards category, was for the Livvi’s Place all abilities playground at Timbrell Park. I understand that this award has only been given on one other occasion in the past decade. I would like to draw the attention of the House to the judges’ comments and to the following comment in particular. They said: Once every few years a project comes along that catches our imagination as something that is worthy of special attention because of the uniqueness or importance as a community facility. This playground is just such a facility. I wholeheartedly agree. This is an important initiative and I know it will continue to be of immense value to our community for years to come. I join with the judges in commending the Touched by Olivia Foundation, Canada Bay council staff and the various corporate partners who donated time, expertise and materials to such a worthy community project. I am encouraged by the judges’ comments that Livvi’s Place is: … a project that could and should be replicated in other areas to provide the means for less able children to experience the joys of a playground and the opportunity to mix with others. I know too that John and Justine Perkins, from the Touched by Olivia Foundation, will be encouraged by this, as I know one of their aspirations is to have this type of project replicated across all councils to help improve the lives of children all over Australia. The great news is that, as a result of this award, Canada Bay council has been approached to assist other councils to deliver such projects. I take the opportunity this afternoon to note two other awards received by Canada Bay council at the IPWEA (NSW Division) Excellence Awards for 2010. I understand the council received a ‘highly commended’ recommendation in the environmental enhancement project category for their Powells Creek stormwater harvesting project. The council also won the new or improved techniques category for project management methodology. I have been advised that the project management methodology was developed in-house by Canada Bay council. This methodology sets out various processes which the council decided must be followed to ensure a project is properly planned and delivered. The judges agreed that the methodology developed by Canada Bay council ‘provides a framework for the successful delivery of a project with all parties sharing responsibility for a successful outcome.’ Again the judges have recognised Canada Bay council as a leader and suggested that ‘other Councils consider this method of effective delivery of projects contained within their works program.’ I agree with the Mayor of Canada Bay, Councillor Angelo Tsirekas, when he says that winning one award at this level is good and that winning two is excellent, but gaining recognition in three areas is extremely rare and a credit to council, council staff and the community partnerships that delivered these projects. I draw to the attention of the House that the Mayor of Canada Bay, Angelo Tsirekas, is in the distinguished visitors’ gallery today. Through the speaker, I congratulate you, Angelo, for your leadership and vision. I again congratulate you, Angelo, and Canada Bay council on your great success and you, Angelo, for leading a pioneering council that keeps achieving better outcomes for ratepayers and residents. Well done to Angelo Tsirekas, the Mayor of the City of Canada Bay, to the general manager, Gary Sawyer, and to all his staff. They have done a terrific job. 10000 SPEAKER, The The SPEAKER —Order! It being 5 pm, the debate is interrupted. 5807 17:00:00 House adjourned at 5.00 pm 2010-06-17 The DEPUTY SPEAKER (Hon. AR Bevis) took the chair at 9.30 am. 5808 Constituency Statements 5808 5808 09:30:00 Pyne, Chris, MP 9V5 Sturt LP 0 0 Mr PYNE —In my three-minute statement today I rise to talk about the plight of the residents of Skye, in my electorate, in relation to being connected to mains water. I know it sounds surprising that in a suburban electorate such as mine there are still households that are not connected to mains water, but in fact in Skye there are 140 households that have never been connected to mains water for various historical reasons. It is high time that the state government made the $3.7 million investment to make sure that those households are connected to mains water. There are two particularly important reasons for doing so. Firstly, the suburb of Skye borders the Adelaide Hills. It is in the foothills, an area in the Adelaide Hills that has been subject to fire danger in the last few decades. In fact, in 1983 the Ash Wednesday bushfire touched the foothills of my electorate. My own household was evacuated during the Ash Wednesday bushfires back in 1983. The suburb of Skye is in a dangerous zone for fire, and the Country Fire Service relies on mains water to fight dangerous bushfires. If a bushfire were to get into Skye, it would be very hard to stop it spreading to other neighbouring suburbs. For that reason alone it is important for the state government to invest in putting the households of Skye on mains water. Secondly, the water that the Skye residents have relied upon for about 40 years has come through a system of pipes which are now aged. The evidence is growing, according to the Skye action group, the SA Water appeal group, that there is a higher level of E. coli in the water that is being used in Skye than in other parts of metropolitan Adelaide. That situation may only get worse. It is exacerbated by the fact that most Skye residents have septic tanks rather than being connected to the sewer, because of how the suburb was developed. As a consequence, leakage over the decades has created a danger in terms of their use of bores and the local pipe system. So that is a second very important reason why it is important that the residents of Skye be given access to the SA Water mains water system. For that reason, the state government should act to spend the $3.7 million necessary to connect them. I have written to the Minister for Water, Paul Caica—whose seat is in fact in the electorate of the member for Hindmarsh, who is in the chamber—asking him to take that action as the Minister for Water. I look forward to a positive response from him. (Time expired) 5808 5808 09:33:00 Plibersek, Tanya, MP 83M Sydney ALP Minister for Housing and Minister for the Status of Women 1 0 Ms PLIBERSEK —I am really looking forward—and I know you will be as well, Mr Deputy Speaker—to seeing the Wear It With Pride campaign that I am going to be involved with next week in Sydney. It is an initiative that has received funding from the federal government and will be run by the AIDS Council of New South Wales on behalf of the National LGBT Health Alliance. The campaign is designed to let members of the gay and lesbian community know about their rights following this government’s removal of discrimination against same-sex couples, lesbians and gay men from 85 pieces of federal legislation. To celebrate that milestone, 85 designers are producing 85 T-shirts inspired by each of the reforms, which will then be worn by influential Australians to spread the campaign’s message to the community. The Wear It With Pride website says: These historic 85 reforms reward decades of protesting. I think it is really worth remembering that many of the people who will be participating in this campaign would have fought 20 years ago for the legalisation of homosexuality. They would have fought for the changes to the Commonwealth superannuation schemes, social security, taxation, Medicare benefits and so on for decades. They would have grown up at not just a time when it was a secret that you were gay or lesbian but a time when you could be arrested for simply forming a relationship with someone of the same gender. We have come a long way and it is a very proud day that these 85 reforms have gone through the Australian parliament and we are able to promote them in this way. In the last three years these reforms have covered many areas. In public office, same-sex partners are being recognised equally if they work for the government, the defence forces or as a judge. In parenting, families are regulated by the Federal Court in areas like parental responsibilities, child support, maintenance and so on. In the workplace, the Fair Work Act means that lesbian, gay, bisexual or transgender employees under the federal system are protected from discrimination and specifically included in leave set aside for couples, like unpaid leave and carers leave. In relationships, same-sex couples are defined within de facto relationships for social security purposes, in financial areas like taxation and superannuation, and in health and ageing for purposes of the Pharmaceutical Benefits Scheme and the extended Medicare safety net. Couples will also be able to exempt their homes from an asset test when one member moves into aged care but the other remains in the home. Immigration is also included. I represent an area, as you do, I know, Mr Deputy Speaker Bevis, where a great number of same-sex couples live and I know these reforms will make an enormous difference to their lives. They are long fought for and hard won, and I am very proud to be part of a government that has delivered them. 5809 5809 09:36:00 Gash, Joanna, MP AK6 Gilmore LP 0 0 Mrs GASH —It is with considerable sadness that I rise to inform the House of the passing of Col McPhedran. Many of you would know him as the father of Ian McPhedran, a well-known journalist, three daughters and another son. Colin is also the author of a book, White Butterflies, which recounts the story of his escape from the Japanese occupation of Burma—where he walked as a young boy to India losing his entire family on the way. Colin died in the loving arms of his family in Perth on Thursday, 3 June. Last Friday I spoke at the memorial service in his honour, which was conducted in the Anglican Church in Bowral and as a gesture of respect was attended by a mix of all religions, including Buddhist monks. Later his ashes were scattered at Summataram Forest Buddhist Monastery just outside Bundanoon in the Southern Highlands of New South Wales, which he helped found and I opened some 20 years ago. Colin was born in Burma of a Burmese mother and a Scottish father. He adopted the religious belief of his mother and practised those philosophies throughout his life. The Colin McPhedran I knew was part of my being and in his passing I have lost part of me that I can never get back. He, more than any other person, shaped my life as an adult and certainly as a politician. His serenity masked a canny mind but a mind always tempered with compassion and tolerance. I am indebted to him for so much; all of it spiritual, all of it timeless and all of it precious. Colin came into my life about 35 years ago—at the right time. But to me, his leaving will always be at the wrong time. His compassion and beliefs made him an ideal mentor for me, a role he took on fully despite having an entirely different political disposition to mine. Yet he was on first name terms with John Howard and Kim Beazley, who launched his book. He saw me through my first forays into politics and was the invisible voice at my shoulder guiding me through the tangle of politics as I entered the field of federal politics. He assumed the mantle of my mentor—guiding, advising, listening and just being there when I was at my most vulnerable. His stabilising presence and quietly spoken counsel soothed my anxieties, allowed me to clear my mind and focus on the challenge at hand—and no amount of money can buy that. Col would often divide his time between Perth and the Southern Highlands, where we ran a guest house with Kay Jones and her family. Col was the face of Ranelagh House; it was there that he wrote his book White Butterflies. I am pleased to inform the House that it is presently being made into a film. He was generous because he knew that ultimately he did not actually possess anything; rather he saw himself as having been given the privilege of having a lend of things during his current life. As a Buddhist he believed in reincarnation and he viewed his life amongst us as part of the endless cycle of life and rebirth. It is a liberating thought—the knowledge that whatever bedevils us today is just a moment in time. He was truly a peaceful man and a man whose virtues far outshone his human vulnerabilities and failings. To those of us who are left behind, how fortunate we are to have known and shared his life, and I thank his family for allowing me to share their father. He was a good teacher to me. I deeply regret his passing yet I rejoice in the knowledge of having known him, loved him and shared this very special man who taught me that to live life you need love, peace, truth and righteousness. I wish had listened to him just that little bit more when he was here. 5810 5810 09:39:00 Sidebottom, Sid, MP 849 Braddon ALP 1 0 Mr SIDEBOTTOM —I would like to talk about PICSE today—and I mean not the pixies at the bottom of the garden but a terrific program that was initiated in my electorate of Braddon by David Russell and a number of his colleagues from the University of Tasmania. PICSE stands for National Primary Industry Centre for Science Education. It promotes science and particularly agricultural science and primary industries in our schools and encourages people towards science and particularly towards science as applied to the primary industries. It was a fantastic dream and idea of Associate Professor David Russell, and it finally received Commonwealth funding of a number of millions of dollars and now has spread nationally. I want to again congratulate David and his team on this fantastic program. Nationally in 2009 there were 223 schools engaged in this education program, 7,529 students actively signed up and engaged, 99 local industries engaged and 199 science teachers on professional development through the PICSE program. That is a fantastic story, especially as it encourages people not just into the sciences but particularly into the areas that affect primary industries. Let us face it: if we cannot grow our own food and if we do not have people involved in producing and growing our own food then we will be reliant on others. For food security, that is not a good story. The program has just done its major evaluation report and has a fantastic report card because of that. Some of the major activities undertaken by the PICSE program are as follows. There is teacher professional development, which is absolutely crucial to encourage teachers, and teachers are great influencers on students. There is a student camp and industry placement program, which is fantastic. They go out and do work experience in real, live industries. That is very important. There are science investigation awards to encourage people to take up investigative projects. Finally, there is the science education national forum. Some of the 190 investigation projects that were presented in my electorate in 2009 included titles such as ‘Acid rain affecting pea plant growth’, ‘Plant fertiliser—what’s hot and what’s not’ and ‘Do different detergents affect algal growth?’ (Time expired) 5811 5811 09:42:00 Laming, Andrew, MP E0H Bowman LP 0 0 Mr LAMING —I rise today to remember the life of Grahame Rees, who was a Comcar driver in this place. Grahame was born on 20 December 1950 in Canberra hospital to parents Beryl and Ken. For every one of us that works here and jumps into the cars with these extraordinary men and women—so often preoccupied as we are by what is on the radio news or what is on our mobile phone—it is important, I think, to pause and remember this incredible group of people who flank our building and make it work, who connect us to our lives while we are in the city of Canberra. Grahame was one of these people. You could not help but get in the car and have a chat. He was a man who had enormous passions—golf, fishing and his family—and I was one of the privileged few young members who got to meet him while he was driving. He was also a keen team mate of a gentleman by the name of Kevin Grace, whom I lived with for the first three years I was in Canberra. I will paraphrase the eulogy of his son Todd, which was delivered at the funeral. In Grahame’s early years he lived in Queanbeyan with his sister, Yvonne. The eulogy explained that their father Ken worked as the station master of Queanbeyan railway station. Ken was later transferred to Darling Harbour and their family home was built in Kogarah, where Grahame attended James Cook High. In his formative years his parents and the family became involved with the Uniting Church in Rockdale, and later the Salvation Army. Grahame met his wife in 1969 and they were married in 1972. He worked for Elders Stock and Station Agency and was transferred to Cooma in 1973. Three years later he began working with the Snowy Mountains Engineering Corporation—SMEC—and expanded his interest in sport by playing rugby, tennis and cricket. The last was a lifelong passion for Grahame. In 1988 his home was established in Spence and Grahame began his career in Humanitarian Aid. That allows me to pause and reflect on just how wide and varied the careers of many of the men and women who drive Comcars are. I am sure many of them have even more fascinating backgrounds than we do. In that time Grahame became involved with overseas aid organisations, frequently travelling to war-torn countries in Africa such as Rwanda, Somalia, Ethiopia, Zimbabwe and Kenya. The final part of Todd’s eulogy read: Dad assumed onerous responsibilities from coordinating supplies to refugees, which included food, clothing, tents and medicines. In recognition of this, he received the Humanitarian Overseas Service Medal in early 2000. During our early lives, Dad coached our Soccer Teams and was thrilled when Grant began to share his passion for Cricket. Dad would often be seen umpiring or scoring when Grant began playing competitively and making ACT representative sides. Dads other passion was fishing and our family holidays were spent at Tuross Head’s in our grandparents’ holiday house. Dad taught all three of us (and Mum) how to fish, and in particular spent many hours with Todd and Pa beach fishing at all hours of the day and night. I know Dad was very proud of my achievements, especially when I graduated from University and started working with the AFP forensics team. Dad was very excited when my nephew Zac was born in 2005 just four days before his birthday, and flew to South West Rocks to see him when he was just a few days old. In the last seven years, Dad has been very involved with Gungahlin Lakes Golf Club—doing something that he really enjoyed. Being such a sports fan it seems appropriate if you are going to depart, then the golf course is as good a place as any. It was at the golf club, through Kevin Grace, that our paths crossed. Many of us have seen amazing contributions made by Comcar drivers, none more than Grahame Rees, and I am glad that I had the chance to meet this man. 5812 5812 09:45:00 Neumann, Shayne, MP HVO Blair ALP 1 0 Mr NEUMANN —On 4 June I opened new facilities at Bethany Lutheran Primary School. They received a new learning hub and a new amenities block under the Rudd government’s Nation Building Economic Stimulus Plan. Of course, Primary Schools for the 21st Century is a key element of that funding, as is the National School Pride Program. It was great to be there at the Lutheran community. While I was there Neil Schiller, the principal who has been there for many years, commended the Rudd government for this initiative, bringing forward, he said, their school infrastructure program by many years. The builder, Robin Fardoulys, the director of Fardoulys Constructions, told me that 200 jobs were supported across South-East Queensland by this project alone across the life of the project. We have 64 schools in the Blair electorate. Students in the western corridor and the West Moreton region will never get to study at a local trade training centre if the opposition is elected. In my electorate, Redbank Plains State High School is a very important school, one of the largest high schools in the Ipswich and West Moreton region. It, together with Woodcrest State College and Forest Lake State High School in the electorate of Oxley are joining forces to apply for a local trade training facility in Springfield, a satellite city which straddles the two electorates of Blair and Oxley. I strongly support that application to round 3 of the Trade Training Centres in Schools Program. If the coalition had their way, there would be no trade training centre in Springfield with these three great schools. Under the coalition this will all come to an end. Under the coalition in the Blair electorate the $3 million trade training centre run in conjunction with the two grammar schools—Ipswich Grammar School and Ipswich Girls Grammar School—and St Edmund’s College would also be at risk. There are also 44 library projects under threat, construction on seven classrooms would stop and some 1,056 students would no longer receive computers which have been promised to them. No school in Blair, no family, no student would be immune from the coalition’s cuts. All of the 64 schools in Blair would be at risk of reduced education funding. The Leader of the Opposition needs to explain to the parents and school communities across the Blair electorate in Ipswich and the West Moreton region up into the Somerset region why he will not deliver computers in schools or build trade training centres and will cut back the BER funding. He needs to explain to Woodcrest State College, Redbank Plains State High School and Forest Lake State College. He needs to explain to the federal electorates of Oxley and Blair. He needs to come to the offices of Bernie Ripoll, the member for Oxley, and mine in my electorate in Blair and explain to us why those schools will not get trade training centres and why their hopes need to be dashed. He needs to explain why hundreds of workers will not get jobs in this vital local school infrastructure. (Time expired) 5813 5813 09:48:00 Jensen, Dennis, MP DYN Tangney LP 0 0 Dr JENSEN —Last night on Lateline Tom Burbage, the Lockheed Martin head of the Joint Strike Fighter program, showed a total indifference to what is real and either misrepresented or, worse, lied about various aspects of the project. First of all he was talking about the cost of the project, realising that cost is merely one of the aspects used to build up the price. Tom Burbage said that in Australia we would get JSFs for $60 million. Quite frankly, if he thinks we can get a JSF for $60 million I say to the Australian government: ‘Buy the things. Buy 100. It will only cost $6 billion, and then we can spend the rest of the $9 billion or $10 billion to get to the $16 billion total to buy some real capability that we need.’ To give you some idea of how fanciful this number is, 24 Super Hornets cost us $3.2 billion or $150 million per aeroplane. He talks about concurrency—doing the development at the same time as actually building production aircraft—as being cost effective. This is something that is out of the trees. Car manufacturers, who have a far better handle on things—and cars are nowhere near as advanced as this—run the prototypes before they put the items into production. Burbage also talks about 4,000 to 5,000 aircraft. This is fanciful stuff. About 2,400 are currently proposed, and nations like the Netherlands are pulling out of initial operational testing and evaluation. He admitted that the earliest the aircraft would be in Australia is 2018. How is this giving us the capability we require? The performance of this aircraft is a dog. He is betting on a revolution that aerodynamic performance speed—what is called energy manoeuvrability—no longer counts. This has been bet on numerous times in the past, and every time the reality of warfare has come to bite it has been found that the fundamentals are important. This aircraft is not a true fifth generation aircraft. It does not have supercruise or the ability to cruise supersonically without using afterburner, and it certainly does not have superagility. It is not even as agile as current fourth generation aircraft. He did not deny that the competition flies higher and faster and can outturn and outrun the Joint Strike Fighter. He tried to say that they are only pictures of the competition. The PAK-FA—the F22 equivalent, which is far better than the JSF—is in flight test. The US House Committee on Armed Services has put budgetary requirements on the program to meet time lines in order to get full funding. And what has happened? The Secretary of Defense has said that it makes the program undeliverable. If anyone wants to find out any more about this, I suggest that they go to the Air Power Australia website. (Time expired) 5814 5814 09:52:00 Georganas, Steve, MP DZY Hindmarsh ALP 1 0 Mr GEORGANAS —I rise to speak on the future of the Lower Murray, the Lower Lakes and the Coorong in South Australia. I am pleased to see in here the member for Mayo, who has been very outspoken on this issue. As I said, the Coorong and the Lower Lakes rest in the hands of whomever forms federal government, as no South Australian government can extract or buy enough water from the eastern states to keep the river healthy, to keep the lakes from dying out and to keep the Coorong alive. This is very self-evident. South Australians need a federal government that will free up sufficient water to keep these systems and the communities that rely on them in South Australia alive. Our federal government’s Murray-Darling Basin Authority is preparing a basin-wide plan to allocate water where it is needed and where we need it. The plan will decrease the volume of water that can be drained out of the rivers, leaving enough water for our river system to remain healthy. It has become apparent that only this Labor government supports such a basin-wide plan, with upstream irrigators facing having their water entitlements cut. We have heard the Liberal-National opposition warn the country of an upcoming fight over water, a fight between farmers and the environment. They have lined up the environment in their sights and plan a bloody knock-them-down, drag-them-out fight to keep the water upriver in places in New South Wales and Queensland. They justify their fight by saying that irrigators upstream cannot afford to use less water. They even say that we, South Australians, cannot afford to have the upstream states use less water. The Liberal and National parties do not understand that it is not just the environment that they fight. In South Australia, when they fight the Murray they fight all South Australian interests. The Liberal-National opposition spokesman, the very colourful Senator Barnaby Joyce, believes that Queensland ‘actually extracts less water, I think, than South Australia or approximately the same amount’. This statement is very irresponsible. It shows that he has no idea. South Australia extracts substantially less water for agriculture than does Queensland, which extracts substantially less than does Victoria, which extracts substantially less than does New South Wales. Senator Joyce says that he has consulted with South Australians, and he says that he knows what we need. But he says that we in South Australia use more water than Queensland does, which is not true. Presumably, we do not need any more. Quite unapologetically, he says that he and his irrigator mates are looking forward to their fight with the river system on which we rely. Barnaby Joyce says he will fight it, and by that he means he will fight us—those in the Lower Murray, the Lower Lakes and the Coorong and all of us who stand up for them and the communities that from them derive life. If Senator Joyce’s opposition wants to fight South Australia, then so be it, because we cannot live without the Murray and we cannot live with the acidic destruction of the Lower Lakes and the death of our Coorong— (Time expired) 5814 5814 09:55:00 Briggs, Jamie, MP IYU Mayo LP 0 0 Mr BRIGGS —Firstly, I will speak briefly on a couple of points that the member for Hindmarsh made. Generally he is a good man, but it was of course John Howard and the member for Wentworth who initially came up with the idea of a national takeover of water in this country, so it is actually a Liberal Party initiative that remains our policy. We are the only people who are interested in saving the Lower Lakes. We are not interested in getting front-page headlines about fake water which does not exist to mislead people to win a state election; we are interested in actually fixing an environmental crisis in that area. The reason I have risen today is to speak about local roads in the electorate of Mayo. Unfortunately, in South Australia this year we have seen an extraordinarily high road toll, particularly in the earlier parts of the year, with 65 people having died. About half of those people have been in my electorate. The Adelaide Hills and the Fleurieu Peninsula have winding, small roads and unfortunately we have seen too many deaths due to a range of factors. One of those factors has been the quality of the roads and the lack of investment by the state Rann Labor government to keep these roads safe for the people who live in my area. I am talking about roads like the one at Crafers. I have recently done a survey of people who live in Crafers and there has been an overwhelming response about concerns as to the main street of Crafers, about people speeding up on it to get onto the South-Eastern Freeway, so using it as a launch pad. State Rann Labor government ministers have said there is no problem, although I am pleased that the new state minister, Jack Snelling, has taken this on board and is now looking at it after substantial community pressure. Over 10 per cent of people replied to the 700-odd letters that were sent out into Crafers, which I am sure members would acknowledge as being an extraordinary number of people, and we sent that information to the state Rann Labor government minister. In addition to that, Kangaroo Island—which is often left out by state Labor, as the Rann government does not like KI; they like to use it as a tourism attraction but they do not like to invest any money down there—has enormous challenges with roads and we need to do more. There is a lot of attention always given to the Victor Harbour road—and it should be duplicated—and, equally, I think we need to pay significant attention—perhaps more attention—to the road that goes down from Normanville and Yankalilla to Cape Jervis. It is a major tourism attraction. I think it is a long-term challenge for South Australia that we upgrade that road to increase the capacity for tourists to get to Kangaroo Island safely and for locals to travel on that road safely. It is a burning issue and it will be an issue into the future that I will be fighting over on behalf of my community. 5815 5815 09:58:00 Hale, Damian, MP HWD Solomon ALP 1 0 Mr HALE —I rise this morning to briefly outline some of the fantastic Building the Education Revolution projects that are occurring in my electorate. As there had been some conjecture and plenty of debate over the BER funding, I went out and spoke to the principals of different schools and collected some third party endorsements on how well this program has been received. I spoke to June Wessels, principal of the Bakewell Primary School, one of the biggest primary schools in my electorate with 680-odd kids. They got a new classroom block and they got an all-weather roof for basketball courts and outdoor stage facilities. She said to me that there had been excellent feedback from the community. Local businesses had been able to build a lot of the infrastructure that was very important to the people in my electorate. The Durack Primary School principal, Heather Stedman, got new extra classrooms and more library space. Once again a local company did the building and it had been received very positively by all the community. Certainly the Durack Primary School is growing. It is a very big school as well and this was very significant funding for that school. Even smaller schools like Ludmilla Primary School had work done. It had a library extension and a new resource centre. Its principal said to me that the whole community was right behind the BER funding and these sorts of projects were very important to the school as it continued to develop. Even in the Catholic schools sector, the principal of Sacred Heart Primary School, Kathy Neely, was very positive about the upgrade of the classrooms and the library extension. Once again, it was a local company that did the work—on time and on budget. She said the community is pleased and the parents have been very much involved in the design and very much involved in the whole process there. Principal Kelly Smith, of St Paul’s Primary School, said the roof over an outdoor learning area was something that they had been saving for and she said it would have taken many fetes and many chook raffles to get that money to be able to afford to do the extensions at the St Paul’s Primary School. So there are many great stories out there about the BER funding. I think one of the threats, obviously, is that the Leader of the Opposition has made it quite clear that these projects will be cut. There is $20 million worth of projects in my electorate of Solomon alone, and I ask the Leader of the Opposition to come to Darwin and tell those schools that they are not going to be funded. I seek leave to table these third-party endorsements that I have received from principals. Leave granted. 10000 Bevis, Arch (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. AR Bevis)—Order! In accordance with standing order 193 the time for constituency statements has concluded. 5816 Bills R4361 5816 Consideration resumed from 16 June. Immigration and Citizenship Portfolio Proposed expenditure, $1,996,327,000 5816 10:01:00 Morrison, Scott, MP E3L Cook LP 0 0 Mr MORRISON —Could I pose a question please to the Minister representing the Minister for Immigration and Citizenship, regarding the current detention population: could the minister please confirm how many children are currently being detained by the Department of Immigration and Citizenship as of today? 10000 Bevis, Arch (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. AR Bevis)—I extend to the Attorney-General my sympathy for the thrashing that New South Wales copped last night, but I give the call to the Attorney. 5816 10:02:00 McClelland, Robert, MP JK6 Barton ALP Attorney-General 1 0 Mr McCLELLAND —If I can indicate, I will get some specific figures as I am giving an account. The current population, as I understand it, as of two days ago, at least, on Christmas Island was 2,359 people and 44 crew. I understand that at Leonora there were 86 people, including 21 families. It is my understanding that 189 single men were transferred to the Curtin detention centre on 13 and 14 July. I will see what we have for other centres—just bear with me for one moment. 5816 10:04:00 Morrison, Scott, MP E3L Cook LP 0 0 Mr MORRISON —While the Attorney-General is doing that, perhaps I could assist. On 21 May, the department tabled some detention statistics, which noted that there were 3,612 people in detention on 21 May in all centres, including those which the minister refers to, and there were 452 children, 193 women and 2,967 men. I am just seeking an update on those total figures from those that are regularly published by the Department. 5817 10:04:00 McClelland, Robert, MP JK6 Barton ALP Attorney-General 1 0 Mr McCLELLAND —I thank the honourable member. I may have to take some of that question on the updated numbers on notice. The most recent figures that I have with respect to children are that 60 unaccompanied minors were transferred to Port Augusta immigration residential housing in April, a number of other unaccompanied minors are being accommodated in Melbourne immigration transit accommodation, and a number of families are being accommodated in Brisbane immigration transit accommodation and an alternative place of detention in Brisbane pending finalisation of their processing. I will take the other numbers on notice. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The member for Cook has the call. We will alternate across the chamber—that is the normal process—and the Attorney has just spoken. 83N Hall, Jill, MP Ms Hall interjecting— 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —No, I do not think the minister does not count as a government spokesperson. The member for Cook has the call. 5817 10:05:00 Morrison, Scott, MP E3L Cook LP 0 0 Mr MORRISON —Could the minister advise how many permanent residency visas have been granted to offshore entry persons since August 2008, and could he further advise how many offshore entry persons have been unsuccessful in their claims for asylum, have completed their merit appeals process and have been returned to their country of origin since August 2008? 5817 10:06:00 McClelland, Robert, MP JK6 Barton ALP Attorney-General 1 0 Mr McCLELLAND —On indulgence, I will go back to some figures previously asked for. As at 11 June 2010 there were 508 people being treated as minors—that is, under 18 years of age. Eight were in the community on the mainland under residence determinations, four in Queensland and four in Victoria. There were 292 in alternative detention on the mainland, including seven in New South Wales, 38 in Victoria, 68 in Queensland, 56 in South Australia, 63 in Western Australia and 60 in the Northern Territory; one in the community on Christmas Island under a residence determination; and 207 in alternative detention in the Christmas Island construction camp. With respect to those numbers that have been granted permanent visas, I understand that during 2009 there were 1,133 that were granted permanent visas. The figures I have for 2010 are a little old, but my last figures were 1,108. The removals figures that I had also require updating, but the last removals figures—and I will update these with updated figures from the minister—that were provided to me were that there had been 149 removals, 132 voluntary and 15 forced. But I will get those forced removals. 5817 10:08:00 Morrison, Scott, MP E3L Cook LP 0 0 Mr MORRISON —Are you referring in those removals figures only to offshore entry persons, people who arrived by boat, or do those figures apply to the global detention population, which would include others who have made arrivals by air or other means? 5817 10:08:00 McClelland, Robert, MP JK6 Barton ALP Attorney-General 1 0 Mr McCLELLAND —I thank the honourable member. On the basis of my information I am not able to answer that. My assumption is offshore entry persons, but I will seek some clarification of that from the minister. 5817 10:08:00 Morrison, Scott, MP E3L Cook LP 0 0 Mr MORRISON —Could the minister provide a status update on the High Court action currently being pursued by a number of asylum seekers whose claims have been rejected or gone through a merit appeals process? Could the minister advise the basis of the action that is being brought, how many people have joined that action and what advice the government may have received in terms of the case? 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —I probably should just point out that the normal custom of the House, which is appropriate to be followed here, is for the call to be alternated from government to opposition. Whilst it is open to any member of the government to seek the call, if the minister seeks the call then, in accordance with the convention, the minister receives the call. 5818 10:09:00 McClelland, Robert, MP JK6 Barton ALP Attorney-General 1 0 Mr McCLELLAND —In this matter, Justice Hayne in the High Court held a directions hearing on 16 of the 17 matters on 4 June 2010. His Honour made procedural orders putting in place a timetable for the filing of evidence and amended applications. His Honour listed both matters for a further directions hearing on 25 June 2010. His Honour indicated the first available date for a substantive hearing before the full court of the High Court would be in the week of 23 August 2010. However, I am not sure that that date has been allocated by the court. I think there is still some discussion between the parties and the court about that matter. It seems that the court is likely to identify two cases as essentially representative of the issues in dispute in the number of cases that have been filed. Again, there is some negotiation between the parties. The basis of the claims is a challenge to the validity of the refugee status assessment and the independent merits review process applying to offshore irregular maritime arrivals. I cannot comment on the specifics of the issues raised in the proceedings. Regarding the issue of class actions, the Immigration Act specifically precludes class actions; hence, the filing of the individual matters. Regarding the issues in dispute, I am advised in accordance with the non-statutory refugee status assessment procedures, which were introduced by the former government in 2001 as part of the excision arrangements, that these applicants’ protection claims were thoroughly examined by an independent decision maker from the Department of Immigration and Citizenship. These claims were considered on a case-by-case basis and each person was found not to be owed Australia’s protection; hence, they have taken court action. These decisions were in turn reviewed by an independent reviewer in accordance with the independent merits review process, introduced by the Rudd government, to ensure greater fairness and integrity in the offshore refugee status assessment. The government’s position, which we believe is sound but obviously these matters are determined by the court, is that if an offshore entry person is moved from Christmas Island to the mainland it is simply a case of transferring detainees from one place of immigration detention in Australia to another place of immigration detention. The person’s status as an offshore entry person does not change as a result of that transfer. That was based on legislation introduced by the former government. One of the applicants in the case is, as I understand it, currently on Christmas Island. So in that sense the issue about whether the people are in Australia or on Christmas Island has not been dissected. The challenge is to the process, as opposed to where the people are currently located. Obviously these issues will be discussed in the court case. 5818 10:13:00 Morrison, Scott, MP E3L Cook LP 0 0 Mr MORRISON —On the matter that the Attorney just raised, I understand that what he is saying is that each of those actions that are being brought before the High Court are individual actions. So the position being pursued by the individual on Christmas Island will be assessed separately to the positions of those claimants who are making their claims on the mainland. I just want to clarify with the Attorney that each of these cases will be considered separately. It is not a class action; they are separate actions being brought by these individuals. So the claim of the person on Christmas Island will be considered in the courts separately to those who are on the mainland and have been transferred? 5819 10:14:00 McClelland, Robert, MP JK6 Barton ALP Attorney-General 1 0 Mr McCLELLAND —I cannot say whether one of the cases identified as being one of the two to be determined by the court is of that person on Christmas Island. I do not have the information to identify that person. It appears likely, on my briefing, that matter 61 of 2010 and another case known as matter 69 of 2010 will be the leading cases that will be heard together. On 25 June the plaintiffs in matter S116 of 2010 and S121 of 2010 will be given the opportunity to say why their cases should also be referred to the full court for determination. Again, however, I am not sure whether either of those cases relates to the person on Christmas Island. He has indicated that his current view—this is at the time of the directions hearing—was that he could not see that these two additional cases would add to the points of legal principle that the full court needs to resolve in order to establish the legal principle applying to the cases that have been filed. Without speaking on behalf of the court, it seems that they are seeking to identify a common factual base that will enable the court to determine legal principle that can be assumed to have broader application. I cannot say, on the basis of information before me, whether any of those cases so identified by the court relates to the person on Christmas Island. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —Before I give the call, I would like to make something clear. Over the course of debate, the proceedings have taken on the character of question time—and that is quite appropriate; there is no reason why that should not be so. However, it is in fact not question time so it is not a circumstance in which the practice would be to call questions from one side then the other. It is in fact a debate. At the conclusion of that debate the resolution will be put. Because it is a debate, the normal practice is to give the call to a government member then to an opposition member, and where more than one government member stands, if the minister seeks the call then the minister will receive the call. I think we need to understand the practice of what we are going through. 5819 10:17:00 Morrison, Scott, MP E3L Cook LP 0 0 Mr MORRISON —In recent times there have been a number of reports about—and the Attorney referred earlier to this—the number of people who have been transferred from Christmas Island, due to the overcrowding and unprecedented rate of arrivals, to mainland places like Leonora and the recently reopened Curtin detention centre. I understand that the government has received a range of propositions and applications from various places around the country in relation to where other potential detention facilities might be located to cope with the unprecedented rate of arrivals—three boats per week as opposed to three boats per year under the last six years of the coalition government. I would be interested to know from the Attorney in considering these appropriations how many additional places are required in the department’s view to cope with the increase in arrivals and the detention population as it stands and as it is expected to increase over the next 12 months? How many extra beds are they looking for and in what places are they seeking to place those beds? 5819 10:18:00 Hall, Jill, MP 83N Shortland ALP 1 0 Ms HALL —I was wondering whether the Attorney can provide additional information on developments to further strengthened Australia’s border security. 5820 10:18:00 Morrison, Scott, MP E3L Cook LP 0 0 Mr MORRISON —I repeat the question I asked earlier. How many additional beds will the government need to create to cope with the rate of arrivals? 5820 10:19:00 McClelland, Robert, MP JK6 Barton ALP Attorney-General 1 0 Mr McCLELLAND —I thank the honourable members for their questions. I went through details of movements to Leonora and to Curtin, and obviously the northern detention centre in Darwin has also been opened. I indicated that a number of families have been placed in other locations in Brisbane and Sydney. Obviously there is an issue occurring now with irregular maritime arrivals coming to Australia. The government has strategies in place to deal with those arrivals, in anticipation that there will be additional arrivals. Clearly, the government have devoted considerable resources to developing cooperative intelligence arrangements with our neighbours, including coordinating the intelligence in the home affairs unit and specifically in the Customs and Border Protection Service. Obviously there is an anticipation of additional boats seeking to enter Australian waters, and steps are being taken in that regard. However, the circumstances and the predictions as to how they are going to pan out over a longer term period are obviously dependent on a number of factors. In that respect, the planning, as I understand it, is taken on the basis of developing contingency arrangements with the officers of his department to identify potential locations. Given that we have imposed a freeze on the processing of people from Afghanistan and also from Sri Lanka, there will be a need to accommodate those people during the course of the freeze. The minister’s department is taking advice and examining alternative places of detention, and accommodation in the case of families. But, necessarily, there is no specific number given the circumstances that can impact on, firstly, those seeking to arrive in Australia and, secondly, the response once they arrive in Australia. In that context, and in answering a question from the member for Shortland, I indicate that the government have taken very strong measures. I think I said this the other day in the House. Our policy is one of excision of offshore islands, mandatory detention of persons for the purposes of checking their immigration and their identity, and of conducting security and health assessments. We also have compulsory return of those found not to be seeking asylum. The Minister for Immigration and Citizenship recently indicated that there has been in the order of a 40 per cent rejection rate of asylum claims from persons from Afghanistan. Clearly, we anticipate that at the conclusion of the suspension of the processing of those persons from Afghanistan and Sri Lanka, updated information from the United Nations High Commissioner for Refugees and from in-country information will mean that more of those applications will be rejected. The government do not believe the opposition’s policy of introducing temporary protection visas will work. I think the history speaks for itself in that respect. There was a significant increase after that was introduced in 1999. Nor do we think the Pacific solution will be effective. We saw that 70 per cent of the people who were part of that were returned. In particular, the Pacific solution introduced by the former government was based on what was effectively indefinite detention on Nauru and Manus Island. I ask the opposition: do they intend, as part of their reintroduction of third-country processing, that there will be indefinite detention on those places or do they intend to process claims within a specified time limit? 5820 10:23:00 Morrison, Scott, MP E3L Cook LP 0 0 Mr MORRISON —I note that the Attorney raises the issue of indefinite detention, and I will come to that in a moment. In relation to the appropriations, Senator Evans indicated that the estimated number of people to arrive in financial year 2010-11, which begins in just a couple of weeks, will be just 2,000—a 60 per cent decline on this current financial year’s number. Given that the budget estimates currently include a $1 billion increase from last year when the figures were introduced, can the minister comment on the following. If the current rate of arrivals—three boats per week and 600 people per month—were to continue in the next financial year, what impact would that be on the budget estimates and what would the likely further increase be? I also go to the issue raised of indefinite detention and the asylum freeze introduced by the government on 9 April. With the asylum freeze, I would be interested to know what advice was given, or if advice was given, to the government regarding the legal position as to the United Nations Convention relating to the Status of Refugees and in particular article 3, which stipulates against discrimination due to a person’s race, religion or country of origin. Given that there is currently a six-month freeze for Afghan asylum seekers and a three-month freeze on assessment for Sri Lankans, and absolutely no certainty one way or the other on whether those freezes are to be extended, how does that sit comfortably with the government’s own stated detention principle that no-one will be detained indefinitely, when it is clear that those subject to those freezes have been discriminated against on the basis of their nationality and are indeed being detained indefinitely with no assessments being undertaken? 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —If this were questions I would rule the first part out of order as hypothetical, but, as I commented before, it is not questions; it is debate. 5821 10:26:00 McClelland, Robert, MP JK6 Barton ALP Attorney-General 1 0 Mr McCLELLAND —I thank the honourable member. On those detentions: our advice is that, while the Racial Discrimination Act prevents discrimination on the basis of colour, or racial, ethnic or national origin, the Federal Court of Australia has determined that making assessments—as we are in the case of our suspensions—on the basis of nationality is not equivalent to making a determination on the basis of national origin. We are in fact looking at the circumstances existing in Afghanistan and Sri Lanka in light of the state of hostilities in those countries, and at the re-engagement of the democratic system in Sri Lanka after the cessation of hostilities, and looking to receive that updated in-country information. I would also point out that in contradistinction to the government’s policies of these people remaining in detention during the period of suspension, as I understand it, on the basis of the opposition’s temporary protection visa arrangements these people would actually be released into the community, assuming that they satisfied the assessment criteria. More broadly, the figures quoted in the media about a $1 billion blow-out in processing are wrong. It seems that the media has referred to outcome 4, rather than outcome 4.3 dealing with the processing of irregular maritime arrivals. The total estimated cost for the detention and management of immigration arrivals in 2010-11 is $440 million. That includes Christmas Island and also onshore facilities. The estimated cost in respect of Christmas Island is $213.1 million. These estimates are agreed between the department of immigration and Finance. They are agreed on the basis of an averaging process of numbers, which I understand were the same budget and forecast arrangements that were used under the previous government. In respect of that, the previous government experienced again a very substantial peak in the costs that they incurred during the 1999, 2000 and 2001 years, which the honourable member spoke of the other day. There was a substantial influx of arrivals into Australia during the period of the former government. I recall that the figure was then an additional $1.5 billion over those three years. These things are not unknown, and the arrangements between Immigration and Finance accommodate that potentially occurring. I note, for example, that the former government had estimated in its budget in 2002 that the construction cost of the Christmas Island facility that it eventually built would be $153 million. That blew out to $400 million. I also note that the opposition’s proposed arrangements for detention of persons at an offshore place or in another country would necessarily involve a very substantial expense. Indeed, from my observations, I doubt that the opposition has factored in that cost. For instance, it is my understanding that the costs of Nauru were well over $315 million. Again, considering how the opposition is explaining its policies, I wonder how those contingencies would be factored into its costings. 10000 Bevis, Arch (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. AR Bevis)—Order! The time agreed between the government and the opposition parties for consideration of this matter has concluded. Proposed expenditure agreed to. Resources, Energy and Tourism Portfolio Proposed expenditure, $1,130,673,000 5822 10:31:00 Macfarlane, Ian, MP WN6 Groom LP 0 0 Mr IAN MACFARLANE —I ask the Minister for Resources and Energy and Minister for Tourism when he became aware of the detail of the mining supertax. LS4 Ferguson, Martin, MP Mr Martin Ferguson interjecting— WN6 Macfarlane, Ian, MP Mr IAN MACFARLANE —I did not realise I was going to have to be pedantic. Can I ask the minister if he had a detailed briefing any earlier than two days before the announcement of the supertax on the Sunday before the budget. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —Just before I call the minister, I will make the same observation that I made during the previous consideration. Whilst it is totally appropriate for questions to be asked, this process is morphing into a question and answer session. It is in fact not question time. It is time for debate and at the end of the allotted time the debate will conclude and the motion will be put. It is totally appropriate for questions to be asked but I make the observation that this is debate as to a proposed resolution. I call the minister. 5822 10:32:00 Ferguson, Martin, MP LS4 Batman ALP Minister for Resources and Energy and Minister for Tourism 1 0 Mr MARTIN FERGUSON —It is appropriate that the shadow minister ask questions but, as a former member of cabinet, he would know that it is not the practice of either side of politics to detail the confidential nature of cabinet processes. He did not do it in the past and nor will I now. I must say that, unlike the former Treasurer, the member for Higgins—and I can recall the tough GST debate when he was going around bagging the then Prime Minister, saying that he had got the GST wrong and that the government should walk away from it—I am not going to dodge it and walk away from a tough debate. This is about Australia’s future. The Minerals Council of Australia argued to the Henry tax review over a period of two years that Australia actually should reform the taxation system and put in place a long-overdue profits based system. The industry argued that the system of state royalties was inappropriate. It also thought it was inappropriate, as state and territory governments had done over a long period, to adjust royalties on a regular basis to suit their short-term budgetary considerations. It also thought it was inappropriate that when times were bad it would have to go and ask state premiers and treasurers for royalty relief or holidays from the payment of royalties so as to enable workers to continue to be employed during the down times. For those reasons we are committed to putting in place a profit based tax system. But I go back to where I started: the member for Groom, as a former member of cabinet of longstanding nature and respect, understands—as do I—that you do not breach cabinet solidarity. 5823 10:35:00 Macfarlane, Ian, MP WN6 Groom LP 0 0 Mr IAN MACFARLANE —I note the minister’s answer, but it is not the answer that his colleague the Minister for Trade gave this morning where he told his department, therefore publicly, that he learnt about this issue in the newspaper and I suspect, if the minister is honest, that is where he learnt about it as well. My next question is to ask the minister if he can supply me with the names of companies with a market cap of more than $10 billion that support this tax. 5823 10:35:00 Ferguson, Martin, MP LS4 Batman ALP Minister for Resources and Energy and Minister for Tourism 1 0 Mr MARTIN FERGUSON —I have no intention of responding to media speculation about what other ministers may or may not have said. Perhaps the member for Groom believes everything in the media, I certainly do not. But I do believe the media when they say he is a good bloke. They are right on that, but I am not sure they are always right about the internal workings of government. I have been engaged in discussions with companies both big and small. Strange, but I approach discussions on the basis that what is discussed in a room stays in the room. That is why companies have always been able to have discussions with me. Just as the member for Groom, as a former minister, did, I have access to a significant amount of confidential and commercial-in-confidence material. I do not particularly care how big or small companies are that talk to me, I have no intentions of talking publicly about what is discussed with me. 5823 10:36:00 Macfarlane, Ian, MP WN6 Groom LP 0 0 Mr IAN MACFARLANE —Mr Deputy Speaker, again that is an evasive answer because the Prime Minister has stated in the House that there are mining companies that support this tax. I again ask the minister whether he is aware of any mining company with a market cap over $10 billion who supports this tax, either publicly or in private. 5823 10:36:00 Ferguson, Martin, MP LS4 Batman ALP Minister for Resources and Energy and Minister for Tourism 1 0 Mr MARTIN FERGUSON —And as I have said previously—and this is an interesting little game of ping-pong across the chamber—I talk to companies on a regular basis and I have no intentions of disclosing publicly what they have talked to me about confidentially. I have had very clear feedback from a number of companies that they are not intending to put their hand up publicly because of the huge pressure being placed upon them by certain mining companies in Australia and certain peak councils representing the mining industry. It is not merely pressure to say nothing publicly; there is also significant pressure to donate significant amounts of money to fund the campaign against the government. I do read the media. I do not always believe them, and perhaps I might be wrong on this, but I read an article in a national daily yesterday which referred to significant fundraising efforts out of the Western Australian branch of the Liberal Party relating to the current campaign against the government on the proposal to significantly change and reform the Australian taxation system. It spoke about the view in the Liberal caucus that their deputy leader has not always been that relevant to the future of the coalition. One has said that the member for Curtin ‘has finally found her place in the sun’. There is a report on her good connections to the mining industry in Western Australia— WN6 Macfarlane, Ian, MP Mr Ian Macfarlane —Mr Deputy Speaker, I rise on a point of order: I would like to know the relevance of this answer in relation to the question. 10000 Bevis, Arch (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Hon. AR Bevis)—It is not question time—I think I have made that point a couple of times while you have been here—it is in fact a debate, and the minister is thoroughly in order. LS4 Ferguson, Martin, MP Mr MARTIN FERGUSON —I would like to continue, Mr Deputy Speaker. It talked about her very close connections to a number of key business houses up and down—I think it is King Georges Terrace in Perth— WN6 Macfarlane, Ian, MP Mr Ian Macfarlane —St Georges Terrace—I know you don’t know anything about Perth! LS4 Ferguson, Martin, MP Mr MARTIN FERGUSON —St Georges Terrace. You know it well, and I would not be surprised if she has you walking up and down the pavement hand-in-hand with her. I did remind her in the House the other day that since this dispute started she had had to buy a bigger handbag to collect her donations. And that is reflected in the article in the national daily yesterday, which said that all of a sudden she has a great place in the sun: good contacts, collecting donations and the party is now expecting her to spread the money across other state and territory branches of the coalition. I can hardly wait for the electoral returns after the next election. 5824 10:39:00 Macfarlane, Ian, MP WN6 Groom LP 0 0 Mr IAN MACFARLANE —I ask the minister what his estimation of the mining tax is on companies that operate on a historical basis? 5824 10:39:00 Ferguson, Martin, MP LS4 Batman ALP Minister for Resources and Energy and Minister for Tourism 1 0 Mr MARTIN FERGUSON —I refer the member for Groom to the Treasury documentation. 5824 10:39:00 Macfarlane, Ian, MP WN6 Groom LP 0 0 Mr IAN MACFARLANE —I refer the minister to the estimation by the Treasurer that companies will pay 48 per cent tax. Does the minister agree? 5824 10:40:00 Ferguson, Martin, MP LS4 Batman ALP Minister for Resources and Energy and Minister for Tourism 1 0 Mr MARTIN FERGUSON —I think it is more appropriate that the member for Groom attend the session that involves the Treasurer and ask the Treasurer about his views about his estimates. WN6 Macfarlane, Ian, MP Mr Ian Macfarlane —I am asking about your views. LS4 Ferguson, Martin, MP Mr MARTIN FERGUSON —I take the view that this is about industry paying a fair and appropriate level of taxation to the Australian community and about the opportunity on a one-off basis to develop resources 100 per cent owned by the Australian community. 5824 10:40:00 Windsor, Antony, MP 009LP New England IND 0 0 Mr WINDSOR —I have two questions for the minister. LS4 Ferguson, Martin, MP Mr Martin Ferguson —Serious questions? 009LP Windsor, Antony, MP Mr WINDSOR —I will attempt to bring some sanity back to the debate. One question is on the resource super profits tax. I personally support a rent resource tax; I have some issues with the current proposal in the budget papers. My question to the minister relates to the long-term bond rate being the starting point of the tax and the definition of the resource super profits tax. Has the minister done any modelling in terms of the total revenue take—if in fact the level of the entry point into the resource super profits tax area is in fact increased? In particular, if a level of 10 per cent were placed in the definition, what would that mean in terms of the total take? My second question is one of jurisdiction, in a sense. The minister would be well aware of some of the issues relating to the Liverpool Plains—for instance, the interface between water issues, particularly groundwater issues but also surface water issues, and the potential impacts of mining to the agricultural area and water resources. I know those areas in Queensland—which the member for Groom would also be aware of—where there are very real concerns about the jurisdiction of state governments. My question to the minister is: given that the Commonwealth has now moved into the policing and the end of valley caps in relation to the Murray-Darling system, does the minister believe that the state based planning processes that are currently in place are sufficient to safeguard the water resource and agricultural areas the Commonwealth is playing a much stronger role in? WN6 Macfarlane, Ian, MP Mr Ian Macfarlane interjecting— 5825 10:42:00 Ferguson, Martin, MP LS4 Batman ALP Minister for Resources and Energy and Minister for Tourism 1 0 Mr MARTIN FERGUSON —Let us deal with the last question first. I think, to be fair, the member for Groom also understands the importance of this. As you know, with respect to projects such as those on the Liverpool Plains, other than the operation of the Environmental Protection and Biodiversity Conservation Act, full responsibility for approval of mining has historically rested in the hands of state and territory governments. There has been a serious campaign in the Liverpool Plains area against BHP Billiton by a local community with respect to potential mining activity. We all appreciate that as a result of discussions BHP Billiton has now agreed not to mine on the plains and their mining licence has been adjusted on a voluntary basis to reflect that. There is then an outstanding question about a potential examination of water related issues, which, as the member for New England would appreciate, I have been having discussions about with our Minister for Climate Change, Energy Efficiency and Water, Senator Penny Wong. I treat the request for such an investigation seriously. I remind the member that he asked the Prime Minister a question in the House about three or four weeks ago concerning this matter and that he was given an undertaking that I would visit the Liverpool Plains area for the purpose of having discussions with the member for New England with respect to these issues. At that time, I would also like to talk to him and the local community about the potential to undertake an independent water study. It is not proposed at this stage that the Commonwealth government take over responsibilities for these matters. We all appreciate that on an ongoing basis these issues are going to get more and more difficult. It is something that is going to have to involve further state and territory and Commonwealth discussions as we go forward. But, with respect to the specifics of the Liverpool Plains, I am focused on that, as is the government, for good purposes. In terms of the long-term bond rate, my department has not done modelling related to the tax proposal because that is the responsibility of the Treasury. He appreciates, as does the member for Groom, who has primary responsibility for modelling relating to tax issues. I can confirm, because it is in the public arena, that a number of companies, big and small, have raised with me the proposal with respect to the resource super profits tax and the interface with the long-term bond rate. 5825 10:45:00 Ciobo, Steven, MP 00AN0 Moncrieff LP 0 0 Mr CIOBO —I question the minister with respect to his portfolio duties regarding tourism. Is the minister aware of the concept of inflation and the fact that the purchasing power of a dollar erodes over time? If the minister is aware of that concept, could the minister outline why funding to Tourism Australia under his stewardship has now fallen to its lowest level since 2003 in real terms? Would the minister also outline why he has provided absolutely no additional assistance to the tourism industry under the Long-Term Tourism Strategy—further, why in fact in real terms this year has the minister not supplemented the additional $9 million that was pulled forward from this year’s budget with new funds for this year? Additionally, would the minister also outline his government’s policy decision to impose $1¼ billion of new taxes on the tourism industry through predominantly the increase in the passenger movement charge as well as other ancillary charges? 5826 10:46:00 Ferguson, Martin, MP LS4 Batman ALP Minister for Resources and Energy and Minister for Tourism 1 0 Mr MARTIN FERGUSON —I think it is about 700 days since I last got a question from the member for Moncrieff on a tourism related matter. Firstly, on the $9 million, the industry asked that the government bring forward the $9 million to suit a short-term requirement to assist the industry to get through a very tough period. The government responded in a positive way to the request by industry. It was never suggested by industry that having brought it forward we then supplement it. The request has only come after the government agreed to bring forward the $9 million. I made it clear in bringing forward the $9 million that we would continue to seek to assist the industry through the global financial crisis. That $9 million in partnerships with industry and state tourism organisations was turned into $20 million, because in bringing forward the $9 million I was determined to get a multiplier effect by working with industry and state tourism organisations on the basis of at least dollar for dollar so that you got a bigger impact from the investment by government. Through the January, February, March period—especially the Chinese New Year period—that was of substantial importance to the tourism industry, especially in areas such as tropical North Queensland, where they have been doing it very tough for a long, long time, including under the previous government, because of the collapse in the Japanese market. It is interesting to note that for the March quarter of this year, for the first time since 2005, tourism numbers out of Japan were up by three per cent. I can only hope that, as the Japanese economy strengthens, we return to some growth, but I will never suggest we are ever going to have the figures we previously had out of Japan into areas such as tropical North Queensland. The nature of the market has changed. So in terms that $9 million, the answer is no. The industry knows it because I told them at the time. More importantly, I turned $9 million into $20 million by working closely with industry. By the way, in terms of government expenditure, I simply remind the member for Moncrieff that he had better be very, very careful travelling around the country creating a view in the minds of people in the tourism industry that the coalition in the lead-up to the next election is going to meet all these half-promises that local groups are asking him for in meetings. Next week, we have the annual meeting of the national Tourism and Transport Forum to be held in Canberra. I remind the member for Moncrieff that he has an outstanding funding commitment to the transport and tourism community. During the course of the forum last year, he talked up—in a very strong way—abolishing the passenger movement charge relating to the movement of people between Australia and New Zealand. I do not know if he has done his sums on the cost, but I have booked it. It is quite a substantial amount of money that the coalition is going to have to come forward with to meet the promise he made to the transport and tourism foundation at its meeting here in Canberra, at Parliament House, last year. I would also say he has been going around the community making a number of other half-promises about restoring TQUAL—about another $30 million over four years. Are you going to meet that commitment, or are you going continue to mislead people about what you may or may not do in government? My relationship with the tourism industry is upfront. I tell them what I can do and I tell them what I cannot do. I am not particularly worried about that, because I have a view that that is what being a minister is about—not creating misleading expectations that you can do things when you cannot do them. I would also remind the member for Moncrieff that he has been out there making speeches about the need to return the budget to surplus. Our budget parameters return the budget to surplus in three years, half the time expected. You cannot have it both ways, going out there saying we should cut the cloth to suit the current circumstances and then going out there saying we should spend money. People soon see that you are an absolute hypocrite because they see through such half-baked speeches and promises. The member for Moncrieff can come in here and ask all the questions in the world, but it has got to a point where people understand that he is not serious about tourism because he is not prepared to call it as it is. He continues to go round telling them, ‘We’ll do this and do that,’ knowing full well that he has no capacity to do it. 5827 10:51:00 Macfarlane, Ian, MP WN6 Groom LP 0 0 Mr IAN MACFARLANE —I thank the minister for his earlier answers, where he admitted he was not aware of the proposal until it was announced and that he cannot name— LS4 Ferguson, Martin, MP Mr Martin Ferguson —Mr Deputy Speaker, on a point of order: that is a deliberate misrepresentation of my views. 10000 Schultz, Alby (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Mr AJ Schultz)—There is no point of order. The minister will resume his seat. WN6 Macfarlane, Ian, MP Mr IAN MACFARLANE —He did give an answer which showed that he was not aware of the tax before it was announced—as the Minister for Trade was not aware of it. He is also unable to name a single company that supports this tax, despite the Prime Minister’s statements in the chamber. But he has agreed that companies will be paying 47 to 48 per cent tax, because that is the figure that the Treasurer is using. Can I ask one question that he might be able to answer: can the minister give an assurance that the government will resolve the issues surrounding the supertax by the end of this calendar year? 5827 10:53:00 Ferguson, Martin, MP LS4 Batman ALP Minister for Resources and Energy and Minister for Tourism 1 0 Mr MARTIN FERGUSON —They are the same types of assurances that the member for Groom gave the government in the lead-up to last Christmas—that he would deliver the coalition rooms in support of a Carbon Pollution Reduction Scheme. Not only that, he made very strong public statements that the CPRS is the best thing since sliced bread. That is what he said: the best thing since sliced bread. Here we have the member for Groom—who has a bit of standing and respect in the Australian community—fully understanding the complex nature of negotiations, because he himself went through them around the Carbon Pollution Reduction Scheme in the lead-up to last Christmas. Unfortunately, he failed miserably. I know it took him a long time to recover because, at about the same time, a new leader was elected. And, because he dared to stand in support of fundamental change in Australia, structural reform, he was sacked. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —Order! I am under the firm impression, as the chair, that the member for Groom asked the minister the question, not vice versa. LS4 Ferguson, Martin, MP Mr MARTIN FERGUSON —This is not question time, with all respect, Mr Deputy Speaker. 10000 DEPUTY SPEAKER, The The DEPUTY SPEAKER —The minister should address the issue. LS4 Ferguson, Martin, MP Mr MARTIN FERGUSON —I am addressing the issue, but the question was rather colourful in nature and intent, and I intend replying in a similar way. In the same way in which the member for Groom approached detailed negotiations and meetings with the government over the Carbon Pollution Reduction Scheme, I approach negotiations around the resource rent tax proposal: with goodwill and with good intent. I simply say to industry that, in many ways, the resolution of this and the timing are very much related to their negotiations and their capacity to engage in good faith and to assist to inform the process. I simply say to the member for Groom: do not always believe what you read in the media. 5828 10:55:00 Ciobo, Steven, MP 00AN0 Moncrieff LP 0 0 Mr CIOBO —I welcome the fact that the Minister for Tourism has indicated that there is not a single cent of additional funding for Australia’s tourism industry. It helps provide some clarity. I also noticed that the minister refused to address the fact that, under his government, the tourism industry has gone backwards, with $1¼ billion of new taxes, with funding for Tourism Australia cut in real terms to 2003 levels. I also notice that the minister comes from the school of thought that the best defence is offence, and I welcome him to attack the coalition’s strong record with respect to support for the tourism industry as much as he sees fit. Notwithstanding that, given that the minister has now confirmed that he will not be providing any additional assistance for the tourist industry through Tourism Australia funding and, indeed, does not have any real concern about the fact that his government imposed $1¼ billion of new taxes, I wonder if the minister could indicate whether the TQUAL program, which he spoke about earlier—a program that replaced the $29 million Australian Tourism Development Program; incidentally, Minister, I note you raced around the country for nearly two years announcing various projects around the country under ATDP funding—will be extended given the minister’s particular desire to constantly lecture Australia’s tourism industry about the need to invest in supply-side infrastructure and supply-side attractions. Minister, will the money match your mouth and will your government be doing anything with respect to extending the TQUAL program? Your indication of that or otherwise would be welcomed. 5828 10:57:00 Ferguson, Martin, MP LS4 Batman ALP Minister for Resources and Energy and Minister for Tourism 1 0 Mr MARTIN FERGUSON —Direct support for Tourism Australia stands steady. Let us go to the question of the tourism industry and how this government approaches it. Firstly, we turned it into a cabinet portfolio because we regard it as a key part of the Australian economy, something the previous government failed to do—and I know what you thought about your junior minister at the time, but I will not go there. In terms of the tourism portfolio, it is about time the industry and the shadow minister started to think about a whole-of-government approach. When it comes to the tourism industry, you also have to look at transport infrastructure. I just met with six councils from the Ocean Road area this morning. I was shadow minister for transport at the last election, and the most significant contribution they got to the further development of the tourism industry in that area previously was the Geelong Road bypass. We decided to put more in than expected to finish it and to enable the industry to go forward and further develop it, because it was a key hindrance to the development of the tourism industry in that area. Perhaps more importantly, in terms of the supply-side issues, have a look at the funding given to local councils by our government budget by budget through the department of local government and go through the list of projects and see how much of that money is actually being spent on tourism related projects. There are very, very significant amounts of money across the length and breadth of Australia. When it comes to supply-side issues, unfortunately, the member for Moncrieff is still stuck in the past. He thinks the key to future growth of the tourism industry in Australia is to spend more money on marketing. It is not; it is about attending to a long-term tourism strategy going to supply-side issues, including consideration of the skilling of the industry. How can the industry compete when a trades assistant employed at Gorgon receives $150,000 per year and a chef in the city receives about $82,000 per year? What is the importance of migration? What is the importance of aviation access? How do we get some of these airports to improve their infrastructure? They are the types of issues that will determine where we go in the tourism sector in Australia—that is, not whether or not we bring forward $9 million out of the Tourism Australia marketing campaign for a short-term opportunity with industry but having a long-term tourism strategy which puts tourism front and centre of the Australian economy. It was never thought about as part of the Australian economy. It was just a leisure opportunity for coalition ministers to travel the country, freewheeling and putting their feet under the table at every up-market restaurant they could at taxpayers’ expense. The world has changed. We treat tourism as a serious part of the economy, not a holiday opportunity, as the coalition did for far too long. Proposed expenditure agreed to. Innovation, Industry, Science and Research Portfolio Proposed expenditure, $2,248,036,000 5829 11:00:00 Billson, Bruce, MP 1K6 Dunkley LP 0 0 Mr BILLSON —Minister, we were just discussing some parts of the industry portfolio, so I will come back to the R&D tax credit, some stuff on the Automotive Industry Structural Adjustment Program and Commercialisation Australia. I do have some questions around the Green Building Fund and the linkages programs, so I signal those in advance. I appreciate that they are not in the minister’s direct portfolio, so it might be easiest to come back to them. Minister, in the budget there were some announcements in your direct area of responsibility. I am hopeful you might be able to shed some light on the budget announcement on mediation services relating to the various codes. In your media release you talked about an ‘introduction’, and you might have seen some of my commentary on the ‘introduction’ of services that are largely in place now. Then, in the body of your release, you talked about a continuation of them. Could I have a clarification on whether the $2.7 million is for new resources on top of the resources that were already available for those services and what the aggregate sum looks like? The budget documents actually float another number, a $2 million number, so it is a little hard to follow what is new and what is an extension. Some guidance on that would be helpful. Also, could you tell me the extent to which those services are being taken up and whether you think that will help streamline the process through the consolidation? I would be grateful for an expansion on the business number and business name registration initiative. I note that a number of portfolios are party to that process—ASIC, the Administrative Appeals Tribunal and the tax office. There is some capital expenditure and the like as well as some for your own department. I would be keen to get a sense of how that is being apportioned, what processes and programs are going to work through that and how it may overcome some of the current business name challenges where, in some states, the ‘&’ symbol does not get recognised. We have had some examples of what I would call ‘ambush marketing’, where it might be ‘Craig & Bruce’s Small Business Advisory Service’, the ‘&’ symbol does not appear on some search engines and someone then gets ‘Craig Bruce’s Small Business Advisory Service’. There have been some problems in that space and I am interested in how they could be overcome by this measure. The other issue—and it is not directly in your portfolio but I am sure it is something you are aware of—was around the charge on respondents with reporting obligations under AUSTRAC for some of its anti-money-laundering activities. The $500 annual charge and the amount per transaction are really proving to be quite a concern for some of the smaller businesses—newsagents and the like—that handle cash transfer arrangements that are not very high margin. To what extent are you engaged with that subject and how it might be rolled out to deal with the small business impact? 5830 11:04:00 Emerson, Craig, MP 83V Rankin ALP Minister for Small Business, Independent Contractors and the Service Economy, Minister Assisting the Finance Minister on Deregulation and Minister for Competition Policy and Consumer Affairs 1 0 Dr EMERSON —I thank the member for Dunkley for the questions and the manner in which he has approached this consideration in detail. By way of general background on the mediation services, obviously I think we would share the view of the coalition in preferring to head off disputes rather than letting them develop into fully blown problems in the courts. This is the better approach and that is why we have sought to rationalise the mediation services that are available under the various mandatory codes of conduct. There is an extra emphasis on that first point of contact to see if we can resolve as many issues there as we can. You can then go into a formal mediation process where, if that does not work, the more formal legal processes have to take their course. We have found through the ACCC, for example, that the mediation services for franchising are of some value. The shadow minister knows that franchising is an area that tends to attract more controversy, misunderstandings and disputes. Anything that we can do to improve our performance in that area is a very important development. Regarding the program funding, we have got expenses totalling $533,000 in 2010-11, $498,000 in 2011-12, $503,000 in 2012-13 and another $508,000 in 2013-14. What is not absolutely clear to me from the table is the extent to which this is total net new funding or a reallocation of existing funding. I will get back to you on that. I think that is the best way of handling that. Again, it makes sense to try to centralise, or at least coordinate, the mediation services and the skills associated with it under the various mandatory codes of conduct, and that is what we are trying to do. The business names registration exercise is one of the 27 areas of regulatory reform under the national partnership agreement of the Council of Australian Governments to deliver a seamless national economy. The purpose of the business registration program is to move from eight state and territory systems to a single national system. We have been really encouraged by the cooperation of the states and territories here. I can relate to you the sorts of conversations that were held at the Council of Australian Governments meeting in July 2008 when we accelerated a number of these reforms after having identified them in around February 2008. We compressed some timetables and I remember premiers saying to me: ‘Craig, this is ridiculous. Why would we have all of our own different systems for registering business names?’ There was a lot of cooperation, and that is continuing with the Barnett government in Western Australia, so it is not a matter of political partisanship here. Everyone recognises that we need to put an end to this kind of rail-gauge economics. I have heard the shadow minister say in the past that some of these reforms are really for bigger businesses and not for smaller ones, but I contend that new businesses that are setting up in Australia these days very often have a strong online presence. Once you have got an online presence, unless you are the Kosciusko Cafe in Cooma, you are probably trying to sell your goods and services across state boundaries. By the way, the reduction in fees will be dramatic. I have not got the figures in my head, but if you were operating in every state and territory you would have to pay eight sets of fees. Now you will have to pay one, and that will be a very important reduction in red tape and fees. The money that you asked about is basically the Commonwealth putting up money early to get the process underway for this single national system of registration. I will prefer to get back to you about the apportionment of money and take that one on notice, but we did provide for this in the agreement to create a seamless national economy under the national partnership agreement. The third set of questions you asked were on AUSTRAC. I am conscious of newsagents and other small retail outlets—for example, milk bars and 7-Eleven stores—where these transfers of moneys are an ancillary part of their activity. Where they are an ancillary part of their activity, they are not really making a lot of money out of the exercise. It may be, as much as anything, a matter of trying to attract a bit more foot traffic into the store or into the newsagent so people may buy some books or groceries. I am conscious of that and of the budget measure that involves a levy of $500, and $1.06, or a little over a dollar, per transaction. Can you let me take that one on notice. I have also met, as I suspect you have, with the relevant business interests there, and we will continue to engage in discussions. On the broader issue, I support the idea of a user-pay system for AUSTRAC but, as the Minister for Small Business, Independent Contractors and the Small Economy, we need to have a careful look at these impacts. 10000 Schultz, Alby (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Mr AJ Schultz)—In the interests of clarification, the minister did very well covering the issues over the period of five minutes. 5831 11:11:00 Billson, Bruce, MP 1K6 Dunkley LP 0 0 Mr BILLSON —Yes, I thought the minister was providing constructive input. In relation to the business names issue, could I get some breakdown on the effort? Some questions have been raised with me—though not hostile to the idea; nor am I—about the costs to the states in administering their schemes and how that washed through in that initiative. Where is that administrative burden and cost going to land? I could not work out from the material available to me and in the budget appropriation how that was being factored into that measure. Some insights on that would be good. Minister, on your point about the smaller operators, I was thinking in particular about A&J Floorsanding Pty Ltd. They are registered and operate in and around Sydney and have for some time. They are doing quite well. Then a totally unrelated business, not A&J but AJ Floor Sanding popped up, and there was an argument that there was sufficient difference in their names simply by not having the ‘&’ symbol. It turned out that it might have been a software problem to do with the ‘&’ symbol. I am curious as to how that may work out and the extent to which the initiative that you announced in the budget will help overcome and protect businesses from ambush marketing. In relation to other parts of the budget, we have inquired previously about business enterprise centres and the funding program that you are responsible for, Minister, and the work that was going on around performance objectives and KPIs—and I understand there was a process of developing those so there was clarity. How is that going? Do these appropriations foreshadow any new business enterprise centres? You would no doubt be aware that there is a perception that there are some gaps in the marketplace, that some geographic regions are not being serviced. A range of other influences were at play in the way locations were selected in the lead-up to the election—which tends to happen in the lead-up to an election. I am interested as to how that is going. I am also interested in the advocacy for small business within cabinet. Is Senator Carr getting adequate opportunity? I am sure you would like to be around the big table and be involved in those discussions. How is that working its way through? There is a sense that there has been an oversight of small business implications from decisions that are being made. I would like a sense of how that advocacy is being carried by Senator Carr in cabinet and then in the gang of four. I would appreciate your insights on that. 5832 11:14:00 Emerson, Craig, MP 83V Rankin ALP Minister for Small Business, Independent Contractors and the Service Economy, Minister Assisting the Finance Minister on Deregulation and Minister for Competition Policy and Consumer Affairs 1 0 Dr EMERSON —The member for Dunkley has obviously seen the breakdown of administered expenses and departmental funds for business names registration on page 20 of the portfolio statement. I am happy to provide any further detail we can on that. 1K6 Billson, Bruce, MP Mr Billson —It’s that operating change of arrangements. 83V Emerson, Craig, MP Dr EMERSON —Yes, sure. What it involves is building a single national system. You would perhaps be surprised to know that in some jurisdictions the systems are still paper based. I think you are talking about a software problem with the non-recognition of the ‘&’. The problems could even be worse than that in terms of still having paper based systems. The build of this national system is quite a sophisticated exercise. I would hope and expect, being a brand-new system in the 21st century, it will be capable of picking up these sorts of problems. It certainly will be a vast improvement on the systems that are now in place. I would like to go to the question about the business enterprise centres. I think it was in Senate estimates where there was a line of questioning to departmental officials—I know this did not come from you—as though there was something terribly sinister about a party in opposition deciding to fund a particular array of business enterprise centres, which at that time was 36 out of about 108. This meant, subsequently, further BECs being established. It was using the resources of opposition which, as you would be all too aware, are not extensive. Departmental officials were being asked about their level of involvement in the selection of these BECs. If I had been at Senate estimates I would have said it was nil, because they would have told us where to go if we had approached the department as an opposition and said ‘Could you tell us where we might fund BECs’. What I did do in relation to that, which I thought was the best effort I could make, was to get a set of gradings, if you like, as imperfect as they might have been, from BEC Australia, who were familiar with them all. They said to us, ‘Look, these ones seem to be going especially well and these ones are going pretty well’. We did not stick to that religiously, but what I was conscious of doing was ensuring there was a reasonable geographic spread and anticipating the likelihood of the coalition asserting that they were all in marginal Labor seats. I wanted to assure myself that they were not. In fact, there was a very reasonable spread across coalition and Labor seats, marginal and safe. We just did the best that we could. The alternative, with the money I was able to get through our opposition budget processes, was to spread it across all 108 BECs, and they would barely have noticed the addition to their funding. I suppose another consideration is that the department would have had to administer amounts of, say, $25,000 in each of 108 BECs, so you can see the administration costs of that would have been higher. In terms of new BECs being added and so on, we have not in the budget identified any extra funding for BECs, so at this stage we need to stick with the 36 that we are funding. In terms of small business advocacy, I can assure the member for Dunkley that I have very good access to all of the relevant processes, including the Prime Minister, on small business matters. He was very supportive during the global recession of the small business tax break, and in fact he extended it, increasing it from 30 to 50 per cent. I must go more often to him with proposals, hoping and expecting that he will not only accept them but also augment them, as he did in this case! We do have the formal departmental processes as well, through coordination, comments and so on, where Minister Carr in a discussion would represent those views. In any event, a variety of formal and informal processes are available to me and I make sure that I take every advantage of those. I feel very happy that my views are heard and policies are developed in response. 10000 Schultz, Alby (The DEPUTY SPEAKER) The DEPUTY SPEAKER (Mr AJ Schultz)—Before I call the member for Werriwa may I apologise to the member for Werriwa for missing the call before—and you were on my visionary side. I now call the member for Werriwa. 5833 11:20:00 Hayes, Chris, MP ECV Werriwa ALP 1 0 Mr HAYES —Thank you, Mr Deputy Speaker. I can never ever call you one-eyed. Minister, I am one of those who are very fortunate to have a funded BEC operating in my area—the Macarthur-Liverpool BEC, chaired by Bruce Hanrahan, a local solicitor. But, importantly, in my area of the south-west of Sydney I have approximately 10,000 small businesses. Quite clearly, the employment generator—and I suppose this is similar in most people’s electorates—is not going to be another big mining company. It is going to be the establishment of another small business and the development of those small businesses into larger ones. Minister, one of the issues we are often confronted with out there, in view of supporting small business, is particularly what is on offer to small businesses to encourage their development. The issue of tax reduction is always raised, and I know that has been addressed in the budget and I invite you to comment on that. Specifically to your portfolio in relation to small business online support and the small business support programs, these are matters that the BEC has indicated to me—for the people who use their services—have made significant inroads into developing and assisting small business to develop in my region of Werriwa. I would also like it if you could give us any information about the prospect of growth that is anticipated in the small business sector; how that is being monitored; and what further opportunities that we might have to develop small business, particularly in the innovative sectors. I am approached often about the issue of investment in innovation in the south-west of Sydney. It is an area which is developing. The fact that we have a very good infrastructure arrangement there between road and rail makes it a very clear area for the development of business operations in the south-west. Innovation is one of those areas which are being clearly targeted for localised investment. 5834 11:22:00 Emerson, Craig, MP 83V Rankin ALP Minister for Small Business, Independent Contractors and the Service Economy, Minister Assisting the Finance Minister on Deregulation and Minister for Competition Policy and Consumer Affairs 1 0 Dr EMERSON —I thank my friend and colleague the member for Werriwa for his strong advocacy of small business. During the global financial crisis we had a major forum in his electorate. It was very, very well attended and we were seeking to get tradies involved in the business of Building the Education Revolution and housing projects in the local area. I think that has been pretty successful. Regarding the Macarthur BEC and the other BECs, I met this morning in fact with BEC Australia and while I will not put any strong reliability on these figures—they are very, very preliminary estimates—the funding has enabled an increase in BEC activity of around 45 per cent. Interestingly, that is like a step-up increase. I also believe that the extended reach of the BECs is then built into their base ongoing growth because if you can reach further then more businesses will then seek to avail themselves of these one-stop-shop advisory services. The member for Werriwa asked about small business tax breaks. Also provided in this budget are two major initiatives for small business in terms of tax breaks. One is the availability from 1 July 2012 of an instant write-off of the value of any eligible asset up to an amount of $5,000. The instant write-off provides a benefit compared with pre-existing depreciation schedules because by writing off the value of that asset in the year in which it was purchased you get a cash flow benefit. Your taxable income is reduced and that is more cash flow for the business and a strong incentive to invest in productive assets. That is for every small business in Australia—all 2.4 million small businesses. The 720,000 small businesses that are companies would get a head start on the reduction in the company income tax rate from 30c to 28c in the dollar, starting on 1 July 2012. We know that those tax breaks are conditional upon the implementation of the resource super profits tax and, though I am probably whistling Dixie, I would urge the member for Dunkley to prevail upon his leader and change the coalition’s position on that matter, because small business deserves a tax break. It got a tax break from this government during the economic downturn, the small business tax break to which I referred in my earlier remarks, and we believe that as small business is moving gradually into the recovery phase it again deserves some support from the government in the extra incentive provided through tax breaks. The member for Werriwa asked about small business growth. I think the member for Dunkley would probably agree with me that small business overall is still struggling. The recovery is well under way, but small business has not fully emerged from that, by any means. Hopefully, over time as the recovery gains pace our small businesses will recover. I know small business retailers have been doing it tough in terms of the number of customers coming through the door and, interestingly, the amount that they are prepared to spend. You hear anecdotally all the time that customers these days are looking for discounts, so the margins on small business retailing have been reduced as a result. I think the reduction in hours associated with the economic downturn worked. Small businesses and other business did not so much lay people off as negotiate reduced hours. Reduced hours mean reduced purchasing power, and so those consumers are becoming much more astute and discerning and therefore are seeking bargains—and that means lower margins for small businesses. In order to give the member for Dunkley a bit more time, I think I might leave it there. I would go on to the R&D tax offset otherwise; but I think in fairness we should give the member for Dunkley a go. 5835 11:27:00 Billson, Bruce, MP 1K6 Dunkley LP 0 0 Mr BILLSON —Thank you, Minister, for your accommodation. Regarding the things in the industry portfolio that I alerted you to, it might be easier if I provide the questions and read the answers in the Hansard. 5835 11:27:00 Emerson, Craig, MP 83V Rankin ALP Minister for Small Business, Independent Contractors and the Service Economy, Minister Assisting the Finance Minister on Deregulation and Minister for Competition Policy and Consumer Affairs 1 0 Dr EMERSON —Yes, and then we will follow them up. 5835 11:27:00 Billson, Bruce, MP 1K6 Dunkley LP 0 0 Mr BILLSON —Is there a chance we might get a reply before the end of next week? After that things move into a different mode. Could you see if you could get the replies back whenever you are able? It is not much use to us if the circus comes to town with electioneering and we have not got back any answers. A timely response would be highly valued. On the R&D tax credits, we are interested to know how much of the allocated funding will be spent on the administrative side of the new R&D tax credit program for 2010-11 onwards, specifically in relation to the changing staffing arrangements within the portfolio and an education campaign through AusIndustry to provide information to business about the new arrangements. Particularly given the sense that some of the novelty factors in the new requirements might be challenging for small business, I am interested in how that communication is going to be handled. In the automotive area, can the minister confirm that the structural adjustment side of the government’s Automotive Industry Structural Adjustment Program still has about $43.75 million assigned to it in 2011? We understand that about $7.8 million was paid on this side of the program in 2008-09 and we believe that there is approximately $18.9 million to be paid in 2009-10. It seems rather a large jump to $43.75 million, on the face of it, considering the period of time still to go. Can the minister outline why there is such a comparatively large increase in this financial year compared to the other years? Also, can the minister advise how many companies have received funding under the Automotive Industry Structural Adjustment Program. How many of those companies have merged and, if they have, with whom? I am interested to know how much revenue the government received from the luxury car tax in 2008-09 and 2009-10. That was not clear in the papers available to us. I know you have an interest in Commercialisation Australia, Minister. How many applications have been made for assistance through Commercialisation Australia since it was established? What is the total amount in funding that has been committed to successful applicants so far under the program? I have a similar question on the Green Car Innovation Fund. The budget papers seem to suggest the government has withdrawn about $200 million over three years from the Green Car Innovation Fund. I would like the minister to confirm that amount and outline the reasons for the cuts. I touched on the Green Building Fund earlier, and I would like an indication of when the round 4 grants might be available. I would like the minister to provide information on how much will be paid out in grants under round 2 of the ARC Linkages program and confirm that applications for funding under this round closed on 18 November last year. The successful projects were supposed to begin on 1 July but there has been no announcement of any kind and applicants are quite anxious to know whether they have been successful or not. Finally, I am curious about the funding commitment for the industry adjustment package for the automotive industry. That program is presented as transforming Australia’s automotive industry and it will involve some change in the way it operates. Is the government planning a similar adjustment package for businesses and staff that suffer dislocation as a result of the resource super profits tax? Is there a reference to that in the numbers that are being thrown around about the benefits of this tax? As the minister would know, it is not just the big companies like Rio and Xstrata that will be affected; it is also the small gravel pit operators, sand operators and those extracting fertiliser. Many small and family operated businesses will be deeply affected. I am just wondering whether, given the commitment to a structural adjustment package for the automotive industry, the government has an eye to a similar structural adjustment package for the resources sector. I will leave it at that. I thank the minister for his courtesy and his willingness to engage constructively in this process. 5836 11:31:00 Emerson, Craig, MP 83V Rankin ALP Minister for Small Business, Independent Contractors and the Service Economy, Minister Assisting the Finance Minister on Deregulation and Minister for Competition Policy and Consumer Affairs 1 0 Dr EMERSON —I will give a very brief answer because I am conscious of the desire of other ministers to respond to questions. In relation to the various questions you have asked about different programs, I will seek to respond but I cannot, in good conscience, give a date by which the department may be able to do that. I am not aware of any circuses coming to town, but if Ashton’s Circus is coming to town I am sure you will let me know! In relation to the resource super profits tax, I do not regard that line of questioning as being serious. We are still going through a consultation process as set out in the response to the Henry review. I would ask the coalition to reconsider its position opposing the resource super profits tax and, in the process, opposing small business tax breaks. The Liberal Party, a once great party that professed to be the party of small business, is now the party of small business betrayal. I think it is time the party rebadged itself, got on board and actually supported the 2.4 million small businesses in Australia that would benefit from the instant write-off of assets valued at up to $5,000 and the 720,000 small businesses that would get a head-start reduction in the company tax rate. Proposed expenditure agreed to. Agriculture, Fisheries and Forestry Portfolio Proposed expenditure, $655,547,000 5836 11:34:00 Cobb, John, MP 00AN1 Calare NATS 0 0 Mr JOHN COBB —I appreciate the opportunity to question the minister. Minister, I have a series of questions. Firstly, can you guarantee that funding for agricultural research will not be cut as a result of the Productivity Commission review of RDCs? Can you also guarantee that primary producers and industry will continue to have a full say on what research is undertaken, without fear of government interference? By that, I do not mean that the government does not have individuals on the various bodies to have their say as everybody else does. Can you confirm whether the Department of Climate Change, Energy Efficiency and Water has complaints lodged about work undertaken by any of the RDCs? Is it routine for any other department to comment or have input into the performance reviews of any of the RDCs, because the information we have is they have been making comments about what our various agricultural bodies have been looking into. On the issue of quarantine, has the minister seen a copy of the World Trade Organisation’s final ruling on the New Zealand apples dispute? If so, is there a good reason why it has not been released? Are media reports to the effect that the Minister for Trade has had a copy of it for some three weeks correct? For obvious reasons, we need to know what is in it and when it will be released and why it hasn’t been. If, as rumoured, it is an adverse finding on Australia’s biosecurity, will the government be appealing against that ruling and could you tell us to what extent we entered into the disputes committee’s procedure? On the issue of China, why has the import risk assessment, the IRA, failed to assess the impact of the Chinese fruit fly? I cannot pronounce the first word, but the second one is Suzuki. What action have we taken? There are reasons why the industry has not looked into it—it has not come up until recently—but are we doing research into the ability of pears and apples to carry it as a host? Irrespective of this current analysis, will we be looking further into its ability to affect us and its ability to be carried, whether it is via America or anywhere else? It is a very pertinent question, particularly given the fact that they have an application currently before us, as you are well aware, which I understand is in the final throes of analysis by the relevant committee. Could you tell us where that is at? Would it be true to say that, as things stand, Chinese and New Zealand apples could be coming to Australia within the next six months? 5837 11:38:00 Chester, Darren, MP IPZ Gippsland NATS 0 0 Mr CHESTER —I want to raise the Minister for Agriculture, Fisheries and Forestry’s attention to the issue of Landcare funding and the decision to not proceed with the forecast expenditure, which involves an amount in excess of $10 million. The minister does continue to claim that because funding has gone up by $1 million Landcare funding has not actually been cut. I think we are splitting hairs in that regard, minister, because the feeling on the ground throughout regional Australia is that Landcare has suffered a blow in this budget. Your own budget papers indicate that Landcare is not getting the money that your government intended to give Landcare 12 months ago. For the sake of clarity, Minister, is it true that funding for Landcare has not been increased at the level that was originally planned by your government? What is the government’s justification for making that decision in relation to Landcare and what impact do you expect that decision will have on the reduction in practical environmental work undertaken by an estimated 100,000 volunteers across Australia and by more than 4,000 Landcare groups? Does the decision to not proceed with that forecast level of spending reflect some change in the government’s position regarding Landcare? Are you focusing on a different form of community based environmental action? I would appreciate some clarity on those points from the minister on behalf of the Landcare volunteers right throughout Australia, who I believe are the great champions of our environment through their practical work. I will just reflect for a moment, Minister. I am sure you are aware—you have been out in regional areas—that these people are bitterly disappointed. They are seeing this as some sort of diminishing of the government’s respect for the fact that they are prepared to give up their time, normally on a weekend, to get out there and get their hands dirty. These are the practical environmentalists of our nation. They are not the people writing reports; they are actually out there digging holes on a weekend, planting trees, undertaking pest animal and pest weed controls. They are the people who we really need engaged in the process. The reaction they have taken to this budget has been very negative. They believe there is some sort of diminished view of Landcare as a result of the government’s decision to not proceed with the original forecast level of expenditure. 5838 11:40:00 Windsor, Antony, MP 009LP New England IND 0 0 Mr WINDSOR —I support the comments made by the member for Gippsland in relation to Landcare. Minister, I think there needs to be some greater clarity on where government policy is actually taking Landcare. We are all, to some degree, concerned about the environment generally and in our case as country members the environment in country areas. Obviously, under your ministry, you cover those areas. There are concerns out there that in the main can be alleviated, but there needs to be greater clarity on just where the real foot soldiers of Landcare and environmentalism at a local level are going and how they will seek direction into the future. I note that in some areas there are differences of view between the catchment management authorities and Landcare groups. Those sorts of issues will always be out there. But there is no doubt—just to reinforce what the member for Gippsland said—that these are the people who we really need on the ground to carry out a lot of these things. Advertisements on TV of what could be happening within their catchment are all very well, but these people, who are volunteers, who are ready to do a whole range of things, should probably be given a greater degree of recognition than they are currently given. Another question, Minister, is in relation to Liverpool Plains and the interface of that particular area with the prime agricultural land, the groundwater and surface water resources and the potential for massive mining development in those areas. I wonder where you stand, Minister, in relation to the potential offsite impacts on the water systems in the Murray-Darling river system. I am aware there are issues in Queensland in part of the Murray-Darling catchment. The Commonwealth is playing a greater role there and, in my view, it should. But I think there needs to be some real jurisdictional interpretations undertaken as to the state based planning processes for allowing mining activities to proceed. Now the Commonwealth is involved in water resources, it is obviously involved in the production of food in some of these very fertile areas. Just briefly, the minister may be able to report on another area. I note that there is money in the budget for the science of soil carbon. He may be able to report briefly on progress regarding those management practices that are encouraging the sequestration of carbon and on how government policy will encourage farmers to move in that direction? 5838 11:43:00 Schultz, Alby, MP 83Q Hume LP 0 0 Mr SCHULTZ —Minister, before I ask the question I am going to ask I will give you a little bit of background information so that you will understand why I have serious concerns about this particular issue. As the first elected conservative in the state seat of Burrinjuck in the New South Wales parliament, in the late 1980s, I raised the very serious issue of the importation of apples and pears from New Zealand and the inherent risk that that would place on Australia’s disease-free status, particularly in relation to fire blight. I raised the issue again in this place, in 1999, 2000, 2001 and 2004, and those issues are all on the record in Hansard. Given the recent press release by Biosecurity about their recommendations to introduce apples from Japan into this country and the inherent risks associated with that particular cause, can the minister give the apple and pear industry in this country some assurance that he is not going to be influenced by the recommendations of Biosecurity, who have as a matter of record in the past demonstrated their lack of scientific investigation into the actual problems associated with the introduction of apples and pears into this country, in particular from New Zealand? Can the minister also give a guarantee to this parliament, the Australian people and in particular the apple and pear industry that he will not take too lightly the serious ramifications of any recommendation by Biosecurity Australia to compromise the very safe biosecurity regimes that have operated in this country and have prevented disease from apples and pears from other countries coming into this country? I say this in the interests of the very real concerns from apple and pear growers across the country who are, once again, being placed in a situation where, with their limited resources, they have to fight a federal department whose track record has demonstrated time and time again that they are is not interested in the safety of Australia’s disease-free status but are more focused on the easy option of agreeing to pressure from organisations outside of this country in the interests of so-called free trade. 5839 11:46:00 Briggs, Jamie, MP IYU Mayo LP 0 0 Mr BRIGGS —I think you would agree with this line of questioning as well. I also rise to speak on the very important issue of apples and pears to my electorate of Mayo. The Adelaide Hills probably produce the finest apples in Australia. My apple and pear producers are extremely worried. I wrote to the minister yesterday on the Chinese import risk assessment that the shadow minister so eloquently put in his question to the minister. I am interested in that answer. In particular, is the department looking at possibly reopening that risk assessment given this new bug? I will not try and pronounce the name of the bug—you may be able to assist, Minister, in that respect. I am interested in the New Zealand aspect and the more pressing issue of the risk assessment of the Chinese situation. The second issue which was raised by the member for New England relates to prime agricultural land. In my area in the Adelaide Hills, the state government is opening up large parcels of land for housing development. Is an assessment being conducted by the federal agricultural department about the impact on our ability to produce food from inappropriate development on prime agricultural land? Certainly around Mount Barker this is a very contentious issue. This is a very important issue: where we choose to put houses and the use of areas that have fertile soil and good water—which are not always available in South Australia. Is an assessment being done on the risk here? I do not think the state Labor government in South Australia is doing enough in that respect. 5839 11:49:00 Burke, Tony, MP DYW Watson ALP Minister for Agriculture, Fisheries and Forestry and Minister for Population 1 0 Mr BURKE —Can I deal with the issues raised by the shadow minister first. I suspect I am going to want a few goes at my five minutes to work through the different issues that have been raised. I will deal first with the non-apple issues raised by the shadow minister, then deal with apples and then deal with the different issues that have been raised. First of all, the shadow minister raised the issue of the Productivity Commission review into the research and development corporations. I believe I can actually give him all the assurances he seeks by simply referring to the National Press Club speech I gave when the Productivity Commission inquiry was launched. There is no desire by government to use this as a mechanism to reduce funding. What we are trying to do is find ways for the money that is made available for research and development through the RDCs to be used far more effectively and efficiently than it has been. The research and development corporations by and large do a very good job. I do not want to mince words on that; generally they do. For each of them I do believe there are examples where they could use their money more efficiently than they do, which would result in more money being made available for research and development, not less. The key examples that I think you can focus on fairly easily are: first of all, there were a handful of them where executive salaries became completely out of control. I believe that whoever is the CEO of a research body is doing an incredibly important job. When their salaries got beyond the salary of the Prime Minister of Australia, and they were doing that off the back of farmers’ and taxpayers’ money, I think it was not a reasonable call. I spoke to them for a long time, asking them to do something about it. One of them moved a tiny bit but very few of them moved at all, and I do believe it is an appropriate issue for the Productivity Commission to have a look at. Secondly, there is the issue of co-location. We have more than half-a-dozen of the research and development corporations based here in Canberra, but they all have their own building, they all have their own conference room, they have their own payroll systems under different enterprise agreements and they have their own receptionist. I do not believe for a minute that there are not opportunities to co-locate, streamline and outsource some functions, even if the RDCs all want to keep their separate identities and not amalgamate. I really believe that at the moment there is money that could go to research and development—that farmers believe they are paying for the purpose of research and development and that taxpayers are pretty happy to contribute to in the matched funds—that, though it is not being thrown up against a wall, by any means, is not being used as efficiently as it could be. The intention of the Productivity Commission review is to find a way for the money that is provided to be used more effectively and efficiently than it has been. There are some people, including some in the electorate of New England, for example, who oppose the levies outright. It is a common view as well among beef producers in that part of the member for New England’s electorate. It is also a common view among a number of grain growers in Western Australia. It is not a view I hold. I am not opposed to the levy system. I actually think it works and works well for these reasons: firstly, if you believe that there should be an Australian government contribution to research and development—and I do—then the people who get the financial benefit from the research and development should pay a higher contribution than the general taxpayer does, and the levy system does exactly that; secondly, research and development is only of any use at all if it makes it from the lab to the farm and if farmers have been involved on the boards. If the farming organisations have had a direct stake in what is being chosen for the purposes of research, I believe that is the best way you can have of ensuring the extension part works—that the research actually makes it from the lab to the farm. My commitment to the current system is one where the more I have looked at it, the more I think it works. I think it is a smart structure. There are individual issues. Some of them have got more tied up in agri-political activity than I think is warranted for a research body. There are different areas where the money can be used more efficiently than it has been. But as a general rule the model itself is one I support and I have said so publicly previously. The next issue raised by the shadow minister concerns whether I am receiving information, advice and complaints from other departments on the work of the research and development corporations. The advice that comes to me on the RDCs comes from two sources: it comes from my department and it comes from farmers. That is it; that is the only advice that comes to me. The extent to which other departments have chosen to engage in the Productivity Commission process, for example, I do not know the answer to, but I suspect the Productivity Commission would be able to provide very quickly which departments have made submissions to it. The advice that comes to me comes is from my department and from farmers, and I am not sure that advice on research and development corporations from any other department would be as useful to me as those two sources of information. We then go to the issues surrounding apples. I will deal with the issue of China and the issue of New Zealand separately because they are very different issues in terms of biosecurity. I first of all thank all members who participated in that discussion on apples for the fact that, without exception, everybody was arguing from a biosecurity perspective. No-one was arguing—in the questions that I heard and the way they were framed—from a protectionist perspective. I think that is a very important message not just for us to relay to each other but for the rest of the world to hear Australian politicians argue. Australia’s approach to biosecurity and quarantine has always been within the context of us being largely a free-trading nation. But we are also an island nation. There are pests and diseases which do not exist here, and Australia has every right to protect itself from those pests and diseases using the formula of the appropriate level of protection which has been used by both sides of politics for a very long time, which is that the level of protection should be for very low but not zero risk. If we sought zero risk, we know that that would mean that you would take no imports of anything, you would allow no tourists in or out of the nation and you would shoot all migratory birds as they approached the border. The approach of zero risk is one that no-one can deliver in any sensible public policy approach, but to minimise the risk is good and appropriate public policy, and that has had bipartisan support within Australian politics for a long time. I think the discussion we just had, the questions and the way they were framed affirmed that very strongly. I now go to the biosecurity issues which we are dealing with. With respect to New Zealand, we are talking principally but not solely about fire blight, in terms of the issues which have been raised. Drosophila suzukii—I always have to check that name—is the pest that we are talking about with China. Honourable member interjecting— DYW Burke, Tony, MP Mr BURKE —I can spell it if you need that. I will deal with New Zealand first because the biosecurity arguments there are the strongest ones in the sense that they have been around as arguments between the two nations for 70 years. When I was shadow minister for immigration, I took a quick trip to New Zealand as a guest of the then New Zealand government. I was shadow minister for immigration, and every discussion I had with every member of parliament or government agency began with a discussion about the migration of New Zealand apples to Australia. It is a massive issue for New Zealand, but fire blight is a massive issue for Australia, and we have every right to defend ourselves in every international court. There are protocols around WTO decisions, protocols which—from leaks that have appeared in the international press—it would be arguable that not everybody has followed. But there is a protocol that there is a gap between when the parties receive a ruling or a draft ruling from the WTO and when they are allowed to make it public. We observe those protocols to the letter. The final report is expected to be made public later in the year, possibly in July, but that will have to follow very strictly the WTO rules about when it is allowed to be made public, and the release of it would come not from me but from the Minister for Trade, as he has principal carriage of the issue. (Extension of time granted) The issue of an appeal obviously always depends on legal advice and is a call made by the Minister for Trade in the final instance, not by me, although it is an issue on which we do work closely together. Without in any way compromising the formalities of the process we are in, I will just say there is no difference between the vigorous way in which this government will defend Australia’s biosecurity in every international court and the way in which every previous Australian government has defended our biosecurity in every international court. I do not know that I can go any further than that without reflecting on information which at this point is still confidential. With respect to New Zealand, that applies to the fire blight issues surrounding both apples and pears. China is different. Since 1999, pears from China have been allowed into Australia. That means that a large number of biosecurity issues and the science on apples had in fact already been resolved to Australia’s satisfaction since 1999. The issue of the pest whose name I have pronounced once—and I will leave it at that; we will refer to them as the suzukii pest—has been raised by industry recently. I know the shadow minister has met with the peak industry body. The peak industry body were offered a meeting with my office, but it was not at a time they could do, in fairness to them, and we are still finalising another meeting. There is certainly no reticence from me or from them about sitting down and working through this issue. Any decision on the pest that has been referred to will be made on the basis of the science and will be made at arm’s length from the minister, as previous ministers have done. But a decision will be made on the basis of the science, and if the science says there is a biosecurity problem which has only recently come to light then I have no doubt that the Director of Biosecurity will act according to the responsibilities he holds in that job by making sure that the level of risk that is dealt with for Australia is kept at the appropriate level of very low but not zero. I cannot answer further than that, as the shadow minister would respect, without there being a ministerial direction of that nature to the Director of Biosecurity, and I think we would both agree that to go that distance would be inappropriate. In terms of particular references that have been made by others, any recommendations obviously will not be taken lightly but extremely seriously. I go to issues first raised by the member for Gippsland and echoed by the member for New England with respect to Landcare, and then there were a couple of other issues that were raised by the member for New England. On Landcare, I believe that part of the way in which the member for Gippsland described the issue is accurate. Some of it is, I think, rhetoric which does not quite match the truth, but some of it is accurate. Is there less money for Landcare? In the forward estimates of this budget, when compared to the forward estimates of the previous budget, the answer to that is yes. Is there more money for Landcare next year than there was last year? Yes. Is there more money again for Landcare the year after that? Yes. So what does that mean? First of all, in dollar terms, in 2009-10 there is $35.1 million for the National Landcare Program; in 2010-11, $36.2 million; and in 2011-12, $39.1 million. Would we all—everybody here—liked to have had a situation where the budgetary constraints were different and we had a whole lot more money for Landcare? Of course we would. But I do not believe it is reasonable to put it in the terms that the member for Gippsland did. He said that this would result in a reduction in practical environmental work. You cannot increase the funds and reduce the practical environmental work. IPZ Chester, Darren, MP Mr Chester interjecting— DYW Burke, Tony, MP Mr BURKE —If there is a view that an increase from $35.1 million to $39.1 million in two years is in some way less than other expenditure and a reduction against CPI, there are rates of CPI being projected by the coalition which, I think, do not reflect what their shadow minister for finance or their shadow Treasurer would be saying is the case. But, Member for Gippsland, if you believe that the CPI is going to be running at those sorts of proportions over the next two years, by all means run that argument. But I do not think your economic spokespeople are matching that argument at all. In terms of Landcare, the member for New England went a little bit further and just asked: where is government policy taking Landcare? I dealt with a lot of these issues in a speech I gave to the National Landcare Conference in Adelaide. I believe Landcare in the future has to work on three pillars: food, environment and climate. I think those three pillars provide the basic framework for the work of Landcare, where work that has now been going for 20 years for the challenges of the past—whether they be soil degradation, salinity or soil moisture problems through drought—will also deal with a whole lot of climate challenges that we will be facing in the future. There have been areas where government policy in the first two years of government fell short and which we have acted to fix. Initially, when we got rid of the local facilitators, a number of members of parliament—including the member for New England and, I acknowledge, the member for Corangamite—argued vigorously with me that that was an error. We responded to that and we reinstated the facilitators on a local basis. Secondly, there are the community action grants. We had no small grants program. The only way to be able to access grants was to largely work in with a big project through the catchment management authorities or whatever the NRM bodies are called in the various states—certainly for the member for New England it is the CMAs. There were many small groups that felt they were shut out and could do good, practical work with smaller amounts of money than were being made readily available, so the community action grants were introduced. On the issues surrounding the Liverpool Plains, a large number of those in terms of final policy carriage, to the extent that there is a federal involvement, go to issues within the Department of the Environment, Water, Heritage and the Arts, through the water portfolio, because the issue of quality of downstream water is something that, to the extent it rests with the federal government, rests with that portfolio. But certainly, within the arms of government, my department does feed in information on those issues. In respect of this, though, there is an issue which was raised by the member for Mayo—which I have skipped; I am sorry. He refers to fertile soil, which is a similar argument to those about the changes in land use. This is something which does not rest at a federal level, and it is being dealt with very differently by different states. Tasmania, for example, has zoned agricultural land in particular ways to be able to make a zoning decision about preservation of fertile soil. One of the particular features of Australia since white settlement has been that people move where the soil is at its most fertile and then put cities over the top of our best soil. It has been an ongoing practice. Some states are now starting to deal with that in new and creative ways, but I do not want to pretend that land zoning is a federal power; it is not. Finally, on the science of soil carbon, the work that we are doing on soil carbon is less than we had hoped to do. There was an extra $50 million on the table as part of the package surrounding the Carbon Pollution Reduction Scheme for research and development in agriculture, a good part of which was to go to soil carbon, coupled with a system of incentives whereby farmers would get cash for good work in soils. Some of that is now off the table because we were not able to secure passage of that legislation. Certainly, with the funding that we have available, there is more work being done in soil carbon than there ever has been before. It goes in two ways. One is in terms of measurement—not simply measuring the improvement in the soil but measuring how much carbon still finds its way out. The second is working out ways of integrating that with farm practices. There has been one simple rule that I have put over the programs there under Australia’s Farming Future: when research and development are being done into carbon sequestration, I want there to be an alignment between improved carbon levels in the soil and improved productivity. Regardless of where any other policy gets, if you get a productivity dividend, that is the best way of making sure you get uptake by farmers. 5844 12:09:00 Sidebottom, Sid, MP 849 Braddon ALP 1 0 Mr SIDEBOTTOM —Thank you, Minister, for the several visits you have made to the north-west coast, in particular, and for your representation of our primary industries. Minister, you are well aware that the forestry sector is a major industry in my electorate. I know the government established a number of funds to support businesses in the forestry sector. Would you please outline what support the government provided in the 2010-11 budget for our forests and wood products industry? 5844 12:10:00 Cheeseman, Darren, MP HW7 Corangamite ALP 1 0 Mr CHEESEMAN —Again I would like to thank the minister for his ongoing interest in Corangamite. Minister, you recently announced a trial of drought reform in Western Australia. How did the government decide what measures to include in this trial, and when is it likely that that new system will be rolled out nationally? 5844 12:10:00 Briggs, Jamie, MP IYU Mayo LP 0 0 Mr BRIGGS —Minister, I have a brief follow-up on an answer you gave, and I thank you very much for your comprehensive answer particularly in relation to apples and pears. Is the agricultural land issue something that you think it is worthwhile the federal department having more of a role in, given the different policies state governments are applying to particularly housing developments and the risk as we go into the future that we are developing land that we should be retaining for food production? 5844 12:11:00 Zappia, Tony, MP HWB Makin ALP 1 0 Mr ZAPPIA —My question to the minister follows on from the one from the member for Mayo. It concerns a similar topic, given that in the Adelaide area much of the original agricultural land is slowly being swallowed up by urban development. When you combine that with the effects of climate change on our food production, can the minister comment on what policies and strategies are being implemented at federal level to overcome both of these serious concerns to our food security? 5844 12:11:00 Burke, Tony, MP DYW Watson ALP Minister for Agriculture, Fisheries and Forestry and Minister for Population 1 0 Mr BURKE —I will first address the question of the member for Braddon on forestry, and then I will take the different issues raised in order. The 2010-11 budget contains two critical areas of forest industries funding. There is more than $7 million in total for projects available through the Forest Industries Development Fund. This allows businesses in the industry to apply—I know, Mr Deputy Speaker Adams, you have an interest in this—for up to 30 per cent of funding for projects that add value to the forests and wood products industry. I think the fact that there has to be the 70 per cent contribution from the industry itself is an important way of making sure that what is funded is something that industry itself has judged to be in its best interests. It is expected, because we usually leverage more than this, that we will be able to leverage more than $20 million worth of investment from the private sector and other sources. There are places like the McKay mill and various other places I have visited on different occasions to see how this sort of government investment actually delivers for timber communities and delivers in the long term for jobs, notwithstanding the many challenges that are being faced by the forestry sector. Similarly, we also concluded the $6.3 million investment for research into the impacts of climate change on our forest systems and industries. The impacts of climate change are often thought of in terms of agriculture and are often missed in terms of forestry. There is research there which is important both in terms of the impact, for adaptation, but also in developing different accounting mechanisms. Forestry does particularly poorly out of the Kyoto protocol, under current accounting mechanisms, where there is a presumption that while a tree is vertical it is full of carbon but the moment it is horizontal all the carbon leaves. That is a method of accounting that does not match the science, and Australia has continued to pursue through international negotiations a correcting of that with a recognition of stored carbon, and research and development is able to contribute to that as well. The member for Corangamite asked about the trial of drought policy in Western Australia. Essentially what we are trialling there is something that there is never any political pressure on a government to do, which is to ask when there is not a drought, when times are good, whether you should bail out because there is no political pressure or whether that is actually the time to invest. The problem with waiting for the crisis is that you end up paying the banks rather than paying the farmer, and you do not necessarily reward those farmers who have made really tough decisions during good times and therefore have avoided crisis. They then look to their neighbour over the fence and ask, ‘How come they are getting the government money and I am not?’ The strength of this new approach is in being able to say that, with the exception of food-on-the-table money through household support, we will actually come in when times are good. We will help with proper risk management and proper planning and co-invest with the farmer on their own plan in the belief that we are then better able to manage the next crisis by farmers managing much more of it themselves rather than the government coming in at those times with the interest rate subsidy. That subsidy carries a whole lot of incentives which are terribly difficult to justify and which I believe cannot be separated from many of the mental health challenges that exist in many parts of Australia that are doing it particularly tough. The member for Corangamite also asked when that would be rolled out nationally. It will be reviewed at the end of the new financial year. We expect the nature of that review will take a few months. Following that review, depending on the findings, there would be an opportunity to start to roll it out. It is not the sort of trial where you could do a massive rollout in one hit, for the very simple reason that you do not want to undermine the value of the strategic planning. If you try to do too many farms at once you end up not having enough good-quality people to help with the strategic planning and you end up creating an army of consultants with templates, on which you fill in the blanks, as a way of them getting a whole heap of government money and the farmer getting less than they should. It only works if it is done in an incremental way that then allows good-quality strategic plans to be developed. That means that, even if the trial is successful, I suspect we will be in a transition process for some time as we move from the old system to the new. I would hate to undermine good-quality planning by trying to roll out something too quickly. The members for Makin and Mayo both asked questions concerning land use, agricultural land and urban development. If the Deputy Speaker turns a blind eye for a moment, this has probably got more to do in some ways with some of the work that is happening under the population portfolio, which I hold but which is not currently before this room because we are dealing with a different set of government appropriations. The issues of food security, where people live and whether our urban planning has been as smart as a nation as it needs to be are all issues that are coming through the consultative process which I announced yesterday in population. They are issues which have always been raised with me as the minister for agriculture, where I have been able to carry the stakeholder concern without ever having any of the policy carriage. In population strategy many of these issues come directly to the forefront. It is not only an issue in South Australia but also an issue in, for example, Western Sydney, where once again the most fertile land is also the land that carries the highest financial value for the next round of urban development. These are significant concerns. This does not mean we are about to run out of food—and I do not want us to become too alarmist with the debate. We are still a massive food-exporting nation, but the question is: are we using a precious resource in the smartest possible way? It is a level of strategy that previously we have never applied. It is one of the issues that are being raised with me. I do not want to pre-empt the consultative process; I want only to say that it will be one of the issues that is fed in through that portfolio. 5846 12:18:00 Neville, Paul, MP KV5 Hinkler NATS 0 0 Mr NEVILLE —It is fortuitous that I am here, Minister. You will recall that you came to Bundaberg—very graciously, I might add, and very helpfully—and we talked about the problem of bats. Bats are a big problem, especially in fruit-growing areas. Long debate has ensued over how they should be controlled. I for one am not into the wholesale slaughter of wildlife at any cost, but there are other methods, which you have heard about—shooting the scouts. In view of the fact that this is having a big impact on fruit crops on the one hand and in view of the links between bats and viruses in horses on the other, what is your current thinking with regard to that and what negotiations have you had with your state colleagues? 5846 12:19:00 Burke, Tony, MP DYW Watson ALP Minister for Agriculture, Fisheries and Forestry and Minister for Population 1 0 Mr BURKE —I thank the member for Hinkler for the question because it goes to one of the great tensions that arise in the policy debate—and he has hit both of them. It is an issue that can have a devastating impact on producers and a tragic impact on people. If we were talking about an exotic, invasive species then the arguments would be simple, immediate and almost entirely contained within my portfolio. But because the question largely goes to native animals the restrictions on action bring in another area of policy in terms of our native biodiversity and therefore the final approval rests not with me but in another portfolio. I simply say that I can ensure the member that on these issues my colleagues are very much aware of the views of the stakeholders that come to me through this portfolio but it would be inappropriate for me to pretend that I have policy carriage in an area where I do not. 5847 12:21:00 Cheeseman, Darren, MP HW7 Corangamite ALP 1 0 Mr CHEESEMAN —Minister, as you are aware, significant parts of my electorate have gone through quite a remarkable change in landscape over the last decade or so, particularly with farmers embracing new practices such as agroforestry. What is the government’s approach to agroforestry? 5847 12:21:00 Burke, Tony, MP DYW Watson ALP Minister for Agriculture, Fisheries and Forestry and Minister for Population 1 0 Mr BURKE —I prefer to refer to it as ‘agriforestry’ although I know the sector calls itself ‘agroforestry’. I do think there are benefits in having the same minister responsible for both agriculture and forestry. Very often the agriculture and forestry sectors have regarded themselves as being in opposition. They seek approval for the same parcels of land. Sometimes that sense of opposition has been pretty accurate. That has often been how things have transpired. The work that the member for Corangamite has taken me out to see in his electorate is deeply impressive. There is some success with cropping but particularly in grazing. Strategically based high-value timber actually helps with shading. In the examples I have seen in Corangamite you end up with a timber resource being planted on the land and stock numbers can be increased as a result—you are on a smaller parcel of land, your soil is healthier, the shade is more appropriate, you have windbreaks and you also have an asset for the farmer. There are some areas where it will work more effectively than others—where there are mills or ports there is always a market for the timber. This means it is not something that works on every single farm. But it is something which I think has suffered from the fact that agriculture and forestry, while within the same department, have usually been dealt with by separate ministers. To that end, we have started to align some opportunities where previously that had not happened. The new business plan for Caring for Our Country quite specifically allows the agriculture-forestry mix to receive funding. Similarly, we have someone directly involved with agriforestry on the National Landcare Council to make sure they are feeding into the landcare agenda. There will be parts of Australia where this is not a deal. There will be parts of Australia where the old conflict continues. But there will be parts of Australia, such as Corangamite, where this is a very real opportunity for farmers to effectively give up part of their land for its traditional purposes to plant a new asset. They may well get a benefit of soil carbon from that. Additionally, there are benefits through the growth of the resource itself when it is time for the timber to be harvested. Finally, in the examples I have seen, it has resulted in the land remaining for agriculture having an increase in both its productivity and the total production of that area. You often get talk of win-win outcomes in government. Agriculture and forestry working together is clearly one of those. Proposed expenditure agreed to. Debate (on motion by Mr Melham) adjourned. 5848 Adjournment Mr MELHAM (Banks) 12:25:00 —I move: That the Main Committee do now adjourn. 5848 5848 12:25:00 Neville, Paul, MP KV5 Hinkler NATS 0 0 Mr NEVILLE —Last week I had the pleasure of introducing the Leader of the Opposition to the marvellous work being carried out by the We Care 2 organisation in Hervey Bay. We Care 2 is the not-for-profit welfare arm of the Hervey Bay Christian Church, which supplies emergency relief, counselling and food to residents in need. Its food supplies come from the Foodbank network, other Queensland suppliers and generous farmers and are distributed through a virtually non-profit supermarket which turned over $350,000 to May of this year and is currently turning over about $10,000 a week. Led by Pastor Robert Geluk and CEO Duncan Croxon, We Care 2 is a unique organisation, and the value of its support services cannot be questioned in these difficult financial times. Its important work is evidenced by the fact that around 3,800 locals are registered clients, 2,000 of them as regulars, out of a district population of 65,000 people. That is the equivalent of one in every seven families in the Hervey Bay area using its services. More recently, We Care 2 has been the engine room of a program providing personal toiletry kits to homeless youths in the Hervey Bay area. Its We Care Bags project has involved a wide cross-section of the community, with the Hervey Bay RSL donating $2,000 towards the cost of materials to make around 1,000 toiletry bags, many volunteers sewing the bags and still more people working hard to fill them with personal hygiene products—soap, toothpaste et cetera—donated by the general public. It is hoped that these bags will last for about 12 months and will send a clear message to those living on the streets that the wider community cares about their welfare. I must also praise the Fraser Coast Chronicle and its editor, Peter Chapman. They have tirelessly supported this project and promoted it far and wide. I have mentioned the good work being done by We Care 2 and the support it receives from the local community. Now I will mention what I want to see for it in the future. I believe We Care 2 requires ongoing recurrent funding to ensure that it can continue the services and welfare that it has supplied to date. In the last calendar year, We Care 2 gave away, in the form of emergency aid, food valued at $55,000—that is over and above its Commonwealth emergency money and its supermarket operation. It will be almost impossible to continue this without some form of recurrent outside funding. As I mentioned, the emergency relief funds of around $28,000 are nowhere near sufficient for the level of demand that the organisation meets. This could be solved if We Care 2, and other grassroots organisations doing similar work, were eligible to receive a modest annual funding allocation from the Commonwealth. In the case of We Care 2, an additional $50,000 a year would ensure that the thousands of people who rely on its discount supermarket can continue to do so. In the words of board member and secretary David Rees: “After countless fruitless applications for funding, We Care 2 simply resolved to get on with doing whatever can be done with its limited resources. It has done very well and it has certainly helped the community at no cost to Government - but it can no longer continue to do so without significant help. “It is certain however that the cost of providing financial help to enable We Care 2 to continue its services to the impoverished sector of Hervey Bay’s population is very small in the bigger picture - and miniscule in comparison to the problems which will most certainly arise if it should be forced to close.” I could not agree more, and I applaud the amazing work being carried out by We Care 2, a truly Christian organisation. I am very proud of the way the local community has rallied behind this organisation and I am proud to be associated with it. 5849 5849 12:30:00 Price, Roger, MP QI4 Chifley ALP 1 0 Mr PRICE —I want to talk about a couple of parliamentary things today. As this term of parliament ends, I do want to express my regret that what was I think a significant reform of parliamentary business did not proceed as I had expected. I am talking about private members’ Fridays, the idea that we should devote a parliamentary sitting day to private members. You could not have parliamentary secretaries or ministers but you could have shadow ministers, shadow parliamentary secretaries and ordinary members and if the subject matter were good enough—say there was an interesting report being tabled or there was a particular private member’s notice of motion being debated—it would have clear air in terms of attracting media interest. I cannot say the proposals of the Rudd government were unique, because New South Wales has had private members’ Fridays for many years. It is a great irony that the then Leader of the Opposition and the Manager of Opposition Business both came from the sovereign state of New South Wales, where this has been the practice. In retrospect, I could say that it was a function of a government going into opposition and the one thing rallying it was to object to this particular initiative. As the former Chair of the Procedure Committee in the Main Committee chamber, I say perhaps it might have been better digested through the Procedure Committee. But I must confess I did not see the opposition to it coming, and it certainly blindsided me and others. I think the current arrangements for private members’ business are abominable and I do hope that in the new parliament we will go to something that is much better. There is a proposal from the Procedure Committee for that to happen, which will be tabled shortly. I predict that it will be a long time before we see another proposal for a day exclusively devoted to private members’ business—and more is the pity because I think this sells short the activities, interests and passions of members on both sides of parliament. The other thing that I want to comment on is the abolition of the selection committee. Previously, to select private members’ business we had a selection committee chaired by the Deputy Speaker with whips on both sides nominated to it and also some backbench members. The reality of the way it operated, and I compliment Deputy Speaker Ian Causley on this, was very businesslike. He would ask the Chief Government Whip, Mr Bartlett, what he wanted to select and then he would ask me, as the Chief Opposition Whip, what I wanted to select and that was it. It was all over—wham, bam and thank you, ma’am—in about one minute, but the coffee and biscuits were nice and there were a lot of minutes taken and papers produced and distributed. That has been replaced by a whips meeting, and I can say that the whips do attend that meeting and there is not the formality of paper preparation or minute taking. I am pleased to say that an Independent member—Rob Oakeshott, the honourable member for Lyne—attends, which never occurred with the old selection committee, and the informality of the meeting allows us to sometimes discuss other matters. They say that, because it is a whips meeting, it must be political. I can say to people that I have never prevented anyone saying anything in this parliament. It is true that I have occasionally selected a more moderate and balanced motion about a particular matter rather than an extreme motion. I am not aware of my counterparts either censuring or prohibiting any of their members from raising issues. So I think the system has worked well. I think the Independents do have a right to have their voices heard on these matters and, under these arrangements, they currently are being heard. Sometimes they are able to raise other difficulties they may have, which are addressed by both the Chief Opposition Whip and me. I would commend the new arrangements and I suspect they will go on into the future. 5850 5850 12:36:00 Keenan, Michael, MP E0J Stirling LP 0 0 Mr KEENAN —Last week I had a lot of constituent meetings in my electorate and I want to raise one in particular in the House today. I was met by representatives of the Ogaden Community Association of Western Australia. My electorate of Stirling is extremely diverse. It is the most multicultural part of Western Australia. We also get the largest number of humanitarian arrivals of any seat, with the exception of another in New South Wales. The concerns expressed to me by the Ogaden community were grave concerns about the human rights situation within their homeland. The Ogaden region is actually known as the Somali state—the Somali provincial government—within Ethiopia. It is at the crossroads of what is a pretty benighted area that has been subject to very serious civil and international conflict. There is conflict with the states that border Ethiopia—Eritrea and Somalia—and there is civil conflict within Ethiopia itself. The result is that this is an incredibly poor and disadvantaged part of Ethiopia, which is of course quite a poor and disadvantaged country. But the Ogaden region has particular difficulties. The representatives of the Ogaden community said to me that what is happening there, through the Ethiopian government, is very similar to what is happening in the Darfur region of the Sudan. Of course, people here would be very familiar with that conflict, whereas the conflict in the Ogaden region is not as widely known. I listened very carefully to what my constituents had to say. They are very concerned about relatives and friends that they have back in their homeland. It is very difficult to communicate with people there. But the reports that they are getting of murder, rape, extensive sexual violence against women and burning down of their villages are greatly concerning to me. I gave them an undertaking that I would raise this matter in the Australian parliament and also raise it with the foreign minister, because Ethiopia is in receipt of a significant amount of Australian aid. Clearly, the Australian government has every right to express human rights concerns to the Ethiopian government. I will be separately contacting the foreign minister to urge him to do this, and I am sure he will. Following that meeting I went back and checked on the veracity of the claims that were put to me by representatives of the community. There is plenty of evidence from international organisations, such as Human Rights Watch and Amnesty International, that what was put to me about what is happening in the Ogaden region is certainly true. The military forces of the Ethiopian government are engaged in a campaign against the local separatist movement. That separatist movement is quite a brutal movement. There is plenty of blame to go around. Regardless of that, the treatment that the Ogaden people have been subject to at the hands of the Ethiopian military is incredibly disturbing. The Ethiopian government does not allow much access to that region by international organisations. Indeed, the Red Cross was actually expelled from there. It is pretty serious for a government to expel the International Committee of the Red Cross. When they do things like that, they are clearly trying to avoid scrutiny by the international community. The reports are that the Ethiopian military, in their campaign in pursuit of the Ogaden National Liberation Front, will go into villages and tell the villagers that they need to abandon their village. If that is not done, they will return within a couple of days and burn that village down. They will also afflict quite horrendous treatment on the local people. The Australian government, particularly as a donor to the Ethiopian government, needs to use all its good offices to say that the international community does have an interest in what is going on in that region, that we are watching and that we do not believe that what is happening there is acceptable. We should use all our good offices both as a government and as a parliament to highlight that. I congratulate members of the Ogaden community who have come to see me to raise my awareness of what is a very little understood conflict. I give them my undertaking that I will use all of my best efforts to highlight what is going on in their homeland. 5851 5851 12:41:00 Hall, Jill, MP 83N Shortland ALP 1 0 Ms HALL —I believe that the opportunity to access education is possibly the most important thing that any government can give to Australia as a nation. Education is about our future. The fact that not all young people in Australia access education at a level that will prepare them for life is, I think, one of the very sad features of our society. I believe that the Rudd government has really concentrated on trying to make education freely accessible for all young Australians and, at the same time, make it relevant for young Australians. Catherine is a young person who has just finished university and has been working in my office this week in Canberra. I asked her to identify a topic that she thought was of vital importance, something that she felt passionate about. The topic that she chose was education. It is coincidental that last night in the chamber I spoke about the importance of education, the importance of Building the Education Revolution, the importance of trade training schools and the importance of enabling young people to obtain the education they need. I would like to share with the House some of the words that Catherine has written for me. It is always very good to be able to look at these issues from somebody else’s perspective and not just from mine, as a member of parliament. I am somebody who has been here a while now, somebody who connects with their electorate very strongly and visits schools on a regular basis. But, still, I am somebody who looks at education from the perspective of having been in this job for quite a while. I find that Catherine’s thoughts coincide with mine very closely. She is not a person who has been involved in the Labor Party or anything like that. Here are the words she has written for me. I would like to take this opportunity to discuss the importance of vocational training experiences for young people. In my electorate, school retention rates in some areas are very low. Schools recognise this trend and have been working on the development of vocational training opportunities, which is an area of importance identified and expressed by students, as was reiterated at a school leaders working luncheon that I have mentioned previously. I had a working lunch with the leaders from the schools in my electorate. In the Hunter and the Central Coast—they are the areas that the Shortland electorate covers—the retention rate, as recorded by the Department of Education and Training, for years 7 to 10 is 91 per cent. However, this drops dramatically for years 10 to 12, where the apparent retention rate in 2009 was 58.3 per cent, which is lower than other regions in New South Wales. I might add that the rate for the Central Coast is the lowest in Australia. In recognition of these trends, there is a growing focus by schools in my electorate on the provision of vocational and more hands-on, practical skills development. Recognising the different skills areas and interests of young people and encouraging development in these areas builds confidence—assuring them that they can make a positive contribution to Australia’s workforce—and encourages continuation of studies in senior high school. In my electorate on the Central Coast, Gorokan High School, Lake Munmorah High School and Northlakes High School will be receiving funding towards facilities to better enable more vocational training. The measures include upgrading hospitality, engineering and construction facilities. The importance of giving young people the opportunity to gain practical experience that they can apply in the workforce cannot be undervalued. Catherine really believes that the most important issue for government to address is education and ensuring that young people who attend our schools have the skills that they need for the future. (Time expired) 5852 5852 12:46:00 Markus, Louise, MP E07 Greenway LP 0 0 Mrs MARKUS —The Hawkesbury and Blue Mountains region is a great place to live, work, raise a family and retire. It is surrounded by a picturesque World Heritage listed national park and stunning river systems including the Hawkesbury-Nepean river. Protecting the way of life which we all enjoy is absolutely critical to the ongoing sustainability of our region. It is important to keep debt and inflation down in order to ease the burden of interest rates, particularly for families and small businesses. This is essential to continued growth in our local economy. Securing the future for our young people by developing and delivering programs that provide them with opportunities to build for the future is a key priority. In recent years I have been running an annual youth leadership forum and this year will see the inaugural Macquarie Youth Leadership Forum, named after and in honour of Lachlan Macquarie. This year is the 200th anniversary of his appointment as Governor of New South Wales. The forum is dedicated to developing future leaders through practical exposure to core leadership values such as service to others, integrity and courage. It is critical that the community invests in today’s youth. The forum provides an opportunity for students to begin asking themselves questions about their life, their future and the manner in which they will conduct themselves, inspiring them to reach their fullest potential. The forum has a great program, featuring speakers from all walks of life. On the final Saturday a community project that responds to the needs of the local community will be conducted. These young people often do not want to leave on the Saturday night when their parents are waiting for them. Currently, whenever I am out and about people raise with me their concerns about the safety of our roads, easier access to general and specialist health care and community safety. I will be fighting to increase safety on our local roads across the Hawkesbury and the Blue Mountains—roads such as Freemans Reach Road, Comleroy Road, Terrace Road at North Richmond, Jennings Road in Faulconbridge, The Avenue in Valley Heights and the Bells Line of Road, to name a few. Working towards decreasing the amount of freight on our roads is vitally important to local road safety. While we need to make roads safer, there is a need for a long-term plan. We cannot afford to make rash decisions with policy on the run, as the Labor government so often does, because we cannot afford to get safety wrong. Community safety is also a key concern. CCTV cameras would be of great assistance in the fight to improve community safety, particularly around our parks and public places. I will also be fighting for better access to specialist and preventative healthcare services. Six-year-old Brianna Ashcroft and others like her have this year found themselves without access to the specialist services of a juvenile endocrinologist. The Nepean Hospital’s specialist took maternity leave but was not replaced. While specialists are available at Westmead Hospital, families have been told they cannot access them due to local health catchment area rules. Whilst receiving wonderful care from the staff at the Nepean, these families still have no access to a specialist—this is unacceptable in the 21st century. I call on the New South Wales government to return a juvenile endocrinologist to the Nepean Hospital. Access for women in our region to breast-screening services has also been removed in the past year. Funding for mobile screening vans was quietly axed in September 2009 and local women are only now realising they must organise to travel for a mammogram. One in nine New South Wales women will be diagnosed with breast cancer in their lifetime. I have launched a petition calling on Labor governments to return mobile breast-screening units to New South Wales. In addition to these many health concerns it slipped out late yesterday that the national funding authority for Mr Rudd’s grand hospital plan is to be abolished before it has even been created. The national funding authority was to provide transparency and accountability so that federal funding and taxpayer dollars would not be diverted by the states or misused, as they have been by so many states, with federal programs such as Building the Education Revolution. The states must be held accountable for the money they spend. We cannot afford to have Labor governments keep throwing good money after bad. We need real action on these local issues. The Rudd Labor government has wasted millions of dollars on local school hall rip-offs, money which could have been better spent on tackling local crime or filling potholes in our local roads. The Rudd Labor government has promised much but delivered little, failing our community. People shake their heads at the long list of broken promises and all the waste. The Hawkesbury and the Blue Mountains are struggling to cope now. What they need is investment in health, investment in roads, investment in their community safety. (Time expired) 5853 5853 12:51:00 Saffin, Janelle, MP HVY Page ALP 1 0 Ms SAFFIN —On Saturday it will be the 65th birthday of Burma’s Aung San Suu Kyi and about the 14th birthday that she has spent incarcerated. She is currently serving a three-year jail sentence which was commuted to 18 months house arrest by Burma’s military dictator, General Than Shue. The UN Working Group On Arbitrary Detention recently issued an opinion, No. 12/2010 on the incarceration of Aung San Suu Kyi. It said ‘the continuation of the deprivation of liberty of Ms Aung San Suu Kyi is arbitrary, being in contravention of articles 9, 10, 19 and 20 of the Universal Declaration of Human Rights’. It further said ‘she was not informed of the reasons for her arrest, had ineffective remedy to challenge her detention, no records were given to her, she was never informed of her rights, she has been denied communication with the outside world and is being detained because of her political views’. This was the fifth opinion. All the opinions find that she is arbitrarily detained. This started in 1992. The latest fiasco arose when a man called John Yettaw, a US citizen, swam across Lake Inya and gained entry to Suu Kyi’s house. This was a misguided adventure by a person who by all accounts is an unwell person. As a result, Suu Kyi was charged with breaching the terms of her house arrest under section 22 of the State Protection Law 1975—a very draconian law. Burma Campaign Australia have invited prominent women from around Australia, including women in this place, to be ambassadors for Aung San Suu Kyi from 19 June until 24 October and use our public profile to raise awareness of Aung San Suu Kyi’s continued detention and struggle for human rights and democracy in Burma. They have said that our being ambassadors will tell her that the world has not forgotten her despite her having been under house arrest for more than 14 years. It will also tell the people of Burma that we support their struggle for democracy. It is important that they get to hear that message from we who have our freedom. In a report to the UN Human Rights Council, the UN Special Rapporteur on the Situation of Human Rights in Myanmar, Tomas Quintana, called for consideration of a commission of inquiry to look into whether war crimes and human rights violations have been committed in Burma. The UK, the Czech Republic and Australia have signalled some support for that, and that support is growing. I know that all members in this place on all sides of politics join together to give support in the particular area. The National League for Democracy was the party that Aung San Suu Kyi led in the 1990 election. They were not able to take up their positions in parliament because the military dictatorship would not allow them to do so despite their having won 392 of the 485 seats contested—not a bad win. The party no longer exists as a so-called legal entity because of the five election laws that were introduced by the State Peace and Development Council in Burma. The National League for Democracy released what was called the Shwegondaing Declaration, which set out four benchmarks for the election process to be considered credible or legitimate: the immediate unconditional release of all political prisoners, including Aung San Suu Kyi; an inclusive review of the 2008 constitution, which is a military constitution; elections to be carried out in a free, fair, open and inclusive manner under international supervision; and recognition in some way of the 1990 election result. The regime has said there will be an election sometime this year. By any account, by any benchmark, it cannot be free and fair. There is no way anybody could determine that it would be and nobody expects it to be. It will be a wasted opportunity because there are so many people who are willing to change Burma and transition it into what they want, which is a free country. But it does not happen. More people have been arrested and detained. Question agreed to. 5854 12:56:00 Main Committee adjourned at 12.57 pm